Design for Economy: Planning Ahead Creates Long-Term Value for Clients and Positive Impact in Communities
Time and time again, architects debunk the myth that sustainable, high-performing design comes at too high a cost. While it’s true that up-front costs compel clients and designers to look for savings in the short term, the economic value of a project shouldn’t only be measured in terms of design and construction expenses. Architectural value has more to do with the returns a building realizes over its lifespan, and that value impacts its owners, occupants, community and our environment, too.
“When we look at the timeline of our involvement as architects, engineers, planners and designers, it is a small portion of the project’s total life, however the decisions that we make ultimately impact the building’s performance for decades to come,” said HKS Chief Technology Officer Cory Brugger, who works across HKS practices to leverage digital tools that support high-value design solutions.
AIA’s Framework for Design Excellence — a guide encouraging architects to design with a commitment to environmental and social responsibility — includes criteria specifically dedicated to project economics. By thoughtfully deploying clients’ resources and analyzing potential impacts of financial and design choices, architects can create value that extends far beyond the walls of a newly constructed building and ensure that high-quality, sustainable design is accessible to all.
“Decisions that we make throughout the design process can improve the performance of a project and contribute to better outcomes for our clients and the communities that they serve, ultimately improving the long-term health of our cities and the environment,” Brugger said.
HKS Director of Education Leonardo Gonzalez Sangri sees the Design for Economy measure as an ‘enabler’ of all the others in the Framework, which covers sustainability topics ranging from ecology to community equity. Gonzalez Sangri challenges the notion that architects are meant to stick to design, that economics are outside their purview. He believes that in order for communities to thrive, particularly the school districts and institutions he works with, it’s necessary to be a “whole architect” — someone who collaborates with a team to understand needs and ideate solutions that unlock unforeseen value.
“As architects and designers, we have a responsibility to understand project economies. We need to understand them as much as we do building systems and how we can leverage resources for impact,” Gonzalez Sangri said.
As architects and designers, we have a responsibility to understand project economies. We need to understand them as much as we do building systems and how we can leverage resources for impact.
Triple Bottom Line in Design
With Design for Economy, AIA describes, “good design adds value for owners, occupants, community, and planet, regardless of project size and budget.” This principle harkens back to a nearly 30-year-old business framework, the triple bottom line concept, which unites social, environmental, and economic outcomes — often dubbed people, planet and prosperity — as key indicators of an organization’s performance.
In recent decades, the design and construction industries have moved away from a single bottom line approach where strict budget adherence takes precedence over social and environmental performance, according to HKS Director of Building Engineering Physics, Dr. Tommy Zakrzewski.
“It used to be that high-performance buildings were perceived of as a niche market. Not anymore. High-performance building is becoming more and more the standard in commercial construction,” he said, advocating for an integrated approach where designers and clients view ‘performance’ from a variety of angles including reduced energy consumption, healthy materials, budget optimization and improved user experience.
“You have to recognize the significance of a design strategy and measure the impact beyond [up-front costs and] economics,” Zakrzewski said.
Unlocking Value from Pre-Design to Post-Occupancy
The Design for Economy measure focuses on tactics related to building size, material use, operational requirements, financing and incentives, and community links, all of which can coincide to bridge performance with compelling design and balance equity with profitability. By embracing Design for Economy strategies, HKS designers and advisors bring triple bottom line value to clients in many sectors and communities around the world.
An economist and Principal in HKS’ Hospitality Advisory practice, Ben Martin has spent his career focusing on market analysis, financial feasibility and concept development for tourism, leisure and mixed-use developments. Taking a macro approach, he helps clients see the possible outcomes and local impact their developments may inspire long before any ground is broken or any beams installed.
“At the front end, you have a big opportunity to get things right and set things along the right course,” Martin said.
Martin works with clients to conceive of ways to maximize budgets and generate economic growth through development. In addition to assessing typical supply and demand factors and suggesting prudent phasing schemes, he advises clients to think about design choices during the earliest phases of project planning because of the long-term social, environmental and economic benefits they may yield.
A building’s orientation, for example, can help clients “cash in on free value generators,” he says. Thoughtful orientation often contributes to better views, increased natural light and shading for comfort and energy reductions, and more opportunities for street-facing retail or food and beverage offerings.
Great design, business success and long-term community vitality go hand in hand, according to Martin. “If a building or operation is economically unsustainable and you go out of business, then you’re doing nothing good for the local economy, local people and local jobs,” he said, reiterating the need for developers and owners to think about the entire lifecycle value of a project.
