Green Building: Expanding Market Share

Without question, energy-efficient and sustainable homes are legitimately gaining popularity. A very high percentage of new homes built this year – I have seen estimates as high as 40 to 50 percent – will be “green.” According to the U.S. Environmental Protection Agency, almost 17 percent of all single family homes built in the United States in 2008 qualified for the Energy Star label.

Unfortunately, green home demand still does not approach the demand for conventionally-built homes; and without proper education and marketing, sustainable design and building may not emerge from the housing recession as solidly as some would hope. There are many obstacles that stand in the way of total acceptance and an increased market share.

How “green” is “green?”

There are many local, regional, and national green-building certification programs – private sector and government initiated – that provide systematic approaches for mandating, quantifying and verifying sustainable building practices, but all of the programs are not created equally.

Reputable and accredited third-party certification is essential to providing credibility and withstanding the skepticism that has emerged in response to over-saturation and complexity.

However, recognition can be somewhat misleading as a result of the multitude of green certification levels within each program. The ability in most programs to achieve certification is based on a total score with a limited number of prerequisites and few restrictions in place to enforce how additional points are accumulated. Naturally, individuals seeking certification will follow the path of least resistance for each particular project, which may result in inconsistent performance within each certification level or program.

While obtaining certification is ideal, there are also many builders and owners of existing or new homes that are incorporating green-building elements for improved energy efficiency, marketability, and so forth without seeking formal certification or third-party verification. Even when intentions are commendable, there are no guarantees that the tradespeople getting the directives are performing the work correctly and meeting owners’ expectations or substantiating builders’ marketing efforts. Many builders may be attending trainings and making claims to stay relevant, but reverting to their old ways, or simply building to code, on the job site.

Also, the current economic climate may be contributing to a misrepresentation of the overall, long-term demand for green homes. Large quantities of builders are employing green building practices in an attempt to increase marketability and overcome competition in this dismal residential market.

Some individuals may be inadvertently purchasing these homes due to availability, affordability, or other related reasons. Optimistically, this scenario will help to perpetuate further acceptance and demand.

However, it is possible that many of these homes are marketed as green with few substantial changes, or that home buyers will make purchases of quality green homes without a proper understanding of the home’s features or how to market the home for sale in the future. In addition to evaluating authenticity and demand, it is also important to understand potential reasons for resistance to green building.

Market Resistance

Green home communities, traditional neighborhood developments, lifestyle centers, and other new urbanist or sustainable developments, as well as autonomous green homes definitely have appeal and strong consumer demand in many areas throughout the country. A large number of green homes and homes in or near sustainable developments are pre-sold and the communities are flourishing and extremely successful.

However, in many instances these homes still only appeal to individuals in a niche market – for example, not dissimilar to general appreciation or contempt of condominium living in a city’s urban core versus more conventional arrangements. In order to reach broader acceptance, the industry must genuinely assess and understand the elements that influence decision-making.

What are the most important issues that dictate an individual’s willingness to purchase a home:  cost, quality, energy efficiency, proximity to work and amenities, livable area, lot size, fancy finishes, length of investment, resale value? All of these are reasonable and largely depend on demographics, but the overriding sentiment is that most people prefer to live the way that they have always lived, or better.

In order to increase demand, the green building industry must work to alter expectations while also continuing to provide traditionally accepted deliverables and increasing quality.

Many people currently purchasing or renovating homes are very interested in lessening their impact on the environment, but there is an inherent resistance to change. When it comes to green building, the general public is undereducated and discouraged by the complexity, the overuse of “green” terminology, and the anticipated cost. Inadequate research often leads to uniformed decisions regarding design and construction.

Many people begin projects claiming that they want to incorporate green-building practices and make their homes as energy efficient as possible. In the end, most efforts are add-ons and not an integral part of the process, lessening the effectiveness and undermining the economics.

Another critical component of the equation is realtor training, awareness, and involvement. In many areas, the real estate industry seems to be lagging behind other industry segments. Recently, more training opportunities and credentials, such as NAR’s Green Designation, have become available and it is imperative that real estate professionals are educated and able to convey applicable information and make generalized comparisons between green and conventional homes. Many realtor databases now make sustainable features searchable, but significant progress still needs to be made.

Long term, energy-efficiency ratings, provided by energy assessments that will be as common as conventional home inspections, as well as building certifications will provide an unbiased mechanism to evaluate and compare available homes, but there must be a way for realtors to market and consumers to evaluate homes as the number of green properties continues to grow.

Above all, sustainability must be client driven. Consumer demand will dictate builder practices, fuel the evolution of certification programs, force realtors and developers to provide information, and continue to change the residential industry.

Providing Solutions

Certification, verification and marketing must reach a higher level of standardization, professionals must continue to change perceptions regarding economic constraints, and everyone involved must work to inform consumers and ensure that green building remains relevant without becoming diluted.

Currently, there are multiple certification programs competing for market share, many professionals obtaining credentials to stay competitive, and, fortunately, a large number of previously inactive consumers and developers that are now beginning to make decisions regarding building or purchasing homes. Now is the time to take advantage of the market conditions, but it is very important that all sectors of the industry work collectively.

Green homes and sustainable developments must be definable, verifiable, marketable, and ultimately make sense to consumers on all fronts – including economics, comfort, quality, location, and design – in order to gain a more significant market share. By placing the focus on providing high-quality, well-built new or renovated homes that are designed and constructed as interrelated systems, saving the environment and decreasing societal impact simply become a desirable byproduct.

photo: Wonderlane

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