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Inside Out
Healthy Buildings: How Indoor Spaces Drive Performance and Creativity
Senior Lecturer John Macomber grew up working for the George B.H. Macomber Company, the construction company found by his great-grandfather, that built Boston's Faneuil Hall Marketplace. When he and his siblings sold it in 2006, Macomber started teaching at HBS, where he began some revelatory research into the Indian real estate market and its regulatory and environmental issues. “It turns out that what I am highly qualified to think about is money and construction: notably, how to get trillions of dollars of private capital off the sideline to make high-impact investments in water, sanitation, roads, power, and mass transit that will impact the lives of hundreds of millions of people,” writes Macomber in his new book, Healthy Buildings: How Indoor Spaces Drive Performance and Creativity, coauthored with Harvard T.H. Chan School of Public Health Assistant Professor Joe Allen. “Public health is obviously directly connected to society’s success in answering this call."
In real terms, Macomber and Allen note, this requires improving the physical structures that we occupy. The authors make the case that the characteristics of where we live and work—things like air quality, acoustics, and lighting—have a massive impact on our physical and mental health, and lay the foundations for developing and maintaining buildings that can ensure happier and more productive workers. In this excerpt, the authors sketch out the scope of the opportunity.
“Why are we ignoring the 90 percent?”
This is the question with which Joe likes to start most presentations, to get the audience thinking about the importance of the buildings we live and work in for our health and the bottom line. There are two parts to his equation: time and money.
Let’s start with time: studies have found that in North America and Europe we spend 90 percent of our time indoors. It isn’t a perfect formula—some jobs have you out and about more, and kids tend to spend a little more time outside than adults—but for most of the developed world, it is more accurate than you might think. (In some places and in some seasons, that 90 percent is actually an underestimate. Joe once quoted the 90 percent figure while presenting in Abu Dhabi and heard chuckles in the audience—in the United Arab Emirates, it can be more like 99.9 percent indoors for some people.)
To put this 90 percent figure in perspective, it’s useful to think of what it means in terms of our own lives. By the time we hit 40, most of us have spent 36 years indoors. Try it for yourself: take your age and multiply it by 0.9. That’s your indoor age. If we are lucky enough to live to 80, most of us will have spent 72 years inside! We spend nearly all of our time indoors—so much so that Velux, a Danish company that specializes in skylights, cleverly branded us as “the Indoor Generation.” When we look at it this way, in terms of years, it becomes obvious and intuitive that our indoor environment would have a disproportionate impact on our health.
So let’s break down that 90 percent and see where we spend our time. (Note that this section is based on research in the United States; the specific numbers will vary from country to country, but the basic facts don’t change in most parts of the world.) We tend to split our time among our homes, our offices, our cars, and an assortment of other indoor places like restaurants, stores, gyms, and airplanes. For kids, this looks very different. By the time they graduate from high school, they will have spent 15,600 hours inside a school. (Incidentally, as Harvard professor Jack Spengler likes to point out, schools are one of two types of buildings where we force people to spend time indoors. The other is prison.) ...
Here’s a weird but helpful way to think about all of this indoor time, courtesy of Rich Corsi, dean of engineering and computer science at Portland State University, an outstanding building scientist with a clever take to put this in perspective: “Americans spend more time inside buildings than some whale species spend underwater.”
What?! It’s kind of hard to wrap your head around this—that whales spend more time on the surface than we, as land mammals, spend outdoors—but it’s true. We would never go about trying to understand whales by studying the air they breathe when they are at the surface; we study them where they live, underwater.
And yet that’s exactly what we do with humans. For all this time spent indoors, we tend to focus much more on outdoor air quality than on indoor air quality. Check any newspaper or news site on any given day and you are likely to see a story about the hazards of outdoor pollution, but how often do you see a story about building health?
Our regulatory system is also geared toward the outdoor environment, too. In the United States we have the Clean Air Act, which set National Ambient Air Quality Standards establishing limits for the six so-called criteria air pollutants: particles (PM2.5 and PM10), lead, ozone, sulfur dioxide, nitrogen dioxide, and carbon monoxide. Many other countries have similar standards for outdoor air pollution.
