Vauban regenerated suburb, Germany

6 September 2011 – Favourites – A new worldwide study of sustainable precincts commissioned by Sustainability Victoria has unearthed some of the drivers to the most successful sustainable communities

The report, Business Models for Enabling Sustainable Precincts was prepared by Moreland Energy Foundation Ltd, Net Balance and Green Spark Consulting. It  analysed 43 projects in a dozen countries to demonstrate innovative business models for the delivery of precinct-level sustainability initiatives.

The report explores business models – such as public-private partnerships and the creation of energy services companies such as ESCo in Germany and the UK.

ESCo allows a third party to finance, manage and sell electricity and hot water to residents, and benefit from revenue available from feed-in tariffs.

Despite there being few technological barriers, there was lack of knowledge about sustainable technologies among industry players, the report said.

This often resulted in a sustainability cost premium which can undermine the commercial viability of the project.

The solution would be to create demonstration sites to help building contractors familiarise themselves with sustainable technologies (Green Plumping Centre in Brunswick, Vic is an example).

MEFL chief executive Paul Murfitt said: “There is no one business model which can guarantee the success of a sustainable precinct; successful models need to respond to the project’s context.

Precincts can be defined as greenfield, brownfield and infill developments or revitalisation/retrofitting of existing sites/neighbourhoods which cover a range of activities/land uses, such as residential, retail, commercial and industrial.

“Typically, the value of many precincts we studied could not be demonstrated in purely financial terms.

“Many developers or proponents were motivated by a broader commitment to sustainability and desire to demonstrate what was possible.”

For now support from various levels of government is likely to remain an important factor in the evolution of sustainable precincts.Government support for instance could help overcome uncertainty around sustainable precincts caused by the carbon price.

This could be through direct involvement; subsidies; subsidised or gifted public land; regulatory support; streamlining of planning process (this was a feature of almost all projects studied).

“Over time, the combination of rising costs for traditional energy supplies, feed-in tariffs, the proposed price on carbon and growing consumer awareness about the future impacts of climate change is likely to reduce the need for direct government support and boost the commercial viability of sustainable precincts,” Mr Murfitt  said.

Mr Murfitt said: “Current business systems, cultural attitudes and organisational processes can be a substantial hurdle to sustainable precincts.

“Furthermore, planning and government approval processes are also geared towards business-as-usual infrastructure provision.

“Despite these hurdles, this report shows us that great things are possible when developers, government, planners and residents work together to overcome barriers currently facing the creation of truly sustainable neighbourhoods.”

The multi faceted innovations of Vauban

One of the successful precincts studied was the urban regeneration suburb of Vauban in Freiburg, German –  an example of multi-faceted innovation.

Several public and private sector stakeholders and developed a model that achieved an integrated best practice environmental, social and economic outcome.

With strong community participation, delivered through a not-for-profit engagement organisation, Forum Vauban, the city council closely managed the sale and redevelopment of the land by clearly setting requirements, boundaries and incentives to ensure best practice environmental sustainability and social outcomes.

Two key elements include:

  • Construction communities based on the co-housing concept

Construction communities involve a group of individuals with a common vision for living forming a cooperative to develop an apartment building on their terms.

Through the master planning process, the local council prescribed that a large

number of the sites within the broader Vauban development would be reserved for construction community projects.

These communities form either organically or in a structured manner, facilitated by a project management body.

A formal cooperative is established by the group, to be responsible for financing, project management, cost control and for the accounts of the project.

The approach combines owner-building with medium-density housing, and has a variety of potential financial, social and sustainability benefits.

These include reduced tax on land acquisition, improved sense of community

within the building and a higher likelihood of going beyond minimum building standards.

  • Car-free living

Another central component of the success of Vauban as a model of sustainability has been car parking management.

Car parking has been separated from the individual housing unit both physically, by providing a number of centralised garages, and financially, by establishing a separate organisation to manage the sale and upkeep of spaces in these garages.

Residents with cars purchase a car park and pay an annual fee for maintenance of the garage.

This has made the cost of car parking an up-front, separate and optional expense to residents.

The Association for Car Free Living, a not-for-profit group established for the purpose, manages this aspect of the development, removing the developer and local government from the financial risk of this system.

The report gives a case study of architect and resident, Meinhard Hansen, PassivHaus who was involved in some of the first of Vauban’s ‘construction communities.

One of the critical lessons he took from this was the importance of a robust governance structure and appropriate technical expertise.

Identifying a business opportunity, he set up a project management company tailored to the needs of groups wishing to build their own apartment building.

This has led to a more streamlined development process and a reduced chance of dissatisfaction amongst the membership of the co-housing groups.

The report concludes that the success of Vauban was defined by the ability of the city council to create a managed market made up of boundaries and regulations, supported by infrastructure and incentives.

This enabled commercial interests to be managed while social, environmental and broader economic outcomes were delivered by a range of stakeholders.

See the full report:

A two day workshop…For details on an upcoming two-day workshop on MEFL’s Sustainable Urban Development Framework decision tool for planners, developers, architects, policy makers and academics, see