Design Added Value

Economics is the study of assets and their value. It provides methods and tools to quantify the value of commodities, resources, and potentialities of goods available in the marketplace. Its relatively short history belies its rich and complex subject matter. Advances in the methods used in economics originated from the development of concepts of “utility” and “value.” Interestingly, perhaps lamentably, social studies of practicing architects, particularly the most successful ones, care least about economics of their designs compared to other goals like aesthetics. Unfortunately, this attitude is one of the reasons why architects are unable to make a stronger case for their aesthetics and design goals among other factors. This book aims to demonstrate that being smart about the economics of design can be the strongest vehicle for their designers to add value while enhancing their aesthetic qualities, disproving the old adage that you cannot have your cake once you have consumed it. The chapters collected under Part I will lay the foundational concepts that will guide design professionals in combining economics with the fields of architecture, engineering, and construction (AEC), establishing principles of value-based design.

The most significant personal expenditure we ever make, both in terms of absolute numbers and as ratios of total assets we hold, is building related. Housing makes up about 34% of the total expenditures, and this percentage has stayed consistently this high over the decades. The potential impact of capital projects on society and individuals is enormous. In addition, inefficient design, operations, and management of buildings have other tangible costs, such as wasteful energy use and harmful environmental consequences. Given the criticalities introduced by inherent expenditures seen in the AEC sector by individuals, societies, and the environment, it appears that evaluating and monitoring capital project delivery is a key function of this sector. This chapter introduces common building capital project evaluation techniques, including post-occupancy evaluation, facility performance evaluation, building feasibility analysis, and simulation-based evaluation. The gold standard of capital project evaluation is Building Commissioning (BCx) and Embedded Commissioning (ECx). Digital modeling such as building information models (BIM) and analysis tools enable interoperable data representation and transfer enables improved design added value analysis. This chapter also introduces these concepts and current challenges and opportunities in the AEC sector.

Frank Llyod Wright’s Fallingwater House designed and built for Edgar Kaugmann, Jr. is one of the most celebrated examples of design excellence, innovation, and creativity. The building is located on Bear Run in the Mill Run section of Stewart Township, Fayette County, Pennsylvania, located in the Laurel Highlands of the Allegheny Mountains, near Pittsburgh, PA. The house is partly built on a waterfall, which at the time of its construction became a source of several construction challenges including moisture damage and structural problems. How these challenges were negotiated and resolved over time and how the Fallingwater stood the test of time exemplify a unique opportunity to introduce the decision-making process of value-based design. This chapter presents a retrospective design added value analysis of Fallingwater, including key historical events that contributed to its design, construction, and emergence and resolution of its several construction challenges.

Economics is one of the central disciplines that have paved the way to decision-making in general and rational decision-making in specific. In turn, decision-making is the skill of choosing between alternatives. The decision maker is the agent that ultimately makes the choice. Alternatives are the options that are available to the decision maker. When an entity, an individual or institution, decides to invest in a product there is an expectation that there will be economic gain. The same logic applies to building investments. In this chapter, we introduce foundational concepts in value-based design decision-making such as return on investment, net present value, design feature, cash flow, cost benefit analysis, and risk.

There are a myriad of methods that are available in calculating the design added value (DAV) of given design features. The central methodology we recommend for this purpose is cost–benefit analysis with risk. In this chapter, our mission is to describe specific techniques to implement classic cost–benefit analysis methods that can be effective in analyzing DAV features.

Design requirement specification, or architectural programming, is the stage when the users’ needs, wants, and potential design features are considered. Design needs are the true expression of what is necessary in a new design. User needs, whether functional, aesthetic, or economic in nature, are the true expression of what is necessary in a design and what are essential to the user or client. The simple question “what do you need?” is the prototypical query to identify design requirements. However, the answer to this simple query is often insufficient since clients and users do not have a full understanding of what is needed. Since the design process itself may illuminate overlooked requirements, later on, the preliminary list of requirements may need augmentation. This chapter is dedicated to a discussion of the myriad of techniques to facilitate the elicitation of design requirements and their specification.

The classical value engineering methods provide a suitable benchmark for function-feature-cost analysis in VBD. In order to fully unravel this relationship we need to take a closer look at value engineering in its own terms. Value engineering aims to minimize cost without sacrificing function. Value engineering provides a clear motivation for VBD. In DAV analysis, design features provide the basis for costing functions included in the design. Since features are not accounted for in classical value engineering, this fills the void that is difficult to fill otherwise. These features help define branding, and add value through features with no apparent exchange value or use in the functional realm of a building. As a result, these design features elevate value beyond the initially expected levels. This chapter presents pre facto and post facto analysis methods which assist value engineering based on comparative precedents or available data analysis, respectively.

