Efficiency in housing production
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Real Estate Watch
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Technical aspects
Once the real estate production frontier has been established in the institutional context, the search for efficiency in building centres around increasing technical possibilities and improving the production processes of the industry as a whole. To do this, it would be desirable to have a set of internal indicators for the industry itself, applicable to sector companies, which make it possible to pinpoint the areas and processes that could be improved and, thus, increase the efficiency of the sector in general and of the companies in particular.
These indicators can be divided into different categories and are aimed at measuring: a) the time it takes to build and market a development, b) the production costs, c) the qualities of the end product, d) customer satisfaction, e) corporate results and f) other aspects related to the development. In turn, it is possible to enrich and disaggregate these indicators even more if a distinction is made between the different stages a development goes through before it is totally completed; in this way, production times and costs can be classified both in the process of designing a development and in land development or the building process as such.
a) Construction time
In Spain there are few indicators that may be directly used as references for measuring the efficiency of the industry, or of private companies, at their different stages. Thus, there is scant information about the first set of indicators, those related to the time the different stages of the real estate development take. Although it is easy to determine the time that will be spent on building the property, pinpointing the time required to change land into urban land or to obtain a building permit is not so simple. In addition, the timing changes according to the region where the product is being developed.
Generally speaking, the planning process in Spain requires an estimated time of between 3 and 10 years to transform rustic land into urban land; obtaining a permit can take between 3 and 9 months while the time taken to erect the building could be between 18 and 28 months or more, depending on its complexity.
The town planning process in Spain is slow and rigid. Once the planning regulation has been fully defined and the physical area for development has been delimited, the next step in the process is to define the type of development project. There are usually long time lags in both cases. Once the project has been established, the model of development management has to be established. The development works include work on roads, sanitation, water and electricity supply, and parks and gardens.
b) Production costs
Cost indicators are easier to estimate because there is more information available. The Public Works Ministry draws up series with
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An interesting set of indicators can be found in: DETR 2000 Key Performance Indicators Report for The Minister of Construction. Department of Environment, Transport and Regions (DETR). London 2000.
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