Coined out of the Latin word ‘obsolesce’, obsolescence means to grow old. It is not only about age, the chief cause of obsolescence is ‘circumstantial changes’ occurring. With respect to property, it leads to depreciation (as in the case of physical obsolescence) – a loss in value from any cause as measured in money terms by the difference between replacement cost anew of the property and the market value, actual or estimated, of the same property in its current conditions (Ifediora, 1993). Although obsolescence may be present almost everywhere and at any stage (for example, it can attack a new building before it is even completed), it becomes a factor to be reckoned with when buildings or facilities fall below contemporary standards. These standards will vary with time and place (Thorncroft, 1976). The principal causes of obsolescence may be grouped into the following categories:
This is the easiest to observe and relates to the deterioration of the physical structure and the components of the building both externally and internally. According to Flanagan et al. (1989), physical obsolescence is determined by environmental and non-environmental factors. Any material or component will deteriorate because of environmental factors such as radiation (solar and thermal), temperature ranges, water (rain, condensation, snow, ice), air contamination, biological factors (micro-organisms, fungi, bacteria) and stress factors (physical action of wind, hail). The non-environmental factors are generally the stresses that are imposed by humans in their various activities of living, working and playing. Examples are permanent loading, fatigue loading, impact, abrasion, chemical attack, normal wear and tear, and abuse by the user. The rapid deterioration of buildings and their components can be attributes to many different causes:
- An emphasis upon initial building costs without considering the consequences of costs in use.
- Inappropriate design and detailing of buildings and their components.
- Constructional practices on site that were poorly managed, supervised and inspected.
- A lack of understanding of the various mechanisms of deterioration.
- Insufficient attention given to the maintenance the building stock.
- Inappropriate use by owners and occupies.
- Structural impairment through neglect, fire, water, explosion, acts of war and vandalism.
- Wear and tear through use, and high occupation density.
- Action of the elements (include ravages of storms and extreme temperatures) age and destruction by termites and other vermin.
Physical obsolescence or the rate of physical deterioration can be controlled by the designer through the correct choice of material, methods of construction and appropriate standards of maintenance, obsolescence cannot, other than through the ability to provide a flexible and adaptable design solution to facilitate easier adaptation and renewal at same later date.
This is a defect arising from poor design or a layout which renders a building less suitable for use than other buildings. Calus (1986) suggested that functional obsolescence is the loss of value of the subject facility resulting from a deficiency (other than physical deterioration) that impairs the subject when compared to a replacement facility. Baum (1991) viewed ‘functional obsolescence’ as the product of technological progress that causes changes in the occupiers requirements, impinging on the layout and facilities and also felt that legal and social obsolescence should be regarded as sub-sets of functional obsolescence. An important cause of functional obsolescence is the inappropriateness of the building, owing to its size to meet modern demand, when either division into smaller units or enlargement is necessary. This could be introduced through:
- Faulty design e.g. wasted space, improper location of kitchen, bedroom, toilet etc.
- Inadequacy of structural facilities e.g. inadequate electrical wiring, plumbing, fencing non-water resistant walls, etc.
- Super-adequacy of structural facilities e.g. excessive number of built-in facilities, oversized bathrooms
- Out-of-time/out-dated equipment e.g. coal burning kitchen stove, exposed wiring and plumbing.
Technological progress such as an invention e.g. the advent of lift to provide greater convenience than staircases in multi-storey buildings (functional obsolescence), changes in economic conditions (economic obsolescence) or legislations (social obsolescence) can also bring in obsolescence. Functional obsolescence is mainly incurable, which can shorten the economic life of a building (Rand, 1986).
This is another standard against which obsolescence can be measured. It is the most intractable of the causes of depreciation in property because its causes are outside the control of the property. It occurs where there is a loss in the usefulness of the building because of fluctuation in the market for its services. This fluctuation involves a fall in demand.
Economic obsolescence is a function of appreciation rather than depreciation: a building becomes economically obsolete not as a result of the existing structure, but through enhancement of the development potential of the underlying land. The building value decreases over time due to obsolescence. The building can become obsolete if the land value exceeds the capital value of the building faster than its expected physical life. On this occasion, replacement of the existing building becomes economically attractive, as better return from the asset can be generated. For instance, the land value in a particular area drops due to relocation of the central business zone to another area. New development having advantage of cheaper land cost will be more competitive and attractive to the tenants and will cause the rental for the existing buildings to decline. According to Salway (1986), economic obsolescence is considered to be the result of a change in the “highest and best use for the land. Such a change could be related to specific site or more generally to the surrounding area. The followings are the sources of economic obsolescence:
- Change in the size and age structure of the population.
- Migration of population and the number of people in a household.
- Technological improvement especially those affecting transportation.
- Changes in taste and fashion.
- Fluctuation in the standard of living either of the whole or part of the community.
Economic obsolescence is incurable and difficult to predict due to lack of information on the future development and confidentiality of government policies.
