From the California Association of Realtors:
By Amy Westervelt
LEED®, GreenPoint Rated, USGBC, FSC-Certified, ENERGY STAR. You've likely heard these terms pop up in conversations or news stories recently as green building surges into the mainstream. Knowing what they mean, both in general and to your clients, will become increasingly necessary in the years to come, and may even be a helpful marketing tool in a tight housing market.
Green building refers to an approach to building that reduces energy usage through efficient heating, cooling, and lighting systems; reduces water needs through the use of efficient plumbing systems; and uses renewable, non-toxic building materials, which include everything from wood certified as sustainable by the Forest Stewardship Council (FSC) to finishes, such as recycled glass countertops. The practice has gained popularity in California's commercial real estate sector over the past two decades as developers, contractors, and facilities managers have benefited both financially and reputation-wise from the decision to build green.
Now, with energy prices at an all-time high, the federal government set to renew and possibly increase incentives for improvements such as energy efficiency and renewable energy systems in homes, and climate change on consumers' minds more than ever before, green building is infiltrating the residential market. While the focus on oil prices and energy costs is reminiscent of the 1970s boom in renewable energy, even critics of the "green" movement believe this time it's here to stay. You only have to look at one of the thousands of "green" issues put out by consumer magazines last year or tune in to one of the hundreds of green-themed television shows to see why: This time around, mainstream consumers are riding the green wave.
Although hard data on the marketability of residential green building don't exist, Tom Cody, a principal with green building-focused developer Gerding Edlen, is optimistic. "Consumers are beginning to really vote with their feet and wallets in terms of green," he says. "In the coming years, I think a lot of data will support the value of residential green building."
Two recent news stories back up Cody's optimism. First, "ABC News" reported record sales of three "eco" housing developments in San Jose (an apartment building and two single-family housing developments that included solar panels standard on the roofs of all homes). "The green technology has allowed us to surpass anything that we could have imagined," Mark Rowson with Warmington Homes told ABC's reporters. Rowson added that demand has been so great for eco-friendly homes that prices have bucked market trends and increased several times in the last year.
Meanwhile, Meg Collins, project manager of Intracorp's Arterra Building, San Francisco's first certified green condo complex, told Sustainable Industries magazine in May 2008 that units in the building are selling better than those in the company's conventional complex across town.
Green Homes=Healthy Homes
At its most fundamental level, green building is linked to the overall livability of a home. Livability can be broken down into two areas: the neighborhood, and the home itself. Gerding Edlen's South Park residential development in downtown L.A. is a good example. Cody says many of the same features that are helping the development's buildings (there will be four, total, when the project is complete) to achieve Leadership in Energy and Environmental Design (LEED®) certification from the U.S. Green Building Council (USGBC) are also amenities that prospective home buyers appreciate.
"We get points from the USGBC toward certification for being located close to transit, having bike facilities with locker rooms in the building, providing parking spaces for ride-sharing vehicles (like Zipcar), including ground-floor retail units, and being part of a walkable, dense urban neighborhood," Cody says, "and all of those things are also attractive to home buyers."
For more information on enhancements that count toward certification, see "Is It Green?" in this issue.
However, the topic most often associated with green building is energy savings. While the details of mechanical and plumbing systems may get a tad too technical for the average home buyer, the ongoing savings provided by efficient systems are both tangible and attractive. And even without federal incentives, California provides state and local financial incentives that make it financially feasible and even desirable to link homes to renewable energy sources and/or make them more energy efficient to begin with.
"For every 1,000 watts of power in a home that's coming from PV (photovoltaic panels), it can add $20,000 to the resale value of your home," says Mike Hall, president and CEO of Berkeley-based solar company Borrego Solar.
"Sometimes we're able to cut someone's heating or cooling bill in half, and their water bill too-that's a major savings," adds Cody.