A number of quantitative techniques can be used to support design added value analysis. These techniques can be used in isolation or together based on the design context. In this chapter, we review a number of example techniques for quantitatively supporting DAV analysis including scaling ordinal values, risk analysis, Bayesian probability, sensitivity analysis, and optimization. We demonstrate the application of these techniques using seminal buildings as examples such as Fallingwater and the Citicorp Building.

The quantitative analysis techniques to support DAV analysis are most successfully applied in the context of a design process that is iterative, responsive to change, and collaborative. Such a design process empowers creativity and innovation while anchoring design and its construction in fundamental quantitative engineering and economic trade-offs. Chapter 8 focuses on the importance of expertise, innovation, and creativity in design, all of which are essential in identifying features which drive DAV.

The Swiss Re Tower, designed as the headquarters of the Swiss Reinsurance Company, is situated at the historic core and financial district of the City of London. Designed by the architect Foster and Partners, it is one of the most distinguished and controversial office skyscrapers in London. Officially named “30 St Mary Axe,” and popularly called the gherkin, the Swiss Re Tower adds a distinctive identity to the skyline of the city due to its form. In addition, this award-winning building reflects Foster’s ideals about quality of work space and Swiss Reinsurance Company’s core values of sustainability. In this chapter, you will find the design value added analysis of Swiss Re Tower, demonstrated using the techniques described in this book.

Standing at a height of 300 m, the Commerzbank Tower was also the tallest skyscraper in Germany and held that title for all of Europe from its erection in 1997 until 2005. The structure boasts a full-height atrium, nine four-story sky gardens, a Vierendeel truss structural system, and a double-skin façade. Together these features create a high-quality indoor environment that is less impactful on the environment because of reduced energy consumption and emissions compared to conventional high-rise office buildings. It is still considered the world’s first ecological office tower which contributes to its design added value, which this chapter presents as a second case study.

Kansas City Hyatt Regency hotel takes its fame after the unfortunate incident of July 17, 1981, when the two suspended walkways within the atrium area of the hotel in Kansas City, MO, collapsed, leaving 113 people dead and 186 injured. In terms of loss of life and injuries, this was the most devastating structural collapse ever to take place in the USA. This case study provides a good example of the assessment of the negative consequences and value depreciation and reputation loss for DAV analysis.

The Pruitt-Igoe public housing project in St. Louis, Missouri, occupies a significant niche in the annals of architectural “riches to rags” stories. Designed for low-income families, the complex comprised 33 high-rise, 11-story, buildings containing 2870 apartments on 57.5 acres. As with most “conventional” public housing of this period, that were built, owned, and managed by a government agency, Pruitt-Igoe was part of the larger post-World War II slum clearance and urban renewal efforts launched by the partnership of local municipalities and the federal government which resulted with the housing units demolition. Several facts concerning conventional public housing in the USA are essential to an understanding of the problems that Pruitt-Igoe faced despite efforts to embellish it with the most advanced design features of the times and the decline and missed assessment of their design added value.

Sir Joseph Paxton (1803–1865), a self-made botanist, designer, and engineer of greenhouses was the principal designer of the Crystal Palace, the structure inside of which the Great Exhibition of 1851, a world’s fair of technology and production of the times, was held. At the time, this was the largest international exhibition held anywhere. It marked the culmination of an extraordinary confluence of forces emanating from international commerce, technology, architecture, and politics. Its impact on the engineering of buildings, not to mention the architectural world is, surprisingly, remarkable. This design was obtained at the last minute, at a time when all options were practically exhausted. While a design competition, which yielded more than 230 entries, was held in advance, the jury decided to use none of these designs, including that of the winner. As the jury, in a desperate move, was contemplating to assemble a hybrid design from the outstanding features of some of the competition entries, Mr. Paxton was given a chance to submit a design for the building, whose innovative features demonstrated their value until the structure burned down in 1936 as the assumption that glass and iron would be fire proof would not hold true.

One of the most celebrated modern buildings in the world, next to the Fallingwater, must be the Sydney Opera House. From its inception to its implementation, it has occupied the attention of the Australian nation as well as that of the Western world. It has been one of the most complex and visible construction projects anywhere in the world. The design created by the Danish architect, Jorn Utzon, has had no equals, or successor for that matter. Its implementation was possible only because an unprecedented national and professional resolve overcame sizable political, technical, aesthetic, financial, and cultural obstacles. The role that this building and its design played in the life of an entire nation for a period of a decade during its construction is absolutely unprecedented in modern architectural history.

Citicorp Center building is a 59-story, mid-Manhattan tower well known for its unique urban form. The building is supported by four, nine-story columns located on the center points of the lot lines, rather than the corners that define the block that it occupies. This peculiarity is a result of the deal that the owners had to strike in order to purchase the air rights of the church, which still occupies one of the corners of the site. It was this unique form that caused a series of events, which eventually lead the principal design engineer of the building to discover a major structural flaw. The discovery was surrounded by a certain drama highlighting important professional and DAV issues.