1. Introduction

The term social housing refers to the initiative implemented by public and private institutions to reduce the social disadvantages of individuals, thereby allowing them access to buy or rent low-cost housing to achieve a satisfactory quality of life and social growth (^{Boeri et al., 2011}). In general, this type of homes are built with a considerably limited budget; consequently, the Colombian construction industry tends to believe that it is impossible to obtain a green seal certification. This research deals with this belief in this kind of projects, and analyzes the possibility of obtaining a certification from one of the main evaluation systems for green buildings, known as LEED (Leadership in Energy and Environmental Design).

The national government, as well as the agencies defining themselves as sustainable in Colombia (for example, the Colombian Green Building Council, CCCS in Spanish), are developing public policies and adopting sustainable aspects that can be applied to social and non-social housing, which are sometimes based on the criteria described in the LEED certification. Thus, this represents a contextual opportunity for this research.

Unlike the Colombian situation, many countries voluntarily apply green construction measures in social housing, especially European countries (^{Boeri et al., 2011}). Therefore, it seems reasonable to establish the environmental and financial viability of including LEED criteria in this type of projects in the country. There are many opportunities for studying green building in this kind of constructions, among which we can highlight the possible development and advancement scenarios that the Colombian government has recently boosted, and the efforts that the CCCS has already made to improve the practices in the green housing environment. Consequently, the objective of the present work is to study sustainability parameters; specifically, the variations in environmental and financial issues based on LEED certification criteria, for a social housing project in Bogota, which can help apply these criteria on a wider scale in this city.

2. Description of the Case Study

The project considered in this study is a residential complex for relatively low-income persons, consisting in 384 apartments within an area of 7,623.19 m², located in the south of Bogota. The complex has accesses for vehicles, pedestrians and people with disabilities, common areas for social meetings in multi-purpose rooms and open spaces, and parking lots. (Figure 1) shows an internal visual of the project object of this study.

Figure 1 Visual view of the Project 

Considering that the apartment buildings have the same design and construction configuration, one of the external buildings was taken as a unit of analysis, as observed

in (Figure 2), whose built area is 1,071.85 m². The choice of the building was based on its greatest exposure to environmental factors, which makes it the most critical.

Figure 2 Location of the analyzed building 

3. Methodology

(Figure 3) illustrates the procedure for the case study analysis.

Figure 3 Procedure for the case study analysis 

First, we studied the original conditions of the residential project, which was conceived without sustainability criteria, in order to identify these conditions in relation to each LEED certification category described below.

3.9 Regional Priority (RP)

The compliance with the RP category is not obligatory and rewards projects using green strategies within areas identified by the USGBC as “environmental priority areas”. This category awards 4 points maximum.

In order to evaluate the categories mentioned above, each of the corresponding prerequisites and credits were analyzed, which are applicable for LEED BD+C Homes Design and Construction of Multifamily Midrise Buildings, according to the provisions stipulated in version V4.0, published in 2013 by the US Green Building Council (^{USGBC 2017}).

The minimum score for pursuing one of the LEED certification levels is the following: 40 points for LEED CERTIFIED, 50 points for LEED SILVER, 60 points for LEED GOLD, 80 points for LEED PLATINUM, where 110 points is the maximum possible score.

Furthermore, in order to calculate the water consumption in the WE category, the daily water use of each fixture installed in the analyzed building was modeled with the (Indoor Water Use Reduction Calculator 2012) used for LEED V4.0, and the water use in the urban design for the E&A category was modeled with the “Water Budget Tool” of (^{EPA WaterSense 2014}). Additionally, for calculating the energy consumptions, it was necessary to model the spaces and materials of the building’s walls and floors with the (^{eQUEST software 2016}). (Figure 4) shows a diagram of inputs and outputs for each modeling indicated above.

Figure 4 Diagram of inputs and outputs for the modelling of wáter and electricity consumptions 

Then, we established the sustainable alternatives and performed a sensitivity analysis of the costs obtained in the project modified according to the implementation of the certification categories needed to achieve the score required for the LEED CERTIFIED level.

Finally, we envisaged scenarios considering LEED certification parameters that would keep financial return levels similar to those considered by the social housing building association. For each scenario, the return obtained when applying sustainable parameters was calculated and compared with the project’s original return. Lastly, the investment cash flow analysis was performed, and the project return was calculated as a result of this flow, through the net present value (NPV) and the internal rate of return (IRR).

4. Sustainability Diagnosis

Once the project’s original conditions were analyzed, the baseline was identified based on the compliance with the LEED certification categories, and the points awarded for each category were calculated based on the original conditions involved in the construction of the studied building. First, the compliance with the prerequisites was analyzed and then, the compliance with the credits established for each category. (Table 1) shows the number of prerequisites that fulfil the original conditions of the project, and (Table 2) indicates the score obtained for the credits.

Table 1 Compliance with the prerequisites of the LEED BD+C Homes certification 

Table 2 Score obtained in the LEED BD+C Homes certifications categories 

It is possible to observe that, among the 15 obligatory prerequisites, 6 comply and 9 do not comply with them. Additionally, the total score obtained as a baseline was 38.5 points, which is below the score required to obtain the LEED CERTIFIED level.

5. Study of Sustainable Alternatives and Associated Costs

The information resulting from the baseline was used to establish the construction variables that were liable to modifications and which allowed the compliance with the prerequisites and credits in each certification category to, at least, achieve the certification level. These alternatives estimated a viable solution in terms of the financial return expected by the builder in the case study, without modifying the building’s operating conditions nor the originally planned architectural design.

