Challenges in Delivering Green Building Projects: Unearthing the Transaction Costs (TCs)

Queena K. Qian, Edwin H. W. Chan and Abd Ghani Khalid
Additional contact information
Queena K. Qian: OTB Research Institute for the Built Environment, Delft University of Technology, 2628 BL Delft, The Netherlands
Edwin H. W. Chan: Building and Real Estate Department, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, China
Abd Ghani Khalid: Faculty of Built Environment, Universiti Teknologi Malaysia, 81300 Johor, Malaysia

Sustainability, 2015, vol. 7, issue 4, 1-22

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.

Keywords: green building (GB); transaction costs (TCs); uncertainty; real estate development process (REDP); government policy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
https://www.mdpi.com/2071-1050/7/4/3615/pdf (application/pdf)
https://www.mdpi.com/2071-1050/7/4/3615/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:7:y:2015:i:4:p:3615-3636:d:47404

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().