The third in three-post series explores how we as humans come to grips with social issues. The series started in Australia, where cost-benefit analysis has been applied to two different issues. This first was about youth homelessness1 and the second was about accessible housing2. This post reflects on how cost-benefit analysis supports efforts to pull everyday lives away from misery and toward thriving.
3 . . . Where next with cost-benefit analysis
Over the last 30 years, when free market approaches have dominated as the accepted narrative driving public policy and program choices. More and more, however, we’ve seen a worrying evolution of negative consequences. Increasing numbers people are becoming homeless. It’s harder and harder to purchase a home. Even renting is becoming beyond reach. This Australian report from 2020 sums up the situation in a sentence:
“It can no longer be said that we are, in general, affordably housed; nor can it be said that the ‘housing system’ is meeting the needs and aspirations of as large a proportion of Australians as it did a quarter of a century ago.”
How do we as a global society turn away from decisions and policies that add to people’s misery on a daily basis? A lot of people do in fact see a problem and are stepping up to do something about it. Many seek answers in economics. Some are attracted to cost-benefit analysis3.
This post looks at how cost-benefit analysis might help us to move toward a better housing situation for everyone. The discussion will centre around three cost-benefit analyses about different issues that centre on housing. These are: an energy retrofit in Scotland, a building code review in Australia and a proposed program to end youth homelessness, also in Australia.
Housing Retrofit – Glasgow, Scotland
In a story that spans several years, a cost-benefit study followed a process to renovate a century-old tenement with the goal of significantly reducing the building’s carbon footprint. The study was financed by the Scottish government.
The renovation proceeded slowly, in part to give time to complete the cost-benefit analysis. Here are a few of the findings:
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- Gutting the building and renovating it meant less carbon was emitted than if the building had been torn down and replaced with new construction.
- It did not prove possible to achieve the Passivhaus EnerPHit certification4, something that was a disappointment for the project team.
- But the project did achieve energy efficiencies well beyond the most ambitious standards currently set by the Scottish government. The tenants in the renovated building are spending very little on heating and cooling. Tenants also report that their homes are comfortable to live in5.
These results are encouraging. They do seem to help a move toward better housing. Has it paved the path to wholesale renovation of every 100 year old tenement in Scotland? Well, no. There are other issues to be sorted out. For example, the retrofit took place in a vacant building. Imagine the logistics (not to mention the cost) of organizing temporary moves for all the homes that might be occupied!
Building Code Review – Australia
The cost-benefit analysis about Australia’s building code was paid for by the Australian government.
When the results of the cost-benefit analysis reached the public review stage, a problem emerged. The analysis had not considered universal design principles, which would enable people with disabilities to fully access and live in their homes. Disability activists argued successfully that obtaining and measuring the impact of changes for the affected populations was an essential component of a cost-benefit analysis. Their argument was based on the cost-benefit analysis methodology.
Obtaining the views of people who are directly affected by policy and program changes aligns with a host of human rights statements about disabilities and adequate housing, as well as economic social and cultural rights. Finding a way to argue human rights issues in the language of economics may open a way for collaboration between groups that had not been able to find common ground before.
Ending Youth Homelessness – Australia
A cost-benefit analysis about a program to end youth homelessness was sponsored by Housing All Australians — an organization which represents business groups. It was formed in 2019, as a platform to speak publicly about homelessness. A cost-benefit analysis that is sponsored by business could be an effective way to persuade other businesses to think about how public funding on homelessness is spent.
The Housing All Australians cost benefit analysis supports ending youth homelessness. It also sends a message that business is open to collaboration with the broader community. Potential collaborators include service providers, human rights advocates, faith based communities and government.
Why does this matter?
This collection of reports show some of the ways that cost-benefit analyses could help to move toward a future with less homelessness and better housing. When done well, they have the potential to build coalitions of support for policies and programs. When the media brings news of a cost-benefit analysis, it may be useful to think of the analysis as a door for potential collaboration.
Footnotes
- See: Ending Youth Homelessness In Australia — A Matter Of Dollars and Sense
- See: Retrospective: How Australia Decided To Make New Buildings Accessible
- See more in Wikipedia on this subject: Cost-benefit Analysis
- Passivhaus enerfit is the pinnacle of achievement for minimal building emissions.
- For more on the housing retrofit in Glasgow, try: Energy Retrofits In Older Homes: A Case Study
