4.1 Introduction

In Chap. 1, we explored the broader context as to why there was an urgent need for the provision of sustainable housing as part of a wider transition to a low carbon future. We discussed what sustainable housing is and the range of environmental, social, and financial benefits that such housing can provide both at the individual household level and at larger urban scales. In Chap. 2, we outlined how housing design, quality, and performance has typically been addressed around the world, that is through the setting of regulations for minimum thermal and energy performance of new and existing housing. The introduction of such regulations has arguably been the biggest driver of improvements to dwelling performance over the past 30 years. However, despite the evidence on the benefits of sustainable housing and the role that such housing will play in a transition to a low carbon future, progress in improving the design, quality, and performance of new and existing housing around the world remains below where it should be and below where it needs to be to meet future sustainability goals such as the 2050 emission reduction targets. Building upon this, we discussed in Chap. 3 the critical juncture we are currently at, and the importance that the time leading to 2030 will play in shaping the direction of the sustainable housing transition to a low carbon future.

In this chapter, we build upon the disconnect between what we know is required for housing design, quality, and performance and what we are currently providing. The chapter explores why this is the case by looking at historic, current, and future challenges that contribute to holding back a sustainable housing transition. The chapter is not intended to be an exhaustive list of challenges, but rather attempts to highlight the range of challenges across different domains (e.g., technical, financial, knowledge, practice). Naturally, not all these challenges will be relevant everywhere and every location will have a more nuanced set of challenges relating to things such as climate and the existing urban context. The intent here is to highlight some of the common challenges to help us develop an understanding of the types of things we need to address in order to scale up the provision of sustainable housing. Some of these challenges are deeply complex and play out differently at different scales. We structure the discussion in this chapter around the scales where decisions are typically made: the dwelling scale (Sect. 4.2), the neighbourhood and city scale (Sect. 4.3), and the state, national, and international scale (Sect. 4.4). We then discuss the wider residential market and the unwillingness to change (Sect. 4.5) and the interconnected complexity of such change (Sect. 4.6).

4.2 Dwelling Scale

There are well-established elements that contribute to providing a sustainable dwelling, including considerations around design, materials, technologies, and construction methods and the way the dwelling is used by occupants across its life [1,2,3,4,5]. When basic sustainable design principles, such as orienting the dwelling to maximize use of passive solar design and natural ventilation are included in the initial design of a dwelling (or even before that, in the planning for property lot layouts) sustainable housing outcomes can be maximized for little (<10%), if any, additional financial cost [6,7,8,9]. However, despite the technical understanding of how we can provide sustainable housing in different climate zones, and the increasing number of real-world case studies of how to do this (see Chaps. 6 and 7), challenges remain at the individual dwelling and site level in many jurisdictions, which can make it difficult to provide improved sustainability.

4.2.1 Planning and Design

In many developed countries, there is some form of planning process involved in the provision of housing (see Chap. 2). In addition to the ability to set local requirements for design, quality, and performance, planning systems have a critical role in deciding how land is used and where development should occur [10,11,12,13]. The decision of what land can or cannot be used for has important implications for environmental, social, and economic outcomes for a range of stakeholders. For example, the planning system can set parameters for areas that are to have higher, or lower, density development which then immediately influences the type of housing that can be provided, as well as its affordability. In other areas, the rezoning of land from industrial or agricultural to residential can unlock significant financial value for the landowner. Furthermore, it is in the planning system where decisions on climate risk typically sit, such as determining if dwellings should be built in an area with a particular climate risk such as flooding or bushfire. These planning system decisions present opportunities for improvement of design and sustainability outcomes but can also create negative outcomes if not done properly. For example, after significant flooding events through urban centres on the east coast of Australia in 2022, it was revealed that many local planning authorities were using historical climate data to make decisions about flood risks. Some researchers suggested that this had led to some houses being built in areas we should not be building in, considering future climate changes [14, 15].

The planning system is typically also responsible for the design and layout of proposed development sites. This means that before any dwellings are designed, materials and technologies are selected, and construction methods are confirmed, that lot layout of vacant or underdeveloped land is done in a way that maximizes sustainability outcomes. For example, optimizing orientation can reduce the costs for design, materials, technologies, and construction methods to achieve improved performance outcomes. Conversely, if lot layout is done without considering orientation, it can negatively impact dwelling performance. Research from Australia shows that the difference between the best and worst orientations for a minimum regulated performance house in Melbourne was as much as 35% and that higher performing dwellings had less variance from worst to best orientations [16]. Research on the benefits of orientation in other locations has also found significant performance improvements. For example, Elnagar and Köhler [17] found thermal performance improved by 7% for a residential dwelling in Kiruna (Sweden), 15% in Stuttgart (Germany), and 22% in Palemo (Italy). In the UK, Abanda and Byers [18] modelled a house and found a 5% difference in thermal performance between the best and worst orientations and this translated this to an energy saving cost of about £900 over 30 years. Abanda and Byers [18] demonstrate that orientation is not just about reducing energy consumption but it has a wider impact on affordability and liveability, an outcome that is only likely to increase with a changing climate and increasing energy bills.

