Development and procurement in the Scottish housing sector

Euan Pirie | 10 May 2021

INSIGHTS

The 19th edition of Harper Macleod’s National Housing Conference played an important part in setting out the role of social housing in the country’s transition from the social and economic impacts of the pandemic.

Over 5 days, our legal specialists were joined by a selection of industry and academic speakers. If you missed any sessions or would like to revisit what happened on particular days all the content is now available on-demand.

Day 3 of our National Housing Conference 2021 focused on some recent housing development projects housing associations had been focusing on in the past year and the impacts that COVID had on these projects. Energy efficiency and the importance of this in new developments was a key focus and the panel shared their experiences in building energy efficient housing and the different types of schemes that had been used. Possible procurement issues were discussed and what protections can be put in place to protect the sector.

Passivhaus standard

Karen discussed the experience that WoSHA has had in constructing housing that meets the Passivhaus standard at two of its new developments. There was discussion among the panel as to whether having housing built to meet this standard was more than just achieving a badge or accreditation. Two areas that the panel discussed that WoSHA had had to find a solution to included:

Ventilation

To meet the Passivhaus standard, the building required to be airtight. As such, adequate ventilation was essential and in providing this, some space in the development was lost to accommodate this.

Circulation space

As a result of the airtight building requirement of the Passivhaus standard, moisture levels within buildings is an area requiring careful consideration. There was agreement between the panel that there are several ways to ensure this is not an issue such as natural ventilation and mechanical ventilation. The additional cost for mechanical ventilation is something to consider and any additional space required to install the system.

Karen explained that there are still lessons to be learned in ensuring housing meets the Passivhaus standard but that this will be achieved if more developments are to try and attain this standard. To ensure WoSHA could achieve its aim in having the housing meeting the Passivhaus standard, a ‘Passivhaus Champion’ was appointed to oversee the development site to ensure all evidence required to be submitted to achieve the Passivhaus standard was collected as the inspections are very rigorous.

Modular construction

Andrew then went on to explain some of the reasons why Caledonia had decided to use modular construction for one of its new developments rather than the Passivhaus standard. The panel drew comparisons between the two and discussed some of the positive and possible issues of each.

Energy efficiency is one of Caledonia’s main goals in its new development projects and being able to pass the savings on to tenants. Andrew noted that there is a lot more to Passivhaus than just energy efficiency and it was decided that Caledonia could do more in terms of energy efficiency than Passivhaus allowed for. However, it has decided to follow many of the principles to help Caledonia achieve its zero carbon housing target.

For this new development, Caledonia will be working with a local developer experienced in modular house construction. Some benefits of modular construction include:

speed at which houses can be constructed – properties can be constructed in just a few days once all components are on site;
standardisation of units can help reduce costs and provide uniformity;
cheaper for tenants to heat and use the property due to being energy efficient; and
allows for construction to continue in spite of weather conditions as the majority of the construction of the panels is done in a factory.

Some of the challenges were also discussed, one of which included the point at which ownership of the panels/components passes to the housing association. This can be an important consideration if the manufacturer ceases trading as the housing association needs to have a clear understanding of what parts it owns and at what point the transfer of ownership took place. As such, keeping an accurate record of every component is essential.

Key considerations for Passivhaus and modular construction

Working with an experienced developer in the desired construction type at as early a stage as possible is very beneficial as it allows for the association to be much more specific about what it wants.
Implementing elements of the Passivhaus standard can have many benefits without having to meet the full criteria.
Awareness of possible funding issues as these standards are typically much higher than current building standards and associations may have to look to alternative funding streams.
The costs of making properties more energy efficient should decrease over time as the technology and practices become more mainstream.

Procurement considerations

The panel also discussed some key considerations when beginning the process of procuring a developer, some of which are as follows:

Have a clear idea of what requires to be procured and the minimum requirements that a developer must meet. Many developers may not have the required experience.
Ensure a clear requirements list and performance specification is included in the procurement documentation.
Identifying, at an early stage, what the housing association is looking to achieve from the development is essentials. Examples include: a specific accreditation or badge; specific efficiency standards; or the ability to complete a large proportion of the work offsite.
Clarity is key to ensure the correct developer with the right skill set and experience is appointed for the development.