The importance of housing and the construction industries to the U.S. economy has probably never been more apparent than over the past year. Whether they are active players in the real estate arena or not, investors of all kinds have been affected because Wall Street has been hit, no doubt with your clients among them.
The mortgage and credit crises are having an undeniable effect on the market for single-family homes, but in much of the country other construction continues unabated, and an increasing number of those projects are green, at least to some degree.
My first exposure to energy-efficient building came when I wrote a short article about earth-berm housing in 1980 for World Construction magazine. The basic idea is that you build your house into an existing hillside, or you create an artificial one around your single story structure. It’s been called “under earth, without being underground.” The resultant dwelling is warm in the winter, cool in the summer. Skylights and front windows let in natural light and the home never needs repainting. You do have to mow it, but that’s another issue.
Thirty years ago, the world wasn’t ready for earth-berm housing, but I thought for sure it would take off when the Lord of the Rings movies came out and people could see for themselves how cozy and comfortable hobbit dwellings could be. But there were no builders doing movie tie-ins to build hobbit holes, and I’m still the only person I know who would want to live in one.
Hobbit holes aside, there is much being done to make all kinds of buildings–residential, office, and retail–more energy efficient and with a smaller overall environmental impact.
One of the primary driving forces behind this environmentally friendly approach to building is the U.S. Green Building Council (USGBC), a non-profit, self-regulating organization committed to expanding sustainable building practices. USGBC administers the LEED (Leadership in Energy and Environmental Design) Green Building Rating System, which provides independent, third-party verification that a building project meets the highest green building and performance measures.
According to USGBC, more than 1,500 buildings have received LEED certification since the program was launched in 2000, and there are currently 11,000 projects that are seeking certification.
LEED promotes a whole-building approach to sustainability by focusing on five areas: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality. Points are awarded for specific practices in each area and verified by a third party. Depending on the final score, the building is given a certified, silver, gold, or platinum ranking.
For advisors who deal with clients who invest in real estate projects, knowledge of the LEED program is important not only because of the environmental benefits. There are financial payoffs as well in many areas, including tax rebates, zoning allowances, and other benefits.
The New Urbanism is Green
Dean Marchetto, founding principal of Dean Marchetto Architects, P.C., in Hoboken, New Jersey, tries to incorporate sustainability into all of his designs. His firm recently converted a century-old coconut processing and storage facility into condominiums with prices starting somewhere above $600,000, which was the first Silver LEED-certified residential building in New Jersey. The building’s marketing materials call it “Hoboken’s hippest, smartest, and only green residence,” and stress the air filtration system, “spectrally specific glass” windows, “HVAC systems that do not use ozone depleting HCFCs,” and the “carefully selected soils and plants” of its green roof (see sidebar).