Additionally, planning systems address the question of density of housing. Arguments for density include the need to house growing populations close to amenities as well as for housing affordability outcomes. However, density should not be done at the expense of good design practices. In relation to environmental sustainability, there is disagreement across the research as to what is optimum in relation to density and diversity of dwellings. From a purely energy perspective, research has shown that detached housing is more energy intensive from dwelling operation compared to medium-higher density housing. However, this depends on what is under consideration, as higher density housing requires increased energy for things outside the dwelling such as elevators, communal lighting, and heating/cooling [19,20,21,22,23].

It also depends on what other considerations are included. Research undertaken in Adelaide (Australia) compared energy consumption and emissions across the life cycles of apartments within the city centre and detached homes in the suburbs. This research found that the total delivered energy consumption of apartment households was lower than the suburban households [24]. However, the authors found that, when looking at greenhouse gas emissions, the total per capita emissions typically exceeded those of the detached suburban households.

The challenge in the density discussion is that when housing gets built upwards, it often results in higher embodied energyFootnote 1 consumption due to the requirements of the structure and results in lower occupants/dwellings in comparison to lower density housing. Highlighting the complexity of this issue, Estiri [22], analysed more than 12,000 dwellings in the USA and found that lower density suburban households consumed 23% more energy than higher density inner city households. Again, depending on the metric, the data could be interpreted differently with the research showing that those living in the higher density city housing had a 22.6% higher energy intensity compared to the detached suburban homes. Roberts et al. [25] found that, with apartment occupants, it was not just the difference in energy consumption, but also how and when the energy was consumed which was different to detached housing. This could have broader implications for energy generation and energy grid stability. As we move towards consuming more renewable energy we are already seeing a need to better align energy consumption with when energy is being generated [4].

In an interesting analysis of more than 73% of housing in the USA, Goldstein et al. [26] explored the carbon footprint of housing across the country. They calculated that if cities were to meet Paris 2050 goals, there would need to be an increase in density of 19%. In some cities, such as Boston, the required increase in density was more than 50% (increasing to an approximate 5000 residents/km2, which the study authors say is a critical threshold for residential energy sustainability targets). The authors also argued that densification has wider benefits for affordable housing, largely through the provision of more housing options in well-established areas.

The design stage is also critical for the sustainability of a dwelling. In many countries around the world, like the USA, Canada, and Australia, the floor area of new detached housing has been increasing for many years, although there are signs that this may have plateaued [27]. The growth in floor area has not occurred equally around the world or across housing types; other jurisdictions, like the UK and Sweden, have much smaller housing [28]. Furthermore, while the average new detached dwelling size in Australia has grown in recent decades, the opposite was seen for Australian apartments with a rapid increase of small apartments entering the market and prompting some Australian states to introduce minimum design, space, and performance requirements.

The increase in the average floor area of new dwellings has been occurring at a time of declining average occupant numbers. It has also occurred across a period of increasing shifts in consumer expectations around housing quality and inclusions. As Ellsworth-Krebs [27, p. 22] states, the trends of ‘increasing house sizes and floor area per capita undoubtedly impact expectations of home comfort and aspirations for the ideal home. Just as standardization and globalization has resulted in homogenization of indoor temperatures across the globe over the past forty years, so too can increasing floor area per capita shift norms and expectations of how much space is “enough”’.

Increasing floor area has an impact on the design, quality, and performance of dwellings [29, 30]. Research in the USA found that a 1000 square foot increase in dwelling size would result in a 16% increase in energy consumption for space heating/cooling [31]. In Australia, researchers estimated that each 2% increase in average new floor area would add 1 tonne to a household’s total CO2 emissions per year [32]. Although much of this growth in floor area occurred during the same time that minimum performance requirements were introduced, research has found that the growth of floor area of detached housing has largely nullified energy efficiency gains from these improve thermal performance requirements [33]. It is also not just the floor area that is an issue for sustainability, but that the growing floor area on decreasing lot sizes means there are less opportunities to optimize passive design and address wider issues such as the urban heat island effect [30].

There also needs to be a better match between occupant numbers and house size or number of bedrooms due to the impact on sustainability outcomes. In China, Wu et al. [34] found that removing one person from a household results in an increase of 17–23% per capita residential electricity consumption. In England, Huebner and Shipworth [35] found that if single occupant households with multiple bedrooms downsized by one bedroom, they could achieve an 8% energy efficiency saving, or a 27% saving if they downsized to a one-bedroom dwelling. The authors also note the range of benefits downsizing has beyond environmental benefits, such as social and financial ones like freeing up larger dwellings for growing families and releasing equity for those downsizing.

These benefits have not only been identified for small occupant households; in the USA, Berrill et al. [36] found that changing 14 million dwellings from family housing to multi-family housing would reduce energy demand by up to 47% per household and reduce total urban residential energy by up to 8%. Clearly, the benefits achieved just from ensuring appropriate household and housing balance will have significant implications for the environment. As McKinlay et al. [30, p. 146] state

[g]overnment policies that attempt to address urban consolidation, green urbanism and housing affordability, seldom consider the dwelling size factor … The size of a dwelling has cumulative effects for sustainability at the scale of both neighbourhood, city and country. If these sustainability goals are to be met, the dwelling scale needs addressing. It can be speculated that neoliberal government attitudes avoid intruding in the private realm of the home, however policy documents need to reflect dwelling size as a fundamental aspect of sustainable housing.

