At present, rising material costs, land availability, a shortage of skilled workers and general construction industry inefficiencies impede both investment and innovation in affordable energy efficient solutions for the underserved and underperforming low income housing market.
At Fluxus LLC, an impact enterprise committed to bringing aesthetic energy-efficient building designs coupled with prefabrication in highly automated modern factories to low-income housing sector, we capitalize on the counter-intuitive relationship between housing cost and energy efficiency, believing that lower cost homes tend to be far less energy efficient than higher cost ones.
The low income housing sector is huge, if we could address this performance gap by reconstructing the low income housing value chain, it would have a tremendous environmental impact at a significant scale. It is through scale that the net zero energy use and zero emission demonstration homes that we see today will become affordable for the masses.
~40% of all energy use and emissions come from buildings, ~20% from residences.
Since the world’s median annual income is ~$10,000, the maximum housing cost is ~$3,000/yr. for half the world. (~$40,000 for home ownership).
There are approximately 1.5 billion households in the world. About 26% are considered “low income”.
Higher cost renewable energy technologies such as solar and wind are exceptionally difficult for low income families.
Today’s building standards are much more energy efficient. But 70% of all homes were built before 1970 (to much lower standards). Low income families typically live in older, less efficient homes. Typically these older homes are more than 50% less efficient than new homes.
The underserved and underperforming low income housing market
If the place where you live was built before 1980, chances are your energy use is about 50% higher than new one built today. Imagine the challenges faced by low income families. Many live in the oldest and least energy efficient buildings in the world. They lack the financial resources to make energy efficiency investments. Their utility bills represent a much larger percentage of their household budget. The trend toward urbanization has contributed to a worldwide shortage of affordable inner city housing. This in turn leads to much higher rental costs.
Low income households in the US and across the world consume a lot of energy and emit a lot of greenhouse gasses. Most families live in inner-city, multi-family units that are the oldest and most inefficient housing stock nationally. In colder climates, 43% of all public housing have heating units that are over 20 years old. Many use electrical resistance heat which is inexpensive to install but highly inefficient. (1)
The environmental impact is surprisingly large. In New York City for example, multifamily residences account for 23% of all the city’s GHG emissions. This figure is 50% higher that all emissions attributed to all vehicles. Buildings constructed before 1980 account for more than 70% of these emissions (2). On a global scale, assuming that residential buildings account for 13% of our global energy consumption (3) and that at least 30% of all households are classified as low income (4), we can deduce that the global low income housing market represents somewhere around 4% of our total energy consumption, approximately 16 quads (quadrillion BTU’s). Therefore, simply bringing this sector to current performance standards has the potential to reduce global energy consumption by about 4 quads. Corresponding emissions reduction potential would be amount to approximately 300 million metric tons of CO2.
Creative solutions to reduce the costs and environmental footprint of low income housing
The pros and cons of deep energy retrofits of existing building stock are well documented. Many innovative solutions and incentives have been developed through government sponsored programs such as Build America in the U.S. (5), the Energy Performance of Buildings Directive in the EU (6), and others. Unfortunately, adoptions rates of new solutions have been very slow for the low income housing market. Complexity and the lack of viable economic drivers are formidable headwinds to meaningful progress.
The new construction low income housing market is an obvious place where progress can be made in a meaningful way. In a May 2018 report, the National Low income Housing Coalition estimates a shortage of 7.1 million affordable and available rental homes for needy families (7). At Fluxus LLC, we have concluded that a new approach is necessary to address this urgent need. At present, rising material costs, land availability, a shortage of skilled workers and general construction industry inefficiencies impede both investment and innovation. We believe however that the overall cost of construction and ownership can be significantly reduced without sacrificing quality by stepping back and reconstructing the low income housing value chain.
Our goal is to build new, aesthetic and energy efficient residences at a price point that is affordable for most low income families. In the U.S. according to HUD statistics, this equates to an average monthly cost for a four person household at approximately $986 per month.
It’s a formidable challenge that requires good design, innovative materials and modern construction practices. We leverage the efficiencies gained by moving construction from current site assembled processes to an industrialized setting. While prefabrication isn’t a new concept, enabling technologies such as building controls, robotics and digitization can now be inexpensively integrated into the building process with reliable quality and high performance. Building envelopes are designed and manufactured using high efficiency, low carbon footprint insulation materials.
FluxHouse buildings are constructed using only nine standardized prefabricated panels. The panels can be arranged to create a variety of aesthetic, spacious floor plans to abundantly leverage natural lighting, maximize living space and optimize energy efficiency. Because the number of components are dramatically reduced, manufacture is optimized for the factory environment. The panels themselves use high efficiency continuous insulation which exceed current performance standards. Quick connection features simplify installations processes at the construction site.
FluxHouse designs can also optionally leverage advances in renewable energy and energy storage technologies by integrating them into the manufacturing process. With many countries reaching grid parity sometime between 2020 and 2030, there is additional potential to reduce the cost of ownership and further reduce GHG emissions. Coupled with intelligent urban planning, we are not far off from envisioning net zero communities within large metropolitan settings.
Global urbanization trends have resulted in an urgent need for innovation in the low income housing market. We believe that the cost and energy efficiency of low income housing can be dramatically improved through innovative design, industrialization of construction processes and in interdisciplinary collaboration. Successful implementation will have a very significant, favorable impact on our environment.
Bridging the gap between ecology and economy – One of the first to envision ecology through the lens of profitability, Bertrand Piccard has always advocated that protection of the environment would become a reality only if it was perceived as economically viable and requiring no financial or behavioural sacrifices. He actively speaks out against the absurdity of old and polluting devices and systems, and promotes the benefits of new existing efficient technologies and solutions to motivate governments and industries to take action. A way to prove that solving climate change – rather than an expensive problem – is a fantastic market opportunity.
About World Alliance for Efficient Solutions
The World Alliance for Efficient Solutions, established by the Solar Impulse Foundation, brings together the main actors involved in developing, financing or promoting products, services, processes and technologies that protect the environment in a profitable way. To this end, we will assess the solutions submitted by our Members, with the help of independent technical and financial Experts, and select 1000 of the most promising ones. They will be labelled as Efficient Solutions and presented to governments, businesses and institutions at COP 24 to encourage them to adopt more ambitious environmental targets and energy policies.
About Fluxus LLC
Fluxus LLC was founded in 2013 to develop the FluxSystem, a prefabricated building technology platform that provides an efficient way to deliver sustainable and affordable housing with intelligent manufacturing and industrialized method of construction to build in communities across the economic spectrum.