Market Analysis of Used Building Materials in Metro Vancouver

Transcription

1 Market Analysis of Used Building Materials in Metro Vancouver Prepared for Metro Vancouver February 2012 Kane Consulting LOCO BC Restraint Consulting Urban Fabric

2 Market Analysis of Used Building Materials in Metro Vancouver 2

3 Market Analysis of Used Building Materials in Metro Vancouver 3 Table of Contents Executive Summary... 5 I. Waste Generation... 9 A - Methodology... 9 General Approach... 9 Data Collection... 9 Gaps in Data Set Cross-Check with Other Statistics Residential New Construction Non-Residential New Construction Residential Renovations Non-Residential Renovations Residential Demolition Non-Residential Demolition B - Results C - Sensitivity of Key Assumptions D - Projections II. Distribution Network A - Existing Network Used Building Material Stores Direct Sales of Used Building Materials Recycling III. Barriers to Improving Diversion A - Market Forces B - Performance Requirements C - Disaggregation and Disconnection D - Lack of Infrastructure E - Cultural Impediments IV. Opportunities to Improve Diversion A - Market Support B - Entrepreneurial and Manufacturing Support C - Education and Training D - Support 5Rs Hierarchy E - Job Site Organization F - Central Facility G - Connect Supply Chain H - Stimulate Deconstruction I - Design J - Maintain Existing Building Stock V. Best Practices A - Methodology B - Geographic Scan New York State State of Massachusetts San Francisco... 50

4 Market Analysis of Used Building Materials in Metro Vancouver 4 Portland, Oregon Cleveland, Ohio Netherlands C - Interventions Tax Credits Reuse Centres Procurement Industry Development, Training & Jobs VI. Recommendations Recommendations for Immediate Action Creating Opportunities for Improved Diversion Strengthening Distribution Supporting the Market Other Recommendations for Medium-Term Action Creating Opportunities for Improved Diversion Strengthening Distribution Supporting the Market Other References Appendices Appendix I Detailed Results and Projections Appendix II Population Projections Appendix III Material Specific Barriers to Reuse Appendix IV Interviews Conducted Appendix V Material Categories & Waste Generation Composition Studies... 75

5 Market Analysis of Used Building Materials in Metro Vancouver 5 Executive Summary The main objective of this study is to understand the supply chain of used building materials in Metro Vancouver to help support policy that advances the practice of salvage and deconstruction in the region. Part I of this project reviewed construction, renovation, and demolition activity in Metro Vancouver in order to develop an estimate of the waste generated by these activities in both the residential and non-residential sectors. Permit data for these activities, from , was obtained from every member municipality of Metro Vancouver, and this information was then translated into the square footage of activity, and then into generated waste. Specific additional projects such as roof replacements, driveway replacements, and interior renovations, were also estimated and translated into generated waste. The methodology used in this project was developed by Franklin Associates (1998) and was also used by the US Environmental Protection Agency (USEPA 2003). Following this approach, it was estimated that 1.3 million tonnes of construction and demolition (C&D) waste is, on average, generated annually in Metro Vancouver: Material % Avg Tonnes/Yr Glass 1% 9,560 Hazardous Waste 1% 9,642 Metals 13% 165,788 Mineral Aggregates 34% 445,087 Other Materials 10% 126,574 Other Organics 3% 40,210 Plastics 4% 55,173 Wood Waste 36% 469,755 Total 100% 1,321,788 Section I of the report details the methodology followed, and summarizes the results. Detailed results are provided in Appendix I. An Excel spreadsheet, used to record and calculate the results of this study, accompanies the submission of this report to Metro Vancouver. The remainder of the report focuses on the market for used building materials in the context of the existing distribution system, the current barriers to improving diversion, the opportunities for improving diversion and increasing the reuse of building materials, and best practices in other jurisdictions. Interviews were conducted with representatives in building design, construction, renovation, deconstruction, demolition, waste hauling, material reuse, material recycling, and analysis of the system. Relevant literature was reviewed, and a number of case studies from other jurisdictions were compiled. Mineral aggregates constitute 34% of the C&D waste stream generated annually in Metro Vancouver (445,000 tonnes annually). Concrete represents the bulk of this category, and is generally sent to a small number of Lower Mainland concrete recycling facilities. These facilities crush the material to make road base, but have challenges finding markets for their products in spite of offering what they feel is a high-quality product at a lower price than gravel. As a result, their facilities are sometimes unable to accept all the concrete waste available which results in concrete being taken to the landfill. Government support for the recycled concrete products market would help avoid this situation. Wood constitute 36% of the C&D waste generated (470,000 tonnes annually), and include a wide range of items. Large timbers (3 or thicker) are sold for reuse or re-sawing into flooring or furniture stock. Heritage value items are often sold directly from job sites, and include windows, doors, cabinets, porch columns, siding, panelling, and flooring. The rest of the wood waste generated (the vast majority) is chipped. Urban Wood Waste Recyclers process over 200,000 tonnes per year, and 100% of their sales are to district energy projects in BC (such as Howe Sound Pulp and Paper which sells power to BC Hydro).

6 Market Analysis of Used Building Materials in Metro Vancouver 6 Two general observations emerged with regard to the challenge of finding valuable markets for C&D wood waste. First, there is generally an inverse relationship between a product s place in the 5Rs hierarchy, and the potential volume of wood waste that could be utilized in making that product. For example, the reuse of heritage items occupies an elevated position in the 5Rs hierarchy (and commands a high dollar value per unit of wood), but is able to consume only a very small portion of the waste generated. At the other extreme, chipping wood is able to consume the majority of the wood waste generated, but occupies a low level in the 5Rs hierarchy (and commands a low dollar value per unit of wood). Second, the low value of virgin timber severely limits the range of economically-viable options for reuse and recycling of wood. One contractor interviewed noted that 30 years ago he had 25% of the wood waste on site he has today because of the price of wood relative to labour. He explained that since a new 2x4 costs only $2, he is not going to pay a carpenter $40/hr to de-nail and salvage a used one. If his crew makes a mistake in framing a wall, the whole wall goes in the wood recycling bin. There are currently four used building material stores in Metro Vancouver. Together they have approximately 30 employees, hold inventory in approximately 160,000 square feet of space, and turnover between 2,000 and 12,000 tonnes per year. Their collective volume represents less than 1% of the C&D waste generated annually, but research indicates that this sector could possibly expand to handle 3% of the C&D waste generated annually. Many of the construction and demolition firms, interviewed for this project currently claim to be achieving 70-95% diversion, making Metro Vancouver s goal of 80% diversion by 2015 readily attainable. The challenge now lies as much in moving material up the 5Rs hierarchy, as it does in further increasing diversion. Barriers to improving diversion and increasing the reuse of building materials were identified, and include: Market forces that result in labour and land being expensive, and materials being inexpensive. High labour costs create a disincentive to utilize used building materials at the design, restoration, re-grading, and installation stages. Expensive land makes it difficult for used building material stores to hold significant inventory. Performance requirements that limit the use of used building materials. These requirements include code changes, re-grading requirements, contracts that specify new materials covered by a warranty, and energy performance and water conservation objectives. Disaggregation of supply such that each supplier of used building materials has a small inventory, much is sold informally, and there is no way to capture the entire offering. Architects interviewed express frustration at not being able to easily find what is available. Disconnection between each step in the construction process (design, construction, renovation, deconstruction, diversion) which isolates decision-making and precludes the coordination that would allow additional use of used building materials. Lack of infrastructure for supporting diversion into reuse and recycling, which includes too few drop-off locations, lack of facilities for some materials (e.g. glass), pricing structures that don t support small and medium-scale recycling, and a lack of used building material stores able to support large projects. Cultural impediments, including customer/client preferences for new materials, a general lack of awareness of deconstruction options, and the firm entrenchment of status-quo construction practices. Opportunities for improving diversion and increasing the reuse of building materials were identified, and include: Supporting the market through government and institutional purchasing for core products (e.g. crushed concrete as road base), visible products that illustrate the potential for used materials (e.g. flooring in high-profile buildings), and mandatory minimum content requirements for used materials in public projects and publicly-funded projects. Tax incentives have proven very helpful in other jurisdictions, and potential policies include tax receipting for donated used materials, and the elimination of sales tax on used materials. Other market incentives include reduced permit fees, density bonuses, and set-back leniencies when used building materials are utilized.

7 Market Analysis of Used Building Materials in Metro Vancouver 7 Supporting entrepreneurs and manufacturing, including those involved with both recycling and valueadded product manufacturing. Offering technical assistance to entrepreneurs, partnership programs, financing support, the provision of low-cost land, and the use of other economic development tools will help establish a market pull. Providing education and training in all aspects of the construction process, targeting architects, demolition and renovation contractors, home-owners and clients, and waste haulers. Ensuring job-site recycling practices, which are an effective way to reduce waste, are more widely adopted. Establishing a central facility such as a deconstruction hub emerged as a key strategy to improving diversion. This facility should be non-profit, focus on used building materials and on wood but be capable of receiving all C&D materials, and act as a hub in support of entrepreneurial activity. A virtual inventory will help engage the design community, and a critical mass of inventory is necessary (not a few hundred doors, but 10,000 doors). The wood processing aspect of the facility should be capable of sorting, de-nailing, metal detection, chopping and re-grading, thickness sanding, gluing, and pressing into new products. The facility should also be supported by multiple drop-off locations across Metro Vancouver, including the Eco-Centres envisioned by Metro Vancouver. Connecting the supply chain between the supply of used materials and the requirements of new construction. This can be accomplished, in part, by working with institutions that have the capacity to do this internally (e.g. universities and branches of government). Stimulating deconstruction through mechanisms such as the City of Vancouver s deconstruction strategy which de-couples deconstruction from the building permit. Other approaches include offering an accelerated development permit process, mandatory deconstruction for categories of buildings, and establishing targets within the 5Rs hierarchy rather than simply overall diversion. Designing for minimal waste through the use of common dimensions (e.g. not 9-foot ceilings), relaxing demands for matching visible components, changing contract requirements to allow for used materials, and designing for long-term expansion, durability and deconstruction. Maintaining existing building stock by limiting the ability to take down buildings (e.g. new spec houses and condos), offering incentives to retain buildings or move houses to a new location, and requiring a minimum building lifespan as part of the development permit. Recommendations for improving diversion from the C&D waste stream in Metro Vancouver were developed for both immediate action and for medium-term action: Immediate Action 1. Stimulate deconstruction through bylaw and permit incentives (Section IV-H). 2. Encourage the development of deconstruction training (Section IV-C). 3. Establish and promote targets for improved diversion within each level of the 5Rs hierarchy (Section IV- D). 4. Research opportunities for tax incentives (Section IV-A) 5. Establish more distributed drop-off locations for all C&D waste stream materials (Section IV-F). 6. Establish purchasing policies that give preference to products from the C&D waste stream, and encourage other institutions and levels of government to do the same (Section IV-A). 7. Collect permit, construction value, and square footage data from each municipality, from this point on, in order to more accurately estimate C&D waste generation (Section I-A). Medium-Term Action 1. Partner with professional organizations to create education programs about designing buildings for minimal waste, long-term versatility, and deconstruction (Section IV-I). 2. Implement regulations and incentives to maintain the existing building stock (Section IV-J). 3. Establish a central non-profit facility (or facilities), focused on used building material and wood, but capable of receiving all C&D materials, and organized as a hub in support of entrepreneurial activity (Section IV-F).

8 Market Analysis of Used Building Materials in Metro Vancouver 8 4. Support entrepreneurial and manufacturing initiatives (Section IV-B) 5. Collect data from C&D reuse and recycling facilities to inform progress toward targets within 5Rs hierarchy (Section IV-D.)

9 Market Analysis of Used Building Materials in Metro Vancouver 9 I. Waste Generation A - Methodology General Approach An objective of this study was to estimate the mass and composition of waste that is generated annually, from , in Metro Vancouver from construction, renovation, and demolition activities. The first step in developing this estimate was to obtain building permit data for these activities from every municipality in Metro Vancouver. An estimate for un-permitted activity was then added to this core data. The available data revealed the level of activity as measured by the number of permits and the dollar value of activities, for new construction, renovation, and demolition, in both residential and non-residential sectors. This information was then translated into the square footage of activity. We also estimated the number of specific additional projects for which permits are not required, such as roof replacements, driveway replacements, and heating equipment replacements. From this information, an estimate was generated for the total annual mass of waste and the composition by material category. In order to determine appropriate waste generation rates for this study, a number of published studies were reviewed and interviews were conducted with individuals involved in the industry. 1 The most comprehensive study reviewed was conducted by Franklin Associates (1998) in which a methodology was presented and followed, and summaries of waste generation studies for multiple building types and locations in the United States were presented. A USEPA study was conducted in 2003 that followed the Franklin Associates methodology and used the same waste generation rates, with the exception of non-residential new construction. For the purposes of this study, the Franklin Associates methodology is followed and their waste generation rates are used, with a few exceptions as noted in the detailed methodology. To estimate the composition, by material, of the generated waste, the same composition tables that were used by Franklin Associates (1998) are used in this study as well. These tables were generated from waste audits for new construction, renovation, and demolition activities, in residential and non-residential projects, in various locations around the United States. The appropriate tables used in the Franklin Associates study, from projects in Seattle, Washington, are used based on the assumption that construction practices and materials utilized in Seattle would be most similar to those in Metro Vancouver. Data Collection Each municipality in Metro Vancouver was requested to provide, for the years , the following data: 1. Residential construction permits: i) number for each year; ii) construction value for each year; iii) square footage for each year (if available); iv) percentage on undeveloped land; v) estimate of un-permitted activity 2. Residential renovation permits, broken down by type (kitchen, bathroom, etc.)(if possible): i) number for each year; ii) construction value for each year; iii) estimate of un-permitted activity 3. Residential demolition permits: i) number for each year; ii) square footage (if available); iii) categorized by age of structure (if possible); iv) estimate of un-permitted activity 4. Non-residential construction permits: i) number for each year; ii) construction value for each year; iii) square footage for each year (if available); iv) percentage on undeveloped land; v) estimate of un-permitted activity 5. Non-residential renovation permits: i) number for each year; ii) construction value for each year; iii) estimate of un-permitted activity 6. Non-residential demolition permits: i) number for each year; ii) square footage (if available); iii) estimate of unpermitted activity 1 The studies reviewed include: 3R Demolition (2004), City of Anitoch (2004), Cosper (1993), Franklin Associates (1998), Freeman (1994), Gordon (2003), Metro Vancouver (1999a), Santa Monica (2010), and Weber (2009).

10 Market Analysis of Used Building Materials in Metro Vancouver 10 The format and content of data collected by each municipality varied significantly. Some municipalities used a database, others used spreadsheets, and some had only hand-written records until very recently. In some cases, municipal staff provided print-outs of all permit activity detail, and in other cases summaries were provided. The data generally not tracked or available from municipalities included: Square footage of construction Percentage of development on undeveloped land Estimate of unpermitted activity Breakdown of residential renovations by type (kitchen, bathroom, addition, etc.) Square footage of demolitions The core data that was available from almost all municipalities consisted of: Residential new construction: number of permits; construction cost Residential renovations: number of permits; construction cost Non-residential new construction: number of permits; construction cost Non-residential renovations: number of permits; construction cost Demolitions: number of permits Gaps in Data Set Anmore: no data was available. Anmore s data was estimated based on Anmore's portion of Metro Vancouver's total population (0.0845%) 2. Coquitlam: in 2005 and 2006, only totals were available for residential and non-residential construction (rather than a breakdown between new construction and renovations). The totals provided for each of those years were multiplied by the average proportion of new construction versus renovation. The assumption is that the same ratio will apply to The same was done for demolition permits, for which the total only was given in 2005 and 2006 (rather than a breakdown between residential demolitions and non-residential demolition). Langley City: only data for 2010 was available. So for , the 2010 data was applied to each of those years according to the Metro Vancouver wide totals for each year in comparison to For example, if the Metro Vancouver wide total for 2009 was 98% of 2010, the Langley City's 2010 data was multiplied by 98% to come up with Langley City's 2009 figures. The result is the Langley City's pre-2010 numbers will rise and fall with the overall trends, arriving at the actual 2010 data. Maple Ridge: demolition permit data was not provided. Demolition permit data was estimated based on Maple Ridge's portion of Metro Vancouver's total population. New Westminster: Only totals were available for residential and non-residential construction (rather than a breakdown between new construction and renovation). The totals provided were multiplied by the Metro Vancouver wide proportion of new construction versus renovation. No data was available for demolition permits, so the figures were estimated based on population. Pitt Meadows: Only totals were available for residential and non-residential construction (rather than a breakdown between new construction and renovation). The totals provided were multiplied by the Metro Vancouver wide proportion of new construction versus renovation. No data was available for demolition permits, so the figures were estimated based on population. University Endowment Lands: no data was available. UEL s data was estimated based on UEL's portion of Metro Vancouver's total population (0.1893%). 2 Population figures used in this study were sourced from Metro Vancouver (2007).

