Description

In the property market, housing projects for the elderly are no longer a niche segment. By the year 2020 almost a quarter of all German residents will be older than 65 years of age. The number of people interested in forms of housing appropriate for the elderly is increasing rapidly and a consumer group is growing whose needs the property market will have to cater for in the coming years. This trend began three to four years ago with a sharp uptake in the number of nursing home projects and is currently expanding to address a variety of different forms of housing for the elderly.

In recent years, it has become increasingly clear that project controllers are being involved in building projects at an ever earlier stage. In many cases there is no longer a single client but rather a consortium of financial investors and project developers. In the case of housing projects for the elderly, they are often joined by the operating agency during the initial phase who, although not actually the client, plays a major role in defining the planning and building parameters. This constellation makes it absolutely necessary to obtain professional advice on costs, time schedules and risk assessment in advance of going ahead with a project in order to determine the basis for a collaboration between investor and developer, and in this special case also the operator. Although this initial involvement on the part of the project controller is very often not remunerated – many regard this as part of acquisition – it nevertheless requires special care as the parameters laid down in this preparatory phase are very difficult to change once the project is under way.

The proactive project manager

In the past project controllers were regarded much as “building accountants” or as “protocol clerks”, and the German guidelines for planning services (HOAI §31) underlined this with their heavily simplified, formalised definitions. Modern project controlling is, by contrast, an active management task with the project controller situated between investor, developer, planning team, building contractor and the final user. The aspects discussed below apply in general, not just to the specifics of managing projects for the elderly, and are important for an overall understanding.

Of the tasks a project controller undertakes, cost management is one of the most extensive, and is especially important not least because the effects of time scheduling and quality control can have implications for the cost. Cost management is divided into three sections:

• Cost planning: determining the budget on the basis of a cost estimate;

• Cost control (planning phase): monitoring adherence to the budget as the planning progresses and in the awarding of contracts;

• Cost control (construction phase): anticipation and assessment of cost risks, intervention where costs are likely to be exceeded and the arrangement of corrective measures.

Costs incurred and potential influence on costs over the duration of a project

As the diagram shows, the ability to influence the project costs reduces significantly as the project progresses, meaning that cost management plays a particularly important role during the early phases of a project. It is therefore necessary to recognise potential risks that may affect costs as early as possible and to implement appropriate measures to stay within the projected costs. Typical risks include:

Deadlines – delays in the time schedule can quickly lead to high additional costs, potentially endangering the budget. This risk can be reduced through:

• Professional project coordination, clear organisational structure and operating schedule and the choice of appropriately experienced project partners.

• Regular communications with all project partners;

Stipulations of the planning permission require:

• Early communications with all relevant authorities involved in assessing planning permission;

• Proactive and clear elaboration of all aspects that deviate from the building regulations or require exceptional consent or permission; where necessary obtain advance clarification via a preliminary building permit.

Increasing construction costs – this risk is difficult to avoid but can nevertheless be minimised through the following:

• Invite tenders of all major building works and trades in advance of construction. Typically the building structure, façades and technical installations already cover between 65 and 70% of the overall costs.

• Obtain recommended prices during the planning phase for all special materials and construction techniques where insufficient prior knowledge is available.

• Determine alternative choices for materials and planning variants.

Contractor’s risks – most notably the issue of adequate capacity and the risk of bankruptcy which one must attempt to minimise as follows:

• Obtain information about the size of the company, number of staff and reference projects and talk to the company’s other clients.

• Obtain economic data on the tendering companies, such as legal form, annual turnover, capital resources, stakeholders and annual accounts. For very large contracts it can make sense to draw up a “business rating” method based on this information.

In addition to these general risks, specific projects may exhibit special risks which one should try to anticipate and ascertain early on as they can result in unexpected costs. These include, for example:

Building site risks: Prior research into the site’s history can determine whether the soil is polluted (from a previous use) or whether munitions or ground monuments are likely to exist. A soil investigation is always advisable to ascertain the load-bearing capacity of the site and to determine the ground water level.

Connections to utilities: In some cases it is not possible, or expensive, to connect a site to the necessary utilities. It may not be possible to channel rainwater into a canal, making it necessary to construct a soakaway. The water supply pressure may be insufficient, necessitating a pressure booster station. A transformer station may be necessary to ensure a constant electricity supply.

