How do you solve a problem like an ageing high-rise?
In the run-up to the launch of the CaCHE report “High rise residential development: an international evidence review”, Brian Webb (University of Cardiff) outlines some of the issues with ageing high rise developments.
High-rises are now a common feature of many cities around the world. For some cities this is a rather new phenomena while for others the current high-rise building boom is just another layer being added to an already crowded skyline. Much attention is often paid to the impact of new high-rise buildings on existing neighbourhoods, with common concerns including the effect on traffic, shadows, view corridors, heritage character, and provision of amenities.
Having already made their mark on the urban landscape, less attention is typically paid to older high-rises. The 1950s and 1960s saw the first high rise boom in many Western nations, particularly as a means to deliver social and rental market housing. The introduction of condominium laws (also known as strata title) in a number of countries in the 1960s and 1970s then saw a new form of high-rise appear which was geared towards owner-occupiers. Successive waves of high-rise development then followed as real estate markets ebbed and flowed in different locales.
Redevelop or revitalise
These earlier high-rise buildings are now showing their age. Some, particularly those owned by a single entity, have been demolished and the land redeveloped rather than revitalised due to either the costs involved or the potential profit in building something different. In many cases this has only been made feasible due to steep increases in land values resulting from the renewed popularity of urban living or supported by public funds. This regularly results in the displacement of previous tenants and less affluent residents leading to neighbourhood gentrification (Goetz, 2010).
Other older high-rises have seen green retrofits and aesthetic makeovers to make them more pleasing to the contemporary eye. Costs however remain a major barrier to the revitalisation of many of these properties which in some cases has been exasperated by decades of deferred maintenance. This is especially the case with social housing (McCall & Mooney, 2018).
Governance and management
Trickier still older multi-owner-occupied high-rise buildings, such as condominiums, lead to other conundrums (Webb & Webber, 2017). These buildings potentially have hundreds of owners, each with their own views and opinions about what should be done with the building as it ages.
Investors who own multiple units can create particular barriers to appropriate governance and management of a building as they can potentially influence decisions on property maintenance and investment, such as by deferring work to save money, choosing which companies are hired to work on the building, or by being absentee landlords who stand in the way of a quorum being formed to make decisions.
A strong governance framework is therefore needed. In Japan for instance there are strict rules on condominium management (Webb, 2019). This includes the requirement for all buildings to have a 30-year maintenance plan, automatic renewal of core elements of the building at set time periods, and separate dedicated funds for regular maintenance as well as a reserve fund. This ensures predictability in maintenance fees for residents and make new purchasers aware of costs at the start.
The importance of a supportive legal framework
If a need to redevelop a multi-owner-occupied high-rise is identified there are still a number of considerations that need to align. First and foremost is a legal framework to allow the sale of the building. There would typically be no problem to sell if all owners agree, however this rarely happens, and in these cases a single owner can stop the sale and redevelopment. Governments the world over have only recently begun to deal with this issue, as previous legislation only allowed the creation of condominium or strata-title buildings rather than dealt with their dissolution.
A number of jurisdictions have sought to address this however through legislation that sets a specific threshold of owners, after which the sale of all units can occur. This is generally set at a fairly high level such as 75-80% of owners having to agree to sell, with many drawing on Singapore’s example (Sim, Lum, & Malone-Lee, 2002). Still, getting this percentage of owners to agree is difficult. Additionally, the redevelopment value must be high or the potential to individually sell a unit quite low (or both). The sale of multi-owner-occupied high-rises is therefore still a relatively rare occurrence.
But as high-rises age, the need and desire to revitalise or redevelopment them will likely grow. We must also remember that this is a challenge that will continue long into the future as the high-rises being built now one day be old too.
Brian Webb is a Senior Lecturer in Spatial Planning at the University of Cardiff. He will a panel member at the CaCHE High Rise report launch on Wednesday 28th April at 9am. Sign up here.
Views expressed by the authors may not represent the views of CaCHE.
Date: April 27, 2021 10:28 am
Author(s): Brian Webb
Categorised in: Place