MHN Blog

Green Building Grows In California—And The Multifamily Market

Last week, California became the first U.S. state to issue a mandatory green building code that will require energy efficiency and less water consumption. Regulations for single-family, multifamily and commercial structures are also part of the new code.

It was a big move for the golden state, and a popular one--the California Building Standards Commission voted unanimously for the green building code, which was designed to reduce greenhouse gas emissions.

As MHN reported Monday, the new code will improve water usage in both commercial and residential plumbing fixtures and aim for a 50 percent landscape water conservation reduction.

• Builders will also be encouraged to reduce energy use by 15 percent more than today’s current standards.

• The code also emphasizes using recycled content in building materials and carpets and suggests site improvements like hybrid vehicle parking and stronger storm water plans.

• Until 2010, the code regulations are optional; after 2010, they’re mandatory.

(Other areas are embracing green building, too. In Seattle, the mayor recently suggested changes to the multifamily building code that included adding green roofs and less--or no--parking in developments that are close to mass-transit, according to the Seattle Times.)   

California Building Standards Commission Chair Rosario Marin praised the commission for uniting construction and building industry representatives, environmental groups and labor organizations. 

It’s certainly something to be proud of—by taking a decidedly sustainable stand, California is working to reduce the environmental impact of new construction.

And it’s a decision that the multifamily market can feel good about.

• It’s a strong marketing technique. It’s true, green building can produce some higher upfront costs--but it also offers long-term savings for owner/investors, and provides leasing agents with an added-value for renters.   

And--according to news on the single-home front--in a recent article about builders attempting to move unsold homes, the San Jose Mercury News pointed out that one major technique builders were using included "trying to woo customers with green building techniques and energy-saving features."

• Green urban areas—designed to negate car usage—are more popular. Energy costs are also persuading buyers to look in urban rather than suburban areas.

As gas stubbornly remains above the $4 mark—with little sign of dropping--they’re eager to avoid long commutes and trips to stores, restaurants and other locations.

"People are now saying affirmatively they want to live closer to town centers and have a shorter commute," Lawrence Yun, National Realtors Association economist, told U.S. News & World Report. "And smaller homes mean less energy consumption."

That’s more good news for the multifamily market.

It’s good news, too, for urban planners who have been trying for decades to get Americans to embrace a more compact geographical pattern, according to U.S. News & World Report.

"To be honest, I feel that rising gas prices...are going to do more for good, sustainable urban planning than the entire urban planning profession," says Thomas Campanella, an associate professor of city and regional planning at the University of North Carolina—Chapel Hill.

Space constraints in urban areas have typically meant multifamily buildings were the best, or only choice for development.

If more buyers are looking in downtown areas because high gas prices are making them reconsider long commutes and car-intensive lifestyles, it could be a huge boon for multifamily building.

(Sort of makes the hefty cost of filling your car up seem a little less painful, doesn’t it?)

Cost remains a concern, but the evidence is overwhelming: Green fever is spreading, and going green is becoming increasingly popular in the multifamily market.

And one day, apartment renters and buyers will simply expect it.

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?

Focusing on Green Building Means Encouraging Green Living, Too

Last Sunday, I had brunch at my friend's somewhat-new apartment--she moved in a couple of months ago--and although the building may be older, her unit is cutting-edge green from back to front.

I've known for years that Michelle preferred locally grown, organic produce; but this place takes that mentality to a whole new level.

Although she doesn't have a car, Michelle has made two trips to recycling centers to drop off bottles and cans since moving in. And, even more amazingly, there is a worm bin on the back porch that is used to turn fruit and vegetable waste into compost, a process which I've since learned is called vermicomposting (and the EPA says is great for apartment-dwellers).

In contrast, my building--which is significantly larger--posted an announcement last week in the elevators that although the board is looking into other options, for now, all recycling can be placed in blue bags and thrown in with the rest of the trash.

The garbagemen, we're told, will take those bags to a separate site.

Riiiight.

"Do not do that," Michelle said, laughing, as she served up our omelets. "Seriously. That's a total waste of time."

I have to admit, I think she's right.

Not just because I'm a doubting person by nature--but because the city recently decided to end a similar program, introduced by Mayor Richard Daley in 1995, in which citizens were told to place recyclables in blue bags and--you guessed it--assume they'd find their way to the proper recycling centers.

Not surprisingly, many of them didn't. According to the Chicago Tribune, the city actually kept just 8 percent of waste from landfills--not the 25 percent officials claimed.

Which is why I don't believe my cans are going to end up anywhere but a dump, no matter what color bag I toss them out in.

In our recent annual condo board meeting, we were told that the reason our mid-rise building didn't have a recycling program was because there is an extra charge for a truck to come pick up the recyclables.

So am I supposed to assume that the current waste management guys, out of the goodness of their heart, will take it somewhere else for free? Probably not.

The blue bag program, in fact, was thought to be so infective that local environmentalists aren't even upset that, because of its phasing-out process, the city will be without any recycling for a few years until the new system--which involves blue bins--begins.

"It's taken 16 years," a recent post on the Chicago Recycling Coalition's homepage said, "but the City of Chicago announced on May 2nd the end of the Blue Bag program and its replacement with the Blue Cart program, just as the Chicago Recycling Coalition has been advocating."

Until I receive my blue recycling bin, I'm told I should drop my trash off at one of the city's 16 recycling drop-off centers.

And I should. But realistically, we all know that the harder you make it for people to recycle, the less likely they are to do it. Which is unfortunate, because larger buildings like mine could really have an effect if they did recycle.

