Special Report from IBS: Building Industry Is in Love with Green on Valentine’s Day 2008

By Teresa O’Dea Hein, Managing EditorOrlando, Fla.–While red is traditionally associated with Valentine’s Day, green is the color of the day here at the 64th annual convention and exposition of the International Builders’ Show in Orlando, Fla., sponsored by the National Association of Home Builders (NAHB). Even though seminars on green building technologies and marketing strategies are part of the entire four-day conference, today has been designated as Green Day. It featured the launch of NAHB’s National Green Building Program as well as the introduction of the U.S. Department of Energy’s Builders Challenge program, a keynote speech by noted green design advocate William McDonough and an update on the new National Green Building Standard, expected to be published in the second quarter of this year. (A draft version can be reviewed on www.nahbrc.org.)An SRO press conference, attended by over 100 reporters, heard home builders and a DOE official introduce the National Green Building Standard, which will offer an alternative to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system. Furthermore, NAHB is aiming for a more user-friendly, entry level for green design, explained NAHB Vice President Bob Jones, a home builder from Bloomfield Hills, Mich.“I think multifamily buildings have an edge on green, by the very nature of apartments,’ noted Miles Haber, a multifamily development consultant based in Chevy Chase, Md., due to their more compact footprints and fewer exterior walls to potentially let out heated or cooled air. “Not to take potshots at LEED,” Haber said, “but I was surprised you could get as many points for installing a bicycle rack as for improving energy efficiency.”“Smaller is greener when it comes to housing,” Haber continued, “so the National Green Standard will award more points for smaller units of under about 1,000 sq. ft.’  “A lifeline out of this soft housing market is to go green,” said DOE Deputy Assistant Secretary of Energy Efficiency David Rodgers. “We need to make green building as ubiquitous as American flag lining Main Streets.”Rodgers added that DOE will also modernize the Energy Star program and add other items such as tankless water heaters and solar products.DOE’s new Builder Challenge program calls for builders to produce 220,000 high-performance homes by 2012.As far as another kind of green is concerned, NAHB Director of Forecasting Bernard M. Markstein III reported at a multifamily seminar this afternoon that rent increases for apartments have generally outpaced inflation over the past 10 years in every year except one, when energy prices spiked in 2005. Markstein and his fellow panelists were divided on the immediate future of the multifamily industry. They did agree that tightened lending standards are creating the difficulties in today’s multifamily market by requiring far more equity. The cost of funds has continued to rise and mezzanine financing is drying up, reported Gigi Giannoni, president of Atlanta’s Evolve Real Estate.Granger MacDonald, of MacDonald & Associates in Kerrville, Texas, pulled no punches: “Banks are now running scared. It’ll only be over time, when fear is superseded by greed, that the market will change.”