Reinforcement scenario consideration for homes not meeting safety standard

National coordinator Groningen

If homes are not declared at standard, a recommendation for a strengthening scenario is automatically created. The scenario depends on the market value of the current house and the cost of structural strengthening or demolition and new construction.

Last change on 20th of December 2023, at 7:54 (CET) | Publication Standard 1.0

• Publication category: Impactful algorithms
• Impact assessment: Field not filled in.
• Status: In use

General information

Theme

• Living
• Public Order and Safety
• Space and Infrastructure

Begin date

2021-04

Contact information

[e-mail]

Link to publication website

https://www.nationaalcoordinatorgroningen.nl/versterken/versterking-in-stappen/fase-4-planvorming/versterkingsmogelijkheden

Responsible use

Goal and impact

The purpose of the calculation is to outline a scenario for the resident to bring homes that are not at standard to standard. The impact is to be able to give clear advice on the strengthening path to follow.

Considerations

The benefits consist of as fair and equal a consideration framework as possible when deciding on a particular reinforcement. NCG is transparent about this.

The disadvantages are in the changes in the assessment framework over time due to advancing insight and/or policy changes.

Because the advantages largely outweigh the disadvantages, it is reasonable to use this algorithm in NCG's assessment framework. In addition, this approach makes it explainable to property owners, residents and citizens.

Human intervention

All scenario provisions involve advice that is always discussed by the resident supervisor with the owner/occupier. This does not involve fully automated decision-making.

In addition, in doubtful cases, the construction expert always checks the calculation. Investment costs are an estimate of the total cost. The market value is determined on the basis of the WOZ value minus the land value. Experts may differ slightly in this.

Technically, the calculation is as follows: (Investment cost / reconstruction value= 0.8 < X < 1.2) OR the ratio: (investment cost / market value = 0.8 < X < 1.2) it is recorded as different and passed on to the cost expert(s).

Risk management

The risk is reduced, through human intervention by the resident supervisor and owner. In addition, a ratio is built in, as a result, if the ratio is exceeded, an additional cost expert is always consulted.

Legal basis

The basis for this algorithm is a policy choice made in December 2017 and described in the 'multi-year letter'.

Links to legal bases

Meerjarenprogramma brief: https://www.tweedekamer.nl/kamerstukken/detail?id=2017D38864&did=2017D38864

Operations

Data

• Building reinforcement investment cost (BKV): the cost of the reinforcement measures and ancillary works required according to the reinforcement advice to bring the building up to standard (read: safe):
• The rebuilding value: the total cost to demolish the current building and rebuild a functionally equivalent and earthquake-resistant building.
• The market value: the value of the building on the housing market without the value of the land on which the building stands.

Technical design

The scenario consideration aims to generate a scenario for the owner on how to bring a sub-standard building back up to standard, within the financial possibilities offered by the need for strengthening. There are basically two methods of addressing an existing building that is not up to standard:

1. The first method is to reinforce the existing building with structural modifications.

2. The second method is the alternative, which is to demolish the existing building and replace it with a new earthquake-resistant building.

The financial equation underlying the scenario concerns the market value (MW) of a property plus the investment cost of structural strengthening (BKV) relative to the rebuilding value (HBW). The MW is constructed by subtracting the land value from the WOZ. After entering the basic data, an automatic ratio calculation is started comparing BKV with the HBW and the MW. Deviations above 20% are automatically forwarded to an expert for recalculation. If it falls directly within the ratio, or after checking with the building expert, the values are used to arrive at the correct reinforcement scenario:

- Scenario A Structural strengthening: 110% BKV < 100% HBW and 110% BKV <= 100% MW

- Scenario B structural strengthening: 110% B/C < 100% HBW and 110% B/C > 100% MW <= 150% MW

- Scenario C Structural strengthening or alternative: 110% B/C < 100% HBW and 110% B/C > 150% MW

- Scenario D Structural strengthening or alternative: 110% BTC >= 100% HBW <= 150% HBW

- Scenario E Bespoke solution: 110% BTC > 150% HBW

• Scenario A - If the BKV investment costs are lower than the MW and lower than the HBW, there is no choice. Then structural strengthening according to the strengthening advice is the only option.
• Scenario B - If the BKV investment costs are higher than the MW but lower than 150% of the MW and lower than the HBW there is no choice. Then structural strengthening according to the strengthening advice is the only option.
• Scenario C - If the BKV investment cost is higher than 150% of the MW but lower than the rebuilding value, the owner has the choice of either structural strengthening according to the strengthening advice or choosing an alternative. If the alternative of demolition and new construction is chosen, the owner is responsible for contributing the difference between the investment cost of BKV and the HBW to enable new construction. The owner can also choose not to make a (or a lower) own contribution available, but to build back a cheaper building (smaller or with less functionality) with the available budget. The new building to be built must comply with the applicable building regulations and therefore also be earthquake-proof. For additional costs, such as temporary accommodation, owners are expected to contribute proportionally.
• Scenario D - If the investment cost BKV is higher than 150% of the MW and higher than the HBW, but lower than 150% of the HBW, the owner has the choice to either reinforce construction according to the reinforcement advice or choose an alternative. If the alternative of demolition and new construction is chosen, the NCG is fully responsible for the budget of this alternative and no own contribution is requested from the owner. A functionally similar building will be built within the legal preconditions. The new building to be built must meet the applicable building regulations and thus be earthquake-resistant. Additional costs, such as temporary accommodation, are borne by the NCG.
• Scenario E - If the investment costs BKV are higher than 150% of the HBW and 150% of the MW, the owner has the choice between an alternative such as demolition and new construction or purchase and demolition or for a tailor-made solution. If an alternative is chosen, the same rules apply as for scenario D. In the case of customisation, the available budget is 150% of the rebuilding value and a modification is sought to make the house earthquake-resistant even though the budget is lower than the calculated investment costs for structural reinforcement.

After the scenario determination, a proposal is made by the NCG for the owner. In Scenarios A, B and C, the proposal is to carry out the reinforcement described in the reinforcement advice. In scenarios A and B that proposal is final, in scenario C the owner has the option of demolition and rebuilding. In scenarios D and E, the NCG's proposal is demolition and rebuilding. The owner has the alternative choice of still opting for structural strengthening or using the buy-sell scheme. After a discussion with the owner, the choice is registered in GHG.

External provider

The system (GHG) which facilitates scenario calculation and scenario capture is being developed by Dictu under the direction of NCG.