But it's hard. Our building doesn't have balconies or fire escapes, so there's no outdoor space to store old cans or utilize Michelle's worm box; and that garbage chute down the hall is pretty tempting when the garbage gets stinky.

So what gives, Chicago? Everybody's green. Best Buy is now taking old computers and electronics for free.

Sam's Club is letting members exchange used digital cameras, laptops, MP3 players and printers for gift cards ranging from $1 to $1000, CNNMoney.com reported Wednesday.

And Mayor Daley--whom I feel is a generally good mayor--gets the importance of being green. This is a man who has said that he wants Chicago to be the greenest city in the U.S.--and planted 500,000 trees to prove it, according to the New York Times.

Granted, he was talking about building--the city has focused on growing green construction and wind and solar energies, according to a 2006 Time article--but still. How many cities have a City Hall with a green roof? (We do.)

For a city of this size to have such a fragmented recycling program it's a shame. OK, so the blue bag program didn't work--but why isn't the city offering financial incentives for buildings like mine to recycle? Think of the impact our multifamily structures could have!

According to the Trib, only a third of Chicago's 600,000 homes with city garbage service will have the new blue bins by the end of the year. That leaves a lot of citizens without easy recycling options.

Which is--pun intended--really a huge waste.

Prince Charles Urges Climate Consideration to Protect World Economy

It's not many days we get to link to a newspaper commentary that ends with an attribution like "The writer is heir to the British throne" -- so Out and About couldn't resist sharing Prince Charles' thoughts on climate issues, published today in the Financial Times.

The prince wrote about a climate recommendation that the Corporate Leaders Group on Climate Change prepared yesterday for the group of world leaders that are scheduled to meet next week in Bali to discuss that very issue.

And the 150 U.S., European, Chinese and Australian businesses in the CLGCC -- what the prince called "an unprecedented global corporate alliance" -- are making their message clear: It's time to be proactive about addressing climate issues, because the longer we wait, the more expensive and difficult reversing climate damage will be.

The business heads feel:

• Economic growth absolutely depends on directly addressing the issue of climate change.

• Long-term plans need to be made, and highly industrialized countries need to be ready to buckle down and make changes.

• We need to stop tropical deforestation, responsible for about 20 per cent of global greenhouse gas emissions.

Prince Charles wasn't just making an emotionally-based argument (although he did mention his grandchildren): He did his homework.

"The Ice and Snow Data Centre in Colorado predicts that within the next seven to 23 years, the entire north polar ice cap will completely disappear in summer," the prince wrote. "Why does this matter? A lack of sea ice means that the world is no longer able to reflect as much solar heat as it used to and so the rise in global temperatures will accelerate."

He also warned that as more emissions and natural resource damage was done, floods, droughts, rising sea-levels, spread of disease and poverty will increase.

Will the CLGCC's recommendations have an effect on the decisionmakers next week? Prince Charles seems to think so.

"These companies are showing remarkable leadership and I can only congratulate them," he said. "It is the fervent hope of myself and the signatories that it will strengthen the resolve of those in Bali to make the tough decisions."

We hope so, too.

Vacation, Not all the Environment Ever Wanted

Spain's Balearic islands have been a popular vacation spot since the 1960s -- maybe a little too popular. That's why Spain is expected to announce tomorrow that all construction on the islands of Ibiza, Mallorca and Menorca will be halted, the Guardian reported today. Done. No more.

Details haven't been announced but the move is expected to save land in Palma, at one of Mallorca's largest bays and in urban marshlands in Ibiza and Palma de Mallorca. Those areas will be made protected land, making them untouchable in the future.

Last week, the government began a plan to remove illegally built homes, chalets and hotels  -- construction in Spain is banned within 100 meters of the coast, but some developers ignored that law -- along 500 miles of Spanish coastline.

"We cannot mistreat our natural resources, damage the coastline and allow for a disproportionate growth in residential properties," the socialist president of the Balearic islands, Francesc Antich, said.

Tourism is a rich financial resource for Spain, and for many countries around this world. It's also great for the residential market. Popular destinations require new hotels, rental homes, apartments.

But balancing economic advantages and ecological concerns is important. Consider:

• A recent Travel Industry Association survey found 78 percent of travelers are environmentally conscious, the Chicago Sun-Times reported. More than 50 percent of those travelers said they would choose a travel supllier who ''demonstrated a true commitment to environmental responsibility" over one who didn't, according to leisure trend analyst Peter Yesawich.

• St. Thomas recently nabbed the title of worst island vacation destination in National Geographic Traveler's fourth annual survey of islands around the world because of its habit of packing in tourists -- but in 2004, St. Thomas also was given poor grades on the National Geographic report card system when launched in 2004 for refusing to encourage sustainable tourism, according to The Virgin Islands Daily News.

• In that same survey, St. John was named best of the Caribbean islands -- with panelists praising its committment to maintaining the "natural environment" and "ecologically minded business people," but lost out on getting into the highest-rated category because of excessive development in Cruz Bay, the Daily News reported. "[St. John's] long term prospects, especially for the locals, will depend on good sustainable tourism management," according to the reviewers.

Even in low economic times, people vacation -- and that makes vacation spot development a lucrative industry. But whose responsibility is it to balance progress with protection -- the government's? Developers'?

It's great that Spain has stepped up to protect its natural resources, but one wonders how things progressed so far that demolition has to be involved. It seems it would be easier to determine what land needs to be hands-off before building begins -- or are local governments the ones who are on vacation?