The Norms After the Dust Has Settled: The Built Environment Sector’s Post-COVID-19 New Normal

 

 

In December 2019, an outbreak caused by SARS-CoV-2, a novel zoonotic coronavirus, took place in the city of Wuhan, Hubei Province, a major transport hub of central China.

 

The viral outbreak has since developed into a pandemic of historic proposition.

 

The human catastrophe has resulted in unprecedented disruptions to the world. Some of the disruptions will be transient, while several of them will persist long after the pandemic has receded and become permanent features of the world.

 

Built environment (BE) sector, a major driver of the global economy, is not spared from the headwinds. The black swan event will usher in a new form of BE industry.

 

The following are a collection of new norms predicted to be the new defaults of the BE industry.

 

BE sector players will be nimbler

 

The world’s response to the health crisis has shown us what we are capable of. Two entirely new hospitals with over 1,000 beds each, Huoshenshan Hospital and Leishenshan Hospital, were built with modular design in well over a week by China in Wuhan. In the UK, Arcadis, a design consultancy firm, created pop-up isolation units built in a plant and then assembled on site at medical facilities or treatment centres. The fabrication and installation of the isolation units took just within weeks.The astonishing speed and remarkable modularity of the construction have pushed the boundaries of engineering and construction capabilities. The influenza pandemic also gave impetus to the adoption of prefabrication in BE industry, making the industry nimbler. Prefabrication is carried out in a controlled environment where containment of the spread of coronavirus is easier. Thanks to the virtues of prefabrication, such as less construction waste, production unaffected by outdoor traffic and weather, this technique will remain favourable after the high-profile outbreak has become a history.

Leishenshan Hospital, a medical facility with 1,600 beds, was built in just 12 days

 

Another modern marvel was accomplished by BYD Auto Co., Ltd. BYD moved with incredible speed, and in less than two weeks, it had finished work that normally takes two months to complete. It completed both the R&D and manufacturing process of face-mask production equipment within seven days, whereas on the market, it would normally take 15 to 30 days to fully manufacture a mask-producing machine. At the same time, The firm also completed the R&D of medical-grade hand sanitizers in just six days, which were then shipped to medical staff on the front line of the epidemic after just eight days.

 

Stuff was made at record speed to meet tight deadlines through re-purposing. In the UK, JCB re-purposed its technology by making steel housings for a new ventilator design by Dyson. In the US, a fuel cell firm refurbished old ventilators into devices reusable for new patients.

 

The ongoing health crisis should accelerate the trend of outsourcing over the long term. Occupiers will increasingly seek third-party real estate services to sustain business continuity. There will be increased demand for new workplace design, including more digital, flexible and health-oriented working solutions.

 

Use of technology by BE sector players will be more extensive

 

BE industry had been moving towards deeper technological adoption prior to the wake of the global outbreak. Practically overnight, the raging coronavirus has magnified the significance of technology. People are scrambling to use technology on multiple fronts. Some of these technologies will generate efficiency gains; as such, the users will retain them beyond the crisis.

 

Robots are being deployed to help maintain social distancing at workplaces. In South Korea, as well as around the world, robots are being used to dispense hand sanitizer, measure temperatures, and disinfect hospitals. These robots help minimise exposure for patients and staff. UVD Robots, the Danish manufacture of ultraviolet-light-disinfection robots, shipped hundreds of its machines to hospitals in China and Europe.

 

Thanks to the explosion of the popularity of telepresence, face-to-face meetings are no longer a ritual in office settings. A recent Gartner study found that 74% of American companies will move at least 5% of their office workforce to permanently remote and nearly a quarter of respondents said they will move at least 20% to permanently remote positions, according to a survey of the company’s chief financial officers. Some events have moved from sports arenas to online streaming. Take Formula 1 for example. The organiser launched the Virtual Grand Prix Series to replace postponed races.

 

On the front of digitalisation and Industry 4.0, Malaysia Airports Holdings Bhd (MAHB) is fast-tracking its Airports 4.0 initiatives, which include: contactless self-services, virtual queues, biometrics. On top of that, the contagion prompted relaxation of regulation governing digitalisation. The shelter-in-place measures to mitigate the contagion led Chinese regulators to relax requirements for paper signatures for processes such as opening a bank account.

