Retrofitting apartment buildings: the technical challenges of strata ownership

Despite the rapid trend towards apartment living in Australia, there is a worrying lack of information and support to deliver sustainability retrofits. The vast majority of home sustainability advice focuses on stand-alone dwellings and fails to acknowledge the complexities unique to apartment buildings, including the technical challenge of selecting the right retrofits, navigating strata regulation, and the importance of community connection in facilitating good decision-making. These issues, along with potential solutions, are summarised across two ‘Retrofitting apartment buildings’ articles informed by the inaugural Melbourne High Life Expo.

Existing apartment buildings are not ready to withstand climate-related pressures

Look around any Australian city and you will see the city of the future. It is already built. Around 80% of today's buildings will still exist in 2050. These buildings are our homes, and they need to be resilient to our changing climate and increasing energy prices. We all have lived experience of climate change, be it extreme heat, floods or the thick bushfire smoke that blanketed our southern cities in 2020. It will likely get worse before we make it better.

Australian building standards, however, lag behind international best practice for sustainability and climate resilience. Less than 5 per cent of newer apartment buildings [1] meet minimum sustainability standards, and many older apartment buildings fall well short.

University of Melbourne research released in 2017 showed that if a heatwave hit and the power blacked out, most apartment buildings would bake, with indoor temperatures quickly exceeding international health standards. Since then, standards for new buildings have strengthened but they are still not robust enough, and little has been done to support the retrofitting of existing apartment buildings. In short, people living in apartments are highly exposed to a wide array of climate-related risks [2].

The solution is retrofitting

While every building is different, the interventions needed to improve the thermal performance, resilience, and efficiency of apartment buildings are known. The Unlocking Sustainable Strata project outlined common retrofit opportunities across low-rise, medium-rise and high-rise apartment typologies. Retrofits could include installing solar, a centralised hot water heat pump system, electric vehicle (EV) charging or double-glazed windows.

Retrofitting is harder in apartment buildings

Most apartment buildings are managed under strata regulation set by state governments. In each building there are private areas, usually the apartments themselves (known as ‘lots’), along with common spaces and infrastructure, like hallways and lifts.

What is private and what is common varies from building to building. For example, in some buildings individual hot water systems are privately owned and placed within the apartment or lot. Owners can independently upgrade to an efficient, all-electric hot water system. In other buildings the hot water system is centralised and forms part of the common property. In this case, there needs to be formal agreement by the owners corporation before the system can be upgraded (outside of the scheduled maintenance plan).

The barriers don’t stop at collective decision-making

Now imagine you live in a building where everyone agrees gas is ‘done’, and the future is all-electric. Everyone can afford to pay into a fund to upgrade the shared gas hot water system to an efficient, all-electric model. In the meantime, people are upgrading their apartments with induction cooktops and efficient split-system air conditioners for heating and cooling.

It’s an exciting time of change, until it is discovered that the new hot water system has different space requirements to the old one and will be difficult, if not impossible to install. Then more bad news arrives. The owners corporation’s electrification consultant reports that the existing electrical infrastructure is not sufficient and the building cannot access adequate power from the grid for the increased electricity load. Progressing to an all-electric building will require an upgrade the buildings electrical system and working with the electricity distributor to upgrade the transformer. Costs are expected to run past $100,000 just for these foundational upgrades. It's too much, even for this well-off community.

It is not uncommon to face these types of technical and financial barriers. Some buildings will be able to transition from gas to all-electric relatively seamlessly, others will face barrier after barrier.

Change is driven by people who can collaborate

There is a lot to do to future proof apartment buildings. So, who is going to do it? There is a common (and understandable) misconception that strata managers manage apartment buildings. However, they are more accurately described as contracted administrators. They are often knowledgeable and can play an important role, but ultimately, as a paid service, they act as instructed by the owners corporation or committee.

It is the owners corporation as a whole (i.e.everyone who owns a lot in the building) that is collectively responsible for major decisions and for funding initiatives. It typically falls to the owners corporation committee (a smaller group of nominated lot owners)to implement the decisions made.

In Australia, most owners corporation committees are wholly volunteer run and there are no knowledge or training requirements to join the committee.

Under the status quo, untrained and unsupported volunteers are managing multi-million-dollar buildings, with huge annual budgets, complex infrastructure, and diverse communities and stakeholders. Often, time poor and under-resourced committees can only prioritise immediate issues (such as repairs and maintenance) and do not have the capacity to allocate time to forward planning, including planning for sustainability retrofits [1].

Typically, apartment building retrofits are driven either by an individual owner champion or a sustainability sub-committee made up of interested owners [1]. While not commonplace, there are examples of highly skilled, motivated committees driving important retrofitting projects across Australia.

A range of skills and expertise are needed to deliver projects, but these can be bought. What cannot be bought is the collection of people coming together (i.e. the owners corporation) to make good decisions for their collective benefit. And because of this, community connection within the strata context is critical for good governance, and for sustainable, resilient, liveable, and loveable apartment homes.

Solutions need to be driven by communities, supported and enabled by governments

To capitalise on benefits for the 2.5 million Australians living in apartments and overcome the complex challenges, we need to get more pro-active in delivering retrofitting solutions that work. No one intervention is going to unlock apartment building retrofitting. The ‘Delivering sustainable apartment housing: new build and retrofit’ report [1] from AHURI outlines a range of policy recommendations to drive these shifts. This includes state and territory governments updating legislation to encourage and support sustainable retrofitting in strata schemes and making it easy for purchasers and renters to access building performance information.

Governments at all levels need to recognise the importance and unique needs of vertical communities in their policies and programs. Together, we need to drive a cultural shift that values apartments as long-term, desirable homes. We need people moving into apartments to understand what they are buying into, and their obligations. We need more tailored governance, community building, sustainability and resilience information and support services for apartment communities. And, the strata sector needs to better understand the value retrofitting can contribute to a building’s occupants and owners.

There is a lot of work to be done in strata and a huge amount of latent potential. Only by working together – across all levels of government and within the communities themselves – can we drive the necessary change. In strata, we all have a role to play.

For more tools and resources about retrofitting sustainable, resilient, liveable, and loveable apartment homes, visit the High Life Expo website.