Issue 33, November 2011
Listings:
Press:
Quarterly Reports:
Frances Katzen, Managing Director:
Frances Katzen
Managing Director
485 Madison Ave.
16th Floor
New York, NY 10022
212.350.8575
fkatzen@elliman.com
Tools for Buying / Selling
Fran's Fab Five:
This is an example of a HTML caption with a link.
Green: Real or Myth

Is “Green” real? Specifically, the LEED (Leadership in Energy and Environmental Design) program organized by the U.S. Green Building Council in the mid 90s to evaluate the environmental impact of buildings based on energy use and materials. Touted as the gold standard for environmentally friendly buildings, a careful examination of LEED shows that while the intents are solid, the program is costly and leaves room for fudging compliance.

“Green” buildings have proliferated in recent years; In 2005, it was only two percent. They comprised nearly one-third of all new construction in 2010.

Without getting too detailed on how these programs work, buildings receive a designation as Certified, Silver, Gold or Platinum (the highest). This is based on credits within five “Green” design categories: sustainable sites, water efficiency, energy and atmosphere, materials and resource, as well as indoor environmental quality.

While it may sound rigorous, developers have found ways to skirt the true intent and still accumulate enough points to obtain the Silver designation. For example, a building receives as many credits for installing a bike rack or using bamboo flooring as for having a more energy efficient system.

A study by the engineering firm Syska Hennessy Group analyzing 16 projects reported the following credits were the highest used:

  • employ a LEED accredited professional, 100%;
  • use 20% of materials manufactured with 500 miles, 100%;
  • use low-emitting carpets, 92%;
  • install high-efficiency irrigation, or reduce potable water use for waste by half, 89%;
  • provide bicycle storage and changing facilities for occupants 89%; and
  • use recycled content 87%.

A study of projects in Colorado had similar results.

States are adopting regulations that will make LEED Silver the baseline for all construction requiring energy-efficient features, making accommodations for commuters and using recycled and low-toxic materials. In effect, requiring “Green” buildings, but not LEED buildings.

Another concern is the significant soft costs required to comply with LEED with expenses determined by the certification level sought and including a three cent to five cent per square foot registration and certification charge. This has led to the creation of an industry of architects, engineers, lawyers and accountants with expertise in LEED. In addition, the premium for a LEED constructed building is anywhere from two to 15 percent.

There are acknowledged benefits for LEED buildings including tax benefits and a healthier environment. For some, it increases the market value of the property.

While the LEED designation offers marketing advantages, there are systems that most buildings can utilize that don’t require major investments and quickly return the expenditure and produce savings. One example is lighting. Using compact fluorescent lights in units and common areas reduces energy usage and costs. Another possibility is having motion sensors in stairwells to turn on lights when someone enters. Some buildings are looking to convert to natural gas from oil and benefit from the wide difference in price of the two energy sources. Some buildings are installing dual fuel systems that can use either fuel depending on price. Natural gas is cheaper, requires less maintenance and burns cleaner.

There is a degree of separation between the goals and the realities of LEED buildings. The U.S. Green Building Council reported a couple of years ago that 25% of the LEED certified buildings fail to save as much energy as projected. Furthermore, most do not track energy consumption, a needed step in looking to reduce usage. The council points out that the need to verify is at the heart of the program.

While I support the goals and objectives of LEED, it has become too bureaucratic and costly often focusing more on the marketing impact than on actually helping the environment. Simple steps are available outside of certification that can improve the indoor environment and the quality of life and health for residents. The switch from toxic to non-toxic cleaning materials can be done cost effectively and create a healthier environment for residents.

Those who want a “Green” building should look past the designations and ask question about what materials were used in construction, what energy systems are installed, and other steps the building is taking to be environmentally friendly. It could be that a non-LEED building provides better solutions and has incurred less cost to do so, ultimately affecting the price of units.