 

In China, a 3D-printing company is using their technology to create printed isolation units. Just 10m² in size, each unit can be printed in two hours, with one printing machine able to create up to 30 rooms a day. The units are made from recyclable materials that can be crushed and recycled if they are not re-purposed after the pandemic passes. Current designs can be placed anywhere there is an electricity connection available, while future designs will feature solar panels to create a standalone solution. At the same time, 3D printers fabricated valves for ventilators for coronavirus patients; in Italy, parts for oxygen masks connected to ventilators were 3D-printed

 

Touch-less technology is also catching up fast. Automatic doors, voice-activated elevators, mobile phone-controlled hotel room entry, hands-free light switches and temperature controls, automated luggage bag tags, and advanced airport check-in and security are put into application.

 

Once a company has invested in replacing a worker with a technology it’s unlikely the firm will ever rehire for that role. Technologies such as robots are more expensive to create and integrate into businesses but once they are up and running, technologies are typically cheaper than human workers.

 

There will be a paradigm shift in the engagement of foreign workers

 

The surge in foreign worker infections has shed light on the weakest link in health emergency response: the marginalised workers.

 

A portion of the marginalised workers are undocumented due to illegal entry or overstay. They represent the blind spot in the government’s effort on monitoring the entire population to manage the health crisis. Public health measures are ineffective when some of the population falls through the cracks. Also, owing to fear of deportation, the illegal workers are also afraid to seek testing or care. Moreover, some instructions to ward off the contagious disease are a luxury to them. Social distancing is a case in point; preponderance of the workers live in crowded space, public transport is the only mode of transport they can afford. Many of the foreigners even struggle to access information vital to protecting themselves and the public from contracting diseases.

 

The cluster involving the marginalised workers has given rise to xenophobia. People have become more conscious of being in close proximity to foreign workers as some of whom have questionable standards of cleanliness. A reader letter published in the Chinese daily Lianhe Zaobao on April 13, 2020 stoked controversy when its author said among other claims that workers themselves were ultimately responsible for the outbreak due to their ‘bad personal hygiene habits.’

 

Against the backdrop of the issues compounded by the marginalised workers, the BE industry will be faced with tougher laws and regulations governing the employment of foreign workers. The compliance costs and overheads from engaging the category of workers will be steeper. The repercussion from violations of the mentioned laws and fallout from the health crisis linked to such employees will be severer.

 

Supply chain pattern will change

 

The viral outbreak has underscored the over-reliance of the global chain on a single country or a handful of countries. South Korea faced shortage of medical supplies when its medical supplies were produced in mainland China just-in-time.

 

Consequently, the supply chain will be re-assessed and diversified, dependence on imported materials and parts will be diminished.

 

Foreign direction investment (FDI) into the likes of Vietnam, Myanmar, India, which are manufacturing nations with cheap labour, will rise. BE activities in the manufacturing sectors in the foregoing countries are expected to thrive. The government-owned Development Bank of Japan even plans to subsidise relocation costs of companies that bring production facilities back to the country.

A heightened sense of crisis

 

More efforts and money will go into crisis management, incident response planning and emergency preparedness. Some BE firms will have their project stress tested for the economic shocks. There will be a new attitude as to how risk is shared in the face of similar crises.

 

Force majeure may be redefined in some agreements. A force majeure clause eliminates or mitigates material risks that are recognized to be beyond the control of the contract parties. Per the definition by Graham D. Vinterb, force majeure is ‘a commercial law concept, which prevents a party to a contract being in breach of his obligations to the extent he cannot perform them as a result of supervening events outside his control.’ The COVID-19 outbreak is a supervening event that is first-of-its-kind, rendering the force majeure clauses in those contracts less than effective.

 

Apart from force majeure, contractual terms with respect to deliverables, payment structure, force majeure, delay, remedy, and so forth will see increased sophistication

 

There will be new practices in regards to environmental public health stewardship

 

Clearer skies, returns of wildlife, cleaner rivers, etc. in the aftermath of lockdowns nationwide have made people appreciate mother nature more and demand tougher environmental protection.