11 Market Analysis of Used Building Materials in Metro Vancouver 11 Cross-Check with Other Statistics The total construction value compiled in this study was compared with totals reported by Statistics Canada, and a total variance of 1.6% was found. These results provide reasonable assurance that the data collected from the municipalities for this study represents a verifiable picture of the overall level of new construction and renovation activity in Metro Vancouver. The compared values are shown in Table 1. Table 1: Comparison with Statistics Canada This Study Statistics Canada 3 Difference % 2005 $5,569,070,792 $5,650,982, % 2006 $6,694,826,246 $6,617,381, % 2007 $7,383,093,850 $7,011,139, % 2008 $5,699,624,269 $5,587,958, % 2009 $3,942,344,774 $3,889,824, % 2010 $5,760,351,707 $5,730,200, % Total $35,049,311,638 $34,487,484, % Residential New Construction Starting with the residential new construction permit data collected from each municipality, the construction values for each municipality are broken down between 1-2 family homes and multi-unit residential buildings. Some municipalities record these construction values separately, and some do not. Figure 1 shows the percentage of residential new construction that was for 1-2 family homes, for each of the 11 municipalities that record this information separately. Figure 1: 1-2 Family Home Construction Value as Percentage of Total Residential New Construction Value 3 (

12 Market Analysis of Used Building Materials in Metro Vancouver 12 While there is significant variance between municipalities from year to year, two general trends seem to apply: i. There was a slight downward trend in the proportion of 1-2 family home construction until 2008, and then a slight upward trend after This trend reflects market conditions in Metro Vancouver as the condominium market was stronger between 2005 and 2008, and weaker between 2008 and ii. There was a higher proportion of 1-2 family home construction in less dense communities, such as Maple Ridge, than in more dense communities, such as Vancouver. For the 11 municipalities for which data was tracked, this actual data is used to separate the 1-2 family construction from the multi-unit construction. For all other municipalities, the average percentage of 1-2 family construction is applied to the total construction value reported by the municipality. 1-2 Family Homes The methodology followed for 1-2 family homes residential new construction is illustrated in the graphic above, and is explained in the following detailed steps: 1. For each year, the total value of 1-2 family new construction in each municipality was divided by the construction cost per square foot to determine the square footage of construction. The construction values recorded by municipalities for each project are the higher value of either: i) the value declared by the project, or ii) a calculated value based on the architectural plans and an assumed cost of construction per square foot. This assumed cost of construction varies between municipalities. Some municipalities have developed their own schedule for construction cost, and others use the software or printed tables produced by Marshall & Swift LLC of Los Angeles. This study adopts the approach used by each specific municipality to determine the appropriate construction cost per square foot for that municipality. When this information was not available, a Metro Vancouver wide average of municipalities for which data was available is applied. The range of assumed costs of construction varied from $69/sq. ft. in Surrey to $200/sq. ft. in West Vancouver, with the overall average being $114/sq. ft. These numbers may not reflect actual costs of construction, but they were the numbers that municipalities multiplied by square footage to determine their reported construction values. Accordingly, these same numbers are used to calculate backwards to the square footage of construction. For the municipalities that recorded the actual square footage of construction (Belcarra, Coquitlam, Delta, City of Langley, and Surrey), this data is used. The construction cost and square footage of residential new construction for the study years is shown in Table 2. Table 2: Residential New Construction: Construction Cost and Square Footage Avg Cost (000s) $3,625,658 $4,105,376 $4,769,186 $3,188,424 $2,052,907 $3,639,741 $3,563,549 Sq. Ft.: 1-2 Family 13,593,567 14,426,910 13,394,908 11,491,651 10,289,456 15,480,472 13,112,827 Multi-Unit 20,665,684 24,130,794 27,753,933 17,903,838 9,599,792 17,790,122 19,640,694 Total 34,259,251 38,557,704 41,148,840 29,395,489 19,889,248 33,270,594 32,753, The square footage of 1-2 family new construction was multiplied by a waste generation factor to determine the total mass of waste produced during construction. The two waste generation factors used in this study come

13 Market Analysis of Used Building Materials in Metro Vancouver 13 from two separate reports: Franklin Associates (1998) and USEPA (2003). Franklin Associates (1998) used 4.38 lbs/sq.ft. and USEPA (2003) used 4.39 lbs/sq. ft.. This study uses the average of the two: lbs/sq. ft. 3. The total waste produced was multiplied by the appropriate percentage for each component material group listed in the Franklin Associates (1998) composition table from residential new construction in Seattle. The percentages were taken from Franklin Associates (1998), and the tonnes shown in Table 3 are the result of multiplying these percentages by the total waste. Table 3: Residential New Construction (1-2 Family Homes) Material % Avg Tonnes/Yr Glass 0.03% 9 Hazardous Waste 0.50% 131 Metals 2.75% 717 Mineral Aggregates 29.16% 7,604 Other Materials 8.11% 2,115 Other Organics 1.51% 393 Plastics 5.36% 1,398 Wood Waste 52.58% 13,714 Total % 26,081 Multi-Unit Residential The methodology for multi-unit residential new construction is the same as 1-2 Family residential new construction, with the following exceptions: 1. The assumed construction cost per square foot for multi-unit residential new construction is different from 1-2 family residential new construction in some of the municipalities that use their own schedule. Also, the Marshall & Swift cost of construction is different for multi-unit. In these instances, the appropriate multi-unit assumed cost is used. 2. Non-residential new construction waste generation rate for multi-unit residential new construction is used. This is based on the assumption that multi-unit new construction which includes apartment complexes and condominium towers is more similar to non-residential new construction than it is to 1-2 family residential construction. For example, more concrete and steel is typically used in these projects than in single-family residential construction. The USEPA (2003) waste generation rate for non-residential new construction is based on a larger sample size than the Franklin Associates (1998) waste generation rate, and is from a more recent study. For these reasons, the USEPA (2003) non-residential new construction rate of 4.34 lbs/sq. ft. is used instead of the Franklin Associates (1998) rate of 3.89 lbs/sq. ft. 4. The total waste produced was broken down into various component material groups according to Franklin Associates (1998) composition table from non-residential new construction in Seattle, rather than from residential new construction. As with the waste generation rate, the approach used in this study assumes that the non-residential composition table would better reflect the type of construction and materials used in multiunit residential construction than would the composition table for 1-2 family residential construction.

14 Market Analysis of Used Building Materials in Metro Vancouver 14 Table 4: Residential New Construction (Multi-Unit) Material % Avg Tonnes/Yr Glass 0.04% 16 Hazardous Waste 1.80% 696 Metals 10.20% 3,944 Mineral Aggregates 36.80% 14,229 Other Materials 12.92% 4,995 Other Organics 0.40% 155 Plastics 3.20% 1,237 Wood Waste 34.60% 13,378 Total % 38,649 Non-Residential New Construction The methodology used for non-residential new construction is the same as residential new construction, except that no distinction was made by type of building. Non-residential construction is much more heterogeneous than residential construction, and as the US EPA notes, [t]here are fewer material assessments for non-residential buildings, making the average generation rates for C&D materials more uncertain. (USEPA 2003, 10). Taking these limitations into account, the Franklin Associates (1998) and USEPA (2003) methodology is used as follows: 1. Based on the value of construction data collected from each municipality, the square footage of construction is calculated. The construction value of non-residential new construction is recorded by each municipality because it is necessary for the calculation of permit fees. However, very few municipalities record the square footage of construction. The annual data from the two municipalities that provided this information (City of Langley, and Surrey) ranged from $82/sq. ft. to $196/sq. ft., with an average of $139/sq. ft. For all other municipalities, the average construction cost of $139/sq. ft. is used to calculate the square footage of non-residential new construction. The totals are presented in Table 5. Table 5: Non-Residential New Construction: Construction Cost and Square Footage Avg Cost (000s) $885,334 $1,408,676 $1,503,033 $1,061,469 $697,758 $766,921 $1,053,865 Sq. Ft. 6,369,315 10,134,359 10,813,187 7,636,466 5,019,839 5,517,415 7,581, The square footage of construction for each year was multiplied by the waste generation rate for non-residential new construction. The USEPA (2003) waste generation rate for non-residential new construction is based on a larger sample size than the Franklin Associates (1998) waste generation rate, and is from a more recent study. For these reasons, the USEPA (2003) non-residential new construction rate of 4.34 lbs/sq. ft. is used instead of the Franklin Associates (1998) rate of 3.89 lbs/sq. ft. 3. The total waste produced was broken down into various component material groups according to Franklin Associates (1998) composition table from non-residential new construction in Seattle. The estimated waste produced by category of material is shown in Table 6.

15 Market Analysis of Used Building Materials in Metro Vancouver 15 Table 6: Non-Residential New Construction Material % Avg Tonnes/Yr Glass 0.04% 6 Hazardous Waste 1.80% 269 Metals 10.20% 1,522 Mineral Aggregates 36.80% 5,493 Other Materials 12.92% 1,928 Other Organics 0.40% 60 Plastics 3.20% 478 Wood Waste 34.60% 5,164 Total % 14,919 Residential Renovations As with the approach taken for residential new construction, the methodology for estimating residential renovation waste begins by separating 1-2 family renovations from multi-unit renovations. Starting with the total number of residential renovation permits that were collected from each municipality, the permits are broken down between 1-2 family home renovations, and multi-unit residential renovations. Some municipalities record these permits separately, and some do not. Figure 2 shows the percentage of residential renovation permits (from ) that were for 1-2 family homes, for each of the six municipalities that record this information separately. Figure 2: 1-2 Family Home Permits as Percentage of Total Residential Renovation Permits For the six municipalities that separated 1-2 family renovation permits from multi-unit renovation permits, this actual data is used. For all other municipalities, the average of these six municipalities, for each year, is used to separate 1-2 family renovations from multi-unit renovations. For the 1-2 family renovations, this study follows the Franklin Associates (1998) methodology that attempts to capture renovation waste by job types that include kitchen renovations, bathroom renovation, driveway replacement, roof replacement, and equipment replacement. Multi-unit renovation waste is estimated based on the total dollars spent on multi-unit renovations as compared to 1-2 family renovations.

16 Market Analysis of Used Building Materials in Metro Vancouver Family Homes Rather than estimating waste generation from residential renovations based on the square footage of renovation activity, estimates derived in this study are based on the number of different types of jobs undertaken. As Franklin Associates point out: Because of the wide variation in remodelling projects, waste assessments to determine the generation per square foot are not very useful for estimating total generation. More important is the amount of material produced per job. (1998, 2-8). Accordingly, calculations in this study proceeded as follows: 1. The number of residential renovation permits for 1-2 family homes were determined as outlined above, and then increased by a factor to account for unpermitted activity. The unpermitted activity is intended to capture renovations for which a permit was required but not obtained, as well as for renovations for which a permit was not required. Estimates of unpermitted activity were obtained from three sources: i) Statistics Canada (1995) estimates that the underground economy involved in residential renovations represents approximately 20% more labour cost than is reported on GST filings. They assume that most of the materials are captured because they are purchased from wholesale and retail outlets that report sales. So their estimate of 20% applies only to the labour portion of residential renovations. ii) The Greater Vancouver Home Builders Association estimates that approximately 30% of renovation activity is in the cash economy. (interview with Peter Simpson, 2011) iii) Municipal staff interviewed for this project estimate that the unpermitted activity could be as high as 50%. In light of these estimates, this study assumes that 33% more 1-2 family renovation jobs take place than those for which permits are obtained. Accordingly, the number of permits each year is increased by 33% to give the total number of jobs. 2. The number of renovation jobs is broken down into five categories, as per Franklin Associates (1998): major bathroom, minor bathroom, major kitchen, minor kitchen, and additions and other renovations. To allocate the total number of jobs into these categories, estimates of total annual jobs in the United States referenced by Franklin Associates (1998) and USEPA (2003) are used. Franklin Associates based their estimates on data from the National Association of Home Builders, and USEPA based their estimates on data from the Joint Center for Housing Studies of Harvard University. This study averages the two data sets to estimate the percentage of total renovation jobs represented by each renovation type. Table 6 shows the results. 3. The number of renovation jobs of each type was multiplied by the appropriate tonnes of waste per job. Franklin Associates (1998) and USEPA (2003) each used the same number of tons per job, which are converted into metric tonnes per job for the purposes of this study. Table 6 shows the resulting number of tonnes per job. Table 6: Allocation of Renovation Jobs by Type & Waste Generation by Type Type Franklin USEPA Used in Study Avg # Jobs Tonnes/Job Avg Tonnes/Yr Major Bathroom 18% 10% 14% Major Kitchen 19% 8% 13% ,187 Minor Bathroom 27% 24% 25% 1, Minor Kitchen 19% 20% 19% 1, Additions & Other 19% 37% 28% 1, ,105 5,806 6,126

17 Market Analysis of Used Building Materials in Metro Vancouver 17 Note: percentages shown are rounded and may not total 100% 4. For each year, the total number of tonnes of waste estimated to have been generated by these various types of renovations was multiplied by the composition percentage from Franklin (1998) for residential renovations in Seattle. The results are shown in Table 7. Table 7: Residential Renovations (1-2 Family Homes) Material % Avg Tonnes/Yr Glass 1.00% 61 Hazardous Waste 0.10% 6 Metals 5.20% 319 Mineral Aggregates 31.20% 1,911 Other Materials 3.20% 196 Other Organics 0.80% 49 Plastics 3.00% 184 Wood Waste 55.50% 3,400 Total % 6,126 Multi-Unit Residential The methodology used to estimate waste generation from 1-2 family home renovations is not applicable to multi-unit residential renovations. This is because a single permit for a multi-unit residential renovation might cover many individual kitchen, bathroom, or addition jobs, as understood in the context of 1-2 family renovations. In fact, collected data indicates that the average construction cost per permit was $63,406 for 1-2 family renovations, and $197,199 for multi-unit renovations, indicating that significantly more work is being done for each multi-unit renovation permit. Therefore, the amount of waste generated from multi-unit residential renovations is estimated by comparing the dollars spent on multi-unit renovations to the dollar spent on 1-2 family home renovations. In doing so, it was assumed that the amount of waste generated per dollar spent on renovations would be comparable between 1-2 family renovations and multi-unit renovations; and that the waste stream composition would be similar. The specific steps are outlined as follows: 1. The construction value for multi-unit renovations is increased by 33% to account for unpermitted renovations. The rationale for doing so is the same as it was for increasing the number of 1-2 family renovation permits, as outlined above. 2. The resulting construction value is divided by the construction value for 1-2 family renovations (also marked up by 33%). Table 8: Multi-Unit New Construction: Construction Cost as Percentage of 1-2 Family New Construction Cost Avg 1-2 Family $ (000s) $326,207 $447,249 $341,171 $391,810 $323,930 $378,352 $368,120 Multi-Unit $ (000s) $163,920 $192,118 $204,583 $291,879 $215,746 $245,150 $218,899 Multi-Unit as % of 1-2 Family 50% 43% 60% 74% 67% 65% 59%

