Wooden Additional Floors in Old Apartment Buildings: Perspectives of Housing and Real Estate Companies from Finland
Abstract
:1. Introduction
2. Research Method
3. Findings
3.1. Wooden Additional Floor Construction
- (a)
- additional floor construction allows the building stock to be developed beneficially, increasing the income of the property owners as an efficient and environmentally friendly construction method. Renovation and upgrading of existing buildings are the most advantageous in terms of carbon footprint compared to demolition and new construction [31]. In the comparison study by Huuhka et al. [31], renovation and upgrading operations with additional floors were more than 20% lower in terms of a carbon footprint than demolition and new construction;
- (b)
- additional floor construction provides short-term income to housing companies by selling the building rights or areas of the additional floors. Although the construction cost of the additional floor is around EUR 3285/m2—this is about 1.5 times more expensive than the construction of new buildings—[32], revenues from additional floors can be used to finance the renovation of the existing property, such as the renovation of an elevator to improve the accessibility and commercial conditions of the building. This ensures a profitable investment in the long term [14];
- (c)
- additional floors do not significantly increase the overall energy consumption of the upgraded building, although they substantially increase the total floor area. Moreover, as energy-efficient passive structures, additional floors can considerably increase the energy efficiency of old buildings, especially if upper floors have not been renovated for a long time [33];
- (d)
- additional floors improve the image and appearance of individual buildings as well as spaces. By modernizing the design language, they can have a significant impact on the architectural values of an existing building.
3.2. Interviews with Professionals Involved in an Additional Floor Construction
- (a)
- economic feasibility: this is especially important if the building right is to be sold to an external party constructing additional floors. In case of an incorrect evaluation of the commercial conditions of additional floors, it is difficult to sell the building rights at the desired price and therefore the return of the project is lower than expected. In the worst-case scenario, there is no external party to build an additional floor, in which case the investment cannot be refunded;
- (b)
- city plan change: changing the city plan or granting a deviation from the city plan to increase the right to build on the land affect the property tax amount;
- (c)
- potential contractor: if an external party cannot be found to build additional floors, the project cost suffers, and the maintenance cost of the property increases in the future;
- (d)
- involvement of a specialist: the prerequisites for the success of additional floor projects are raised, especially for a housing company, by assessing and then minimizing risks. There is even a practice in some Finnish cities not to initiate a change in the city plan to allow additional construction unless an expert is involved to introduce the project, or the conditions of the project are adequately explained.
3.2.1. Feasibility Study Phase
- (a)
- city planning issues: it is important to contact the city’s planning authorities at the start of the feasibility study and to identify the possibilities for permits or deviations from the city plan. Additional floor construction, such as the boundary conditions of the city planning, can also be questioned by the city’s building inspectorate or planning authorities at the beginning of the project. City planning issues include, for example, how additional floors relate to the surrounding buildings and, if carried out, overshadow, for example, a courtyard or a busy promenade;
- (b)
- parking spaces: with additional floors, the floor area, and the number of residents increase. Parking spaces for new residents and apartments should be defined and built on or near the plot. The number of parking spaces required for the area is determined by the city authorities on a case-by-case basis, and Finland has no national regulation on the number of parking spaces. The number can also be affected by shared cars. Deviations from the amount of parking included in the city plan can be obtained from the building control authority;
- (c)
- information and documentation process: in most cases, the information provided in the drawings may vary from site to site and needs to be reinforced as the project progresses. Completing building drawings can be costly if information needs to be obtained from the municipality’s building inspectorate or is indicated, for example, through site visits and measurements. However, it is in the general interest of housing and real estate companies to compile the drawings, as they can also be used for other measures, such as designing facade repairs, retrofitting HVAC systems, or constructing retrofit elevators;
- (d)
- the load-bearing capacity of the existing building: to inspect the structure, the housing or real estate company must compile existing drawings of the building. The load-bearing capacity of the existing framework and foundations can in some cases be calculated directly from the drawings but providing the load-bearing capacity may also require structural analysis. A structural engineer specializing in renovation projects should be commissioned to examine this capacity, but if the site requires a more detailed analysis of the structures, an expert on structures and foundation conditions should also be involved;
- (e)
- existing regulations: the extension of a building is affected by new building regulations and rules, such as accessibility. If an apartment without an elevator is upgraded with additional floors, then retrofit elevators are required in the building to apply the additional floor, as is the case in the City of Helsinki [47]. Retrofit elevators can be built inside an existing ready stairwell or built outside of the building mass and thus incorporated into the architecture of the additional floors (Figure 4).
3.2.2. Project Planning Phase
- (a)
- the sale of the building right: when an additional extension building right is sold to a third party by issuing shares, a subscription fee is allocated to the shares. Furthermore, separate compensation may be determined in connection with the sale of the building right, which may include the costs and additional floors used to design the project. The flats in the ascending part are associated with an existing company, in this case, the income from the sale of the building right is tax-free income compared to the capital investment. If the implementation of the project is chosen to include a residential increase in an existing company, the company must be prepared to amend its articles of association for a direct issuance of shares;
- (b)
- building regulations: they affect the scope and application of the elevation, regardless of the building material from which the additional floors are constructed, for example in terms of sound and fire performance. Fire regulations should be considered at an early stage, especially when designing a wooden extension, where Finnish fire codes allow the construction of two additional wooden floors. However, vertical extensions with more than two wooden floors can provide fire safety on a case-by-case basis. In this case, modeling is used to gather information about the building that guides the fire design and sizing of building components, where a fire safety expert is needed to support the design. Expanding the design team increases design costs, site official operations, and possibly construction costs, but also allows for increased building rights and therefore the amount of revenue the expansion can generate. As the number of floors and extensions of a building increases to nine stories and above, it likely needs new exits regardless of the additional material for fire safety. This could make several additional floors economically unprofitable, or new exits could have too much of an impact on the building’s cityscape; in this case, city authorities may not allow the increase.