 

Studies are linking air pollution to more deaths from COVID-19. Being one of the most polluted regions in European, Northern Italy saw high mortality from the contagion. Policy-makers will institute tougher laws and regulations to curb the contamination brought about by the BE in an effort to make air safer to breath.

 

To cut the public use of public transports; for instance, buses and trains, to allow social distancing, some cities have turned car roads into pedestrian streets. Such conversions are expected to be long-lasting as they are in line with their green initiatives and walking promotes healthier urban lifestyle.

 

Indoor air quality could receive a higher priority in construction projects. Indoor air quality is essential; but other project aspects like cost and energy efficiency tend to get more attention. This could change after coronavirus, as companies give more importance to a healthy built environment.

 

Demands of real estate will evolve

 

The future where the COVID-19 tragedy is in our living memory, flexible office space is anticipated to be in higher demand. With telecommuting gaining steam, permanent offices will fall out of favour with some firms. In addition, more firms will be more willing to commit capital expenditure on infrastructure for telepresence, rather than fixed buildings.

 

The increased prevalence of electronic shopping will boost the sales of commercial properties that fit the supply chain model of online commerce. Warehouses and distribution centres nearby the target markets or the container ports and offices which are away from foot traffic will be highly sought after by online retailers.

Interest in warehouse will surge as e-commerce is more popular than ever

 

Student housing sector will also be adversely affected by students receiving education remotely via digital media, though the impact will be mild. 

 

The pandemic has shown vulnerability of cities which are mostly densely populated. Further to that, urban infrastructure and urban overpopulation have facilitated the rapid spread of the disease. As a consequence, urbanisation will slow in the aftermath of the pandemic. Urban design will be rethought to reduce the urban poor, who is sadly the weakest link in disease control, and focus more on public health.

 

On the hospitality front, non-professional lodging options, largely consisting of alternative accommodations, are likely to face increasing scrutiny and pressure from guests who are concerned with their health and well-being.

 

The kinds of BE project will be different

 

The health crisis has exposed the vulnerabilities of high dependence on certain industries. Those sectors are the hardest hit as a result of the wrath of the disease. Travel, tourism and hospitality sector is in crisis mode. Oil and gas industry is in shock. Retail and food and beverage sector is in shambles. Cross-border trade is bleeding.

 

When these sectors are licking their wounds when the world is returning to normalcy, practitioners, policy-makers, investors will rethink their strategies and reduce their dependence on those industries through diversifications. For instance, Nigeria is limiting its over-reliance on oil and gas revenue by expanding its manufacturing sector. BE activities will fall in those industries ravaged by the spread of the virus as part of their diversification drives.

 

The pandemic has highlighted the importance of public health; governments therefore will increase their budget on health infrastructure and expand their strategic stockpile to include medical items; the number of seats in all medical colleges will be increased; researches in medical sectors will start getting more attention. Emmanuel Macron, the president of France, has promised to start major investment in public health. All these will lead to increment in BE activities in the healthcare industry.

 

BE education will be more virtual

 

Some BE education, lectures and some seminars have adapted to the movement restrictions during the pandemic by being conducted online. After being familiar with the mode of delivery and having enjoyed the merits of electronic learning,  BE education will be increasingly virtual. Even though distance education has its shares of limitation—this is particularly true when comparatively richer experience when education is delivered physically—this form of pedagogy is a boon to students which have to travel to the sites of teaching from afar.

 

Conclusion

  

There were more norms that were not covered here; for instance, the epiphany brought about by the shock and introspection allowed during the lockdown will likely spawn new ideas in the BE industry. During the 1972 miner’s strike in the UK, rolling power cuts meant people could only work for three days a week. During this time the biologist Richard Dawkins sat down under candlelight to write the first chapters of his bestselling popular science book, The Selfish Gene. Adding to this, construction of jail, detection centre and so forth will also be affected as crowded jails in India, the US, and some other countries have become the hotbed for the spread of the coronavirus.

 

We hope to bring these norms to the attention of our fellow players in the BE sector so they can be adequately prepared in a timely manner to navigate the new world order.

All in all, the COVID-19 pandemic is a global shake-up that has changed things for ever. As we enter the post-COVID-19 age, challenges aboud, so are the opportunities. We should seize the moment to leap forward to build a stronger nation.

The Primercon Research Team

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