18 Market Analysis of Used Building Materials in Metro Vancouver This number, expressed as a percentage, is then multiplied by the tonnes of waste estimated for each material from 1-2 family renovations. The results are shown in Table 9. Table 9: Residential Renovations (Multi-Unit Residential) Material % Avg Tonnes/Yr Glass 1.00% 37 Hazardous Waste 0.10% 4 Metals 5.20% 190 Mineral Aggregates 31.20% 1,140 Other Materials 3.20% 117 Other Organics 0.80% 29 Plastics 3.00% 110 Wood Waste 55.50% 2,028 Total % 3,654 Driveway Replacements The methodology used for estimating waste from driveway replacements is the one used by Franklin (1998) and USEPA (2003), and is based on Statistics Canada data for the number of housing dwellings in Metro Vancouver. The methodology is as follows: 1. Building categories in Metro Vancouver were grouped to estimate that there are 487,535 single-family dwellings, duplexes, and row house units (Statistics Canada 2006). It is this category of residences, as differentiated from apartment and condominium buildings, that are assumed to be close to the category of residences used by Franklin Associates (residences with less than five units per structure)(1998). 2. As per Franklin Associates (1998) and USEPA (2003) it is assumed that 60% of these buildings have concrete driveways, and that 3% of these are replaced every year. This calculation provides an estimated number of concrete driveway replacement jobs each year. It is assumed that asphalt driveways are generally re-sealed, coated and filled rather than replaced. 3. The annual number of concrete driveway replacement jobs is multiplied by the average weight per driveway, and 100% of this waste is categorized as mineral aggregates. Table 10: Driveway Replacements # Driveways/Yr Lbs per Job Avg Tonnes/Yr 8,776 17,982 71,590 Roof Replacements The methodology used for estimating waste from roof replacements is the one used by Franklin (1998) and USEPA (2003), and is based on Statistics Canada data for the number of housing dwellings in Metro Vancouver. The methodology is as follows:

19 Market Analysis of Used Building Materials in Metro Vancouver The same housing inventory of 487,535 single-family dwellings, duplexes, and row house units (Statistics Canada 2006) that is used in estimating driveway replacements. 2. As per Franklin Associates (1998) and USEPA (2003) it is assumed that 67% of these buildings have asphalt roofs, and that 25% of these buildings have wood roofs. In addition, as per Franklin (1998) and USEPA (2003), it is assumed that 7% of the asphalt roofs and 5% of the wood roofs are replaced each year. This calculation provides an estimated number of asphalt roof replacement jobs each year, and an estimated number of wood roof replacement jobs each year. 3. The annual number of roof replacement jobs is multiplied by the average weight of waste per job. Franklin (1998) had a slightly lower estimate of the weight per job than did USEPA (2003) for both asphalt roofs and wood roofs. For the purpose of this study, the average of these two estimates is used. 100% of the waste from asphalt roof replacement jobs is categorized as mineral aggregates, and 100% of the waste from wood roof replacement jobs is categorized as wood. Table 11 shows the results. HVAC Equipment Replacements Table 11: Roof Replacements # Jobs/Yr Lbs per Job Avg Tonnes/Yr Asphalt Roofs 22,865 3,380 35,056 Wood Roofs 6,094 2,900 8,016 43,072 The methodology used for estimating waste from HVAC equipment replacements is the one used by Franklin (1998) and USEPA (2003), and is based on Statistics Canada data for the number of housing dwellings in Metro Vancouver. The methodology is as follows: 1. The total number of residential dwelling units in Metro Vancouver, which was 807,900 in 2006 (Statistics Canada, 2006) is used as a starting point. A recognized limitation of this approach is that this total is the number of dwelling units rather than the number of buildings. However, it is assumed that the size of equipment is related to the number of dwelling units serviced by it, and therefore any over-estimation in the number of pieces of equipment replaced each year would be offset by under-estimation in the size of equipment. 2. Tables from Franklin Associates (1998) and USEPA (2003) are used to determine the percentage of these dwellings that have various pieces of HVAC equipment, and how frequently these pieces of equipment are replaced. In most cases the percentages used in the two studies are averaged. The exception to this is the assumed frequency of replacement of central air conditioning units, for which data is used from the Office of Energy Efficiency at Natural Resources Canada which found that 18% of homes in British Columbia have air conditioning (Natural Resources Canada, 2003). 3. The annual number of replacement jobs for each type of equipment is multiplied by the weight of each piece of equipment. Franklin (1998) and USEPA (2003) used the same weights for each piece of equipment, which is also used in this study. 100% of the waste from HVAC equipment replacement is categorized as other materials. Table 12 shows the results.

20 Market Analysis of Used Building Materials in Metro Vancouver 20 Table 12: HVAC Replacements Type % of Homes % Replaced/Yr # Jobs Lbs/Job Tonnes/Yr Air Furnaces 57% 5% 22, ,109 Heat Pumps 10% 5% 4, ,104 Hot Water System 13% 3% 3,141 1,000 1,425 Pipeless Furnace 5% 5% 2, Electric Units 6% 7% 3, Room Heaters 3% 7% 1, Stoves 2% 3% Fireplaces 1% 4% Central Air 18% 5% 7, ,979 8,362 Non-Residential Renovations Franklin (1998) attempted two approaches for estimating the mass of waste from non-residential renovations. In the first approach they took the square footage of non-residential renovations and multiplied it by a waste generation factor. The outcome of this approach was found to be unreasonably low and not reliable (Franklin Associates 1998, A- 5). The USEPA study concurred with this finding, stating: Very few material assessments are available for non-residential renovation. Additionally, the materials assessments available do not have any consistency. Therefore, a methodology similar to the one used for residential renovation cannot be used to estimate the materials generated during non-residential renovations. (USEPA 2003, 16) Accordingly, both Franklin Associates (1998) and USEPA (2003) embraced a methodology that compares the dollars spent on non-residential renovations to the dollars spent on residential renovations, and assumes that the waste generated would be proportional. The same approach is followed in this study, as outlined below: 1. The dollars spent on non-residential renovations for each year are compared to the dollars spent on residential renovations (after the 33% increase for unpermitted activity). Non-residential renovation expenditures, as a percentage of residential renovation expenditures, are shown in Table 13. Table 13: Non-Residential Renovations as Portion of Residential Renovations $ Renovations Avg Residential $ (000s) $490,127 $639,367 $545,754 $683,689 $539,676 $623,502 $587,019 Non-Residential $ (000s) $689,561 $700,047 $700,534 $935,679 $785,909 $884,891 $782,770 Non-Residential as % of Residential 141% 109% 128% 137% 146% 142% 133% 2. This percentage is then multiplied by the total residential renovation waste to determine an estimate for total non-residential waste for each year. 3. For each year, the total number of tonnes of waste is multiplied by the composition percentage from Franklin (1998) for non-residential renovations in Seattle. The results are shown in Table 14.

21 Market Analysis of Used Building Materials in Metro Vancouver 21 Table 14: Non-Residential Renovations Material % Avg Tonnes/Yr Glass 0.03% 47 Hazardous Waste 0.90% 1,600 Metals 12.80% 22,757 Mineral Aggregates 21.81% 38,775 Other Materials 3.70% 6,578 Other Organics 1.70% 3,022 Plastics 8.00% 14,223 Wood Waste 51.02% 90,706 Total % 177,709 Residential Demolition 1. The first step in calculating waste from demolitions is to break down the total number of demolition permits between residential demolitions and non-residential demolitions. Seven of the municipalities (Belcarra, Coquitlam, Delta, Langley Twp, Lions Bay, North Van City and Richmond) separated residential from nonresidential demolition permits. For all other municipalities it is assumed that the ratio of residential demolitions to non-residential demolitions is the same as the ratio of residential new construction to non-residential new construction. The ratio of dollars spent on residential new construction to the dollars spent on non-residential new construction is applied to the total number of demolition permits to estimate the breakdown of residential demolitions to non-residential demolitions. 2. The number of residential demolition permits for each year is then multiplied by the average square footage of a residential demolition to give the total square footage of residential demolition for each year in the study. The average home size in the City of Vancouver is between 2,700 and 3,300 sq. ft. of heated space, while the national average for new home construction is around 2,200 sq. ft. 4 Recognizing that homes being demolished were generally built many years ago, and that home sizes have risen over time, a smaller average home size for the average demolished home is assumed. In consultation with Metro Vancouver, the average home being demolished is assumed to be 2,000 square feet. 3. The total square footage of residential demolition is then multiplied by the waste generation factor from Franklin Associates (1998) of 115 lbs/sq. ft. (including concrete). 4. The total waste generated each year is then broken down into material groupings according to the waste composition table for residential demolition in Seattle, from Franklin Associates (1998). The results are shown in Table 15. Table 15: Residential Demolitions Material % Avg Tonnes/Yr Glass 1.60% 3,863 Hazardous Waste 0.30% 724 Metals 5.30% 12, from Chris Higgins, Canada Green Building Council, with reference to a study done by E3 Eco Group Inc.

22 Market Analysis of Used Building Materials in Metro Vancouver 22 Mineral Aggregates 30.35% 73,276 Other Materials 3.20% 7,726 Other Organics 7.40% 17,866 Plastics 2.40% 5,795 Wood Waste 49.45% 119,391 Total % 241,438 Non-Residential Demolition 1. The breakdown of total demolition permits between residential and non-residential permits, as outlined above, provides the number of non-residential demolition permits. 2. The number of non-residential demolition permits for each year is then multiplied by the average square footage of a non-residential demolition to give the total square footage of non-residential demolition for each year in the study. Natural Resources Canada s Commercial and Institutional Building Energy Use Survey 2000 prepared an inventory of all buildings in Canada with an area of at least 1,000 square feet, and with 50% or more of this area devoted to commercial or institutional activities (Natural Resources Canada 2002). This inventory shows that there are 16,681 such buildings in British Columbia, with a combined floor area of 26,937,221 square metres (289,949,833 square feet). The average building size in British Columbia in this inventory is therefore 17,382 square feet. As such, it is assumed that the average non-residential demolition was of a 17,382 square foot building. 3. The total square footage of non-residential demolition is then multiplied by a waste generation factor to estimate the total waste from non-residential demolition. Franklin Associates (1998) used a waste generation factor of 155 lbs/sq. ft., and USEPA (2003) used a waste generation factor of 158 lbs/sq. ft.. The USEPA factor was based on the same waste audits referenced by Franklin Associates, as well as additional audits conducted after the Franklin Associates study. For this study, the USEPA (2003) factor of 158 lbs/sq. ft. is used. 4. The total waste generated each year is then broken down into material groupings according to the waste composition table for non-residential demolition in Seattle, from Franklin Associates (1998). The results are shown in Table 16. Table 16: Non-Residential Demolitions Material % Avg Tonnes/Yr Glass 0.80% 5,521 Hazardous Waste 0.90% 6,212 Metals 17.90% 123,543 Mineral Aggregates 28.40% 196,013 Other Materials 13.70% 94,556 Other Organics 2.70% 18,635 Plastics 4.60% 31,749 Wood Waste 31.00% 213,958 Total % 690,186

23 Market Analysis of Used Building Materials in Metro Vancouver 23 B - Results Utilising the methodology described above, it is estimated that between 2005 and 2010, an average of 1.3 million tonnes per year of waste was generated by the construction, renovation, and demolition activities in Metro Vancouver. Table 17 provides a summary, and Appendix I provides a table of results, including projections through to year Table 17: Total Annual Average C&D Waste Generated Material % Avg Tonnes/Yr Glass 1% 9,560 Hazardous Waste 1% 9,642 Metals 13% 165,788 Mineral Aggregates 34% 445,087 Other Materials 10% 126,574 Other Organics 3% 40,210 Plastics 4% 55,173 Wood Waste 36% 469,755 Total 100% 1,321,788 The waste generated from demolition forms the largest portion of the waste stream. Results indicate that 70% of the waste stream comes from demolition, 25% comes from renovations, and 5% comes from new construction. Figures 3, 4, and 5 present the breakdown of average annual waste between new construction, renovation, and demolition (Figure 3); between residential and non-residential (Figure 4), and by combinations of these groupings (Figure 5). Figure 3: Average Annual C&D Waste Generated by Activity

24 Market Analysis of Used Building Materials in Metro Vancouver 24 Figure 4: Average Annual C&D Waste Generated by Sector Figure 5: Average Annual C&D Waste Generated by Activity and Sector

25 Market Analysis of Used Building Materials in Metro Vancouver 25 Over the six years of the study period, waste generation from new construction, renovation, and demolition varied as shown in Figure 6. Figure 6: Annual C&D Waste Activity In terms of materials present in the waste stream, Figure 7 illustrates the annual breakdown of total waste by material grouping. Figure 7: Annual C&D Waste Generated by Source Category Clearly wood, mineral aggregates, metals, and other materials form the vast majority of the waste stream. On average, 470,000 tonnes of wood, 445,000 tonnes of mineral aggregates, 166,000 tonnes of metals, and 127,000 tonnes of other materials, are generated annually, with these four categories represent 91% of the waste stream. Figure 8 provides a further breakdown of the waste materials generated to allow for comparison of the contribution of residential versus non-residential practices. Between 2005 and 2010, waste generated from the non-residential sector represented approximately 65% of the waste, while the residential sector generated 35%. This overall ratio roughly holds for some of the materials, such as wood, mineral aggregates, glass, and other materials. However, with some materials, such as metals and hazardous waste, non-residential sources are responsible for a much higher portion than their overall contribution.

26 Market Analysis of Used Building Materials in Metro Vancouver 26 Figure 8: Residential vs. Non-Residential Waste Generation By Material C - Sensitivity of Key Assumptions 1. Use of USEPA (2003) non-residential new construction waste generation rate rather than Franklin Associates (1998) rate for both multi-unit residential new construction and for non-residential new construction. The use of the Franklin Associates (1998) rate would have resulted in a total decrease of 5,554 tonnes (0.4%) of C&D waste per year. 2. Non-residential new construction square footage is calculated based on the average actual square footage data obtained from the City of Langley and Surrey, converted into a cost per square foot. If, instead of using the average cost per square foot from these two municipalities, the maximum cost per square foot of $196 was used, the total C&D waste per year would drop by 4,339 tonnes (0.3%). If the minimum cost per square foot of $82 was used, the total C&D waster per year would increase by 10,372 tonnes per year (0.8%). 3. Un-permitted activity is assumed to be 33% of permitted activity, and is applied to the cost and number of permits for 1-2 family renovations (bathrooms, kitchens, additions) and multi-unit renovations. It is not applied to the replacement of driveways, roofs, or HVAC equipment. Non-residential renovations are calculated based on proportionate dollars spent on non-residential renovations versus residential renovations. The assumption is that the tonnes of waste per dollars spent is the same for both non-residential and residential renovations. If the unpermitted activity is increased from 33% to 50%, this increases the dollars spent and the number of permits for residential renovations, and some of the waste from residential renovations (from 1-2 family bathrooms, kitchens, and additions, and from multi-unit renovations), but not the waste from driveway, roof, and HVAC replacements. The total dollars spent on residential renovations increases by $75,032,540 (13%), but the total residential waste only increases by 1,250 tonnes per year (1%). Doing so reduces the ratio of tonnes of waste per dollar spent on residential renovations, and this reduced ratio is then applied to non-residential renovations, reducing the waste from non-residential renovations by 18,651 tonnes per year (10%). The net effect is an overall decrease in total C&D waste by 17,401 tonnes per year (1%). If the unpermitted activity is decreased from 33% to 25%, this decreases the dollars spent and the number of permits for residential renovations, and some of the waste from residential renovations (from 1-2 family bathrooms, kitchens, and additions, and from multi-unit renovations), but not the waste from driveway, roof, and HVAC replacements. The total dollars spent on residential renovations decreases by $35,309,431 (6%), but the total residential waste only decreases by 588 tonnes per year (0.4%). Doing so increases the ratio of tonnes

27 Market Analysis of Used Building Materials in Metro Vancouver 27 of waste per dollar spent on residential renovations, and this increased ratio is then applied to non-residential renovations, increasing the waste from non-residential renovations by 10,532 tonnes per year (6%). The net effect is an overall increase in total C&D waste by 9,994 tonnes per year (1%). 4. The average size of homes being demolished is assumed to be 2,000 square feet. If the national average home size of 2,200 square feet had been used in the calculation, the total C&D waste would increase by 24,144 tonnes per year (2%). If the average Vancouver new home size of 3,000 square feet was used, the total C&D waste would increase by 120,719 tonnes per year (9%). If the national average home size of 1,600 square feet was used, the total waste would decrease by 48,287 tonnes per year (4%). 5. The average size of a non-residential demolition is assumed to be 17,382 square feet, and the waste generated is 158 lbs/sq. ft. If the Franklin Associates waste generation factor of 155 lbs/sq. ft. had been used instead of the USEPA factor of 158 lbs/sq. ft., the total C&D waste would be reduced by 13,105 tonnes per year (1%). If the average size of a non-residential demolition is assumed to be 25% smaller (13,037 square feet instead of 17,382 square feet), the total waste would reduce by 172,527 tonnes per year (13%). If the average size of a nonresidential demolition is assumed to be 25% larger (21,727 square feet instead of 17,382 square feet), the total waste would increase by 172,527 tonnes per year (13%). D - Projections On July 29, 2011, the Greater Vancouver Regional District Board adopted the Regional Growth Strategy (RGS) which includes population projections of populations for each municipality to the years 2021, 2031, and For the purposes of this study, these population projections are used to calculate the growth rate between these periods. The calculated growth rates are then applied to the permit data obtained for 2010 and the same methodology used to calculate waste generation rates and composition above is used to project the waste generation and composition in 2021, 2031, and A table of population projections and calculated growth rates for each Metro Vancouver municipality can be found in Appendix II. Detailed projections are included in Appendix I. Figure 9 illustrates the projected total waste in 2021, 2031, 2041, in comparison to Figure 10 illustrates the projected growth in waste by material category. Figure 9: Projected Total Waste Generation