Buildings may deem unacceptable by occupiers if the appearance is outdated and incompatible with their corporate image. Either fashion in architectural style may have changed or, alternatively the building may simply look old and fail to satisfy an inspiration to be associated with up-to-date products. The improved appearance of a building could result in more satisfied employees and the higher standing of the firm and its services or products. Calus (1986) suggested that fashion permeates all facets of life including architectural experience. Whatever the long-term view of posterity about a particular architectural style, it will invariably fall out of favor in the medium term. The changes in fashion will provide an adverse reaction against styles, which characterised the immediately preceding era. Architectural style cannot be defined precisely. It is best described as a ‘State of the Art’ of the building design, which is characterized by fashion, vogue, available technology, and personal taste. The introduction of a new architectural style can in some cases, cause buildings with an old design to appear old fashioned and less attractive to potential purchasers or lessees. Buildings with a distinctive design appeal are more likely to have lasting appeal and to be less affected by changes in architectural style (Cheong, 2009). The effect of aesthetic obsolescence is greater in commercial buildings because the buildings with new architectural styles can fetch higher rental values. The decline in the revenue of old buildings requires the buildings to be refurbished to make them attractive and competitive again.
According to Medhurst (1969) in Cheong (2009), environmental obsolescence of a whole neighbourhood may occur when the conditions in a neighbourhood render it increasingly unfit for its current use. Changes in the character of an area may make a building unsuitable for its original intended use. Environmental obsolescence will normally be of greater relevance to depreciation of land than to the depreciation of buildings. Environmental change such as high pollution, road congestion and urban decay causes environmental obsolescence. For example, an office building may suddenly become obsolete when the adjacent site is used for industrial use. Disturbances from factory engines and air pollution will deter tenants from staying and the building revenue will start to decline. The need for a change in the infrastructure of an area can also cause a building to be environmentally obsolete. For example, the area needs more car parking, pedestrian areas, efficient public transport and roads. This type of obsolescence is not directly related to building design and difficult to forecast.
A technological obsolescence occurs when the building in no longer technologically superior to alternatives and replacement is undertaken because of lower operating costs or greater efficiency. A building may become technologically obsolete before half of its physical life passed then the speed of change in current society suggests that in the future this life will be reduced even faster. Calus (1986) indicated that this form of obsolescence occurs as a result of technological innovation. For example, some of the existing electrical and mechanical services are no longer technologically suitable or superior in terms of performance or efficiency. Consider for example, improvement in the lighting efficiency of a new lamp, which may make an existing lighting system no longer economically or technologically effective. In some situations, as with building management systems, it may be possible to install these innovations, without replacing the existing asset.
Legal obsolescence stems from the introduction of new legislation or new standards controlling matters such as health, safety, and fire control, which in extreme cases may render a building obsolete. Calus (1986) and Baum (1989) suggested that changes in social needs might result in occupiers demanding for high and compatible image, good neighbourhood and amenities; for instance, cinema in an area loss its utility due to introduction of home videos, VCD or DVD; so, cinema become uneconomic to operate due to loss of revenue. The only way is to convert the cinema to other uses.
It relates to snobbery in discrimination of certain kinds of properties. It can happen that properties may retain an economic value due to scarcity, but standard is highly subjective as what may appear a reasonable standard of repair, function and usefulness to a person, may seem very much below what ought to be rated by another. The main factors taken into consideration in respect to social obsolescence are danger to health; lack of essential amenities; and high social cost involved in retaining the premises in question
Many building become socially obsolete although suitable for the purpose envisaged, because it is situated in the wrong location, and therefore of only limited practical to use. Legal obsolescence occurs where a building fails to meet current legislation requirement and the costs involved in bringing the building up to the required standard are prohibitive. In this case, legislation will advance demolition beyond the building’s physical life. Examples, asbestos and other hazardous materials to health are now prohibited in new buildings and where they occur in existing building they need to be either removed or provided with sealed protection systems. The general condition of a building may in some cases make this financially prohibitive, even where grants for their removal are available, resulting in demolition.
Locational obsolescence occur when an area – and the property located in it suffers from devaluation because it is considered less fashionable or attractive by occupiers (Bryson, 1997). A building can become locationally obsolete when the economic activities in the area change (Medhurst, 1969); for instance, a change in the city planning, such as relocation of the commercial area and construction of new roads and motorways can change the economic activities of the affected areas.
Mitigating the problem of obsolescence
Obsolescence, of whatever nature, could be overcome by sound maintenance, simplicity in design and layout; forward planning; regular inspection and carrying out of repairs of any defects in the building as soon as the defects are discovered; careful selection of materials and method of construction; etc.
References
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CALUS (1986), Depreciation of Commercial Property, CALUS, College of Estate Management, Reading, England.
Cheong, E. S. (2009). A study of building obsolescence in standard design terrace houses in Perak. UK Essays http://www.ukessays.co.uk/essays/property/a-study-of-bulding-obsolescence.php
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