Challenges in delivering green building projects: Unearthing the transaction costs (TCs)

Queena K. Qian, Hon Wan Edwin Chan, Abd Ghani Khalid

Research output: Journal article publicationJournal articleAcademic researchpeer-review

42 Citations (Scopus)

Abstract

Delivering green building (GB) projects involve some activities that are atypical in comparison with conventional buildings. Such new activities are characterized by uncertainty, and they incur hidden costs that have not been expected nor are they readily appreciated among the stakeholders. This paper develops a typology and chronology to examine the new activities that are associated with transaction costs (TCs) in the real estate development process (REDP) of green building. Through in-depth interviews with representatives from the major developers in Hong Kong who have experiences in GB practice, this study aims to unearth TCs involved at the critical stages of the REDP. Apart from reconfirming the early project planning stage as the most critical in the consideration of TCs, the study results also identified "extra legal liability risk of the GB product" as the major concern for any GB developer in Hong Kong. The key additional activities that bring significant TCs in developing GB are identified and compared to their traditional counterparts. In turn, project managers not only have to pursue overall cost management whilst winning more business, but they also have to pay particular attention to sustainability in order to minimize hidden societal costs. The study also provides a reference for governments and professionals that will aid in forming policy as well as advance the practice of the GB market by optimizing the societal costs.
Original languageEnglish
Pages (from-to)3615-3636
Number of pages22
JournalSustainability (Switzerland)
Volume7
Issue number4
DOIs
Publication statusPublished - 1 Jan 2015

Keywords

  • Government policy
  • Green building (GB)
  • Real estate development process (REDP)
  • Transaction costs (TCs)
  • Uncertainty

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

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