28 Market Analysis of Used Building Materials in Metro Vancouver 28 Figure 10: Projected Waste by Material Category

29 Market Analysis of Used Building Materials in Metro Vancouver 29 II. Distribution Network A - Existing Network Used Building Material Stores There are four active used building material retail operations in Metro Vancouver: Jack s New and Used Building Materials (Jack s), Surrey New and Used Building Materials (SNU), Bent Nail New and Preowned Building Supplies (Bent Nail), and the Habitat for Humanity ReStores (ReStore). At one time there were seven such operations in the lower mainland, and Bent Nail has reduced its operation by 75% over the past five years. Two of the operations Jack s and SNU branched from the first used building materials operation in the lower mainland, started in 1947 by the grandfather of Jack s and SNU s current owners. Interviewees said they feel there is no room in the marketplace for other sellers of used building materials. All four sell used building materials that include lumber, trim, siding, doors, windows, kitchen and bathroom cabinets, sinks, tubs, toilets, and flooring. All four also sell new building materials consisting of discontinued items, cancelled orders, surplus inventory, factory-direct, and bulk purchases. The sales of new materials are a big part of the business for Jack s, 50% of sales for SNU, and 40% of sales at ReStore. ReStore acquires its inventory both new and used materials exclusively through donations from individuals and organizations. The other three accept donations, as well as purchase used building materials. SNU indicated that 25% of their inventory comes from donations, and 75% from their own purchases. Jack s, SNU, and Bent Nail offer a salvage service in which they purchase the salvage rights for an entire house, and base their purchase price on the most valuable items. Used items are purchased for approximately 5-8% of their eventual sale price. They have salvage crews that then go into the homes and remove all items of value, including many smaller items. They are looking for quality items in good condition, and items with heritage value. As one representative put it, they want to buy items that are really old, or really new. Some of the operations indicated an interest in expansion into scratched and damaged appliances, or landscape soft goods (plants and trees). All four operations indicated that their customer base includes people with cabins or cottages, individuals renovating a basement suite, owners of heritage homes that want to match existing items, and the movie industry. The architect and designer market is small, as is the non-residential market. SNU indicated that 90% of their sales are directly to homeowners, and that 95% of their inventory comes from residential buildings. For-Profit Stores Jack s New and Used Building Materials has a facility in Burnaby that covers approximately 40,000 square feet of inside and outside storage. They have a staff of 7, and accept between 2-12 tonnes per day of used building materials. Their yard is full and as a result are very careful about bringing in only items that they know will sell. However, they own the land next to their facility and could expand if warranted. Surrey New and Used has a two acre site in Surrey, and one acre site in Chilliwack, that combined provide 80,000 square feet of inventory. The have a staff of 15 and have been in business for 25 years. Bent Nail New and Preowned Building Supplies has a 12,000 square foot facility in Abbotsford, and offers consignment and salvage services. Non-Profit Stores Habitat for Humanity runs two ReStores in Metro Vancouver, with a third planned for The Vancouver store is 20,000 square feet, and the Burnaby store is 7,800 square feet. Each store has two paid managers, one paid truck driver, and a significant number of volunteers. Combined sales are $1.4MM per year generated from 14,000-17,000 transactions ($82-$100 per transaction). As part of a 65-store network across Canada (with hundreds more in the US), the ReStores are supported by significant brand and organizational capacity.

30 Market Analysis of Used Building Materials in Metro Vancouver 30 New products are sold for 50% less than retail, and generate 40% of sales. Used products are sold for 75-90% less than retail, and generate 60% of sales. ReStore does not consider the sale of new items to be essential to their business plan, and not all ReStores in Canada sell new products. The Metro Vancouver ReStores are considering expanding their product line to include hard furniture, in addition to their current offering of office furniture. ReStore s entire inventory comes from donations: 30-40% from individuals, and 60-70% of donations from retailers, manufacturers, the movie industry, and other organizations. In total, 70% of their donations are residential materials, and 30% are non-residential. They feel a network of drop-off bins located across Metro Vancouver would help them acquire more donations from those not wanting to travel great distance to their facility. ReStore offers a tax receipt for some donated items. The tax receipt is based on fair market value, calculated as 50% of the eventual sale value. Individual items are generally not receipted, nor are donations from Home Depot. Some smaller manufacturers appreciate being given a tax receipt for donations, and donations of larger items (such as complete kitchens) generate a tax receipt. Nevertheless, ReStore does not feel the ability to offer tax receipts is an important driver for their business plan, while acknowledging that their American counterparts regularly rely on providing tax receipts in exchange for donations. Volunteer labour, however, is considered by ReStore to be essential for their success, and provides them with an enormous advantage over their competition. ReStore is seeking to further leverage this advantage by partnering with other non-profits (such as the Canadian Mental Health Association) to provide job skills training. They are also planning to use volunteer crews to offer a salvage service, similar to the ones currently offered by Jack s and SNU. While ReStore cannot manufacture products because of CRA rules, they would like to partner with another non-profit that would use some of the donated materials as feedstock for a manufacturing business. Capacity The total floor space of the four active used building material retailers is approximately 160,800 square feet. Based on Jack s stated turnover of between 2-12 tonnes per day in their 40,000 square feet, it is projected that total turnover of all four retailers is approximately 8 to 48 tonnes per day 5, or 2,100 12,700 tonnes per year 6. This estimated mass represents 0.16% to 0.96% of the 1.3MM tonnes of C&D generated annually in Metro Vancouver 7. Notwithstanding the assertion from some interviewees in the business that there is not any more room in the marketplace for another used building materials store, all the retail operations indicated a potential interest in expansion. Dave Bennink, a Bellingham-based deconstruction consultant, stated that with the high tipping fees, cultural attitude toward sustainability, and existing building stock in Metro Vancouver, he could have 100 full-time employees engaged in deconstruction and selling of used building materials in Metro Vancouver. In contrast, there are currently 30 full-time employees at the four existing used building material stores 8, including their deconstruction staff, but not including volunteers. Based on Bennink s estimation of staffing levels, the existing total employment of 30 could more than triple to 100. Assuming the turnover of material would increase proportionately, the mass of used building materials handled by such facilities could increase to between 7,000 and 42,000 tonnes per year, 9 which would represent between 0.5% to 3.2% of the 1.3 million tonnes of C&D generated annually in Metro Vancouver Low-end estimate: (2/40,000) x 160,800 = 8.04 tonnes per day. High-end estimate: (12/40,000) x 160,800 = tonnes per day. 6 Low-end estimate: 8.04 tonnes x 22 working days per month x 12 months = 2,123 tonnes per year. High-end estimate: tonnes x 22 working days per month x 12 months = 12,735 tonnes per year. 7 Low-end estimate: 2,123/1,321,788 = 0.16%. High-end estimate: 12,735/1,321,788 = 0.96%. 8 Jack s has 7 full-time staff. SNU has 15 full-time staff. It is estimated that Bent Nail has 2 full-time staff. Re-Store has 6 full-time staff. 9 Low-end estimate: (100/30) x 2,123 tonnes = 7,077 tonnes per year. High-end estimate: (100/30) x 12,735 tonnes = 42,450 tonnes per year. 10 Low-end estimate: 7,077/1,321,788 = 0.54%. High-end estimate: 42,450/1,321,788 = 3.21%

31 Market Analysis of Used Building Materials in Metro Vancouver 31 Direct Sales of Used Building Materials Most demolition, deconstruction, and renovation companies interviewed for this project reported efforts to sell used building materials directly from the job site. The most common method is direct calls to each company s established network of contacts. These networks are reported in some cases to be small, and in other cases are extensive and established. Each contact in the network is potentially interested in specific materials, and phone calls are material specific. For example, flooring installers are commonly cited as contacts used to sell any valuable wood flooring being removed. If the installer foresees an installation job for which the material could be used, the flooring is easily sold. Sales depend on identifying an immediate end use for the material, and interviews revealed the difficulty in storing used building materials, for both the buyer and the seller. The other common avenue for direct sales is through on-line postings such as Craigslist or Kijiji. While these sites are regularly used to distribute used building materials, they entail significant effort to identify serious buyers. From the perspective of the buyer, interviews revealed that such web-based ad postings are not an efficient place to find materials because the products are disaggregated, and the sellers are unknown. At the same time, used building material stores cited Craigslist as a serious competitor. Some demolition companies reported partnerships with other businesses, or ownership of associated businesses, that would take the salvaged material and manufacture new products. Common examples include the re-sawing of lumber into flooring, the manufacturing of mantles using salvaged timbers, and the production of wood furniture. Recycling Wood Wood represents 36% (by weight) of the construction and demolition waste generated in metro Vancouver, averaging 470,000 tonnes annually. The category of C&D wood waste includes a wide range of structural materials (solid and manufactured beams, lumber, sheet goods), temporary materials (plywood and lumber), coverings (flooring, siding, panelling), trim and finished products (cabinets and built-in furniture, mouldings, mantles, railings), and packaging (crating, dunnage, pallets). Further complicating this waste stream is the fact that wood waste is generated in a wide range of sizes, from massive beams to sawdust. As authors of a previous study pointed out, wood waste is generated along with many other waste streams, it is transported in mixed loads, and it appears in all key final disposal options (Penney et al, 2009, 30). If a demolition or renovation project yields large timbers (generally 3 or thicker), they will be sold either directly by the demolition firm or contractor, or through one of the many reclaimed timber operations in the lower mainland. These larger-dimension timbers are generally available only from non-residential buildings. This portion of the waste stream is highly valued and sought-after for re-use as is, for re-sawing into reclaimed flooring, or for re-sawing into vertical-grain lumber for manufacturing furniture. Local artists, such as Brent Comber Originals, have made a profitable business out of turning these large pieces of lumber into expensive pieces of furniture that may be rightfully understood as art. There are a number of export brokers in the lower mainland that focus on selling large reclaimed beams into high-end projects in the United States. While this portion of the waste stream is the most valuable, reclaimed timber companies interviewed for this study reported that there are more timbers available than they can afford to buy. Once the large beams have been removed and sold, there are some smaller-volume wood items that may be sold from the demolition site, depending on the volume of such items, the value perceived by the demolition firm or contractor, and the project timeline. These include heritage-value (or almost new) wood windows, doors, kitchen cabinets, porch columns, trim and baseboards, fireplace mantels, and panelling. Solid wood flooring may be deemed worthy of removal for sale, depending on how thin it is (old floors have often been sanded down many times), how brittle it is (old floors often splinter upon removal), and other characteristics such as species, width, length, volume, and the ability of reclaimed flooring brokers and installers to find a home for it. Wood exterior siding may be valuable depending on the species, condition, and quantity. One demolition contractor interviewed indicated, however, that it s easier to sell vinyl siding than wood siding because it won t break during deconstruction.

32 Market Analysis of Used Building Materials in Metro Vancouver 32 After the sale of these valuable items, the vast majority of the wood waste still remains, including smaller-dimension lumber, partial sheets of plywood and OSB, broken and damaged flooring and siding, items that were glued in place or cut to short lengths, staircases, roof trusses, painted fences and siding, pallets, and crating. It is this portion of the wood waste stream that poses the greatest challenge in finding a valuable use that will keep it out of the landfill. Potential markets for wood waste identified for Metro Vancouver by Promise Consulting include fuel, fiber board production, wood/plastic composites, agriculture/land applications, animal bedding, and reuse through social enterprise. (Penney et al, 2009, 83). While a complete review of these options is beyond the scope of this study, some observations based on interviews conducted and data analysed for this study inform a general assessment of these options. First, there is generally an inverse relationship between the dollar value of a product per tonne, and the potential volume of wood waste that could be utilized in making that product. The production of low-value products, such as alternative daily landfill cover, is able to consume a large percentage of the wood waste stream, but commands a low dollar value and is ecologically only marginally preferable to landfilling. This inverse relationship could also be understood as an inverse relationship between a products place in Metro Vancouver s 5Rs hierarchy, and the volume of wood waste that could be utilized in making that product. Dave Bennink of Re-Use Consulting, estimates that recycling options (such as those identified in the Promise Consulting report (Penney et al, 2009)) require times more energy, and entail 3-5 times more GHG emissions, than re-use options (such as those available to large beams and other valuable wood products). Within the recycling category itself there are clearly many tiers of ecological and economic preference, and Bennink argues that alternative daily landfill cover isn t really recycling and shouldn t be treated as such. He points out that Recovery 1, a recycling company in Washington State claims a 98% recycling rate for the co-mingled loads they accept, but in fact 61% of this is sold as landfill cover 11. At the same time, low-value commodities, such as alternative landfill cover, and fuel, have established markets for large volumes. For example, Urban Wood Waste processes 200,000 tonnes per year of waste (Temreck, 2011), and interviews for this project revealed that 100% of their sales are for fuel to district energy projects in BC. Urban Wood Waste has a 10-year contract with Howe Sound Pulp and Paper, who in turn sells the energy from burning wood waste, to BC Hydro. Clearly this is an established market for a large volume of a product that is situated at the lower end of Metro Vancouver s 5Rs hierarchy. Some recyclers of large volumes of C&D wood waste are exploring opportunities for producing a product further up Metro Vancouver s 5Rs hierarchy. Darman Recycling, a division of Cloverdale Fuels, accepts C&D wood material, and states on their website that We believe that if the waste is processed correctly, some of the waste could be used for our chip production and eventually become pulp and fiberboard material. Canfor used to operate a fibre board plant that utilized wood waste from the lower mainland, but this plant closed in Second, the low value of virgin timber severely limits the range of economically-viable options for reuse and recycling of wood. This reality translates into a disincentive for construction companies to minimize their wood waste, a lack of incentives for waste haulers to find alternatives to landfill disposal, and a very constrained market for those involved with wood reuse or recycling. Combined with the high value of labour, low lumber prices create a strong disincentive for construction firms to minimize their wood waste. In an environment with 8-foot 2x4s costing $2 each, it is difficult to economically justify paying a framer $40 per hour to spend time minimizing cutting waste. One contractor pointed out that thirty years ago he experienced 25% of the wood waste on construction sites as there is today, but now wood is so cheap that if they make a mistake on a wall, the whole wall just goes in the waste bin. 11 Note that in Metro Vancouver, alternative daily landfill cover is not counted as diversion.

