When Craig Foley, a REALTOR® and chief sustainability officer with LAER Realty Partners in Winchester, Mass., started selling a multifamily sustainable development called E+ Solutions LLC Highlands St., he realized it was the opportunity to run a market comparison between it and another new construction home project to see if sustainable housing truly commanded a higher price. “We were competing against new construction down the street at the same time. In Boston, we had two buildings with two units in each building that were LEED-platinum certified and had Home Energy Efficiency Rating System (HERS) scores between -14 and -22. Net zero is the standard, so these homes were well above the standard,” says Foley. The other development, Marcella St., had seven townhousestyle units and were not high performance and had HERS scores of 55.
“There was a significant price premium for the E+ Solutions Highlands St. homes,” said Foley. Those homes were listed at $450 per sq. ft., while the area average was around $375 per sq. ft., and the price at which the Marcella St. project units were listed. “The average of the two sales prices for the E+ Solutions homes had a 22.7 percent price-persquare-foot premium over the Marcella St. homes. We sold all four units of Highlands at asking price before they sold two of their units. Buyers were speaking with their wallets about the value of sustainability,” he says.
Another example is Stonehenge Park, a 38-lot subdivision in Raleigh, N.C., that featured homes that were both ENERGY STAR-certified and bronze-level certified through the National Green Building Program. All 38 lots sold in 26 months, an accelerated pace that was unprecedented in the surrounding market. The builder, Dickerson, exceeded its targeted sales rate by 40 percent. That was in 2011, and the green building movement is still going gangbusters.
According to the Dodge Data & Analytics World Green Building Trends 2018 SmartMarket Report, global green building activity continues to rise. Importantly, nearly half of the survey respondents expect that the majority of their projects in the next three years will be green buildings. By 2021, in the United States, green activity is expected to grow, with those doing the majority of their projects green increasing from 32 percent to 45 percent. Client demand remains the top trigger driving the market.
“With more people demanding and expecting healthier places to live and work, more leaders around the globe are committing to green building, which is now a trillion-dollar industry,” said Mahesh Ramanujam, president and CEO of U.S. Green Building Council (USGBC). “We need to get all buildings on a path to sustainability in order to raise the standard of living for all people around the world, regardless of their circumstances.”
Not only that, but, according to the USGBC, between 2015 and 2018, LEED-certified buildings in the United States are estimated to have $1.2 billion in energy savings, $149.5 million in water savings, $715.2 million in maintenance savings and $54.2 million in waste savings.