This is echoed by Cohen [28, pp. 175–176] who writes, “the important insight is that size matters and if policymakers are serious about sufficiency – especially with respect to meeting climate targets and commitments embodied by the SDGs (Sustainable Development Goals) – it is imperative to devote serious consideration to shrinking floor area”.

However, Huebner and Shipworth [35] pointed out a number of challenges in achieving these outcomes, including a limited number of options for such households to downsize into. Similar arguments are put forward by Ellsworth-Krebs [27, p. 22] who says any focus on restricting increasing dwelling sizes must be done alongside ensuring that alternative housing options “provide[s] adequate occupant satisfaction in terms of privacy and personal space as this is assumed to be a part of modernization and a driver towards smaller household sizes”. Jack and Ivanova [23] echo these calls, arguing policy makers must think about new ways to encourage new forms of shared living and downsizing as part of an approach to reduce residential carbon emissions. Others like Berrill et al. [36] argue that there needs to be innovation in the use of taxes and subsidies to help guide the housing industry and consumers to build the type of housing we need in the future.

4.2.2 Materials, Construction, and End of Life

Many of the environmental impacts across the life of a dwelling are well known. These include the life cycle impacts from the extraction of raw materials; the manufacture and use of materials for construction; dwelling maintenance and the resources consumed, such as energy and water, by the people living in the dwelling across the building’s life; and the impact from end of life of the dwelling (e.g., disposal or reuse of materials). Many of these impacts are locked in at the design stage and become costly to rectify once a dwelling is built. Elements such as material use, floor area, orientation, and thermal performance levels have been found to be key parameters for determining the environmental impact of a dwelling [37].

Globally, the housing sector consumes between 30–50% of materials with the total amount predicted to increase alongside the need for more housing and the increasing average floor areas in some countries [38]. In their analysis, Marinova et al. [38] identified that, by amount, concrete is the most significant material consumed within the housing sector at around 250 Gt in 2018. Other key materials include steel (12 Gt) and wood (10 Gt). It is not just the sourcing of raw materials that creates a significant environmental impact, but also the embodied energy required to source and manufacture the end products [1]. The use of these materials is not universal as dwelling designs, materials, technologies, and construction methods differ around the world and change over time based on a range of factors including historical, cultural, and climate [39]. In recent years, supply chain shortages for construction materials have been emerging in different regions around the world, highlighting how fragile the globalized material supply chain is and how significant of an impact this can have on local construction costs and other outcomes.

The impact from materials occurs through the generation of waste during construction, through-life (maintenance), and at end of life. Efforts have been made in some jurisdictions to reduce construction waste generated and increasing the amount of waste being reused or recycled. This is evident in the waste reduction and recycling targets and requirements being set in different locations around the world. It is also being driven through improved requirements in voluntary sustainable housing standards. For example, the LEED v4.1 Residential Single Family Homes rating sets out a minimum waste reduction requirement of 40–50% (depending on what option the project follows). This is low in comparison to international best practice for construction waste reduction and/or recycling; construction waste recycling is up over 90% in jurisdictions like Singapore [40], and is above 70% across the EU [41]. However, there is a gap between international best practice and what many jurisdictions are doing.

In terms of embodied energy, research has found that it can account for 5–35% of a typical dwelling’s overall greenhouse gas emissions impact [1]. However, as we start to provide sustainable housing, this embodied energy impact could rise to 80% or more of the dwelling’s greenhouse gas emissions total lifetime impact as the impact of zero carbon energy shifts where the environmental impact of a dwelling occurs [42]. To date, the focus on sustainable housing has often looked at reducing the environmental impacts during the different phases of a dwelling’s use, but there is an increasing call to better incorporate considerations of material impact, and specifically embodied energy, in the provision of sustainable housing. The need to focus on materials will only grow with more improvements to building design and energy efficiency, and the increasing inclusion of renewable energy technologies [42]. This focus of materials also needs to be considered within planetary boundaries as we are consuming many resources faster than the earth can replenish them [43].

Material choices have primarily focused on environmental impacts, but there is increasing acknowledgement that we need safe materials and to consider social implications of material choices [44]. This is not only from an environmental perspective but also in relation to the safety of the dwelling and those involved in the process of producing the materials. Flammable cladding is an example that has emerged in recent years as a significant building safety issue in countries like the UK, Dubai, and Australia. This cladding which goes on the outside of a dwelling has certain properties which increases fire risks, and has been responsible for rapid spread of fire in building fire events such as Grenfell Tower in the UK where more than 70 people lost their lives [44]. While the cladding in question was developed partially to improve thermal performance, it is an example of unintended consequences. This has resulted in increased fire risks for thousands of impacted dwellings around the world and will likely cost billions of dollars and take more than a decade to mitigate the issue [44]. Furthermore, homeowners are experiencing substantial negative impacts to their finances and well-being [45, 46]. Similar environmental, social, and financial impacts were experienced during the leaky homes saga in New Zealand, leaky condos in Canada, and the global issues with asbestos and more recent materials such as engineered stone benchtops [44, 47, 48].

