LCC Analysis to Determine an Appropriate Apartment Rent Rate for HVAC System Renovation Projects

Residential building owners are turning toward renovating their existing buildings to improve old and inefficient HVAC systems. Due to the renovation, much of the added costs will inevitably be passed on to tenants by increasing rent rates. This increment often increases the vacancy rate in the buildings. To balance the interests of both owners and tenants, this paper suggested a method to determine an appropriate rental rate increment for the HVAC system renovation. A case study on residential buildings was conducted to determine a balanced point where the rental rate increment that offsets the amount tenants are willing to pay for the renovation. To calculate all costs incurred by the renovation, life-cycle cost analysis was carried out. Therefore, this paper ultimately provides a threshold value of rental rate increment such that building owners can make a reasonable decision on the HVAC system renovation.