The value of high performing homes

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Not so long ago, the prime driver of home renovations in New Zealand was aesthetics. But the focus is steadily shifting to sustainable retrofits as more and more New Zealand homeowners come to realise that looks aren’t everything.

Crucially, the homes we live in play an important role in our well-being. So a home should be healthy, comfortable and affordable:  warm in winter, cool in summer, dry all year round, cheaper to run and kinder to the environment.

Beacon’s research is all about how best to upgrade our homes to improve their performance.  To stimulate change, we need to understand and demonstrate why better-performing homes are valued.  We seek to show each player, from government to industry to consumers, the enormous benefits that accrue when homes perform.


Direct financial benefits are one source of value only

When promoting new sustainable features, It is common to use ‘pay back period and operational cost savings as the main argument for change.  These are the direct financial benefits of changing to energy-efficient or water-efficient technologies. 

In recognition that government makes many decisions on the basis of cost benefit, Beacon has analysed the cost benefit of renovation technologies at two levels: national and individual. 

  • The National Value Case for Sustainable Housing Innovations makes the case for the value to New Zealand of six simple house improvements.  If these six improvements were made to New Zealand homes,  each year New Zealand could save enough energy to power 500,000 homes,  reduce $54m worth of tradeable CO2 emissions, and save 130 million cubic metres of water.
  • The Cost Benefit of Sustainable Housing Retrofits report considers the cost benefits of a variety of energy and water interventions in four different parts of the country.  It found that lower cost renovations were financially worthwhile throughout the country but, unsurprisingly, the financial case for more expensive and extensive renovations improved the further south you went.

These financial arguments present a strong case and have helped to drive recent initiatives to improve house performance. However, while cost benefit analysis is a valuable tool to make the financial benefits explicit, we believe it is but one approach needed to understand the true value to all players of improved house performance in New Zealand.


Warmth, comfort, good health, happiness

Beacon has commissioned research which highlights benefits to homeowners that go beyond traditional cost benefit analysis.  These benefits are wide-ranging and are increasingly being recognised by consumers.  Participants in Beacon’s HomeSmart Renovation project, for example, rated increased warmth and comfort (69%), and improved health (58%) as the number one driver for improving their homes. 

Beacon is capturing the benefits consumers identify and value through our live research projects.  Commencing with the Waitakere and Rotorua NOW Homes, through to the nine home Papakowhai Renovation project and now in the HomeSmart Renovation project, we have talked to the homeowners involved and the picture is clear.  Improving your home performance extends benefits beyond cost to social, health, mental health and family benefits.

Our families report increased warmth throughout the house leading to improved physical health, with fewer reported colds and flu.  Especially important were reports of the effects of a healthier environment for their children - less asthma, less medication, fewer days off school.   Strikingly, the participants report happier, more relaxed families enjoying better relationships and socialising.

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Renovation means jobs

Beacon’s briefing to the February 2009 Job Summit spelled out the employment possibilities in stimulating the wide scale renovation of New Zealand’s homes.  We calculated that, for every 1000 homes renovated for improved performance, 151 full time equivalent jobs would be required on-site, and 392 full time equivalent jobs to provide related products and services.  This has been borne out by the increased work generated by the Government’s Warm Up New Zealand scheme.


Lower demand reduces infrastructure need

Beacon has been particularly active in promoting water demand management, recognising that increasing populations are outstripping current infrastructure.  Without reduced water demand, local councils face costly infrastructure development, a cost which will be passed to ratepayers.

  • Slowing the Flow is a demand management framework to help councils work their way through developing a demand management approach to water.
  • The Energy-Water Relationships report makes the link between water demand and energy use.  Energy is a hidden cost of treating and reticulating water.
  • The Valuing Water Demand Management reports develop an economic framework to value approaches to reducing demand for water, and test the framework on Tauranga City Council.


Related Documents

  • 31-Mar-2010 (Report WA7090/7)

    Water Demand Management: An economic framework to value with case study application (PDF 700KB)

    Nicola Smith, Garry McDonald, Dorothy Wilson

    This report synthesises three reports produced as a result of the development of a framework to value water demand management and its application to Tauranga City Council. It describes a brief literature review (WA7090/4), and the development and of a framework (WA7090/5). This was applied to a case study (WA7090/6) to demonstrate the potential value of water agencies adopting and implementing water efficiency measures. The case study result shows that in implementing a water demand management approach, Tauranga City Council has delayed the implementation of the next major water supply infrastructure identified for the city's water supply, by approximately 10 years with a net benefit to the community of $53.3 million in 2009 terms.

