Renovation versus New Construction

Renovation versus New Construction and Building Decision Tool

Renovation of an existing building is an accomplished stem of the construction industry because it supplies financial diversification for construction stakeholders. Although several construction planning tools and stakeholder alignment exercises have been developed, no tool exists to assist project owners to decide between renovating an existing building and new construction with a comprehensive decision criteria. The objective of this research is to create and test a renovation versus new building support decision tool for construction project stakeholders. The renovation versus new building support decision tool was created based on an extensive review of existing support tools and construction industry needs. The created tool was implemented to evaluate decisions of educational facilities by university officials experienced in project management. Results show the tool was effective in identifying relevant topics for discussion and guiding a group of stakeholders through an exercise in decision-making. Specifically, the tool was implemented by construction management personnel for university facilities currently under construction to evaluate the decision to renovate an existing building or new construction. The main contribution of this research is a framework and support decision tool readily implementable for construction project stakeholders desiring to determine if renovation or new construction is the optimal path for their specific objectives.

1. Introduction

Renovation of an existing building is a successful branch of the construction industry because it provides financial diversification for construction stakeholders. Building owners are often challenged with deciding between new construction and renovating an existing building to achieve their desired scope. This complex decision can impact the overall project budget, schedule, and quality.

Previous research efforts have identified that support is needed for construction decision-making. Several tools and activities have been created to assist construction stakeholders when planning and making decisions. However, none of these tools specifically support construction project owners tasked of selecting either new construction or renovation of an existing building. The objective of this research was to create a decision-making tool that supports construction project owners to aid in determining between renovating an existing building and new construction. The scope of this project included all construction-related ventures in which some information is known about the project purpose and project owners are deciding between renovation of an existing building and new construction.

A review of a sampling of construction decisions support tools was conducted, specifically tools implemented for project planning. Reviewing findings were used to create a renovation versus new building decision tool. This created decision tool was implemented to evaluate recent “renovation and new construction” decisions made by a university concerning educational facilities. A subsequent discussion of the analyzed research findings, encountered benefits and limitations, and envisioned future research work for decision-making support in the construction industry follows.

2. Background

During a recession or decreasing economic situation, the construction industry often transitions from new construction projects to renovating an existing building. The construction industry has utilized renovation projects as a method of diversification to remain profitable during a down economy. Project owners are often required to decide between renovation of an existing building or new construction.

3. Construction Project Decision-Making

A multitude of research conducted by the construction industry and academics has contributed to decision-making processes and prediction models for construction. Dominant factors in the decision to renovate or build new construction include investment cost and future market value of the existing building. Due to the economic implications, several processes and decision tools have been developed to guide and support stakeholders during decision-making. These processes and tools enable construction project stakeholders to align on specific requirements and support the personnel during a decision-making process.

One such area that requires complex decision-making in construction project planning is sustainability, specifically energy consumption. Energy consumption in existing houses was explored to understand why individuals decide to renovate their utilities. Various decision criteria (e.g., exterior building materials) were evaluated in regard to life cycle implications of building renovations and new construction. In general, renovation-based strategies were found to have less of an environmental impact when compared to newly constructed houses with similar characteristics. Four complex decisions were evaluated for an individual planning to optimize the investment of sustainable renewable options for a house including maintenance only, renovation options with minor improvements, transformation with major adjustments, and a new building option.

Unlike operational energy as previously discussed, embodied energy occurs during the construction phase of a building. The embodied energy makes up a considerable part of the total energy use in buildings. Considerable amounts of energy are spent in the manufacturing processes and transportation of various building materials. Several decision support tools have been created to measure the environmental impacts of embodied energy including life cycle assessment of environmental impacts of building materials, optimization mapping of transportation [30], and specialized tools considering environmental impacts only to commercial buildings.

Many tools have been developed to provide performance-based assessment models of various building characteristics. For example, a rating model tool was created to measure the heat loss through external windows and walls. Other energy assessment tools have been implemented to predict monthly energy uses of an individual building. Tools have also been created and implemented regarding building safety. One such tool simulates a fire evacuation drill for building occupants to validate acceptable escape paths and durations.

In addition to sustainability elements, stakeholders are often tasked with deciding between renovation and new construction for historically significant buildings. Older building renovation can be more aesthetic and culturally significant but often cost much more than newly constructed buildings with the same desired function. Sociological researchers strive to preserve historical buildings as a means to better understand the logics of movement of a people group and conserve a collective memory of a community.

Although renovations of historically significant buildings are in high demand, structural engineers often encounter costly design challenges. The balance between historical significance, building functionality, and economics presents unique challenges when deciding between renovation and new construction. Several research and private sector efforts have focused on improving renovation techniques for historically significant buildings including using timber-concrete composite structures to renovate historical wooden floors, an appraisal method to capture energy efficiency improvements from building renovation [18], and techniques to model human dynamic loads on structural floor vibrations of historical buildings.