Wikis > Guidelines for Affordability module

my-last-cash-3-1208331_lagre

 

The Affordability module is an open source calculation tool developed by SP Technical Institute of Sweden.

KPIs (outcome)

Per district:

• Average minimum disposable income for typical households, Euro/month

Per building:

• Minimum disposable income for typical household, Euro/month

Affordability for residents
When a renovation of a district is planned it is of importance to consider its effects on the housing costs for the people living in the affected houses, i.e. how does it affect the affordability for the residents. In an essence the Affordability module is used to elaborate with what is “the threshold” for the residents when it comes to housing costs, including costs for energy use. The outcome of the module is the minimum disposable income that a typical household need to have in order to be able to afford a certain rent or housing costs. The calculated minimum disposable income can then be compared to benchmarks of the district, city or country.

The concept of affordability and how the module works
To investigate the affordability for residents of a district, where there are comprehensive renewal plans, is very important. Any change in housing costs is of course of high interest for the tenants themselves as it have a great impact on their everyday life. Affordability, and specifically the rent level, is also important for the housing owner to take into consideration in their calculation models of possible renovations. The issue about affordability should be raised early on in the planning process.

In Figure 1 the basic concept of how affordability is defined in the Ecodistr-ICT project is illustrated. In the module, the rent (or corresponding cost for housing, e.g. costs for loans) and the costs for energy is included in the term “total housing costs”. As a rule of thumb, a certain percentage of a household’s income could give a rough estimate on how much of the income is devoted to housing costs. A common value of this percentage is 25% of the disposable income. The remaining income is then the so called “consumption space” for the household. The outcome of the module is the actual minimum disposable income1 of a household that is needed to be able to afford the total housing cost (level of rent and energy costs). The income can then be compared to benchmarks, known income data of the district/region, etc. to highlight part of the current socio-economic situation of the investigated district and how a change of rent and energy cost (related to different renovation scenarios) will affect the residents. The comparison with benchmarks or real income data is not done in the module itself. In the discussion of affordability, national legal aspects of raising rents etc. has to be taken into consideration; this is however outside the scope of the module itself.

affordability

Figure 1 The basic concept of affordability for tenants

It is important to inform the user of the module that no consideration is taken to the number of people supported by the income. A general percentage of X% housing costs of disposable income can be problematic for low income households.

For the calculation, a typical household (in regards to household size, apartment size and rent level) is chosen/studied for each building in the district. A choice also has to be made of which part of the energy consumption that is directly payed for by the tenants (in additional to the rent), i.e. household electricity, domestic hot water, space heating or cooling. The praxis of what is directly or indirectly (via the rent) paid for by the tenants differs between type of housing/ownership and between countries. For the consumptions that are payed for directly by the tenants, the module also offers a number of options regarding how the consumption levels can be estimated, which is explained below.

 

A. Household electricity (annual)

If the household electricity is paid for directly by the tenants, the module user makes a choice between:

  1. To use typical calculation of household electricity (based on household size and floor area)2, either

i. with energy efficient white goods, appliances and lights
ii. or with conventional appliances

2. To enter household electricity consumption manually

 

B. Domestic hot water (annual)
If the domestic hot water (DHW) is paid for directly by the tenants, the module user makes a choice between:

  1. To use typical calculation of domestic hot water (based on household size)3, either

i. with water saving/energy efficient taps
ii. or with conventional taps

2. To enter DHW manually

 

C. Space cooling consumption (annual)
If the space cooling consumption is paid for directly by the tenants, the module user makes a choice between:

  1. To use calculated space cooling consumption from other module in the Ecodistr-ICT IDSS platform (calculated as kilowatt-hours per floor area of building)
  2. To enter space cooling consumption manually

 

D. Space heating consumption (annual)
If the space heating consumption is paid for directly by the tenants, the module user makes a choice between:

  1. To use calculated space heating consumption from other module in the IDSS (calculated as kilowatt-hours per floor area of building)
  2. To enter space heating consumption manually

If the energy consumption is payed for by the tenants, the energy prices also need to be entered for each type of consumption.

 

The housing costs as a percentage of household income is important
A sensitivity analysis performed using the affordability module with data from a Swedish case shows that the output is most sensitive to the choice of maximum housing costs as a percentage of disposable income as well as the rent level. The output is least sensitive to whether water saving/energy efficient taps are used or not.

 

Interdependence to other modules
Estimations of consumptions for space heating and space cooling, calculated in energy calculation modules used in the Ecodistr-ICT IDSS platform, can be used in the Affordability module.

