Growth of Green Building Practices
Green construction is heavily growing in America by rapidly outpacing conventional construction. The 2015 Green Building Impact Study predicted that green construction would account for more than 3.3 million U.S. jobs in 2018. This number makes up more than one-third of the entire U.S. construction sector. Although many associate energy efficiency with higher costs, green building construction now attributes increased economic benefits over those that lack green qualities. These benefits include lower operating expenses, higher occupancy rates, and increased resale value. All of these factors contribute to builders and real estate buyers “going green.” For developers interested in commercial and multi-family properties, implementing sustainable business practices can achieve longevity in the future market.
The Market Push for Green
Government regulations can greatly impact the push for green initiatives. In recent years, agencies require full public disclosure of a projected energy usage of commercial real estate projects. Specifically, New York, Maine, Washington, South Dakota, Kansas and California now have laws requiring energy usage disclosure for multi-family and commercial real estate projects. Thus, developers must achieve a certain regulatory standard to keep their business ranked high.
Despite fluctuations in the political climate, continuous regulations added by the Environmental Protection Agency (EPA) and the U.S. Green Building Council’s LEED certification system, ensure that green buildings continue to improve green practices. In addition, local urban mayors are mandating new building projects to reduce greenhouse emissions. Renters bombarded with green advertising campaigns with words like, “carbon footprint” or “net-energy zero space” should not worry. Renters seeking sustainable buildings can benefit from added property value and cost benefits.
Benefits of Going Green
Many builders are capitalizing on the benefits of green building. According to Dodge Data & Analytics World Green Building Trends 2016 SmartMarket Report, the global green building sector continues to double every three years, with 60% of projects going green by 2018, with survey respondents from 70 countries. The higher initial investment is satisfied with an increase of return on investment for green buildings, as well as a reduction in operating costs. In fact, the U.S. Green Building Council’s LEED buildings report a 20 percent lower maintenance cost for green buildings than typical commercial buildings.
The efficient use of natural resources not only lessens the harmful impact on the environment but also lowers utility costs through conservation of energy. LEED projects have diverted more than 80 million tons of waste from landfills. As a result, experts expect this number to grow to 540 million tons in 2030.
Going green varies for each project ranging from costly to modest investments; there are plenty of resources to help investors improve new building designs to include sustainability. To get started in a green building project, check with municipalities to understand the standards and meaning of sustainability according to your state, as these standards vary across America. For example, in some areas, a sustainable building may be one near a public transportation route. Meanwhile, another unit might only be sustainable if they rely on solar power energy. There are also statewide and federal incentives, including those found in the IRS tax code. Reaching out to the U.S. Green Building Council will help you understand the requirements necessary to get a “green certification.” When deciding on green building options, calculate the benefits of possible capital investments in the long term to quantify the amount each sustainable measure will help reach green requirements.
Contact advisors at HUNT Mortgage Group for more information on green building requirements in your area.
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