Building Green – The Wave of the Future
By Adelaide Grady
Development Associate
Wood Partners – Boston office
Implementing change in the apartment development business is a tall order. Contractors introducing new techniques or materials fear costly delays, call backs, or even building failures. What’s more, renters are extremely price-sensitive and tend to chase lower rents. So additional costs, whether related to learning curves or more expensive materials and equipment, are difficult to pass through to customers.
There are really only three reasons why change happens at all: legislation, value creation, or market demand. Governments – whether local, state or federal – may mandate change in building practices or equipment efficiency standards, such as the steady increase in minimum SEER ratings required by code. Developers may begin to introduce new features incrementally in the hopes of squeezing out higher rents or stealing customers from existing competitors; granite countertops and stainless steel appliances found their way into apartments throughout the last decade in this way. And when upgrades become standard features, new developments must meet the market demand by providing these features, if they hope to capture even baseline market rents.
When we first started dipping our toes into green building, it was motivated by the anticipation of legislation. The memory of costs and headaches brought about by the accessibility requirements of the Americans with Disabilities Act was still fresh in our minds, and in early 2007, we decided to try to get ahead of it. However, what our “Green Team” discovered is that green, when done right, can represent a low-cost opportunity for differentiation in a crowded, commoditized business.
Green, as it turns out, is a matter of degrees, and the costs are not necessarily proportional to the benefit. If you’re going to embark on a green building strategy, you have to answer the question: how green do we want to be? With legislation anxiety as the motivator, most companies would have sought the path of least resistance. How do you check the green building box for the least cost, the least deviation from standard practice, the simplest and the quickest? How do you become just green enough?
Through our detailed research, it became clear that “green enough” just wasn’t good enough. And in fact is the costlier path. The only way to do it cost-effectively, is to do it right. Green building experts will tell you that the only way to make a building green is through a process called “integrated design.” This process starts at the beginning with a blank slate, brings together all of the design professionals involved in the creation of a building, and teases out a design that balances costs in some areas with savings in others. The theoretical result is a super-engineered, if somewhat unorthodox, finely tuned building machine. Based on the beautiful LEED platinum buildings that we read about in the media, this process can yield incredible results.
However, in production development, you never start with a blank slate. With standardization providing the basis for profitability, the puzzle pieces are already set. Aside from the variability of individual sites, each new project is mostly just a rearrangement of those puzzle pieces. A complete overhaul just isn’t feasible.
So, incremental change became the process by which we could implement green building practices. And we discovered that the key to getting it right was in selecting the right increments and executing them well. The horror stories of deal-breaking green building costs generally come from developers taking the seemingly easiest course: build as you always have but slap on some green stuff. Instead, the first step – which offers the greatest benefit for the least cost – must be energy efficiency.
With the ENERGY STAR for New Homes program, to which we made a 100% commitment in early 2009, manageable changes in specs and common-sense construction practices can add up to something real: as much as 30% improvement in energy efficiency over baseline code construction. The required inspections and testing provides a means of verifying that we’ve done something real, and the ENERGY STAR label serves as a marketable reward for getting it right. The ENERGY STAR for New Homes program focuses entirely on energy efficiency, and is therefore just a slice of the green building pie that LEED and other such programs define, but it is widely recognized by those in the industry as well as customers and investors.
The ENERGY STAR for New Homes program isn’t just about putting ENERGY STAR labeled appliances, lights and equipment in a building. It starts at the studs. Actually, it starts at the slab. So it requires that field staff be trained in new, albeit quite simple, building practices – from framing and insulation details to the sealing of gaps and holes. It’s a lot of little things that add up to a more air-tight, energy-efficient building envelope. And if Project Managers and Site Superintendents don’t buy into it, and subcontractors and laborers aren’t trained and supervised to do it, it simply won’t happen. Trying to meet the standards of the ENERGY STAR for New Homes program after the drywall is up can be extremely difficult, not to mention costly.
The key to delivering meaningful, cost-effective green building results lies in the company culture. The development/construction team should be driven by a sense of pride in their work. Whether mandated by governments or demanded by the market, green building will never be feasible if it is merely a specification. It must start with the people who are in the trenches, making buildings happen every day.
About the Author
Adelaide Grady is a development associate with the Boston office of Wood Partners – one of the top national multifamily developers. Grady is responsible for all aspects of apartment development in the Boston area. As part of Wood Partners’ Green Team, Grady and her co-workers recently developed green policies to transition Wood Partners toward becoming a environmentally responsible company. Additional information about Wood Partners is available at www.woodpartners.com