  • 31-Jul-2009 (Report NH3112/2)

    Valuing Sustainable Neighbourhoods (PDF 607KB)

    Kay Saville-Smith, Moira Dwyer, Julie Warren

    This report uses Beacon's Neighbourhood Sustainability Framework and data from Beacon's National Survey of Neighbourhoods to value the opportunities presented by the data collected by the National Survey of people's neighbourhood experiences and neighbourhood characteristics. 

  • 31-May-2009 (Report WA7090/2)

    Energy-Water Relationships in Reticulated Water Infrastructure Systems (PDF 342KB)

    Ben Kneppers, Damon Birchfield, Maggie Lawton

    The report provides an initial analysis of the relationship between energy use and reticulated water supply and wastewater treatment.  A literature study was supplemented by energy and water use data from four distinct reticulated water systems (Waitakere, Palmerston North, Kapiti and Nelson).  The data was considered for energy use and energy efficiency, and how improvements could be made.

  • 31-Mar-2009 (Report TE106/19)

    Cost Benefits of Sustainable Housing Retrofits (PDF 574KB)

    Ian Page

    This report considers the cost benefits of a variety of sustainable energy and water retrofits for existing houses.   Values are calculated for the four main centres and 11 house/ multiunit typologies, including health and comfort benefits,  initial costs of the measures and their replacements.  Future operating costs are discounted and the results are expressed as net present values and benefit cost ratios.  Typologies and locations are scaled up to derive national benefits.  A spreadsheet model is provided on which users can change parameters and try various packages of measures.

  • 31-Mar-2009 (Report TE106/17)

    Papakowhai Renovations: Householder Experiences and Perceptions (PDF 268KB)

    Rachael Trotman

    This report presents the findings of post project interviews  with three of the nine households involved in the Papakowhai Renovation project.  Positive reported impacts of the renovations included physical and mental health benefits, increased warmth, cost savings and greater energy efficiency.  Less positive aspects were some poor workmanship, the need for stronger project management and quality control of the renovations and better communication with householders.  

  • 23-Feb-2009 (Submission PUB/4)

    Beacon Pathway Briefing for Jobs Summit, February 2009 (PDF 54KB)

    Nick Collins

    The full briefing, Large Scale Renovation is BIG on Job Creation, Beacon prepared to support discussions at the February 2009 Jobs Summit.

  • 07-Jan-2008 (Publication WA7060/4)

    Slowing the Flow: A Comprehensive Demand Management Framework for Reticulated Water Supply (PDF 1.4MB)

    Maggie Lawton, Damon Birchfield, Dorothy Wilson

    Based on research, this publication provides a comprehensive demand management framework for all working with reticulated water supply. Slowing the Flow recognises the complex issues in meeting increasing demand, controlling costs (hence pressure on rates), conserving a scarce resource and adopting fresh thinking while maximising the benefits of new technologies.

  • 04-Jan-2008 (Report NO102/5)

    Waitakere NOW Home®: Occupants' experience of the home and implications for future NOW Homes® (PDF 570KB)

    Rachael Trotman

    Results of an interview with the NOW Home® occupants. Explores their experience of living in the house and behaviours that affected the performance of the house. Occupants report better health, improved family life and great sense of wellbing from living in house

  • 11-Jan-2007 (Publication PR240/4)

    National Value Case for Sustainable Housing Innovations (PDF 2MB)

    Melony Clark

    This policy paper for Government presents the value case for intervening to bring New Zealand's housing up to the HSS High Standard of Sustainability®.  Based on the National Value Case report (PR240/3), it shows that simple housing interventions will bring benefits on a nationwide scale.

  • 09-Jan-2007 (Report TE106/8)

    Sustainability Options for Retrofitting New Zealand Houses: Theoretical cost benefit analysis (PDF 382KB)

    M Phillips

    A theoretical cost benefit for options to retrofit for water and energy was carried out using ALF. At a national level, these options are worth implementing from a financial perspective: rainwater tanks (for Auckland only); low flow shower heads for high pressure systems; water efficient washing machines; water heating upgrade to SWH, instant gas or heat pump; floor and ceiling insulation.  Research undertaken to support Papakowhai Renovation project

Warm families

Some examples of what the families have said:

“We are happy here, which flows through to everything else.  Everything has been better since being here”. 

Joe and Hayley, Waitakere NOW Home

“The house feels and smells drier”

Papakowhai homeowner

“We used to hear the train doors open now we can hardly hear the train”

Papakowhai homeowner

Healthy family

“We are doing our job as parents by keeping the house healthy for the kids”. 

Papakowhai parents

“We know what a warm house is now” 

Papakowhai homeowner

Happy family

“Being warmer has made us happier;  we were on edge before, and cold, it was a nightmare, this has taken a weight off us”

Papakowhai family