33 Market Analysis of Used Building Materials in Metro Vancouver 33 The rates charged at wood facilities, such as Urban Wood Waste, are less than the tipping fees at landfills for mixed waste, and even less for clean wood loads. However, speaking with waste haulers confirmed that these rate discrepancies are not enough to cover the costs associated with sorting the wood out from other waste, and that mixed waste and/or co-mingled loads (loads that contain different types of recyclables such as wood, metal and cardboard) are the norm. Further, Urban Wood Waste charges a minimum of $27 for each load, versus the $10 minimum at landfills and public transfer stations. As a result, smaller contractors and home renovators with less than one tonne of waste, are financially encouraged to take their waste to the landfill. In fact, one demolition company interviewed asserted that if Vancouver does not have financially-viable alternatives to the landfill, then the wood waste ban by 2015 will result in illegal dumping all over the place. Closely tied to this is the lack of a lumber re-use market because the costs involved with sourcing, de-nailing, and transporting used lumber makes it often more expensive than new lumber. Demolition companies interviewed noted that wood from residential construction is not worth salvaging for re-use, and that they only try to sell the larger valuable lumber from non-residential buildings. Concrete Mineral aggregates, consisting mostly of concrete, represent 31% of the C&D waste stream in Metro Vancouver, averaging 410,000 tonnes annually. Some contractors grind the concrete on site to be used as fill on site, but most of it is hauled to a few large concrete recycling facilities. These facilities crush the concrete to make road base fill and aggregate products of various diameters. In some cases, the facilities wash, screen, and sort the crushed concrete in order to use it as input material for new concrete blocks that can be used for retaining walls and other new construction applications. To be recycled, the concrete needs to be clean and free from contaminates such as plastic. This requirement creates a barrier for some waste haulers that line their bins with plastic, and also requires careful source separation. The motivation for demolition contractors and waste haulers to provide sorted and uncontaminated concrete is the fact that concrete recycling facilities often do not charge a tipping fee. Some facilities interviewed reported that they only charge a tipping fee during very busy times of the year, and other reported that they only charge a tipping fee to companies that are not also customers of their end products. Waste haulers and demolition companies complained that the concrete recycling facilities sometimes close down during busy periods, generally in the summer, when the haulers need access to those facilities most. When this happens, the waste haulers have no choice but to take the concrete to the landfill. Discussing these shut downs with the concrete recycling facilities revealed that the reason for these shut-downs was not a lack of processing capacity, but rather a lack of market for their road base product. United Lock-Block alone can process 300 tonnes per hour of used concrete. At eight hours per day, 22 days per month, United Lock-Block has an annual capacity of over 600,000 tonnes, which is 46% more than the total annual C&D concrete waste from all of Metro Vancouver. Given that United Lock-Block is only one of the facilities in Metro Vancouver able to crush concrete, there is clearly enough capacity to recycle all the C&D concrete waste. The bottleneck in the distribution of used concrete is the lack of market demand for recycled concrete products. Specifically, it is the lack of demand for road base that causes the facilities to shut down during busy periods. Yet, this lack of demand appears surprising. Concrete recyclers interviewed pointed out that their road base product is superior to round gravel rocks because the pieces of crushed concrete have rough edges allowing them to better adhere and thus offering a more stable base. The concrete recycling facilities claim that they have had engineering tests done to verify the performance of their products. Further, the crushed concrete sells for half the price of fresh gravel. These advantages have enticed private contractors and some municipalities within Metro Vancouver to use the recycled concrete road fill successfully. However, the concrete recyclers assert that the British Columbia Ministry of Transportation has refused to purchase any of their road base, and instead uses only fresh gravel. Clearly the market for road base in the construction of highways across the province is significant, and the concrete recyclers spoken to for this project expressed great frustration that

34 Market Analysis of Used Building Materials in Metro Vancouver 34 they feel excluded from this market. Given that the lack of market drives facility shut-downs and the diversion of material to landfill, opening up the market for recycled concrete products should be given high priority. Other Materials Steel is purchased by recycling facilities so there is a very high rate of recycling and clear motivation for separation. Some small-scale waste haulers will take the metal away for free so even small volumes of metal are generally separated and taken for recycling. All contractors, demolition companies, and waste haulers interviewed for this project reported that the metal is always separated and sent for recycling. Cardboard can be sold for recycling in large enough quantities. Smaller contractors, however, expressed some frustration that there are not drop-off locations for quantities larger than the household recycling volumes targeted by the recycling centres at transfer stations. In addition, these household recycling centres are often too far from construction sites to warrant special trips to recycle the cardboard that comes as packaging for numerous construction materials. Styrofoam is also a common packaging material, and demolition firms that have worked with the movie industry reported a large volume of hard Styrofoam used in set construction. One demolition firm recommended that the volume of Styrofoam be reduced in size, and discussions with Wastech indicate that they are exploring this option. The Capital Regional District started a Styrofoam recycling pilot project in November Nobody interviewed for this project was aware of a local option for recycling the C&D glass waste. This mass is estimated to be about 1% of the C&D waste, or about 9,500 tonnes per year. Firms such as Bedrock Industries in Seattle make products from recycled glass (wall tiles, glass curtains, gift items), but the C&D glass waste in Metro Vancouver is mostly landfilled.

35 Market Analysis of Used Building Materials in Metro Vancouver 35 III. Barriers to Improving Diversion Metro Vancouver s Integrated Solid Waste and Resource Management plan calls for 80% overall diversion in the demolition, land clearing and construction sector by 2015 (Metro Vancouver 2010, 5). The definition of diversion that informs this target is the conventional definition that includes everything other than landfilled material and material incinerated at Metro Vancouver s waste-to-energy facility in Burnaby (Metro Vancouver 2010, 5). Interviews conducted for this project revealed that construction and demolition firms are currently claiming diversion rates between 75% and 95%. On the construction side, one contractor said they only work with guys that care and are able to regularly achieve over 85% diversion. One interviewee claimed that on the Dockside Green project in Victoria (a LEED Platinum project) they achieved over 90% diversion, but that Vancouver projects usually come in around 75-80% diversion. Another contractor reported 70% to 87% diversion depending on the ability to separate materials on site. Contractors reported further that standard diversion for LEED projects is over 75%, and one large commercial and residential contractor reported they achieve between 80% and 95% on all projects. On the demolition side, one demolition company claimed that 90% diversion is standard on commercial LEED projects. Another reported that 75% is standard, and another claimed they regularly achieve over 80% diversion. Litchfield Demolition claims an average rate of 92%. 12 Given the current success of construction and demolition firms in achieving a C&D diversion rate that appear to approximate Metro Vancouver s objective for 2015 (using the definition of diversion in the Integrated Solid Waste and Resource Management plan), it is recommended that the challenge for Metro Vancouver lies as much in increasing the value of products diverted from landfill (moving products up the 5Rs hierarchy) as it is in increasing the diversion rate above 80%. Accordingly, this report identifies barriers and opportunities related to increasing the value of products as well as barriers related to further increasing the overall diversion from landfill. Together, these are referred to as barriers and opportunities related to improving diversion. A - Market Forces The pricing structure related to construction and demolition assigns high values to labour and land in Metro Vancouver, and low values to materials. As one contractor stated, it s all about time and money. This assignment of values creates a number of barriers to improving diversion, and generally encourages mixed waste bins destined for the landfill, while discouraging the reuse of used materials. At the design stage, specifying used building materials adds cost because of the legwork required to research the availability of materials. Given the disaggregation of materials and inconsistent supply (as discussed below) it can take significant effort to find suitable used building materials. Should they be found and sourced, the cost savings may be negligible (or may even cost more than new), and are easily erased by wages paid to design teams to find them. Some firms reported that using used materials on small projects is easier, but with large projects it s economically inefficient and generally not pursued. This same dynamic of high labour costs versus low material costs applies to the labour associated with deconstruction and the careful removal of salvageable materials, the preparation of materials for reuse, the transportation and storage of materials, any necessary engineering reviews, and the possible modification of construction practices to incorporate used materials. In some cases these costs are considerable. In the demolition phase especially when a building permit has already been issued and the project s critical path progress hinges on site clearance significant time pressure comes to bear. If salvaging materials and sorting waste on site causes delays over conventional demolition and off-site sorting; then this becomes a significant financial 12 [

36 Market Analysis of Used Building Materials in Metro Vancouver 36 disincentive that hinders deconstruction. One commercial contractor interviewed pointed out that site preparation must be done as quickly as possible, and salvaging of materials, in their experience, just slows down the process. Green building efforts are significantly influenced by green building rating systems such as LEED (Leadership in Energy and Environmental Design). However, many contractors interviewed for this project felt that the LEED credit for reuse dissuades the reuse of material because the point threshold is too high. One architect asserted that with concrete buildings the point threshold is impossible to meet, and suggested that LEED should have point thresholds for each division rather than for the entire project. Given how accepted LEED has become in the marketplace, it s inability to effectively encourage the use of used building materials has left used building materials behind as the green building community focuses on other strategies and materials. Waste haulers charge by the size and number of bins. As such, it costs a construction project more money to have multiple bins on site in order to separate waste, and waste haulers will not do this unless required to do so by the contractor. The waste hauling industry is quite competitive, and haulers are reluctant to provide any extra service to clients that will increase costs and make the haulers less likely to win the bid for a job. Interviews revealed that most bins picked up by waste haulers are co-mingled, and contractors generally do not require source separation of materials. The willingness to minimize waste on a construction site is dictated significantly by the relationship between material costs and labour costs. As outlined in the section on wood recycling above, labour costs are quite high in Metro Vancouver in comparison to material costs, and therefore it s cheaper to have extra material on site and increase the waste of material if doing so results in labour cost efficiencies. A strong economy makes people less interested in the potential to save money by using used building materials, but it also means that more demolitions and more renovations are taking place. In a slow economy the reverse is true: people may be more interested in looking for less expensive used materials, but there are fewer demolitions and renovations. As a result, the demand for used materials rises at times when the supply of used materials drops, and vice versa, creating a mismatch between supply and demand. High real estate prices in Metro Vancouver add additional urgency to the construction process because of the large amount of capital tied up in financially unproductive real estate. The high cost of land also makes it difficult for businesses that have high space requirements per dollar of revenue. The sale or processing of large, low-value items, and the holding of inventory for long periods of time, are viable business models only if land prices are relatively low. Consequently, used building material distributors face a significant challenge with regards to land prices in Metro Vancouver. This also applies to developers and designers that look to source used materials early in the design stage to ensure they are available upon construction. In these cases, storage of the materials may be prohibitively expensive. One architect pointed out that the cost of land for storage of used materials is a huge barrier in Metro Vancouver one that is not present in other jurisdictions, such as Alberta. The high cost of land (leading to limited space) was often cited as a cause for the relatively low inventory of existing used building material dealers, and this low inventory in turn was frequently pointed to by designers and contractors as a critical limitation to their ability to utilize used building materials. With this limited ability to hold a large inventory, the time pressure to sell materials from a job site increases, and the ability to find higher-value uses decreases. B - Performance Requirements Performance requirements create barriers for utilizing used building materials because of code specifications, contract and warranty requirements, energy performance, and cultural preferences. Evolving building codes change the baseline of acceptability for many products, and make it problematic to reuse these products at the same value as the original use. These code changes relate to structural, performance, and safety features, rather than aesthetic features, and therefore less affect items of heritage value or more visible items. For example, lumber dimensions that used to be acceptable for structural applications such as roof trusses or load-bearing walls, are often no longer large enough to meet code requirements. Deconstruction of homes often yields 2x4s which were used to frame load-bearing walls, which can no longer be used in similar applications because of code changes that

37 Market Analysis of Used Building Materials in Metro Vancouver 37 require 2x6 framing. Even if the code did not change for a particular application, reuse of the lumber in a similar application requires that it be re-graded, something that requires time, money, and effort. Most virgin lumber is graded at a sawmill as part of the production process where significant economies of scale are captured and the grading of lumber does not add significant cost. In contrast, re-grading used lumber is done infrequently and in small volumes. Structural steel also needs to be re-graded for reuse in structural applications. Fixtures with a water usage rating (faucet, toilet) would likely no longer meet code and its reuse runs counter to municipal and Metro Vancouver efforts to reduce water usage. A number of interviewees noted the requirement for new products in construction contracts. This is standard practice in the industry and reflects clients desires for product warrantees. One architect noted that this was particularly the case in institutional and governmental work. Related to warranty requirements, is the standardization of building materials according to third-party labelling programs such as the one operated by the Canadian Standards Association (CSA), whose labels are applied to new products. Ironically, the green building movement has created a barrier to reuse of used building materials because of the focus on energy performance. High-performance materials, especially building envelope materials such as windows and doors, have improved significantly in recent decades and used materials from older buildings cannot match their energy performance. Single-pane windows have little value in the envelope of new construction, but can be used in unheated spaces (sheds, warehouses, carports, outhouses, boathouses) or interior walls. Contemporary health and safety requirements also create a barrier to the reuse of some building materials. Items containing hazardous materials, such as asbestos, must be safely disposed of rather than reused. Items painted with lead paint must be stripped of the paint before reuse, and lumber pressure-treated with chromated copper arsenate (CCA) contains arsenic and has limited reuse possibilities. Standards related to fire resistance have also changed over time and new construction requires some doors to be fire-rated according to current standards a threshold that many older doors cannot meet. Poorly built houses make deconstruction much less desirable. As used building material dealers pointed out, it is the really old or really new houses that are of most value. Other houses, especially if built poorly with low-quality material or those that have been damaged by envelope failure or poor maintenance, yield relatively few valuable materials. One demolition firm noted that houses built in the 1970s and 1980s generally have very little value. C - Disaggregation and Disconnection The disaggregated supply of used building materials includes the reality that each used building material dealer has a relatively small and independent inventory, much of the used material supply is sold informally by demolition firms and contractors through their unique network of contacts, a significant portion of the used materials are sold through Craigslist and other online postings, and those seeking used materials have no effective way of capturing the entire offering of used materials at any given time. The disconnection barrier includes the reality that each step in a building s lifecycle from design through construction, renovation, deconstruction, and diversion of materials is fairly isolated from the other steps, and the actors within each of these steps are also isolated from each other. These two barriers disaggregation and disconnection combine to create a formidable set of barriers to improving the diversion of materials. Architects interviewed for this project consistently pointed out the challenges they face in determining the availability of used building materials. They have trouble specifying used materials because they cannot find enough consistent supply of materials to reliably write those materials into project specifications. The threshold of availability for being able to do so is fairly high because the given material must be available at the time of specification writing in order to evaluate it for suitability, must be available at the time of construction, and must be available in sufficient quantities that contractors bidding on the project are equally able to source the material and provide a competitive bid. For visible items, the threshold may be even higher because aesthetic as well as quality requirements must be met. For example, a large-scale project attempting to specify used interior doors may need dozens of the same door, and each must be equivalent in terms of size, performance, look, and condition.

38 Market Analysis of Used Building Materials in Metro Vancouver 38 It is easier for designers to source used materials for smaller-scale projects simply because fewer of each item is required, yet the disaggregation of material still demands significant effort. Individual homeowners that enjoy the search and do not place significant value on their time may more easily overcome the barrier of disaggregation, but this is a small portion of the potential market. Closely intertwined with the barrier of disaggregated supply, is the disconnection between each stage in the life-cycle of a building, and between the actors involved in the construction process. The design for new construction or renovation of a building is generally done without reference to the materials available from demolition on that site, and without communication with the demolition firm. This is clearly a lost opportunity to incorporate existing materials already on the site, and to minimize the waste stream flowing from demolition activities on the site. Status quo construction focuses on the use of the building immediately after occupancy, rather than with an eye to long-term uses, potential renovations, or eventual deconstruction. As such, materials are often glued together with bonding agents that frustrate eventual deconstruction, fasteners are used that cause damage to materials when removed, and assemblies are constructed without regard to ease of disassembly. Within the design and construction phase of a building s life-cycle, each step is relatively isolated from the ones occurring before, concurrently, and after. As one architect pointed out, the construction process is linear, piecemeal, and traditional. As such, there is often little thought given to minimizing waste at one stage of construction by utilizing material from another stage, and demolition steps are seen as simply necessary for preparing the site for construction, rather than a potential source of material or design ideas. The disconnection between various steps in design and construction precludes creative opportunities to minimize waste, reuse materials, and leverage design synergies. D - Lack of Infrastructure A frequently cited barrier to both the diversion of waste and the sourcing of used materials is the lack of infrastructure for used materials and C&D waste recycling. Some interviewees felt there is a lack of transparency regarding where C&D waste goes when it leaves job sites, and felt this reduced the motivation to take steps towards diverting waste or sourcing used materials. Others felt that there are just not enough convenient locations for taking C&D materials for diversion, and it s therefore too difficult to distribute separated materials. There are only a few wood recycling facilities, and Urban Wood Waste has a pricing structure that encourages smallscale haulers and contractors to take their wood to the landfill. Other materials either do not have a dedicated facility (e.g. glass), or are served by facilities that are inconveniently located at a great distance from many construction sites. A major waste hauler interviewed reported that they used to sort material, but they no longer do because there are not enough facilities to take the material and it s not economically feasible to do so. It was asserted by some demolition firms that the used building material stores are too small to accept materials from large-scale demolitions or commercial projects. Some contractors also stated that these stores won t take much of what they have available from job sites. Other contractors complained that the best items at these stores seem to be reserved for other customers, and that they have had difficulty in finding the items they are seeking. E - Cultural Impediments Cultural attitudes related to used materials also create a significant barrier. The preference for exclusively new materials is wide spread, and the attitude that used building materials are of poor quality and low status is common. Architects interviewed for this project bemoaned this attitude and felt it was a significant struggle to convince clients of the merits of used materials. One noted that the attitude in other countries, such as Switzerland, is very different and therefore much easier to have client support for maximizing the use of used materials. At the design stage in construction, architects point out there is very minimal desire on behalf of clients to incorporate used building materials. This cultural resistance comes from clients and building owners across the full spectrum of size and institutional type. In cases where clients or consumers express interest in used building materials, it is often because of an interest in the character and aesthetics of reused materials, and the ability of featured used materials to tell a story. These aspects may create an opportunity for increased market pull to begin to change habitual and well worn

39 Market Analysis of Used Building Materials in Metro Vancouver 39 ways of operating in the construction industry, but this material usage is quite limited and does not represent a significant percentage of overall usage in most buildings. Reuse is by no means a regular or extensive practice in the industry. At the renovation or demolition stage, it is the opinion of the used building material dealers and deconstruction firms we interviewed that most people are not fully informed about the deconstruction option. For those that are aware of the option to retain a deconstruction firm, or sell the salvage rights to one of the used building material dealers, there appears to be a misconception regarding how long it might take, and a related misconception that the overall revenue from the sale of materials would be less than the cost of time lost during construction. Deconstruction experts, however, emphasize that the additional time taken for deconstruction is minimal, usually a total of two or three days for a single family home. In part this misunderstanding stems from the fact that what is slated for demolition is generally understood to be of little value, and the owner and construction team are preoccupied with the new structure to be built in its place. Traditional construction practices see only new materials as inputs, and treat used materials as waste. Contemporary status quo practices have opened up to the need for recycling waste, but the mainstream construction industry generally does not see used materials as forming any significant part of the input stream. In part this is because construction trades are strongly motivated to do what is easiest, and new materials are generally easier to work with than used ones. Building inspectors are also geared towards status quo practices, and many interviewees asserted that inspectors need to be more open to granting equivalency status to used materials. Other contractors interviewed for this project feel that all the used building materials suitable for reuse are currently being reused, and that pushing further in this regard could create resistance in the industry.