Neighbours: In a number of cases, permission will be required from the neighbours without which planning permission cannot be obtained or building works may not commence. By way of example these can include insufficient distance to neighbouring buildings and underpinning works or the anchoring of foundation revetments on the neighbouring plot. It is much easier to reach an agreement early on than when under pressure to commence building works.

For the investor, or for the client, it is crucial that the project controller reports back in regular intervals with a compact, understandable and concise overview of the essential facts, project data and progress. Such data needs to be condensed to a level sufficient to provide an at-a-glance overview of the salient points. An overview of the budget, for example, is mandatory, as is a register of possible risks and a diagrammatic time schedule. The report should contain all details necessary for the client to make informed decisions and to fulfil his or her obligation to banks, lenders, partners, supervisory boards and so on.

Requirements specific to projects for the elderly

A number of additional factors apply to projects designed for use by the elderly, which in many cases can only be mastered by a project controller with extensive knowledge of this particular field.

Accessibility: In comparison to normal housing projects, additional costs can arise from:

• Larger bathrooms (transit areas according to DIN) with floor-level shower and additional grip rails

• Handrails in all public areas, corridors etc.

• Motorised door openers on main entrances

• Larger lifts

• Even thresholds between rooms and onto balconies and terraces

• In many cases larger balconies (sufficient room for manoeuvring)

• Emergency call and alarm systems

• Non-slip floor surfaces

Care home regulations: If a project is for use by the elderly and is subject to care home regulations, for example for use as a nursing home, it differs fundamentally from normal projects in that it must conform to a series of stipulations. For example, nursing homes and old people’s homes must offer a certain level of staffing, offer particular facilities and technical installations, fulfil hygiene guidelines and organisational structures. As properties run by an operator, they are monitored by the supervising authority. The planning of a nursing home must be carefully negotiated with all relevant authorities as not only planning permission is required but also a permit for running a care home. This form will only be chosen where health and nursing care is envisaged. This can be a sticking point for sheltered housing or assisted living projects. In Germany, for instance, responsibility for nursing home regulations was transferred to the individual federal states in 2006, with the result that each state has its own regulations. The point at which a project is subject to these regulations differs sometimes considerably. In some cases, the level and kind of services offered determines whether or not the regulations apply, even when these services are not directly related to nursing care. For assisted living and sheltered housing schemes, it is important to establish that nursing home regulations do not apply and where necessary to consult the relevant authorities in order to avoid that a scheme is barred from operating because it does not fulfil regulations for which it was not built, effectively endangering the entire investment.

Fire safety: Nursing homes are subject to special fire safety requirements. While the guidelines are now no longer as strict as for hospitals, the necessary fire safety requirements are still determined by certain evacuation scenarios in combination with alarm systems and the like. As there are no universal rules and regulations, this needs to be discussed and agreed for each individual project. Conflicts can arise, and may have to be reconciled, between more modern home concepts with airy, open common areas and the level of fire safety measures the authorities would ideally like to see. Sheltered housing schemes differ only slightly from normal residential schemes and for the most part are not subject to extra fire safety requirements. More stringent regulations can apply, however, for communal forms of living where living quarters are shared, for example with regard to fire alarm systems and fire-protection ratings for walls and doors between the individual living quarters. Again, here too there are no universally applicable regulations, necessitating prior negotiation with the fire safety authorities in order to ensure that the planning process can proceed without unforeseen problems.

Parking provisions: In most cases car parking provisions for residential schemes for the elderly are much lower and savings can be made through the reduced number of car parking spaces, which in turn can be offset against greater expenses in other areas.

Early recognition aids problem solving

To conclude, it is important to realise that project controlling involves not only the smooth running of processes and the protocolling and documentation of results but also the anticipation and early recognition of possible general and specific project-related risks, along with the steps necessary to resolve them so that their implications can be assessed, particularly with regard to costs. The earlier one is aware of these, the easier it is to make adjustments to compensate for them. It is important that the client is given all information necessary to make clear and informed decisions before it is too late, even when in isolated cases this could mean abandoning the project. More typically this will involve adjusting the planning, construction or time schedule to stay within the boundaries and framework of the project. One way or the other, the earlier one is aware of problems the better.

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Originally published in: Eckhard Feddersen, Insa Lüdtke, Living for the Elderly: A Design Manual, Birkhäuser, 2011.