Monday, October 29, 2007

Green Building's Barriers

I was asked by the EcoInvestment Club ( to comment on why green building isn't catching on. I think it should be incorporated into every community in the world, but it won't become viable until economic and cultural factors bring it home to the masses.

Here's a Q&A that I responded to:

1. In your opinion, what is the biggest hindrance to the Green Building

Public attitudes and misperceptions are holding back this movement. Builders need to know how to sell the benefits. They're not just pushing spa tubs and granite counter-tops anymore; they need to show energy savings and healthy interiors. As long as green building is seen as a luxury item for people on the West Coast, it won't succeed elsewhere. It has to be mainstream.

2. A. Why do investors invest in Green Real Estate or Green Building?

Right now, it's the glamor factor. But they will see a return once public attitudes change. "An Inconvenient Truth" helped somewhat -- it earned Gore and the IPCC a Nobel Prize -- but it didn't sway Main Street yet.
B. What prevents investors from investing in Green Real Estate or Green

It's simple. They think it costs too much and doesn't add value.

3. What's the real ROI of building Green?

I think it's much higher than conventional wisdom says it is. When you consider that green buildings are more durable, healthier and have lower operating costs over a long period of time, that should be part of the equation.

4. Do you consider Green Building to be its own industry, separate from
conventional building, at this point?

Unfortunately it is.
If not, what will it take to get Green Building recognized as its own

Mainstream publicly held builders need to embrace it. I saw some Lennar homes going up in the Bay Area and thought, "this is it, this is the wedge," but the homes were too expensive, starting at $1 million-plus. I know that's not a lot of money for the San Francisco area, but it's still more than three times the price of the average U.S. home. It needs to be integrated into tract home developments, condos, resort areas, urban infill and nearly any kind of structure with a roof on it.

5. What is currently needed to support the Green Building Movement?

1) A national awareness campaign similar to the "Got Milk?" campaign. How about "Got Green?" 2) Tax incentives need to be given to builders and homeowners that consider the total structure and site. At present, the tax breaks available for alternative energy and efficiency products are paltry and piecemeal. They are also due to expire soon. If leaders are truly committed to energy independence, they need to target buildings, which consume 30% of all energy and the lion's share of resources. 3) Utilities need to be brought into the equation on a local, regional and national level. They need to provide incentives to home and building owners to produce what Amory Lovins calls "negawatts" -- energy savings through efficiency. 4) A comprehensive national energy policy that creates jobs, new infrastructure, affordability, new companies and research similar to the Apollo program. This has been proposed many times by many parties from The New York Times' Tom Friedman to the Sierra Club. Everybody has to be on board with this and set some targets. It's a win-win proposition for every constituency, but why isn't anyone selling it like that?

6. Do you foresee any legislative actions for 2008 that will assist the Green
Building movement?

The current energy legislation snaking through the House and Senate is the best hope. After that, the Climate Change package expected early next year. Rep. John Dingell had some interesting proposals for Carbon Taxes, but I think the proceeds should go right into alternative (not corn-based ethanol) energy and research.

7. What is the most significant factor propelling the Green Building
Movement forward?

A class of folks loosely referred to as "Cultural Creatives." These are mostly educated, upper-middle class professionals, artists and activists. They are embracing green building and hopefully setting a trend. I thought green building would have caught fire by now, but it hasn't because most Americans are mired in a housing bust that will last for years. No matter what the McGraw-Hill green building survey says, there will not be much growth in this sector this year until some huge inventories of unsold homes wind down. It may be 2009 before the market gets back to normal. No one is more disappointed in this development than I am. I was writing a book on green building that went poof after the crisis hit. Now it's a book on what caused the downturn.

8. How can developers gain the support of investors for their Green Building

They must sell the benefits the way consumers want them presented. People need to know how much money they will save and how much prestige it will give them. They also have to make Green Building a chic consumption item. I know this sounds crass, but it has to be hip. Nobody's going to do it solely to save energy or to reduce CO2 emissions. It has to be a cultural meme. It has to catch on like a new fad and keep going into every town in North America. Developers need to know about paybacks, total cost accounting and savings of resource use over time. The numbers are there, they just have to start plugging them into their production models. You should get a sticker on your home the way a car has a sticker. It should break out energy and consumption use and compare it to average benchmarks. Green building has to be standard practice for every structure and its benefits need to be quantified for every owner and renter. Until that happens, it will be little more than an isolated movement.

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