40 Market Analysis of Used Building Materials in Metro Vancouver 40 IV. Opportunities to Improve Diversion Improving diversion is understood to include both increasing the percentage of C&D waste that is not disposed of in landfill, and also moving diverted material further up the 5Rs hierarchy identified by Metro Vancouver in its Integrated Solid Waste and Resource Management plan (Metro Vancouver, 2010, 5). The opportunities to do so include a combination of leveraging the private sector (supporting the market for used materials, supporting entrepreneurial and manufacturing efforts, improving job-site practices, launching a central facility, connecting the supply chain, and designing for improved diversion), as well as public sector initiatives (education program, reinforcing the 5Rs hierarchy, stimulating deconstruction, and maintaining the existing building stock). In general these opportunities rest of the assumption that greater lasting success will be achieved by directing market forces to make improved diversion cost effective and easy, than will be achieved by isolated command and control government policy mechanisms. Nevertheless it is essential that various levels of government play an active role in shaping market incentives and opportunities, and that measures are implemented in the appropriate sequence, as outlined in Section VI. A - Market Support Traditional construction practices and building life-cycle assumptions are predicated on a one-way flow of virgin material into the construction of a building that serves a particular purpose until such time that the building is reduced to a pile of waste and removed in order to allow for the construction of a replacement building. Market forces are aligned with these assumptions such that the path of least economic resistance is to follow this one-way flow of material. Critical to improving diversion is re-configuring these market forces in support of a two-way and non-linear flow of materials. Doing so includes government and institutional procurement policies, tax and other incentives, and entrepreneurial support. Government and Institutional Purchasing Government and institutional procurement has the potential to support emerging opportunities for the reuse of C&D materials, to show leadership in the marketplace, and to allow market transformation in product areas for which governments are the largest customer. It was suggested by interviewees that this may be an opportunity for governments to demonstrate leadership by using their own buildings to experiment with the adoption of reused materials. This could be undertaken in a controlled way with a select set of materials and a series of pilot projects. The pilots could be studied to examine the extra time and cost that is required, as well as examine the risks that might be assumed in the reuse. It was suggested that governments or institutions would share that information with designers, builders, and developers to facilitate wider scale adoption of reused materials. Institutions such as universities have an interest in being cutting-edge in their sustainability efforts, as well as in the technical results of pilot initiatives, and this should be leveraged to support the market. With some products, such as crushed concrete suitable for road base, the government is the largest customer and it is therefore essential for success of this product that governments purchase this material. As discussed above, concrete recyclers in Metro Vancouver are struggling to find customers for their products, in spite of high product quality and a lower price than virgin material. The Ministry of Transportation could play a key role in supporting the market for this product by purchasing crushed concrete for road base instead of fresh gravel. Other levels of government, while smaller consumers of gravel than the provincial government, could do the same. As one recycler interviewed said, anything that Metro wants recycled, they will help make it happen by buying the products made from the recycled materials. The situation with crushed concrete is the most compelling for immediate government purchasing, but the same potential role would be valuable for all used building materials and products with recycled content from C&D waste. In some cases, purchases of highly visible items, such as reclaimed lumber flooring, can provide significant momentum for entrepreneurs seeking an opportunity to illustrate the potential of their product, and governments are well suited to provide this opportunity. In other cases, a less visible, but technically innovative product, such as laminated lumber products made from used lumber, can be tested out through government purchases or partnerships with universities

41 Market Analysis of Used Building Materials in Metro Vancouver 41 interested in the results. Beyond government procurement policies are various levels of direct market support, including mandatory requirements for public buildings, and requirements for publicly-funded projects. A step-wise approach to increasing the requirements for purchases of used building materials as the supply chain develops, and a harmonized approach between various levels of government, may provide the most effective approach to leveraging government purchasing power. Tax Incentives Interviews for this project revealed the enormous power that tax receipts for donations of used building materials play in the US market, and suggested numerous opportunities for leveraging the tax system in Canada in support of improved diversion. As discussed in Section V, US tax law allows for tax receipts to be given by non-profit used building material stores to the donors of used building materials. The tax receipt is given up-front for the appraised value of the materials, in some cases for the value of an entire house. Interviews confirmed that these tax receipts are seen as essential for driving the supply of materials to used building material stores in the US, including the Rebuilding Exchange in Chicago, the authors of whose market study reviewed the methodology for this report. Tax receipts can be for tens of thousands of dollars in donations, and clearly provide a significant incentive for careful deconstruction and donation of valuable materials. In Metro Vancouver there are two existing approaches to providing tax receipts for donations of used building materials. ReStore only provides tax receipts for some donations, and does so based on the eventual sale value of the item. The Vancouver Heritage Foundation obtains an up-front appraisal of donated items, and provides an immediate tax receipt based on this value. ReStore feels that the receipting process is a grey area for Canada Revenue Agency (CRA), but the Vancouver Heritage Foundation cites a written response from CRA that supports their approach. ReStore indicates that the ability to offer tax receipts is not essential to their business model, and yet the greater ability to offer tax receipts for up-front donations in the US has clearly given an advantage to non-profit operations over for-profit distributors of used building materials. The situation in Metro Vancouver is very different with multiple for-profit used building material stores not only actively competing with non-profit operations, but also having the largest share of the marketplace. While the ability to offer tax receipts is in federal and provincial jurisdiction, further analysis of the potential for increased receipting opportunities is warranted. It is also possible for local governments to provide property tax or building permit fee incentives for donations of used building materials to local non-profit dealers. Such an option may be best pursued in combination with the central facility concept outlined in this section. Tax incentives have a role at other stages in the life-cycle of used building materials. The use of used building materials could also be supported through reductions in property taxes for an initial period of time, reduced building permit fees, density bonuses, set-back leniency, or other incentives. A more direct incentive would be the elimination of PST or GST on purchases of used building materials. Other Support The market for used building materials may not always be in Metro Vancouver, or even in Canada. Interviews revealed the export of used lumber from California to Mexico, and there may be similar opportunities for the sale of used building materials into jurisdictions outside of BC. Brokers of large reclaimed timbers, for example, often sell timbers from BC buildings into construction projects in Montana (high-end ranches) or California (high-end homes). These opportunities may have drawbacks from a carbon perspective, but nevertheless support the reuse of valuable building materials and create economic momentum for used building material entrepreneurs in Metro Vancouver. Programs to assist exporters of used building materials may help stimulate a larger sector that, with increased size and strength from foreign sales, may be better able to develop products for the local market. Interviews revealed that, in general, the materials that are reused are ones that have a high value, such as largedimensional timber that cannot be easily found in the market, and character materials such as older wooden floors, mouldings, and heritage fixtures that can create a signature space and a story. The value of this storytelling potential is worth the additional effort and cost that may be required to utilize these materials. Even if

42 Market Analysis of Used Building Materials in Metro Vancouver 42 governments do not directly purchase these materials, they are in a position to help tell the story by highlighting private sector successes in utilizing used building materials. While uses that tell a compelling story in a highlyvisible way may not constitute a large percentage of the materials in a given building, these stories can help increase awareness among potential users, increase competition among firms in the industry, and help form a reality in which used building materials are a valued part of construction practices. B - Entrepreneurial and Manufacturing Support Entrepreneurial energy is essential to overcoming many of the barriers outlined in Section III. In some cases this support might take the form of technical assistance or financial support, and in other cases it might take the form of focused economic development activities including incentives, marketing, provision of land, or political support in establishing a business. Used building material businesses and recycled content building material businesses have potentially many synergies with each other, and it is advisable to support both categories of businesses within the broader objective of improving diversion. For example, the careful removal of valuable used building materials creates an approach to deconstruction that allows the time necessary for the proper separation of materials necessary for recycling inputs. At the same time, a successful recycling operation may apply their understanding of the material flow to create higher-value products including the reuse of materials as appropriate. Interviews with used lumber dealers revealed business plans that incorporate the direct re-sale of valuable timbers, as well as the recycling of less-valuable timbers into flooring. Similarly, United Lock-Block produces both crushed concrete, as well as new concrete blocks made from recycled concrete. In short, effective support for used building materials necessitates support for high-value recycling efforts as well. Doing so increases the likelihood for the range of businesses involved with improving diversion to become successful, and therefore more able to invest in innovative ways of creating value from the C&D waste stream. Wood waste recycling provides significant opportunity both because of the volume of C&D wood waste, and because of the versatility of wood. The production of fibreboard from wood waste may again be possible, even though Canfor closed their lower mainland plant in C&D wood waste has the potential to be made into other products for reuse in construction, including finger-jointed studs, cross-laminated timbers, and structural insulated panels. Finger-jointed studs are made from shorter pieces of lumber and glued into full-length, non-load-bearing studs. Combined with the recovery of lumber for reuse, the shorter pieces could be thereby be directed away from lower-value uses and into finger-joint production. Cross-laminated timbers consist of layers of dimension lumber glued together at right angles to form solid wood panels. Structurlam in Penticton produces these products that are sold as wall assemblies. Encouraging the use of used lumber in this process would provide a valuable use for a significant portion of the C&D wood waste stream. Similarly, structural insulated panels (SIPs), which are made by sandwiching insulating foam between two layers of oriented strand board (OSB), could incorporate a significant volume of C&D wood waste if these panels are made from OSB that includes recycled C&D wood waste content. SIP Building Systems in Nanaimo and EcoSIP in Duncan are two BC companies that manufacture SIPs. Supporting entrepreneurial activities that would improve diversion can take many forms, including the provision of technical assistance. Technical assistance includes help with business planning, research and development, pilot projects to connect supply with product development, product testing, and market support. Closely tied to this is the provision of capital through grants or loans, something that could be done in partnership between governments, foundations, and lending institutions. A coherent approach of technical assistance and funding, has the potential to go a long way in supporting the entrepreneurial energy necessary to improve diversion. Local governments have significant expertise in the area of economic development, and programs such as Vancouver s Green Capital initiative are perfectly suited to attracting entrepreneurial activity and manufacturing operations that seek to improve diversion. Economic development in support of improving C&D waste diversion should be designed to help entrepreneurs overcome the market barriers outlined in Section III. The provision of free or low-cost land may help significantly in attracting businesses and allowing them to locate in places that are convenient for waste haulers. As

43 Market Analysis of Used Building Materials in Metro Vancouver 43 discussed below, local government economic development initiatives are well suited to creating centralized facilities that can act as a hub for synergistic C&D reuse and recycling businesses. C - Education and Training Education programs related to C&D material reuse and recycling exist in many forms, and programs targeting trades and the construction industry have helped increase appreciation and understanding of the opportunities. Green building rating systems, such as LEED and Built Green, have also helped in the area of education and awareness. Nevertheless, numerous interviews revealed a continued desire for more education and awareness programs targeting the design community, contractors and trades, consumers and homeowners, demolition companies, and waste haulers. BC Wood was often cited as an example of a government-funded program aimed at market transformation, and many interviewees felt a similar, strong program aimed at strengthening the market for used building materials would be helpful. Architects and designers might benefit from specific information about where to source used building materials, about projects that have been successful in utilizing used materials, and about strategies for overcoming the barriers outlined in Section III. Private sector businesses involved in improving diversion have a vested interest in educating design professionals, and they could be strong partners in delivering this information. Deconstruction training programs are available through organizations such as Re-Use Consulting, and should be made available to all individuals involved with construction and demolition. Demolition contractors may benefit from better understanding an alternative approach to taking down a building and be better able to protect the value of materials. Renovation contractors may learn to better incorporate existing materials in the renovation, reduce waste during the site preparation phase, and communicate opportunities for reuse to their clients. New construction contractors or builders may learn how to build in such a way that eases deconstruction, and learn about opportunities for alternatives to adhesives and hard-to-remove fasteners. Designers may also benefit from deconstruction training so that they are better able to design for deconstruction and avoid designs that make deconstruction particularly difficult. Contractors and trades may benefit from training programs aimed at helping to reduce the waste on site, including the elements outlined below in the sub-section entitled job site organization. These training programs can be reinforced through contractual requirements, penalties, and reporting requirements. Contractors and trades might also benefit from information about successful strategies for utilizing used building materials, for working with the inevitable shortcomings of used materials, and for overcoming the barriers outlined in Section III. The many industry and trade associations have significant reach within the construction industry, and partnerships with these organizations to deliver programs could yield greater benefits than government programs alone. The movie industry was often cited during interviews as being especially wasteful with their set construction practices. One interviewee asserted that movie sets are held together with significant amounts of strong adhesives and nails and fasteners that are difficult to remove. As a result, set deconstruction is very challenging, and the movie industry is typically not interested in doing so. In addition, union contracts on movie sets preclude volunteer labour for site deconstruction, so non-profit used building material operations such as ReStore are not able to effectively repurpose the waste from movie sets. A dialogue with the movie industry, leading to options for alternative practices and a potential education program may help to improve diversion from the movie industry. Since client demand frequently drives whether material is re-used during a renovation, education programs aimed at home-owners and consumers may be effective. Interviews with architects and construction firms confirmed that it is generally aesthetic or sentimental reasons that motivate clients to reuse existing materials, or source used materials from other buildings. Education programs aimed at supporting this approach, and addressing some of the hesitancies in doing so, may help improve the number of clients that seek used materials. Such education programs could also be enhanced with information about the other benefits associated with choosing used materials, and with success stories from other projects that have utilized used materials. In the case of non-residential projects, clients may benefit from information about inspirational stories from other projects, and about the sustainability brand values that can be communicated through the use of used materials. Design