Pursuing sustainability goals in building projects often generates significant financial benefits, says Zakrzewski, who works with clients to identify and take advantage of “green” tax incentives and offsets provided by utility and government agencies that have been proven to increase real estate values.
Zakrzewski believes that the early design phase is the “ideal window’” to connect financing incentives to a project. He’s found that clients don’t often know about incentives available to them because they’re not always familiar with the benefits of pursuing sustainable projects. “We advise our clients with the best information available to advance the performance of the design forward and work with their financial team to drive the economic evaluation,” he said.
For Astra Tower, a residential high-rise in Salt Lake City scheduled to begin construction this month, Zakrzewski and his colleagues partnered with IncentiFind, an organization with a mission to increase the number of green developments throughout the country. Leveraging IncentiFind’s database of programs available for building owners, the team identified over $1 million of projected savings through tax incentives and rebates. Presently, the owner is planning to take advantage of approximately $150,000 in rebates. The report cost only $500 to run and analyze.
“The things that were incentivized were already incorporated in the design such as better lighting systems, mechanical systems and EV charging stations,” Zakrzewski said, adding that the owner and design team were able to redistribute funds to deliver even greater environmental and social impact with the high-performance building.
Throughout Texas, Gonzalez Sangri has worked passionately to prove that an engaged design process with the full scope of stakeholders is key to increasing triple bottom line value. Faced with a tight budget at NYOS Charter School in Austin, Gonzalez Sangri and his team launched a deep exploration into the school’s unique curriculum and scheduling during the onset of their design process.
“We needed to dig deep and find ways to solve for their needs while uncovering hidden value,” Gonzalez Sangri said of NYOS, which stands for “Not Your Ordinary School.”
In keeping with the school’s name, the HKS team created highly customized classroom and circulation program that reduced the overall building area by 16 percent. The design leveraged efficiencies that unlocked $3 million, allowing for the addition of a gymnasium and for the entire pre-K-8 school to be built in a single phase. The reduced footprint will also lower the school’s energy consumption, resulting in a significant predicted net present value energy savings over the next 50 years.
“There are probably many other ways that we can track the economic impact of our work on this project, but for NYOS, it really meant being able to provide public education to more students than originally planned for,” Gonzalez Sangri said, underscoring the community impact NYOS will have when it opens later this year.
Designing for economy doesn’t stop when a project’s doors open. For the later parts of a project’s lifespan — from occupancy to decommissioning — there are ample opportunities to keep pushing for additional triple bottom line benefits. HKS researchers and designers consistently seek to understand how buildings are being used and what potential changes could be made to add more value either with the project at hand, or with new ones down the road.
“We can take a good hard look at how the building is performing and whether or not the targets we set during design are being achieved in operation and if not, ask the question: why?,” said Zakrzewski, who believes that by maintaining open lines of communication with owners and operators, designers can guide them to make strategic decisions in their communities and remain lean with finances at the same time.
While the connection between owners and architects can sometimes be limited to the design phase, HKS teams strive to build and maintain fruitful long-term alliances with clients and communities.
“So many of our successes are associated with the relationship that we have with a client,” Zakrzewski said, noting HKS’ history of developing on-going business through occupancy evaluations, repositioning consultations and new business development.
Building strong, trusting relationships with clients who are invested in their communities’ futures is an essential part of HKS’ ability to contribute to triple bottom line value. Take AT&T Stadium in Arlington, Texas, which opened in 2009, and Minneapolis’ U.S. Bank Stadium, which opened in 2016, as examples. With each of these projects, HKS teams worked with clients to reconceive what a high-performance stadium could be and how it could serve sports fans, visitors and residents equally — ultimately generating exceptional returns on investment for the clients and contributing to thriving local economies.
Design for Economy Requires Multi-Level Engagement
Martin, Zakrzewski and Gonzalez Sangri have noticed that in a society drastically altered by a changing climate and a global pandemic, the building sector is grappling with significant challenges. A necessity for viable sustainability, Designing for Economy will be more crucial than ever before in the coming years.
“This next decade of design is really setting us up for success or failure as it relates to climate change. As we’re moving toward carbon neutrality, we have to be very innovative…and really create more value in the design,” said Zakrzewski.
Adaptability and collaboration among all project stakeholders including clients, users, advisors and designers will be essential to ensure projects can adequately generate long-term social, environmental and economic value. And in turn, communities will prosper when integrated teams work to ensure that equity is at the heart of sustainability and performance throughout design and development.
“An integrated approach is the key to success,” Gonzalez Sangri said. “We must embrace the responsibilities and not just design for beauty, but for performance.” Our future depends upon it.