Recent policy developments at a global level have also moved beyond material safety on the construction site, introducing modern slavery laws that address safety across the supply chain [49]. This makes it clear that the stakeholders responsible for the housing provision process have a duty of care and responsibility for ensuring that social considerations are included throughout any decision making processes. The terms “ethical sourcing” and “responsible sourcing” are used to refer to choices that housing sector stakeholders make that support organizations and suppliers that value and demonstrate ethical working practices. Some voluntary sustainable building rating tools and systems, such as LEED and Living Building Challenge, provide purchasing guides or material requirements that meet sustainability and equity standards to encourage or ensure responsible choices. However, housing policies like building codes or land use planning generally have not included any equity requirements.

4.2.3 Use and Technology

A dwelling’s impact on the environment is also influenced by how occupants are using the dwelling and what technology is (or is not) included in the dwelling’s design. The International Energy Agency found that, in 2019, the housing sector contributed 17% of global greenhouse gas emissions [37]. This is primarily due to the amount of fossil fuel energy required to operate dwellings. The decisions made about the design, materials, technologies, and construction methods used can significantly reduce greenhouse gas emissions when they improve a dwelling’s energy efficiency and reduce its energy consumption.

In many developed locations around the world, heating and cooling energy requirements make up the majority of energy consumed by a dwelling [37]. This has been driven by a rapid uptake of mechanical heating and cooling systems in recent decades as technology has become cheaper and changing social norms have resulted in expectations for year-round thermal comfort to be maintained through narrow temperature bands [50,51,52,53]. Energy consumed for heating and cooling varies around the world, largely influenced by climate but also by dwelling quality. Heating and cooling has been found to make up 55% of total residential energy consumption in Central and Eastern Europe, 52% in North America, 49% in Oceania, 46% in Western Europe, 40% in Latin America, 33% in South Asia, 24% in North Africa and the Middle East, and 20% in Sub-Sahara Africa [54]. We have the technology to construct housing that requires significantly less (or even zero) mechanical heating and cooling, such as through the thermal improvements of building envelope and making use of passive design features (e.g., the use of natural sunlight to support heating). This can significantly reduce the amount of energy a household consumes, and the generation of greenhouse gas emissions associated with it.

Some countries are also beginning to face challenges with the rapid uptake of renewable energy technologies and the use of battery storage at the individual dwelling scale. Many energy networks were not built with small-scale energy distribution in mind and they are now struggling to cope with the introduction of renewables such as solar PVs. In some jurisdictions, there are concerns around energy grid stability and, subsequently, for larger energy generators (typically fossil fuel generators). For this reason, certain locations in Australia are not allowed to instal additional residential renewable energy. While this might be rectified with improvements to energy network infrastructure, it is problematic for several reasons including that it locks out those who were slower to add renewables. This is of concern for those who experience housing vulnerability, with previous research finding that it has been the middle and higher income earners who have been the ones to take up residential solar PV while implementing these technologies presents a range of challenges for renters [55,56,57]. There are also instances where energy network providers are turning off renewable energy generation on houses for short periods of time when there is an issue with grid stability such as in South Australia in March 2021 [58]. So, even if a household incorporates sustainable technologies into their dwelling, factors outside of their control can impact how the dwelling performs and how it is used.

The issues presented above are largely developed country issues. In many developing countries, there are still challenges around providing energy of any generation type, as well as challenges in providing other critical requirements such as safe drinking water. The UN Sustainable Development Goals identify that, in 2020, 733 million people were without electricity connection to their dwellings, more than 2.4 billion still used inefficient and polluting cooking systems, 1.6 billion lacked safe drinking water, and 2.8 billion lacked safe sanitation. When considered alongside the fact that around 1 billion people are estimated to be living in slums or informal settlements, this highlights the depth of housing provision challenges in some jurisdictions.

4.3 Neighbourhood and City Scale

4.3.1 Where and How to House a Growing Population

Since 2007, more than 50% of the world’s population has lived in urban regions. The UN predicts that, by 2050, close to 70% of the world’s population will be urban [59]. The growth in urbanization is primarily due to population growth and migration/immigration. However, regions around the world have experienced this growth differently. In North America and Latin America and the Caribbean, more than 80% of the population lives in urban areas. This number is closer to 75% in Europe, just under 70% in Oceania, 50% in Asia, and just over 40% in Africa. These urban areas range in size, from tens of thousands to tens of millions. While most of the world is experiencing population growth, there are some regions that are experiencing decline, including Japan, South Korea, Eastern Europe, and parts of Germany.

The pressure from population growth has forced cities to find ways to house their growing populations; for many cities, this means going out (expanding the urban growth boundary through suburbanization and peri-urban developments) or going up (building medium and high-rise apartments). Growing outwards to accommodate an increase number of dwellings is most common in places like USA and Australia. This is largely driven by a need for cheap land to build on, with the perception that it helps with housing affordability, and that building new developments is easier and cheaper than urban infillFootnote 2 or urban renewal/regeneration.Footnote 3 This has caused a loss in natural environment as areas that were forests or agricultural land are now being consumed for the construction of new housing. This creates issues in relation to food security, biodiversity loss, and air quality, among others.