3.2.3. Implementation Planning Phase
- (a)
- city plan change: for this, the permission of the landowner and material showing the effect of the additional floor on the immediate surroundings of the property is required. Such studies and materials may include, for example, elevation plans and visualizations of their suitability in the immediate environment, a site drawing showing the location of parking lots and the impact on the comfort of courtyard spaces, and possibly an inventory of the building stock. While preparing the city plan, the party initiating the city plan change is obliged to participate in the preparation of such studies. The above-mentioned tasks may be outsourced or carried out by the municipality where the city plan is located. In any case, the party initiating the city plan change is obliged to contribute to the costs incurred;
- (b)
- the building right: in case the building right of the additional floors is sold to an external developer, a tender can be made after the building right has been added to the land. Tender for building right can be started at the projecting stage before the city plan change or permission, however, specifying the city plans and completing the work by the authorized person may increase the value of the building right;
- (c)
- terms and conditions: the company that manages the property to be extended vertically may set conditions for the sale of the building right. The terms and conditions can protect the interests of the company managing the property. Conditions that protect the interests of the company may include restrictions such as what type of contractor must be used to build the upgrade and demonstrating that the contractor has adequate experience and professionalism. Moreover, these conditions may include payment procedures for the purchase of a building right or minimum specifications for warranty periods provided by contractors.
3.2.4. Construction Phase
- (a)
- effective flow of information: residents and stakeholders should be informed about the progress of the construction site, its schedules, and possible times when construction significantly impairs the residents’ comfort of life;
- (b)
- appointing a representative: when planning critical milestones during the construction phase, such as demolition work, it is an effective method for a housing or real estate company representative to attend site meetings and negotiate available times for work to minimize inconvenience from construction to residents.
4. Discussion
5. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
Appendix A. Additional Floor Construction Guide Question Template
- How long was the matter discussed with the government?
- When were the other shareholders informed?
- Neighbors
- City authorities
- Construction supervision
- Planning authorities
- Real estate lawyer
- Builder consultant
- Civil engineers
- Architect
- Do you have architectural goals in mind?
- Project plan
- Partners (Builder Consultant/Real Estate Lawyer)
- Builder/Contractor
- What are the costs for a housing/real estate company?
- What are the roles/obligations of housing associations about the zoning change?
- Project plan
- Formula/derogation
- Negotiations between the builder/contractor
- Plans between As. Oy and the contractor
- A need assessment
- Change of formula
- Negotiations between the builder/contractor
- Plans between As. Oy and the developer/contractor
- Change of formula
- Negotiations between the builder/contractor
- Plans between housing company and the Developer/Contractor
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Interviewee 1 | Interviewee 2 | Interviewee 3 | Interviewee 4 | |
---|---|---|---|---|
Position | Property Development Manager | Additional floor construction consultant | City planner | Project director, City planning |
Experience in additional floor construction | Involvement in two additional floor projects | Involvement in one additional floor project that was built, and in various other projects in the early stages | Promotion of city extension projects and additional floors in various city planning development projects | Promotion of city extension projects and additional floors in various city planning development projects |
Organization type | Contractor | Consultant, Developer | Municipality | Municipality |
Interviewee 5 | Interviewee 6 | Interviewee 7 | Interviewee 8 | |
Position | Project director, City planning | CEO, Associate, Architect | CEO, Associate, housing manager | Member of the Board of Directors of a housing company |
Experience in additional floor construction | Promotion of city extension projects and additional floors in various city planning development projects | Involvement in one additional floor project that was built, and in various other projects in the early stages | Involvement in two additional floor projects that were built, or about to be built, and in various other projects in the early stages | Preliminary examination of the possibilities of additional floor construction in the property under management |
Organization type | Municipality | Architectural design | Housing manager | Housing company |
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Karjalainen, M.; Ilgın, H.E.; Somelar, D. Wooden Additional Floors in Old Apartment Buildings: Perspectives of Housing and Real Estate Companies from Finland. Buildings 2021, 11, 316. https://doi.org/10.3390/buildings11080316
Karjalainen M, Ilgın HE, Somelar D. Wooden Additional Floors in Old Apartment Buildings: Perspectives of Housing and Real Estate Companies from Finland. Buildings. 2021; 11(8):316. https://doi.org/10.3390/buildings11080316
Chicago/Turabian StyleKarjalainen, Markku, Hüseyin Emre Ilgın, and Dennis Somelar. 2021. "Wooden Additional Floors in Old Apartment Buildings: Perspectives of Housing and Real Estate Companies from Finland" Buildings 11, no. 8: 316. https://doi.org/10.3390/buildings11080316