Housing Economics

LEC 2 : Building Economic

L1

FALL2011

Course : Housing economic (AE 431) level 5

Why do we need a building ? “Birds &

animals”, “Beast master”, “Lost World”,

“Survivors” - Common link - We are not them

Designing and making buildings : Stakeholders -

“Sky is the limit”, constraints to the choice of

building systems - Codes, regulations, ordinances,

unions, etc.

How to choose a building system ? “Experience”,

“Pleasing to the eyes”, “Economical”, etc.

Performance during and after constructionFALL2011

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Why do we Need Buildings?

We build because little that we do can take place outdoors. We need shelter from sun, wind, rain, and snow. We need dry, level platforms for our activities. Often we need to stack these platforms to multiply available ground space. On these platforms, and within our shelter, we need air that is warmer or cooler, more or less humid, than outdoors. We need less light by day, and more light by night, than is offered by the natural world. We need services that provide energy, communications and water and disposal of wastes. So we gather materials and assemble them into the constructions we call buildings to satisfy these needs.

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What are the minimum requirements?

· Legal Security of Tenure: this protects people from eviction, harassment,

and other threats. The States must provide and enforce security of tenure

in consultation with affected groups

· Availability of Services, Materials, Facilities, and Infrastructure:

Housing includes facilities essential for health, security, comfort, and

nutrition. For example, there must be safe drinking water, energy for

cooking, heating, lighting, sanitation facilities, refuse disposal, storage and

emergency services

· Affordability: The cost of adequate housing should not compromise the

satisfaction of other basic needs

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Cost = anything that reduces your business objective

Benefit = anything that contributes to it

Two types of costs: investment (capital costs) and operational (on-going)

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Investments (Costs)Preliminary (meetings, legal, land)

Construction (excavation, structures, buildings)

Equipment (vehicles, lab, etc.)

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Cost is a resource sacrificed or foregone to achieve a

specific objective, or something given up in exchange.

Profits are revenues minus expenses

Life cycle costing is estimating the cost of a project plus the

maintenance costs of the products it produces

Cash flow analysis is determining the estimated annual

costs and benefits for a project

Benefits and costs can be tangible or intangible, direct or

indirect

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Cost estimating: Developing an approximation or

estimate of the costs of the resources needed to

complete a project.

Cost budgeting: Allocating the overall cost estimate to

individual work items to establish a baseline for

measuring performance.

Cost control: Controlling changes to the project budget.