## 3 Typology of the Building Stock, Market Segments and Economics of Refurbishing
### The Economics of Refurbishing
#### 3.1.4 Deep Renovations of Apartment Buildings of the 1960s and 1970s Exemplified
\begin{tabular}{c c c c c c c c c c c} \hline \hline
**Langkzerparken, Tilst, Arhus, Denmark, Deep** & \multicolumn{3}{c}{**Total Investments (Incl. Qualitative**} & \multicolumn{3}{c}{**Investments Required for One Step Higher**} \\
**Refurbishing 2010-** & \multicolumn{3}{c}{**Improvements) by Energy Standard**} & \multicolumn{3}{c}{**Energy Standard**} \\ \hline
**Profitability of** & \multicolumn{3}{c}{**Energy Savings**} & \multicolumn{3}{c}{**Investment**} & \multicolumn{3}{c}{**Years to Reach**} & \multicolumn{3}{c}{**Investment**} & \multicolumn{3}{c}{**Extra Years to Reach**} \\
**Investments Through** & \multicolumn{3}{c}{**Energy Savings**} & \multicolumn{3}{c}{**Investment**} & \multicolumn{3}{c}{**Profitability**} & \multicolumn{3}{c}{**Break Even**} \\
**Energy Savings** & **Dkk/sqm** & **Kg CO\({}^{3}\)/sqm** & **Dkk** & **Dkk/sqm** & **Simpel** & **7\% and 4\% \({}^{*}\)** & **1000 Dkk** & **Dkk/sqm** & **Simpel** & **7\% and 4\% \({}^{*}\)** \\ \hline \multicolumn{10}{c}{Building standard: As App.} \\
140 kWh/m’ year & 0 & 0 & & & & & & & & \\ \multicolumn{10}{c}{BR08 ref} & 46 & 8 & & & & & & & \\ \multicolumn{10}{c}{BR08 (required) App.} \\
70 kWh/m’ year & 50 & 9 & 24,803,246 & 8.568 & 172 & 86 & & & & \\ \multicolumn{10}{c}{Low Energy Class 2} \\ LEK2010, App. & 65 & 12 & 26,341,046 & 9.099 & 140 & 79 & 531 & 183 & 35 & 33 \\ \multicolumn{10}{c}{50 kWh/m’ year} \\ Low Energy Class 1, & & & & & & & & & & \\ \multicolumn{10}{c}{LEK2015, App.} \\
35 kWh/m’ year & 74 & 15 & 27,432,626 & 9.476 & 129 & 77 & 908 & 313 & 38 & 36 \\ \multicolumn{10}{c}{35 kWh/m’ year} \\ Low Energy Class 0 & & & & & & & & & & \\ \multicolumn{10}{c}{LEK2020, App.} \\
18 kWh/m’ year & 86 & 18 & 29,428,750 & 10.162 & 118 & 72 & 850 & 293 & 16 & 14 \\ \hline \hline \end{tabular}   
\end{table}
Table 11: Total costs of deep renovations excluding consultancy costs, Langkzerparken, Tilst, Denmark, and calculated number of years to reach profitability of the investment in energy refurbishing to different standards through energy savings under assumptions (“_Simpel_”: Repayment time calculated without interests on mortgage or increased energy prices; “_7% and 4%_” Repayment time with a 4% annual increase in energy prices and an annual financing cost of 7%). Sources: From [PERSON] (2010) [43], and AL2 Bolig (2012) [42] (p. 23). The refurbishing costs per apartment in the pilot project, energy class 0, reached a staggering 1.36 million DKK/apartment (The costs included rehousing costs during some months of the construction), rendering construction of a similar new building a more economical solution. The pilot project costs were 5 million dkk above energy retrofit to actual standard energy class, \"BR 2008\", and it was found that the investment to the best energy standard could not be recovered through energy savings and higher rent (subject to a regulatory ceiling). The remaining 34 apartment blocks were renovated to a lower energy class (30 blocks to LEK2 and four blocks to LEK1) leaving open the option of later upgrading to LEK0. The total costs of renovation and modernization of the 30 apartment blocks (544 million dkk) were equivalent to dkk 7429 per sqm (Euro 1000/sqm). The rent was raised following the renovation (max 680 dkk/sqm excluding utilities), but Danish house rent legislation prohibits full cost recovery over the rent and the project remained economically dependent on annual subsidies [42] (p. 9). In conclusion, the pilot project of \"climate\" refurbishing an apartment block was found not to be economically feasible, even in a long term scenario with possible significant increases in energy prices. The final report recommended not to upgrade the remaining apartment blocks to the highest energy standard [42] (pp. 5, 36). Extensive renovations are complex both technically and organizationally, and there is mounting evidence that energy savings cannot finance extensive renovation costs even within a very long investment horizon.