There is also an increase in jurisdictions around the world that have altered the natural environment to reclaim space for construction. Examples include land reclamation in Singapore to increase the size of the island and accommodate more development, and building over waterways on the Gold Coast (Australia) and over mangrove forests in the Niger Delta (Nigeria) for urban expansion. Reclaiming land can be costly and there are several examples of where it has, or could, cause issues longer term. For example, a significant number of developments on the Gold Coast are now at risk from rising sea levels, and the 2021 apartment collapse in Miami (USA) highlights the safety issues around building in such areas [44].

Unfortunately, the design of urban regions in many parts of the world has largely been done in ways that are not optimized for sustainability. The challenge is that once our built environments are constructed, there are limitations to what can be done to improve outcomes. This applies to the micro and macro level. For example, the way streets and blocks are developed will determine how a dwelling can engage with principles of sustainable design, quality, and performance. While there are design options that can negate some of those challenges (such as access to a certain amount of sun during winter to reduce heating needs), this can add cost and complexity to housing delivery. At a larger scale, the way we have designed our neighbourhoods also creates lock in. For example, adding public transport in the form of trains or light rail to an already established urban area can be costly and limited to existing space and infrastructure, leading to costly and suboptimal outcomes.

4.3.2 Urban Climate Change

In addition to housing a growing urban population, many cities are facing unique challenges related to climate. It is not only the changes in climate that impact housing performance, but also how climate interacts with city design. Many cities have reduced permeable land surfaces due to increasing building numbers and the associated hard infrastructure like roads and paths. With these features, we are now creating our own microclimates in cities through the urban heat island effect. The urban heat island effect occurs when heat is trapped in our urban environments due to high amounts of heat-retaining structures such as concrete and asphalt relative to the amount of natural cooling features such as plants and open space [60]. Temperature increases of up to 15 °C have been found in urban areas due to this heat island effect [61]. This can be detrimental to the health and well-being of people living in these areas. In British Columbia (Canada), the 2021 heat dome event caused more than 600 heat related deaths, while the 2022 heat waves in Europe caused over 2000 deaths in Spain and Portugal [62]. Increases in temperature also mean that more energy is required for cooling. In Sydney (Australia), researchers found a 9 °C increase in summer temperatures which resulted in an additional residential energy load of 6.4% [63].

Fortunately, researchers and practitioners have identified and tested various strategies for reducing the urban heat island effect. These strategies range from increased vegetation, to the use of green roofs, to improved performance through passive design and insulation [63,64,65]. However, in their research across 48 states in the USA, Roxon et al. [66] find there are some cold climatic locations where the heat island effect can help improve thermal performance and reduce energy bills. This also translates to positive and negative impacts on mortality, with Lowe [67] finding that the heat island effect can increase heat related deaths by about 1.1 deaths per million people but reduce cold related deaths by about 4.0 deaths per million people. The above research highlights that specific heat island responses are going to depend on a range of factors.

Global climate change also impacts housing performance in urban areas. In many jurisdictions, historical climate data is used within regulations and support tools to design and build new housing. This means that new housing is unlikely to perform well in a future climate. However, like with the urban heat island impacts, this can have both positive and negative outcomes [68, 69]. Using future climate data, Wang et al. [70] found a mixed result for new housing performance in Australia with performance decreasing in some climate zones (e.g., Sydney, Darwin, and Alice Springs) but increasing in others (e.g., Melbourne and Hobart) with changes of up to 350% by 2100. However, even this increase was not consistent; beyond a certain increase in average temperatures, a negative performance would be seen. In other research, Chakraborty et al. [71] found that, based on likely climate change scenarios, there would be a global increase of cooling energy consumption of 15% for apartments and 37% for detached housing. If climate change is more extreme, this could increase cooling energy consumption by up to 121% for detached housing. In Canada, while energy for cooling in apartments is predicted to increase by about 40% by 2070, energy for heating is likely to decrease by 27% [68] which is similar to results for four USA cities studied by Shen [69].

What the above evidence points to is that we should be building for IPCC’s mid scenarios for a future climate, with an assumed mid-range life of a dwelling. For example, if a dwelling was built in 2020 and expected to last 40 years, it should be built for a 2040 climate. This climate data should not just include temperature but also changes to other areas of the natural environment (such as sea level rise, flooding, and bush/forest fires), and be used to inform housing design, material and technology selection, construction methods, and use. When urban planners and other residential stakeholders are considering these things, they must consider where we are building and living.

4.4 State, National, and International Scale

4.4.1 The Social Challenges

Research has demonstrated that poor quality housing can exacerbate or create poor health and well-being outcomes, and conversely, that sustainable housing can improve these outcomes. As we spend most of our time indoors (up to 90%), the design, location, quality, and sustainability of our dwellings becomes increasingly more important for health outcomes, both broadly as well as during extreme weather events [72,73,74,75,76,77,78,79,80,81,82,83]. Unsurprisingly, the research typically finds that it is those who are already vulnerable that are impacted most by this issue.

Another social challenge is global population growth, resulting in more housing being needed. The UN has predicted that the population will grow from 8 billion in 2022 to 10.9 billion by 2100 [84]. However, assumed continued population growth is being challenged with the UN noting that a number of countries are experiencing population declines. Others such as Bricker and Ibbitson [85] and Vollset et al. [86] argued that the evidence suggests we are already facing a more rapid reduction in population growth and that we are unlikely to reach the numbers projected by the UN. In relation to housing, a smaller population is likely to help address some of the previously identified issues such as how and where we get materials from. However, there is still a significant challenge in how we improve the design, quality, and performance of existing housing and the significant numbers of new housing predicted to be built over the coming decades.

