Valuing social effects of investments in the built environment

The Housing Segregation Inquiry (Fi 2022:20) is tasked with developing proposals on how housing segregation in Sweden can be reduced and counteracted in both the short and long term and thus promote equal living conditions as well as quality of life for everyone.

As part of the inquiry, the Government Offices of Sweden have commissioned a team of researchers and analysts at RISE to investigate the possibilities of developing new tools for calculating social values of built environment investments.

RISE's assignment focuses in particular on SROI (Social Return on Investment), a method that broadens traditional ways of calculating return on investment (ROI) by also including social values. More specifically, this concerns taking into account what different stakeholders (e.g. municipalities or companies) can gain financially from avoiding social costs (such as law enforcement and social care) or achieving social benefits (such as increased health or security).

SROI differs from traditional cost-benefit analyses in that it calculates and breaks down the impact of an investment on the most relevant stakeholder groups, as well as including stakeholders in the work. The idea is that the result of an SROI calculation thus becomes more credible by reducing the risk of distortions in human thinking, such as so-called confirmation bias. Another ideas of SROI to try to make calculations more democratic and rooted in the needs of stakeholders, something which in turn can lead to more people feeling ownership of, and having an interest in, using and implementing the result in their business.

RISE's aim is to compile, analyze and synthesize previous experiences from both its own and others' projects in the field as well as a selection of current research studies. Based on this, a report will be produced that discusses the advantages and disadvantages, as well as the effects, that the SROI method (alternatively SROI-inspired methods) could have in terms of how the built environment is planned, designed and programmed. As part of this, the publication will especially discuss SROI's potential as a form of decision support in municipalities' built environment investments, especially in terms of housing supply and housing segregation.