44 Market Analysis of Used Building Materials in Metro Vancouver 44 firms may be very supportive of such an education program. A number of architects and contractors interviewed for this project noted that there is no demand from non-residential clients for the reuse of materials with the exception of high value or heritage materials. Contractors commented that they simply implement the wishes of their clients as outlined in the specifications and plans and therefore have little influence over the material choices. To create demand one needs to work at the client (homeowner, institution, developer) level to begin to create a market for these products. Institutional decision makers, such as universities and places of higher learning, may be particularly attractive targets for such education campaigns as they are positioned to provide some leadership in changing mindsets around reuse of materials. Demolition firms and waste haulers may appreciate a program that provides current information about opportunities for improving diversion, including listings of facilities, rates, hours of operation, and the ability of facilities to report back on their reuse and recycling of materials. D - Support 5Rs Hierarchy Metro Vancouver s Integrated Solid Waste and Resource Management plan calls for 80% overall diversion in the demolition, land clearing and construction sector by 2015 (Metro Vancouver 2010, 5). The definition of diversion that informs this target is the conventional definition that includes everything other than landfilled material and material incinerated at Metro Vancouver s waste-to-energy facility in Burnaby (Metro Vancouver 2010, 5). As discussed above, 80% diversion under this definition is regularly being achieved on projects across Metro Vancouver. Accordingly, the challenge is now to both increase this above 80%, as well as increase the value of products diverted from landfill (moving products up the 5Rs hierarchy). The five categories of waste identified by Metro Vancouver in their Integrated Solid Waste and Resource Management plan are (Metro Vancouver 2010, 5): 1. Reduce waste at source 2. Reuse where possible 3. Recycle products at the end of their useful life 4. Recover energy or materials from the waste stream 5. Manage residuals in an environmentally sound manner In order to motivate improved diversion, it is recommended that each category of diversion outlined in Metro Vancouver s Integrated Solid Waste and Resource Management plan should be assigned a target percentage, and be tracked separately. Doing so will disaggregate the single diversion target that currently represents everything other than straight landfill, will clarify C&D waste objectives, will create better information about the current state of diversion, and it will encourage an increase in the value of products. In short, setting targets for each category within the 5Rs hierarchy will help move C&D waste up the 5Rs hierarchy. Monitoring the results of activities within these categories may be challenging, but could be addressed with a revised reporting strategy. Green building programs such as LEED require submittals from waste haulers, and it has been suggested that waste haulers should be licensed to help ensure the reliability of their diversion reporting. However the category of waste hauler includes far too many actors of various scales, from large companies with waste bins, to individuals with pickup trucks, and licensing them all might prove impossible. Instead, facilities that accept C&D materials could be licensed to provide simple tallies of the materials received, both for their own records and to be distributed back via haulers to the building owner or project manager. The owner or project manager could then use the source documents to verify their diversion of C&D waste through various channels. The facility could use the same documents to verify inputs, and be audited to verify where their materials went, according to the 5Rs hierarchy. Co-mingled bins sorted off site and handled by appropriate facilities could be audited to ensure they have a reliable system for tallying how much waste goes into each of the 5Rs hierarchy categories. California has such a system of thirdparty certifiers for distribution from co-mingled bins, and their program could be looked to as an example. Further reinforcing the 5Rs hierarchy requires the right tipping fee structures and material bans. Tipping fees should be high, but not so high that they encourage illegal dumping. Dave Bennink of Reuse Consulting in Washington State feels

45 Market Analysis of Used Building Materials in Metro Vancouver 45 that the tipping fees established by Metro Vancouver (between $97 and $107 per tonne) are right where they should be, in contrast to US fees for which $40 per tonne is the high-end of the range. Some US municipalities have very low fees, such as Cleveland at $24, Youngstown Ohio at $11, and Buffalo at $32 with a discount given for higher amounts of waste. However, Vancouver Landfill accepts demolition loads, that are at least 80% wood, delivered in tandem and tridem trailers for only $40 per tonne a rate that significantly lower than the Metro Vancouver fees, and is too low to create a structural incentive for higher and better uses. Tipping fees should always be a bit more than the recycling fees to create a structural incentive for recycling. Ultimately un-sorted loads should not be allowed at the landfill, but bans on materials should be done only in conjunction with the creation of infrastructure and markets. E - Job Site Organization The importance of job site organization as a strategy to reduce waste and sort materials is well understood and documented. Nevertheless, interviews revealed that many approaches to job site organization are not widely adopted and that there still remains room for improvement. Even firms that excel in this area indicated in interviews that they need to continually reinforce their approach, offer training, and implement penalties as necessary. One contractor interviewed for this project pointed out that by having a central area for all waste bins, rather than having them scattered around the job site, trades are not motivated to put waste in the wrong bin simply because it is closer to them. The same contractor reported significant success in implementing a system of penalties for contaminated bins in which all trades are fined if any bin is contaminated. This system creates effective peer pressure among all those working on a job site, and has helped this contractor reduce contamination. Central cutting areas have long been recommended in order to allow for the reuse of materials, and for ensuring the wood offcuts are all in one physical location. Given the current dynamic between labour and material costs, there is significant pressure to have multiple cutting locations on site if doing so makes labour more efficient. However, minimizing the number of cutting areas, or insisting on one cutting area on smaller jobs, remains an important strategy for reducing waste and making it easier to find offcuts that could be utilized. There is a difference of opinion about whether there is usually room on a job site to separate materials before having them removed by a waste hauler. It seems to depend on who is running a particular site, their level of organization, and, of course the physical constraints. In situations where there is no physical room, it is possible to have live load bins of certain materials so that multiple bins do not need to be stored on site. A waste hauler interviewed felt that the competitive nature of their industry precludes bidding on jobs with an offer of multiple bins for source separation because the value-added of such service will be overshadowed by the increased cost. Instead, they recommend mandated site separation of materials so that all waste haulers would be forced to bid on the same service. Site organization is supported by education programs, as well as diligent management of the site. There is significant turnover of individuals on a job site as the stages in construction are completed, and as various trades come and go. Project managers must communicate and reinforce their approach to site organization and waste management for it to be successful. F - Central Facility A central non-profit facility, focused on used building material and wood, but capable of receiving all C&D materials, and organized as a hub in support of entrepreneurial activity, is a central recommendation that emerged during this project. Architects and designers express frustration at the disaggregation of supply and their inability to determine which used building materials might be available for projects. Contractors express frustration at the inconvenience in sourcing suitable used materials, and the lack of necessary volume. Clients and homeowners are generally unaware of the option to utilize used materials and are daunted by the effort required. Waste haulers and contractors express frustration with

46 Market Analysis of Used Building Materials in Metro Vancouver 46 the need to take different materials to different locations, often by travelling great distance, and the shortage of facilities that will take certain materials. These frustrations could all be addressed through a large, central facility that focuses on used building materials and wood, but accepts all other materials as well. The used building material operation would be established as a non-profit organization with significant storage capacity, and would provide a large-scale inventory of used building materials. As a non-profit it would be able to issue tax receipts for donations, could participate on job training programs, and could leverage volunteer labour. The wood portion of the facility would sort and process wood waste in order to maximize its ability to return as inputs into construction. As a hub, the facility could support a range of entrepreneurial and manufacturing ventures predicated on a consistent supply of C&D waste. The physical location should be integrated with a virtual location that provides a current inventory of all used building materials. Ideally this virtual location would include not only the materials on site, but also the materials available at other Metro Vancouver used building materials dealers. Interviews with used building materials dealers indicated that maintaining such a virtual site would entail considerable effort to keep up-to-date because inventory changes too quickly, and each item is different in terms of damage. However, without this effort, the design community will remain reluctant to specify used materials, and it will be harder to encourage contractors and homeowners. Interviews clearly indicated strong support by architects for a web-based clearinghouse of used materials, whether it is a wiki, centrally organized, or a combination of these approaches. There are a number of existing US-based web sites that may serve as models, including Buildingsurplus.com, PlanetReuse.com, and CMDepot.com. Large scale projects require available materials in large quantities, and only by aggregating supply both physically and virtually will used building materials be considered a viable option for larger projects. One interviewee asserted that having a few hundred doors in one location is not nearly enough, and until there are 10,000 doors in one location the use of used materials will remain marginalized. A physical facility of this nature is well suited to job training and partnering with non-profit organizations. There are already numerous examples in Metro Vancouver that follow this model, including the Fab Shop, run by Tradeworks Training Society, which incorporates job training programs with wood product manufacturing. Having a centralized wood collection site would allow economies of scale to be captured in the aggregation of materials, green-chain style sorting, and bulk processing. Job training programs could assist with the sorting, de-nailing, and metal detection. The facility could partner with other organizations for various subsequent steps in manufacturing including chopping and re-grading, thickness sanding, gluing and pressing into laminated products, and grade stamping for reuse or review by an engineer. Other wood that was deemed non-structural could be sold from the site and be utilized for fencing, and other small project that do not require structural wood. The wood collection facility would allow wood to be delivered unsorted, and through various stages of processing and sorting, could be efficiently made ready to re-enter the market. The physical location should act also as a hub that supports entrepreneurial activity, as discussed above that relies on the C&D waste stream as input material. This physical proximity is an important catalyst for the innovation and industrial ecological relationships that can maximize the value of products. Further analysis is needed to determine whether more than one such facility is warranted in Metro Vancouver, but certainly multiple drop-off centres are required. Eco-Centres are already envisioned by Metro Vancouver, and these fit perfectly with the concept of multiple drop-off centres collecting material for a central hub facility. Interviews with residential contractors indicated a strong willingness to support initiatives that make C&D waste disposal easy, and contractors were unanimously supportive of a central facility. A central facility is also of benefit to demolition firms and waste haulers that do not want to take different materials to different locations. Larger demolition and deconstruction projects will also benefit from a large central location that could accept significant quantities of used building materials from both non-residential and residential buildings. As noted in Section III, there are space and time limitations at job sites, and demolition firms often have nowhere to take large quantities of used materials for resale. In support of deconstruction firms that do not have space for large quantities of material, the

47 Market Analysis of Used Building Materials in Metro Vancouver 47 central facility could accept this material by purchasing it directly, selling the items on consignment, or providing storage space at low cost. During the interview and research stages of this project we identified three separate organizations that are in various stages of initiating new used building material stores in Metro Vancouver. Some of these organizations bring significant resources to the table, and clearly there is a shared assessment that additional centres are needed. Given this momentum it seems likely that new capacity for storage and distribution of used materials will emerge, however these efforts may not be structured to overcome the barriers identified in Section III of this report, and may not leverage all the potential synergies. It is recommended that Metro Vancouver convene a conversation with interested parties to explore options for maximizing the potential of a central facility with multiple partners. G - Connect Supply Chain Connections need to be made between the supply of used building materials, and the opportunities in new projects. The supply side includes the used building materials available in the inventory, as well as the material in structures slated for demolition or deconstruction. With low inventory available at any given time, the success of connecting supply with demand rests on timing. In situations where one entity is involved with the supply of used materials as well as with the new construction project, connecting supply with demand is fairly straight forward. One interviewee pointed to the new Trout Lake Community Centre in Vancouver that was built in part from blow-down lumber from Stanley Park. In this case, one entity, the Vancouver Parks Board, owned both the material salvaged from Stanley Park and the new community centre so the connection was easy. When the connections are not so direct, the design team must invest effort early in the process to identify sources of used materials that will be available at the time of construction. The general contractor should be brought in early as well so that options for used materials can be discussed. If appropriate materials are found, they may need to be purchased and stored for a long period of time before construction. This may work best with institutional builders, such as universities that have significant space, or in partnership with a central used building material facility. Successfully connecting supply with demand may also require slowing down the construction timelines so that materials can be researched, specified, sourced, obtained, stored, and incorporated. The supply chain for used building materials also needs to be strengthened so that bottlenecks are cleared, resiliency is established, and multiple links are forged. Currently the supply of used building materials is made available through a small number of distributors or in short-term sales from demolition sites, each creating surges of materials and inconsistent supply. If the market is not ready when the materials are available, the opportunity is frequently lost. If supply is not available at the time when material is required, then builders may become frustrated and the supply chain is not resilient enough to offer other options. By increasing the volume of material and connections in the supply chain, it is possible for the system to become significantly more reliable and encourage further activity from both suppliers and customers. H - Stimulate Deconstruction The practice of deconstruction needs to become more widespread, in both residential and non-residential settings. The City of Vancouver moved ahead in this regard in July 2011 as their Council supported the recommendation that the Zoning and Development Bylaw be amended to allow a building permit to demolish by deconstruction to be issued in advance of a development permit, in order to allow the necessary time to complete deconstruction. (City of Vancouver 2011). Decoupling deconstruction from the building permit relieves the significant time pressure that comes to bear on the site preparation stage of construction, and allows careful deconstruction and maximization of value from the C&D waste stream. Other ways to stimulate deconstruction include offering an accelerated building permit in addition to the decoupling now offered by the City of Vancouver. The accelerated development permit offer must be structured so that there is still ample time for slow deconstruction, while still providing for a slightly faster processing of development permits.

48 Market Analysis of Used Building Materials in Metro Vancouver 48 The licensing of deconstruction activities also offers an avenue for stimulating deconstruction. If deconstruction firms are required to undergo training and licensing in exchange for exclusive access to projects receiving incentives for deconstruction (e.g. decoupled or accelerated permits), they will be provided with a motivation for focusing on deconstruction and improving diversion. Interviews revealed significant resistance on the part of demolition firms to a deposit system for meeting diversion targets. Instead, incentives in the form of reduced permit fees or other benefits to the project manager that could then be passed along to the deconstruction firm were preferred. If deposits are required, they should be in the form of a letter of credit held centrally by Metro Vancouver, rather than individual cash deposits held by each municipality. As one demolition firm representative stated: If I have to put cash up in each municipality, I ll go broke. Inter-municipal co-operation could take other forms to stimulate deconstruction as well. Rather than requiring deconstruction firms to obtain a business license from each municipality in which it does work, a third party could provide certification or licensing that is valid within each member municipality. As discussed above with regards to Metro Vancouver s 5Rs hierarchy, increasing the value of C&D waste can be stimulated by tying deconstruction to specific targets within this hierarchy rather than an overall diversion target that includes everything except landfill. Contractors have an important role to play in stimulating deconstruction through the writing of specifications. Often the deconstruction or demolition activities are carried out as sub-contracts and their diversion targets are set within those contracts. Ensuring that all bids offer minimum deconstruction by writing such requirements into the bid will ensure a level playing field for all deconstruction/demolition firms. By asserting the value of deconstruction it may also stimulate competition among bidders on the value they can add to C&D waste. As market forces begin to further push deconstruction, and as capacity increases, mandatory deconstruction for all buildings, or categories of building type or ownership, will help secure deconstruction as the norm. However, as discussed elsewhere, it is essential that markets and infrastructure are developed concurrently with mandatory diversion requirements. I - Design Building design has an enormous effect on the amount of C&D waste generated during construction, renovation, and deconstruction or demolition. Accordingly, building designs should be encouraged to minimize waste during all these stages, and be designed to last for as long as possible. Designing for minimal waste includes ensuring that designs facilitate the use of common dimensions and standard building materials. For example, nine foot ceilings result in more waste than do eight foot ceilings since sheet goods and lumber come in eight foot and ten foot lengths. Incorporating used materials into building design can be more easily accomplished if there are fewer demands for large quantities of visually-similar materials. For example, the C.K. Choi building at UBC was designed to allow different materials in different sections of the building. One demolition firm interviewed was involved in this project and noted how much easier it was to supply used materials, such as different sub-set of matching doors for each of the floors instead of requiring matching doors for the entire building. Changing building specifications and contract requirements to allow for used materials will go a long way to stimulating the market. Architects and contractors interviewed recognized how effective this strategy might be, and noted that working with larger institutions, such as universities, might allow this to happen sooner. Governments also have a role to play in providing for used material specifications in the design of their buildings. Buildings should also be designed for durability, long-term lifespan, eventual vertical additions, and deconstruction. LEED Canada recognizes the importance of designing for durability by assigning credits for doing so, and this approach should become standard practice. Design should anticipate that a building may eventually be renovated or expanded vertically, and should include structural components to allow for this. One contractor interviewed spoke proudly of a

49 Market Analysis of Used Building Materials in Metro Vancouver 49 current project in which they are reinforcing a building to allow for additional stories, rather than razing the building and starting from scratch. Design for expansion may make the difference between whether or not a future demolition needs to take place. Design and building for deconstruction is critical to maximizing the value of building materials available at the time of deconstruction. Current building practices require extensive use of adhesives and fasteners that make deconstruction difficult and damage to materials inevitable. Nail guns and excessive use of extremely strong construction adhesives are frequently cited as examples. Many buildings are designed as one-offs, filled with detail and complexity that renders much of their materials unusable. For example, roof trusses used in homes are often custom sizes and are challenging to reuse. In contrast, designing for the standardization of materials and sizes of materials will make these materials more appealing for ultimate reuse. Commercial buildings, particularly industrial buildings, are built out of more standard materials and are more frequently reused. An inspiring example is the Centre for Interactive Research on Sustainability (CIRS) building at UBC, which is being designed for deconstruction. Architects involved say that this takes more design time but will ultimately require less construction time. It is constructed out of modular panels that will be highly reusable and also easily transformed into other applications. As these practices develop, and over a longer time horizon, building codes should require these practices. Complementing building design is the design of materials themselves. Since product manufacturers are responsible for the design of materials, a powerful way to spur design for reuse is to require that the manufacturers take back the materials when no longer needed in the building. This extended producer responsibility (EPR) concept could be applied to materials themselves, including concrete and wood, as well as the packaging materials. Once the manufacturers are responsible for taking back the material, they have a strong motivation for ensuring they are designed for reuse, or for establishing a valuable recycling program. J - Maintain Existing Building Stock Since demolition is the largest source of C&D waste, the ultimate way to reduce the amount of C&D waste is to limit the ability to take down existing buildings. Demolition firms interviewed for this project repeatedly noted how common it is for them to demolish a spec home that has never been lived in, or to gut a brand new condo so the new owners can reconstruct the interior to their taste. Clearly these are extreme examples that run counter to Metro Vancouver s objectives of reducing C&D waste. It is obviously difficult to place extreme restrictions on the freedom of a building owner to replace an existing building; however some steps in this direction are warranted. Incentives to retain buildings and modify or expand, rather than destroying the building, would help adjust the economic arguments in favour of demolition. Minimum lifespan requirements for new construction, perhaps five years or more, would act to curtail the most extreme situations of demolishing a brand new building that has never been used, and perhaps encourage higher-quality construction of spec homes if it is certain that someone will occupy the structure. The movement towards laneway housing often results in the tearing down of existing garages. Incentives to maintain the existing structure and incorporate it into the laneway housing might also reduce the number of garage demolitions. While garages are not large structures, interviews with those involved with laneway housing revealed that garages generally do not yield valuable used materials because the lengths of material are relatively short. Maintaining heritage structures is already well established, but these programs could be expanded and strengthened. Incentives could also be provided for the removal of an entire house so that it could be used intact in another location. There are a number of companies that move whole houses, and their efforts could be combined with programs aimed at providing housing to those unable to afford new construction.