Additionally, policy making for a low carbon future must bring together the technical with the social. Research looking at the transition to low carbon housing requirements in the EU, UK, North America, and Australia found that the jurisdictions that had the strongest current and future housing performance requirements clearly communicated how those requirements were going to address a range of environmental and social issues (such as health and well-being, fuel poverty) and linked the outcomes of the policy to other key government policies [9, 87]. In some locations, there is a shift in the focus and language around sustainable housing, moving from one that is strictly about environmental impact (e.g., zero carbon) to include the wider social benefits (e.g., improved health through more stable and comfortable indoor air temperature). This is helping in broadening the benefits and appeal of sustainable housing and addressing some of the arguments put forward by those against the changes. While some people might still see improving sustainability outcomes as a “nice” to have element, it is harder for people to argue against improved health and well-being and reduced living costs!

4.4.2 Governance

There are also key governance challenges to delivering sustainable housing. As discussed in Chap. 2, the improvement to housing performance (or sustainability outcomes) has largely been driven by the introduction, and then revision, of performance requirements [88, 89]. However, these minimum performance regulations create tensions between policy makers, the housing construction industry, and those who argue they do not go far enough. Often when it is suggested that minimum performance requirements should be improved, and that longer term targets should aim to achieve zero or low carbon/energy outcomes, there is significant push back from key stakeholders who are opposed. The housing construction industry tends to be entrenched in the ways they operate and do not like anything they perceive to impact their productivity or ability to make money. This then turns the discussion into a political point scoring and support exercise and ignores why the discussion is required in the first place. The revoking of the Code for Sustainable Homes in the UK is an example where different politics played out to negatively impact the push towards more sustainable housing [90]. A change in government led to a change in priorities and, ultimately, a softening of sustainable housing performance requirements and the long-term policy pathway.

An issue which has had increasing attention in recent years is that, despite the use of minimum performance standards, there is significant evidence of a performance gap between what those standards require and what is delivered as the end product, especially with new construction [91,92,93,94]. This is problematic for several reasons. Firstly, consumers are not getting what they are entitled to in relation to minimum performance. Secondly, it is locking occupants and owners into poorer performance and higher living costs. Thirdly, it helps perpetuate a housing construction industry that already struggles with issues of quality and accountability in many parts of the world.

Researchers have found that buildings can consume up to 250% more energy than predicted in design, although the gap tends to be in the 10–30% range across larger data sets [91]. A study of a housing development in Italy found that there was a gap of 44% between predicted and actual performance but that, by updating various assumptions in the design model (such as the weather file, use profile, and heating, ventilation, and air conditioning features), they were able to close this gap to 7% [94]. Stellberg [95] translated the broader performance-design gap into an economic energy waste number by analysing studies from the USA that found there was a significant issue with high non-compliance against elements of building codes in most states, and as high as 100% in some jurisdictions. This represented reduced economic and environmental benefits of the codes by up to US$175 million a year (for both residential and commercial buildings), demonstrating significant financial waste.

One of the ongoing challenges with addressing housing performance through policy is that policy has historically only been applicable to new construction which only make up a small percentage of the overall building stock. For example, in Australia, new dwellings only make up approximately 1–2% of housing each year. Around the world, various reports highlight that the majority of the housing stock in 2050 has already been built [96]. If we are to deliver sustainable housing, we need to address the dwellings that already exist. The International Energy Agency estimates that up to 2% of the existing building stock undergoes energy renovations per year and that these retrofits lead to energy intensity reductions of up to 15% [97]. To meet future sustainability targets, there is a need to improve this both in terms of number of retrofits undertaken and the improvement in energy reductions. Minimum performance standards addressing existing dwellings are comparatively recent and not yet a requirement in all of the countries that have requirements for new housing.

As regulation implementation varies around the world, it is problematic to rely on regulations in their current form to improve sustainable housing outcomes. Some jurisdictions (like Australia) aim to set a nationally consistent approach, which often contains some subtle variances for different climate zones. Other jurisdictions (such as the USA, and the EU to some degree) have a more fragmented approach where the introduction or improvement of performance regulations is left to state or local governments to implement [9, 98]. There are arguments for and against both ways of delivering these regulations. On the one hand, a nationally consistent approach allows the housing construction industry to have more certainty when working across different locations and attempts to deliver a more collaborative approach to improving outcomes. The downside is, as Australia found out, that if you require the consensus of all stakeholders to lift minimum requirements, it can take just one State or stakeholder to delay the process or create weaker outcomes. When governments are responsible for developing and setting minimum requirements, it can lead to inconsistency in relation to what the targets and requirements are. However, this responsibility also allows the jurisdictions who want to lead or innovate housing to do so. This is what is happening in California, which has a long history of leading in the sustainable housing regulation space [99]. Where the federal or national government does not have authority to set performance requirements, these governments tend to use other levers to try and drive change including through the provision of rebates, subsidies, training, and other support [100].

