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Why Real Estate is a Green Issue

 

The fact that the Green movement started back in the sixties and seventies is no surprise to me. When I was growing up, my grandma used to save the water from washing rice and produce to water her gardens. She was practicing a combination of the "green" principles in green living - reduce and reuse.  No wonder, her roses blossomed. 

Today, we hear and read about everything green. Companies in various sectors, ranging from technology, financial services, energy, retail, to manufacturing, are embracing environmentally safe practices. Bristol Myers-Squibb, General Mills, IBM, HP, Mattel, Exxon-Mobil, Intel, Procter & Gamble, Gap, Nike, Heinz, PG&E, Kohl`s, GE, Citigroup, Microsoft, Coca Cola, Apple, Staples, JP Morgan Chase are just a few of the 100 top corporate citizens named by Forbes Magazine that implement green practices in their work sites, product development and packaging, and energy-saving data centers.1  Bank of America plans to build a 52-story eco-skyscraper near New York's Times Square, while Empire State Building is undergoing a $20 million renovation to be green over a 5-year period with the objective of cutting energy by 40% and saving about $4.4 million on energy costs a year.2

Within the United States alone, homes account for 21 percent of the greenhouse gas emissions.3 Rising energy costs have prompted groups and individuals to look for cost savings. Consumers are becoming more and more environmentally conscious. Cahners Residential Group, a building trades publisher, surveyed and found that consumers are ready to pay for a house that has alternative building materials and energy-efficient systems. Results of the survey showed that almost 80% of respondents listed the environment as a top concern, and almost 90% replied they would be willing to pay more for a house with environmentally friendly features.4 Consumers are also looking for healthier lifestyles in greener homes. According to National Association of Realtors (N.A.R.), 75% consumers surveyed indicate green features preferred when purchasing homes.3  

In the commercial sector, a recent study (CoStar Group Study) revealed the economic benefits of building green.  LEED buildings command rent premiums of $11.24 per square foot over their non-LEED counterparts, and have 3.8 percent higher occupancy.5 What is LEED? "The Leadership in Energy and Environmental Design (LEED) Green Building Rating SystemTM encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria".6  Compared to non-Energy Star buildings, Energy Star buildings represent a $2.38 per square foot increase in rental rates, and have 3.6 percent higher occupancy.  Another trend that may garner more interest from institutional investors is that Energy Star buildings are selling for an average of $61 per square foot more than their peers, while LEED buildings achieve a significantly $171 higher price per square foot.5

Additionally, California's Public Utilities Commission has mandated that new housing developments are to be "zero net energy" by 2020. "A zero energy home (ZEH) combines the latest technology, energy-efficient construction and appliances with commercially available renewable energy systems, such as solar water heating and solar electricity. The result is a home that produces its own energy-as much as or more than it needs".3  Last but not least, federal and state programs offer incentives for homes and buildings to be more energy efficient.  As more and more emphasis moves towards eco-friendly designs and cost-savings, REALTORS® will join hands with consumers, homebuilders, homeowners, local governments, schools, and others to focus on the energy-efficiency of homes and buildings.  

Agents interested in obtaining the GREEN designation offered by N.A.R should visit National Association of Realtors (N.A.R.). To read about green trends, and how they may benefit you as a real estate professional, check out the following sites -

1.       C.A.R. green site - understanding what's green, tips & information for homeowners & more.

2.      U.S. Green Building Council - to learn, certify & understand green building, & more about LEED.

3.      U.S. Environmental Protection Agency, or EPA -  - provides information on its Energy Star program, with resources on new-home builders, lenders, energy-use rater, and utility programs that promote energy efficiency.

4.      Energy Star  - The site also provides users with an extensive list of federal tax credits for using energy-efficient products.

5.      Database of State Incentives for Renewables & Efficiency - DSIRE provides information on state, local, utility, and federal incentives that promote renewable energy and energy efficiency.

6.      Energy & Environmental Building Association or EEBA - is a principal association for builders and others, including real estate professionals, concerned with development of environmentally friendly buildings.

7.      Residential Energy Services Network - sets standards for building energy performance certification industry.  Site also contains basic information on energy-efficient mortgages and links to many of the key green housing sites.

8.       Energy Efficient Mortgages, offered as part of the Energy Star program, spells out EPA home energy-efficiency standards and FHA, Fannie Mae and Freddie Mac mortgage requirements on mortgages that credit a home's energy efficiency in the mortgage.

9.      Earth 911 - find local recyclers, create an office recycling program, and do a waste assessment, among other programs.

10.    National Geographic  - guide for daily living.

 

 

Notes:

1.         Forbes Magazine

2.         Boston Globe

3.         California Association of Realtors' Green site

4           National Association of Realtors

5.          N.A.R. - Green Buildings Perform Better

6.          U.S. Green Building Council

 

Copyright SherrySim2009. Information deemed correct at time of posting but not guaranteed.

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