50 Market Analysis of Used Building Materials in Metro Vancouver 50 V. Best Practices This best practices review assesses the success of several government programs, policies and incentives, in regions outside Canada, that promote or mandate deconstruction, foster market development for used building materials, and develop related green jobs. It was not intended as a comprehensive review of C&D waste diversion or green jobs programs. A - Methodology An initial geographic scan was performed of best practices in deconstruction in the United States and Europe. It looked at high-level practices in two US states (New York, Massachusetts), three US municipalities (San Francisco, Cleveland, Portland), and one European Country (Netherlands). Emerging from the scan were a variety of interventions that help foster the market for used building materials: Tax credits for donations of used building materials Regulations requiring material salvage and recycling during demolition Construction & demolition (C&D) regulations such as landfill bans Government procurement to salvage building materials through the deconstruction of their own buildings Reuse centres that act as used building material depots, some of which also offer deconstruction services and consulting Programs to foster the deconstruction industry, provide training and develop green jobs In order to look more deeply at best practices, the analysis also included an intervention focus, with a deeper look at: Tax credits for donations of used building materials Government procurement to salvage building materials through the deconstruction of their own buildings Reuse centres that act as used building material depots, some of which also offer deconstruction services and consulting Programs to foster the deconstruction industry, provide training and develop green jobs B - Geographic Scan New York State Local industry is well developed, with 16 used building materials reuse stores in the state Government support has funded a NYC pilot and a regional education centre New York City Department of Sanitation runs an online materials exchange Build It Green! NYC (demolition services, warehouse, refashioned used materials) has provided green jobs training for 120 people since 2005 State of Massachusetts State has a comprehensive approach that includes policy, education, and market development. Department of Environment s 2010 Draft Solid Waste Master Plan identifies C&D waste as a priority for diversion and market development. Massachusetts plans to stimulate new recycling markets through state agency procurement practices and support (grants and loans) for expanding recycling/composting businesses. San Francisco State and city regulations aimed at reducing waste California law (AB939) requires municipalities to divert 50 percent of waste from landfills by 2000 San Francisco achieved, by 2008, their 2010 target of 75% diversion from landfill, and has since set a new target of zero waste by 2020 San Francisco requires a minimum of 65% diversion from all construction, demolition or remodeling projects.

51 Market Analysis of Used Building Materials in Metro Vancouver 51 Local non-profit The ReUse People (TRP) started in San Diego/Tijuana that shipped C&D materials to Mexico for reuse, and is now located in Oakland (see reuse centre case studies in Section V-C). Portland, Oregon Similar to San Francisco with state and municipal regulation Portland projects with a value of over $50K in construction costs must divert 75% of their construction waste, and must provide a plan for doing so The following must be recycled: rubble (concrete, asphalt), land clearing, cardboard, metal and wood Cleveland, Ohio Government focus on deconstruction of abandoned buildings in downtown core and residential neighbourhoods Driven by declining economy, rustbelt city excess of abandoned buildings which raised safety concerns, no time pressure on deconstruction Desire to create green jobs for people re-entering society from prison Deconstruction pilot project for green jobs being paid for by the Cleveland Foundation and the City, but are managed by Neighborhood Progress Inc. (partnerships with non profits and foundations) Netherlands Effective, policy-driven approach that has achieved 90% overall waste diversion (less than 10% waste to incinerators). Netherlands is a signatory to the European Union Landfill Directive (1999), with successive targets for reduction of landfilled municipal waste to 75% (by weight) of the 1995 baseline by 2010, 50% by 2013 and 35% by A landfill ban on C&D waste with high tipping fees (63,50 in 2001). Comingled wastes are separated at government certified material sorting plants. And landfills accept waste only from certified operators, who sort and certify loads. The Building Materials Decree also limits the materials left on site and mixed with soil after demolition, but also stipulates what materials can be reused (ex. recycled aggregate in place of gravel in concrete) that encourages industry s acceptance of reuse. Netherlands 12 provinces regulate disposal of C&D wastes. They gain info about waste streams and monitor disposal and processing by requiring quarterly reports from waste collection and processing companies. Used building material reuse and recycling is estimated to be as high as 90%. Asphalt, concrete and mixed granulates are used in road building, and flyash is used in new concrete. Almost all flyash produced in the country is currently used in concrete. C - Interventions A variety of interventions are used across North America to foster the market for used building materials, to develop deconstruction skills in the construction industry and create green jobs, and to reduce C&D waste to landfill. Key interventions include tax credits, government procurement, reuse centres, and programs to foster the deconstruction industry, provide training and develop green jobs. Tax Credits One of the most significant drivers encouraging deconstruction practices and building materials reuse in the US is the availability of tax credits. Tax credits are provided to individuals for donating used building materials to charitable organizations. Tax credits reduce the cost of deconstruction on the average home from almost three times the cost of demolition to 90% less than demolition costs, from $36,300 to $1,300 (see Table 18). This important financial incentive helps homeowners to make the decision to deconstruct rather than demolish and thereby foster the market for used building materials by providing a steady stream of materials to donation centres. Used building materials reuse stores can apply for charitable status (501(c)(3)) that allows them to issue tax receipts for the assessed value of donations. The Internal Revenue Service s IRS Publication 526 on Charitable Contributions of

52 Market Analysis of Used Building Materials in Metro Vancouver 52 property (household items) governs the donation of used building materials. A fair market value of the donation must be determined by the charitable organization. The following example created by The ReUse People illustrates how significant tax credits can be in the business case for deconstruction 13. It compares the costs of a typical full-house deconstruction project with a typical demolition. Assuming a 2,400 sq.ft. house with a two-car attached garage, composition roofing, wood siding, drywall, raised foundation, single-pane wood windows and tongue and groove hardwood floors, they estimate after-tax savings of $11,700 ($13,000 net cost for demolition, versus $1,300 net cost for deconstruction). Although values will vary widely depending upon the location, age, style, and condition of the house, the type of construction and materials used, topography of the property, landfill rates and other factors, this example shows that tax credits are an important part of encouraging deconstruction and used building material reuse in the US. Table 18: Estimated Economic Benefits of Deconstruction Activity Re-use Traditional Solution Demolition Lowering the house to the ground and disposal of $28,800 $8,000 debris Removal of concrete and hardscape $5,000 $5,000 Appraisal of salvaged materials $2,500 - Total cost $36,300 $13,000 Appraised value of donation $100,000 - Tax savings $ 35,000 - Net cost $1,300 $13,000 Reuse Centres Building reuse centres are of central importance to developing the market for used building materials. Many building reuse centres in the US have been supplying the residential market for many years, and often offer deconstruction services and deconstruction training services. The centres highlighted below provide storage and retailing of used building materials, deconstruction services and deconstruction training. These centres play an important role in fostering the market for used building materials, since they provide both the salvage services and the retailing needed to market materials that had been previously disposed of. They also create expertise on the supply and demand sides of the developing market, and help provide these services to other groups throughout the US through their deconstruction consulting and training services. Two successful, long-term centres were interviewed to assess their success factors and challenges as follows: The Reuse People - Oakland, California The Reuse People (TRP) is a non-profit organization dedicated to reducing the solid waste stream by salvaging building-related materials and distributing them for reuse. TRP employs about 25 people and operates two retail warehouses in Oakland and San Diego, where people can purchase salvaged materials. It also runs a deconstruction company, a deconstruction training programme and a consulting service. TRP started in April 1993 as part of a drive to help provide building materials to flood victims in Tijuana, Mexico. The drive collected and donated over 400 tonnes of building materials (valued at US$ The ReUse People calculations, shown in Table 18, assume a combined federal and state tax bracket of 35%. They note that the total materials to be salvaged (lumber, cabinets, plumbing, electrical fixtures, doors, windows, etc.) would generally be appraised somewhere between $87,500 and $120,000 if the materials are in good usable condition, and have therefore assumed an appraised house value of $100,000. Note also that the cost of obtaining an appraisal ($2,500 in this example) is deductible on Schedule A or IRS form

53 Market Analysis of Used Building Materials in Metro Vancouver 53 million) and demonstrated that there was a need and market for used building materials. Based on this success, TRP opened its first materials distribution warehouse in San Diego in The business grew and TRP found itself unable to keep up with the consumer demand for materials. Three years after it first opened, TRP started its own deconstruction company as a way to ensure sufficient flow of materials to their retail warehouse. As demand continued to grow, they began training and certifying contractors to do deconstruction and also added The Reuse Institute, a consulting service. Regulatory framework and incentives A range of state and municipal regulations has been introduced in California to reduce waste going to the landfill. In 1989, the California legislature passed the Integrated Waste Management Act (AB 939), which required municipalities to reduce landfill waste by 25% percent by 1995 and 50% by While most municipalities easily met the 1995 target, far fewer were able to meet the 50% reduction target by San Francisco has been very progressive in its waste reduction policies and programmes. By the time AB 939 was introduced, San Francisco had already set goals to reduce its solid waste by 32% by 1992 and by 43% by 2002; these targets were adjusted to conform to AB 939. The city achieved a 50% diversion rate shortly after rolling out its Fantastic Three program in The program involved a colour-coded system to make recycling easy for residents, with each colour indicating the material accepted (blue=recycling, green=organics, black=landfill).the city then decided to pursue higher diversion rates than those required by the State. In 2002, San Francisco also adopted a target of diverting 75% of its materials from the landfill by 2010 (which it achieved in 2008). It has now set a new target of zero landfill waste by In 2006, the City and County of San Francisco adopted ordinance No , which created a mandatory programme to maximize the recycling of mixed construction and demolition debris. The ordinance requires that at least 65% of the material generated from construction, demolition or remodelling be diverted from the landfill. Construction and demolition debris must be transported off-site by a registered transporter and taken to a registered facility for processing. According to Ted Reiff, President of TRP, these regulations have not influenced or assisted TRP in any significant way. However, in his opinion the LEED programme has had a strong and positive impact on TRP. LEED offers credits for the percentage of construction waste diverted, but its primary benefit to TRP has been in promoting green building and educating the private and public sector. One of TRP s main challenges is getting people to understand that deconstruction is available and that it is an economically viable option. As a non-profit enterprise it lacks sufficient resources to do public education. The most important and effective incentive has been TRP s ability to offer a tax deduction to private building owners. The tax deduction is based on the value of the materials salvaged from the deconstruction process and reduces the homeowners adjusted gross taxable income 14. According to Mr. Reiff, this has been a key factor in helping TRP to source materials. He notes that without it, they would not have been anywhere near as successful as they have been. The value of the materials can often offset the cost of deconstruction and provides a powerful incentive for homeowners. The tax reduction is determined according to an independent appraisal of materials and other IRS regulations. Economic aspects TRP is financially self-sustaining and from its outset was founded on the principle that it should be able to support itself by providing products and services that the market wants to buy. Mr. Reiff funded the initial start-up costs himself. What little grant money that it has received has been for the expansion of its warehouses; it never uses grant money to cover operations costs and has not received any stimulus money from the Obama administration s green jobs initiative. It has, however, benefited indirectly from these funding sources, since some of their clients have received it and used it to purchase TRP services. 14 The tax deduction should not be confused with a tax credit. A tax credit is a sum deducted from the total amount of tax that a taxpayer owes the state.

54 Market Analysis of Used Building Materials in Metro Vancouver 54 The bulk of TRP s revenue is evenly divided between its retail warehouses, deconstruction services and project management services. TRP does not charge to train and certify deconstruction specialists, but instead receives a pay as you go project management fee from the people it has trained for each deconstruction job that they do. The organization s consulting arm is quite small and represents only about 10% of their revenue stream. Revenue goes mainly to expanding the programme. Any funds remaining after operations expenses are covered go to the community, in the form of cash or donated materials. TRP s client base for both deconstruction and retail services is primarily residential. Almost all deconstruction projects are single-family dwellings. TRP has not done any government contracts, largely because California law requires that any workers on government contracts be paid wages agreed by the government union, which according to Mr. Reiff are almost double that of private sector wages. Given the extra labour costs associated with deconstruction versus demolition, this has made government work cost prohibitive for TRP. In terms of numbers, homeowners make up the largest client base for the retail store. But the largest single purchasers are owners of mid-priced, multi-family buildings who are maintaining buildings or replacing materials damaged by tenants. Salvaged items are resold anywhere from 10-75% of new value, with most items selling at 50-75% of new value. Impact Because TRP s mandate is to divert as much waste as possible, they attempt to recover as much as possible when deconstructing buildings. TRP accepts all types of reusable building materials, including: lumber (longer than six feet), windows, doors, sinks, cabinets, roofing tile, flooring, siding, plywood, hardware, and building materials. TRP does not accept concrete, asphalt, or wood materials that need to be ground or crushed. Since its inception, over 300,000 tonnes of reusable materials have been diverted from the landfill, either through TRP s deconstruction services or its certified deconstruction contractors. TRP now deconstructs about 300 building each year and in a typical project is able to recycle or reuse about 85% of materials. TRP s operations have generated approximately 350 green jobs. Plans are underway to expand to 25 to 30 major and smaller metropolitan areas across the United States. TRP has already begun placing full-time managers in many of these locations to work with local groups, such as Habitat for Humanity. It has also started designing a warehouse certification training programme that it hopes to have up and running by the spring of The Rebuilding Centre Portland, Oregon The Rebuilding Centre was started in 1998 by a local non-profit organization (Our United Villages) to encourage reuse of building materials. Based in Portland, the Rebuilding Centre employs about 35 people and now accepts the region's largest volume of used building and remodelling materials. It operates a retail warehouse and a deconstruction service, offers courses, and produces a green furniture line (ReFind Furniture) using materials that are difficult to resell. The Rebuilding Centre was founded by current Executive Director Shane Endicott, to generate revenue for Our United Villages. Previously four used building materials resale operations had already failed in the area, so Mr. Endicott invested some time researching and interviewing the failed organizations, thrift stores, local non-profits and for-profits (like Home Depot) to determine what would enable such an enterprise to be successful. The ReBuilding Centre opened a retail warehouse in a temporary location in 1998 and moved to