There is also an issue of split incentives for rental housing where those responsible for paying energy bills (the tenant) are not the same as those who make capital investment decisions (the dwelling owner). A range of policy, economic, and sustainable housing researchers have found some landlords are unwilling to spend money on sustainability or quality upgrades. The tenant does not have control over changes that can reduce living costs, improve health and well-being, and increase the thermal comfortable of their housing [101,102,103]. Some jurisdictions have developed policies to try to overcome this split incentive. In the UK, the “How to rent a safe home” guidance states that landlords must ‘supply adequate heating in proper working order’, and that ‘a cold home is one that cannot be maintained at a temperature between 18°C to 21°C at a reasonable cost to the occupier’ [104]. In New Zealand, under the “Healthy Homes Standards”, ‘the landlord must provide at least one fixed (not portable) heater that can directly heat the living room to at least 18°C’ [105].

4.5 A Market Unwilling to Change

The broader housing market contains several structural challenges that prevent sustainable housing from being provided in larger numbers. Over recent decades, housing affordability issues have been growing more significant in many parts of the world [106,107,108]. The discussion on housing affordability has focused largely on the cost of purchase (ability to borrow and then service a home loan) or payment of regular rent [109]. Several factors have combined to cause housing prices (both purchase and rent) to rapidly increase in many cities around the world, a rise that has typically outpaced increases in wages. This has meant that people require an increasingly large deposit to purchase a property and that loan amounts are growing. It is now increasingly harder for aspiring first-time homeowners to enter the market without sufficient financial resources as well as impacting on those already in the market [110]. This also pushes lower-and middle income homeowners further out from the city centre in the search of “affordable housing” [109]. In the rental sector, increasing rental costs have meant that those who are renting, but want to own a home, are taking even longer to save for a down payment, and/or impacting where they can afford to rent.

This is leading to an increase in the number of people living at home longer or staying in other types of shared housing to save money or because it is all they can afford and this is reshaping a range of wider social and financial norms. For example, research from the UK shows that the increasing cost of housing has a significant impact on the social and financial well-being of individuals and society [111]. The research found that 21% of 18–44-year-olds without children were delaying starting a family due to the lack of affordable housing, and an increasing number of young adults were living with their parents longer which was negatively impacting that relationship. More than a quarter of people had made trade-offs to help pay for housing costs (such as reducing spending on food) and almost a quarter of people were continuing to live with a partner, or knew someone who was, because it was not affordable for them to live apart. There is also an increasing body of evidence emerging that relates to the negative health and well-being outcomes associated with unaffordable or precarious housing [112, 113].

Sustainable housing researchers and advocates have started to engage with affordable housing debates, arguing that sustainable housing is important for improving affordability outcomes [9, 114]. Affordable housing researchers and advocates have now started to reconcile that housing costs are more than just capital costs and are starting to call for inclusion of costs of location, transport, and energy within affordable housing discussions. As Haffner and Hulse [109, pp., 72, 73] states:

Explicating and measuring housing affordability inevitably involves norms about what is considered acceptable and what is not. Establishing norms for affordable, decent and adequate housing ideally must recognize the bundle of attributes that housing provides which include quality, security and location in relation to jobs, transport, facilities and services, with the latter having become increasingly important in the 2000s at least in large metropolitan areas. Households who hold different norms from societal/political norms may trade off some other essential consumption items to reach these housing norms or trade-off key dimensions of housing to ensure essential consumption to some degree. But there is a limit to the extent to which lower-income households can do this.

Unfortunately, the broader housing market in many countries tends to focus on things that are perceived to increase the re-sale value of a dwelling. Elements such as location (close to amenity, places of work/study/schools, and prestige of area), number of bedrooms (and bathrooms), and what the kitchen benchtops are made of (e.g., granite) are typically the things that people are looking for [115]. While no doubt some of these things have practical benefits, some make little difference to the liveability or sustainability of a home. As a global society, we are preconditioned to want more and to “keep up with the Joneses”. You only have to watch a few episodes from any of the new home or renovation TV shows to see the types of things that are being put forward as desirable. It was not so long ago that a family home might only have one bathroom [39], but these shows have many examples of people turning up their noses at ensuite bathrooms with ‘only’ one vanity.

Key stakeholders in the housing construction industry who are resistant to changes often perpetuated the idea that sustainability elements add cost to a dwelling. The argument often made is that housing is becoming increasingly unaffordable to a greater percentage of the population and that we must not do anything that adds additional costs. However, this argument has a number of flaws, including that we can deliver improved sustainability of housing for little or no additional costs as costs for sustainability elements have fallen significantly over the past decade [8, 9, 116,117,118].

Another challenge remains on how to engage the existing housing regime to embrace the requirements for improved sustainability. Research from around the world has consistently found significant tensions between the housing construction industry and regulators, and to a lesser extent consumers, as to who exactly should be responsible for housing performance [90, 119,120,121,122,123,124]. This resistance to change means that it is a difficult process to create broader structural changes required to deliver more sustainable housing.

