Green Building: Good For the Environment, Good for Sales

Green building has grown exponentially in the past few years. Since 2003, the number of cities with green building programs has increased 418 percent, according to the American Institute of Architects.

And green building is about to grow even more: The green home market is forecast to increase from $2 billion to possibly $20 billion over the next five years, according to a recent report that was co-sponsored by the National Association of Home Builders.

Across the U.S., the frenzy is growing in states such as:

• North Carolina: Between June 2007 and January 2008, the number of certified and completed homes built in western North Carolina as part of the NC HealthyBuilt Homes program–a voluntary, statewide green building certification program–more than doubled, according to the Western North Carolina Green Building Council. Almost 668 are currently in development.

• Indiana: About 60 members of the Builders Association of Greater Indianapolis have joined its new green building committee, Indy Green Build, which is a local branch of the National Association of Home Builders’ National Green Building Program.

Roughly 141 Indiana residents have attended a two-day workshop and earned the programs’ new Certified Green Professional designation since February, according to the Indianapolis Star.

The Price Is Right

Feeling like the home you bought or built could help save the world is one thing. But there’s another reason green building is picking up steam: People are looking to cut costs.

"Everything [green] is going through the roof and shows no sign of stopping," Stephens Farrell of Stephens Smith Farrell Architecture in Asheville, N.C. told the Ashville Citizen-Times. "The thought of owning a 4,500-square-foot, poorly conceived and insulated house 45 minutes from work send shivers down people’s spines when they think about $4.50 gas."

Green building’s energy-saving advantage also has helped it gain industry approval.

• A National Association of Home Builders study found that 90 percent of homebuilders were using green ideas in 2007, according to an article in the Economist.

• Even banks are getting in on the action. As we discussed in September, lenders like Bank of America have created financing packages for green building.

Its popularity is growing in part because it is cheaper to build green these days. It used to cost 15 percent more at least, according to Christi Graham, president of West Coast Green. Now building green ads just 5 percent or less to a project, according to estimates from industry leaders like the World Business Council for Sustainable Development.

A Reason To Buy

As residential building continues to slow–according to the most recent government report, single-family home starts hit a 17-year low in May–homebuilders are finding that energy efficiency can be a big selling point because it can help homeowners save on housing expenses over time.

However, it’s important to distinguish between greater energy efficiency and green, says Phoenix-area remodeler Philip Beere, who owns the Ecofresh Planet cleaning business and formed eco-friendly development company Green Street Development in 2007.

"I think it’s great that the big builders are getting on board to make a better home," Beere told the Arizona Republic. "However, it should be advertised for what it is, which is an efficient home, not a green home."

Some builders-like Shea Homes, headquartered in San Diego–have made sweeping efforts to go green.

The company–which is one of the largest U.S. homebuilders–kicked off an initiative in January to cut the carbon footprint of each new home by 20 to 30 percent in its Trilogy communities, which have water conservation features and use less lumber, the Republic said.

And–even though the homes don’t quite meet LEED standards–it’s important not to get caught up in classification and remember that they’re helping the environment, right?

Shea’s Area President of Shea Homes Active Lifestyle Communities Hal Looney thinks so.

"We’re building a couple of thousand homes, so the [environmental] impact will be a lot greater than four or five custom homes," Looney said.

He has a point. The company predicts that its Shea Green Certified Home program will save it from using more than 8.5 million gallons of gasoline and have the same effect as planting 1.9 million trees over the next 10 years.

It’s Time To Build Green

However, even with noble efforts like Shea Homes’ program, we still have (green) work to do: According to a report by Bethesda, Md.-based investment company The Calvert Group that studied the 13 biggest publicly traded homebuilding companies, most still could add more green offerings, the Gazette reported earlier this month.

According to the report, "while every major homebuilder has incorporated some environmental and efficiency programs and products into some of their new homes, none has fully embraced the emerging market of sustainable building design and construction."

The economy is down, and green certification takes time and money; getting LEED certification on a project does, too.

But as new home sales continue to be rocky–the amount of signed contracts increased 6.3 percent in April, according to the National Association of Realtors, but the National Association of Home Builders/Wells Fargo builder confidence index reached a low point for the second time in the past 12 months in June–builders need to be looking for any sales hook they can find.

And the truth is, saving homeowners money is probably sustainable building’s biggest sales advantage.

Which is why, as energy costs rise, to developers, builders, real estate agents and–most importantly–buyers, green homes can look decidedly golden.

Isn’t that reason enough to go green?