But what about a “National Indoor Air Quality Standard”? No such thing. The only things akin to this in the United States are the legally enforceable limits set by the Occupational Health and Safety Administration (OSHA) for exposures to pollutants indoors. But before you start thinking that this means we’re all set, you should know that very few scientists, if any, would argue that the OSHA limits are truly protective of health. Even OSHA admits this. From its own website: “OSHA recognizes that many of its permissible exposure limits (PELs) are outdated and inadequate for ensuring protection of worker health.” That’s because OSHA was created in 1970, at which time “permissible” exposure limits were set for many chemicals based on a report from 1968, and those existing, unprotective limits were grandfathered into the new law. And as for new permissible exposure limits, OSHA has only created 16 since 1970. The last one was in 2006, for hexavalent chromium, a toxic heavy metal that is linked to respiratory cancer, asthma, skin irritation, and liver and kidney damage. This is not protecting us. And quite frankly, if you encounter any of these regulated hazards in an office building at the OSHA “permissible” limits, something is really amiss.
The second 90 percent that we are ignoring is the true cost of operating our buildings: the people inside. Most companies spend as much as 90 percent of their budgets on human resources, a figure largely driven by their salaries and benefits—and ... their productivity.
The 3-30-300™ rule of real estate was created and popularized by the global facilities management company JLL [Jones Lang Lasalle]. It’s intended to show a company’s relative per-square-foot costs across three factors—utilities, rent, and people. The rule goes like this: for every $3 a company spends on utilities like electricity and heat, it spends $30 on rent and $300 on payroll. This realization can make a focus on miserly utility spending, say, for ventilation, look pretty silly if the expensive assets—the humans—are not functioning at their best.
This rule of thumb can be corroborated through multiple sources. For example, the Building Owners and Managers Association International 2018 Office Experience Exchange Report indicates average office gross rents of $30.35 per square foot for private-sector office buildings, average utility costs of $2.14, and total space per employee of 288 square feet (inclusive of corridors and lobbies). As offices get smaller, a number like 250 square feet per person is becoming more typical. From a salary point of view, in Massachusetts, the gross wages for job titles like advertising sales agent, tax preparer, and computer user support specialist—the kind of people who would make up the bulk of typical office users—are about $65,000 per year, per US Bureau of Labor Statistics. After including other costs paid by the employer, the fully loaded cost per employee would be about $75,000 per year. This divided by 250 square feet works out to $300 per square foot per year as the compensation component. While the 3-30-300 rule of thumb is a generalization and a simplification, the order of magnitude is appropriate and useful. Some professions pay much more. When higher salaries are considered, the impact of productivity becomes greater and the impact of energy savings becomes even smaller.
Just as we pointed out earlier in the context of how much time modern people spend indoors, once again the building industry discussion has missed the key 90 percent—the impact of the big expense, the people. Financial types tend to focus on the 10 percent: the rent and utilities spend. Don’t get us wrong, these costs are critically important, but this has been the sole focus of the building sector for far too long. Think about it this way: the entire green building movement, with billions of square feet of office space registered globally, was largely built to chase a small subset of that 10 percent—the 1 percent costs of energy, waste, and water when looked at in terms of total cost of occupancy.
The reason for this focus on the 1 percent is largely that these are easy targets. They are easy in two ways. First, it’s simple to calculate a return on investment based on energy savings. If you invest in an energy recovery ventilator, for example, an owner can quickly see that the upfront capital costs for the equipment will be recouped in a few years. It’s a straightforward calculus—executives can literally do the math on the back of an envelope. (To be fair to those who do energy modeling, it’s not exactly “easy” in the absolute sense; considerable sophistication and expertise go into building these models, but it is certainly more easily quantifiable than health.)
Second, it’s easy to meter a building for energy, waste, and water. Take the building you’re sitting in or that you own or manage, and we bet with just a little effort you could find out precisely how much energy it uses in a typical year. That’s because it essentially only takes one or a handful of cheap sensors and a couple of utility bills to understand energy use in your building. That means that the return-on-investment calculus can be supported by hard data, which means it can be traded, financed, and guaranteed, as energy service companies do every day.
But now consider the people in your building, that crucial 90 percent of your costs. How do you “meter” the health of people in a building? Or even on one floor, or in one room? This is not a trivial undertaking. And because it’s hard, it has been a barrier to advancement. We measure energy really well, so we manage it. But we’ve ignored the people side of the equation, and, as predicted, we’ve failed to manage this opportunity. …
We’re certain you don’t need this, but we’ll do it anyway to drive the point home. That 90 percent represents a massive opportunity going forward. Said simply: The indoor environment matters for health and wealth.
Full stop. You can probably close this book right now.
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