4.6 The Complexity of Housing

So, what do the above challenges tell us? The role of governance is central to many of the challenges. To date, the introduction and use (or lack thereof) of policy mechanisms has been a key driver of progress towards improved housing performance. However, it is also acting as one of the key challenges that are hindering progress. Research from around the world has shown that the housing construction industry is often resistant to any type of change placed onto them via regulations, and there is an increasing desire to have partisan support for policy changes (or at least a package of support put in place to help with any transition to the new requirements). The current practices of much of the housing construction industry, who are intent on trying to maintain business-as-usual approaches, make it challenging for those niche actors who want to innovate and push boundaries. It does not help that building codes and planning systems around the world often do not allow for innovation.

As touched on above, any changes to design, material, and technology use, and construction methods or improvements to performance are seen as adding red tape, time, or costs to a project, and that this is pushed onto clients in the form of additional costs. In the housing sector where housing affordability is a global issue, anything that is perceived to add cost is a challenging political and public sell, even when there is limited evidence to support such claims. The narrative around the idea of cost and housing performance needs to shift from one of capital costs to through-life costs. The costs to live in housing can be substantial, not just from the operation of the home in relation to utility bills, maintenance, and impact on health and well-being but also the wider costs associated with location such as transport costs. Many new “affordable” houses get built in urban growth areas at the fringes of cities. This has a whole range of implications for liveability and affordability.

There are an increasing number of examples from around the world that have demonstrated that key proponents in the housing construction industry often overstate their own analyses, with costs and benefits more accurately aligning with government analyses [125]. The housing construction industry is more likely to innovate when asked to change which has resulted in any costs for compliance or performance changes rapidly falling away through improved design, material and technology selection, and construction methods. For example, minimum building code requirements changed almost overnight in Australia after the Black Saturday bushfires in 2009 where more than 2000 houses were destroyed and 173 people died. The building codes were strengthened for new housing in bush fire zones to require houses to be better protected against fires. While there were some concerns around this adding cost, houses have continued to be built to those higher standards. In the UK, analysis during the Code for Sustainable Homes found that costs to deliver zero carbon homes fell by more than 8% across four years, and that this was for a standard that was not yet mandatory so costs were expected to continue to fall [125]. Others have also predicted cost reductions around the world as more low or zero carbon houses enter the market and construction industries implement more efficiencies and learnings around the design, materials, technologies, and construction industries [126, 127].

While setting regulation is one thing, ensuring compliance is another. As touched on earlier, there has been an ongoing issue of actual performance not meeting building code requirements [91, 93, 94]. This lack of compliance is enabled by a lax system of checks and balances in many countries. This is not just in relation to sustainable housing performance, but it has also been seen in recent housing crises around flammable cladding (e.g., UK, Dubai, Australia), leaky condo crisis (Canada), and the leaky homes crisis (New Zealand) [44, 45, 47].

Another key consideration is the way we design and select materials, technologies and construction methods for our dwellings has significant implications for how occupants can use them, and in turn how sustainable, usable, and affordable they are. Also important is that these impacts go beyond the individual dwelling. There is a complex relationship between the design and use of our dwellings and how they have been shaped by hundreds of years of development and innovation. The design, use, and challenges of housing around the world have shifted over time. There is probably no better illustration of this than Bill Bryson’s At Home book [39]. Bryson explores how some things we now take for granted in our housing (such as mechanical heating and cooling) are relatively recent innovations, and that housing continues to both influence the occupants as well as be influenced by them.Footnote 4 While Bryson’s book does not directly focus on sustainable housing, some of the elements the book discusses are elements that we have seen contribute to sustainable housing (e.g., natural ventilation).

Furthermore, the history of how our housing has developed cannot be considered in isolation from how our cities have developed. However, much of the focus of sustainable housing and sustainable cities from policy makers often looks at the present moment, without due consideration of how things have changed over time, or could change over the future. This often results in band aid solutions which are reactive to the situation rather than taking a wider consideration of the challenges and potential solutions. By this, we mean that governments have continued with business-as-usual approaches while paying lip service to sustainability or not exploring the deeper structures of what is happening and why. For example, as cities have expanded, people have become increasingly reliant on the car to get around. This is often because public transport is inadequate or is put into communities after they have been built and people have already established their transport practices. The solution to trying to improve mobility is often to build more roads and add more lanes to existing roads, often at great expense. While this might provide a short-term solution (although it rarely does), it does not address the question of why people drive. Providing work, recreation, and other amenities closer to homes (or providing homes closer to those amenities as advocated in transit-orientated development) will have a greater impact on transportation in cities than adding more roads [128, 129]. However, there are locations that deliver public transport and other non-car travel options (e.g., cycling, walking) in a much better way. We return to the need to challenge how we think about housing, and solutions for sustainable housing, in the later chapters of the book.

4.7 Conclusion

In this chapter, we have explored several historic, current, and future challenges that are contributing to holding back the provision of sustainable housing. While not an exhaustive list, the chapter highlights the range of challenges across different domains (e.g., technical, financial, knowledge), the way some of these challenges play out at different scales, and how they are impacted, and how they impact different stakeholders. We need to understand these common challenges, as well as location-specific challenges, if we are going to be able to provide a low carbon future. Many of these challenges are deeply complex and have been entrenched in the ways we have provided housing for decades; addressing these challenges will not be straight forward. As we will discuss in Chap. 5, we have potential transitions frameworks we can draw upon for guiding the sustainable housing transition.