 

Explanations and references

  1. Disposable income is the sum remaining for consumption and savings when the total earned income and capital has been reduced by final tax. Tax-free allowances and grants are also included in the disposable income, e.g. student aid (including student loans), social assistance (financial assistance/income support), housing allowance and child benefits. Also capital gains and capital losses expressed in gross figures, pension savings and periodic subsidies are included in disposable income. (Swedish definition)
  2. The typical calculation of household electricity in the module is based on the following sources:
    • Communication with Svein Ruud, SP (developed energy simulation program for houses)
    • The Swedish National Board of Housing, Building and Planning’s regulations and general advice on energy certifications of buildings (Boverkets föreskrifter och allmänna råd om energideklaration för byggnader, BFS 2007:4, BED 1)
  3. The typical calculation of domestic hot water in the module is based on the following sources:
    • Communication with Svein Ruud, SP (developed energy simulation program for houses)

 

List of input data

The input data used in the Affordability module are listed below. The data are categorised depending on if they are district or building specific. That input data is applicable on district level means that these values are used for all the buildings. In the Affordability module, building specific actually means specific for a typical household of the building.

Note that not all of the data is mandatory. Different information is needed dependent on what choices are made.

Table 1 Input data for Affordability module

Applicable to district Unit Explanations
Maximum cost share % Maximum housing costs (incl. rent and energy costs) as a percentage of disposable income of household.

A common value is 25%.

(mandatory)

Applicable to building Unit Explanations
Rent EUR/month Typical rent per month for a household.

(mandatory)

No of people in household No. of people in a typical household. Information not needed if consumptions for household electricity and hot water use are entered manually.
Dwelling size m2 Floor area of typical dwelling.

Information not needed if consumptions for household electricity, space cooling and space heating are entered manually.

Electricity paid separately True/False Whether household electricity is paid for separately in addition to the monthly rent (i.e. not included in the rent and paid for directly by the residents).
Hot water paid separately True/False Whether domestic hot water is paid for separately in addition to the monthly rent (i.e. not included in the rent and paid for directly by the residents).
Cooling paid separately True/False Whether cooling is paid for separately in addition to the monthly rent (i.e. not included in the rent and paid for directly by the residents).
Space heating paid separately True/False Whether space heating is paid for separately in addition to the monthly rent (i.e. not included in the rent and paid for directly by the residents).
Household electricity calculation choice Choice of how household electricity should be entered.

Question: Use typical calculation of household electricity (based on household size and floor area)?
Alternatives: No, enter manually/Yes, energy efficient white goods, appliances and lights are used/Yes, conventional appliances are used

(Manually mean that consumption needs to be entered in the field of “Household electricity consumption”. For the other two alternatives typical consumptions are calculated.)

Required if household electricity is payed for separately.

Household electricity consumption kWh/year A typical household’s annual household electricity.

Required if household electricity is payed for separately and manual alternative is chosen.

Household electricity price EUR/kWh Energy price for household electricity.

Required if household electricity is payed for separately.

Household hot water calculation choice Choice of how domestic hot water should be entered.

Question: Use typical calculation of domestic hot water (based on household size)?
Alternatives: No, enter manually/Yes, water saving/energy efficient taps are used/Yes, conventional taps are used

(Manually mean that consumption needs to be entered in the field of “Household hot water consumption”. For the other two alternatives typical consumptions are calculated.)

Required if domestic hot water is payed for separately.

Household hot water consumption m3/year A typical household’s annual domestic hot water consumption.

Required if domestic hot water is payed for separately and manual alternative is chosen.

Household hot water price EUR/m3 Energy price for domestic hot water.

Required if domestic hot water is payed for separately.

Household cooling energy consumption kWh/year If payed for separately, energy consumption for cooling for a typical household could be entered manually.
Household cooling energy consumption per floor area of building kWh/year/m2 If payed for separately, and not manually entered, energy consumption for cooling per floor area for the building in question should be requested from energy calculation module.

(Make sure the data for the field of “Dwelling size” is entered.)

Household cooling energy price EUR/kWh Energy price for cooling.

Required if cooling is payed for separately.

Household space heating energy consumption kWh/year If payed for separately, energy consumption for space heating for a typical household could be entered manually.
Household space heating energy consumption per floor area kWh/year/m2 If payed for separately, and not manually entered, energy consumption for space heating per floor area for the building in question should be requested from energy calculation module.

(Make sure the data for the field of “Dwelling size” is entered.)

Household space heating energy price EUR/kWh Energy price for space heating.

Required if space heating is payed for separately.

 

Input data can be uploaded via the Dashboard in the Ecodistr-ICT IDSS platform. Please turn to the Dashboard guidelines and the guidelines for the Data Upload module for more information.

Information for programmers

For more information about the Affordability module for programmers, turn to link >>.

 

More Calculation modules Supporting modules

Share on Google+Share on FacebookTweet about this on TwitterShare on LinkedIn