(Table 3) describes the costs per building, associated to the implementation of the sustainable alternatives required to achieve the LEED CERTIFIED level, which were calculated based on the case study works budget and a market analysis in the city of Bogota.

Table 3 Cost increase per building associated to the alternatives to achieve the LEED CERTIFIED level 

Considering the implementation of the alternatives proposed in (Table 3), the cost increase per building is COP 35,446,810 and a VAT cost per building of COP 3,619,188, which add to a total of COP 39,065,998. This means a 5.5% increase per building in relation to the original cost.

Consequently, considering that the original cost per building is COP 714,994,201 and that of the m² of the original construction is COP 667,066, the implementation of the LEED certification would increase the cost per building to COP 754,060,199 and that of the construction m² would be COP 703,513, as shown in (Figure 4) and (Figure 5).

For the case study

Figure 4 Cost per building obtained 

Figure 5 Cost per m² obtained for the case study 

6. Financial Assessment of the Scenarios

The financial analysis allowed identifying the possibilities for the builder to conceive a social housing project that includes green criteria based on the LEED certification. This analysis envisaged two stages: the construction and the use of the homes.

During the construction stage, three financial feasibility scenarios were analyzed: (i) VAT exemption for social housing construction materials; (ii) project development on flat lands; and (iii) the combination of developing the project on flat lands plus a VAT exemption in certain materials indicated below. Moreover, a flow cash analysis of the user was performed during the use stage of the homes, with the aim of calculating the operational cost differences between the original housing and the housing with LEED certification.

6.2 Use Stage of the Homes

This scenario envisaged the costs associated to the use of the building to determine the differences during the operation under the original conditions and the operation of the building with LEED certification. Therefore, the data indicated in (Table 4) was considered. Additionally, 2 minimum wages were assumed as the average monthly income of a family living in one of the homes of the studied project, because this is the minimum income required to apply for the purchase of this type of housing, as stipulated by the Decree 428 of 2015

Table 4 General considerations of the cash flow for a home operating under the original conditions and a LEED.certified home 

A cash flow was considered where the expenditures included the administration costs, taxes, sewage system, cleaning, gas, electricity, and equipment maintenance expenses for the compliance with the LEED criteria, and the aqueduct costs resulting from the subtraction between the original costs and the saving generated by the implementation of sustainable measures.

According to the information in (Table 4), a NPV of COP 168,130,392 was obtained for the cash flow performed under the original operating conditions, and a NPV of COP 168,435,908 for the cash flow under the operating conditions of a LEED-certified housing. Consequently, although the deviation between both cash flow NPVs is low, it demonstrates that the operation of a LEED-certified housing is more efficient for the user from the economical perspective.

7. Discussion

The research question was: How viable is it, in terms of financial return, to use green technologies with LEED criteria in the construction of social housing projects in the city of Bogota? In order to answer this question, we have to bear in mind that the initiative to use green technologies in social housing is still a decision of the private sector, which must rely on funds that affect their financial return, since they do not receive subsidies for implementing these practices. Thus, even if the government guarantees the demand through subsidies for the users and credit terms to buy this type of buildings, the construction of social housing with sustainable criteria is not attractive for the builder. Therefore, it is imperative to consider aspects that encourage the implementation of these criteria.

In relation to the results obtained from the environmental feasibility analysis, it is possible to obtain a LEED certification for social housing in Bogota, as indicated by (^{Pulido et al. 2013}). On the other hand, the cost increase of social housing construction, generated by the implementation of the LEED certification, was analyzed. According to (^{Cabas et al. 2014}) and (^{Ribero et al. 2016}) the increase in the additional investment is 6.4% and 3.2%, respectively. Consequently, the results of the present research fit these values, while obtaining a 5.5% increase.

Considering the different financial scenarios set out, it is not very attractive for builders to build social housing with sustainable criteria, because the incorporation of green parameters in the housing construction has an impact on their rate of return.

Therefore, given the conditions of the current legal framework, which does not envisage sustainable construction incentives for this kind of housing, we reject the hypothesis in which the studied project located in the city of Bogota can obtain the LEED certification by including green technologies while having attractive economic goodness-of-fit indicators for the builder.

8. Conclusions

The environmental feasibility analysis verified the compliance with the obligatory prerequisites and the credits of the LEED certification. Likewise, the alternatives liable to be implemented, together with their associated costs, were identified for each category. This implied to select only those alternatives that could be more easily implemented in the social housing project in order to achieve the LEED CERTIFIED level, and disregarding the green alternatives that had a negative impact on the costs. Based on this selection, it was established that the builders can adopt sustainability criteria according to the LEED certification by making adjustments from the design stage of a social housing project and thus achieve the certification without generating high costs associated to the implementation of these criteria. Nevertheless, regarding the case study, it requires an investment increase of 5.5%, in relation to the original cost, in order to develop a social housing project with LEED certification.

Parametrizing location criteria and identifying possible supplies liable to tax exemptions are some alternatives that could encourage both the builder and the industry of social housing to implement sustainability criteria. Moreover, the consumption savings and, therefore, the operating costs reduction during the use stage of the building, may be attractive financial alternatives for the society to demand this kind of projects. Despite this, the case study demonstrated that, to date, applying for the LEED certification is not economically interesting for social housing builders in Bogota D.C.