Your Place in Green Building
So, what role can real estate agents play in California's green housing boom? A crucial one, according to San Francisco-based agent Chris Bartle. "The best time to get people interested in green building is right after they buy, before they move in, and REALTORS® have such an opportunity to influence those decisions," he says.
When customers come to a REALTOR® looking for a "green" home, as more and more Californians are beginning to do, according to a report released last year by McGraw-Hill Construction, Bartle says it is sometimes difficult to find a home that is already green. Like a handful of other like-minded brokers, Bartle's firm, Green Key Real Estate, focuses on greening buildings as much as possible and promoting green remodels. To that end, he recently helped to connect two of his customers with local green building professionals who are helping them with "green" remodels. Providing this sort of service can help green-minded REALTORS® to differentiate themselves in the marketplace, and endear themselves to customers, who will likely list their higher value green homes with the same broker if and when they decide to sell.
Cutting through Greenspeak
To help clients interested in green homes, real estate agents need to be well versed in more than just jargon. "There are some misperceptions out there about green building, starting with the fact that it's more expensive," says Bartle.
"If you're comparing it to a super-cheap Home Depot remodel, then yeah, it's more expensive," he explains. "But if you're comparing it to a high-end remodel with granite countertops and things like that, then a lot of times it's actually cheaper."
Rampant greenwashing is something else agents need to be aware of. As all things green grow in popularity, the number of companies touting the environmental features of various green products is increasing daily, and agents need to be able to help clients navigate through a flood of marketing claims. Bartle cites bamboo as a prime example. "Bamboo is really hot right now and it's overhyped," he says. "A lot of it comes from China, and it's questionable how green something is that's shipped halfway around the world when it's compared with local, FSC-certified wood."
Bartle says quality issues also come up with companies jumping on the green bandwagon, and companies putting out low-quality products that donÕt last could tarnish the reputation of green home products.
Certified Green
What will eventually help REALTORS® and their customers cut through the green hype are verifiable third-party rating and certification systems. Such systems exist for commercial buildings and for newly built residential structures in the form of LEED® certification and the GreenPoint Rated system, a California-specific system developed by Build It Green, a non-profit dedicated to furthering the residential green building market. In July, Build It Green released GreenPoint Rated Existing Home rating system, a new system for evaluating existing residential structures. Build It Green is currently training certifiers, who will need to be instructed on the system before they begin certifying homes. It's a long process, but according to Bartle, it will eventually lead to the inclusion of green features on the MLS, which will help buyers search more easily for green homes.
In the meantime, agents need to be on the lookout for hidden green gems. "I just visited a new development the other day-a gorgeous brick building, with beautiful old timber beams-and they had retained a lot of the original structure, then reused anything they had torn down, plus outfitted the homes with radiant floor heating, double-pane windows, all sorts of green building bells and whistles, but they don't even market it as green," says Bartle. "There are a lot of green buildings out there that you would never even know about if you don't tour them."
Amy Westervelt writes about various shades of green for a number of publications, including Budget Travel, Plenty, and Sustainable Industries.
GREEN SPEAK
ENERGY STAR: Created by the U.S. Environmental Protection Agency (EPA), the ENERGY STAR program certifies everything from household appliances to entire homes as being energy efficient. The program's Web site (www.energystar.gov) also hosts a wealth of information on various energy-saving methods and products and a number of educational resources.
Carbon Footprint: Carbon footprint refers to the overall carbon emissions created by a building, including both its construction (what materials were used, how they were produced, and their sources of origin) and its operation (how much energy does the building use on average).
Carbon Neutral: A claim made by some companies and developers to describe a building or product whose net carbon emissions are zero. This is very difficult to achieve and truly possible only if something doesn't emit any carbon at all or soaks up as much as it emits. However, there is an increasing number of carbon neutral claims out there, so much so that the Federal Trade Commission recently launched an investigation of such claims and is currently revising its Green Marketing Guidelines to limit the use of the term.
Carbon Offsets: Carbon offsets allow people to pay money to fund a forestry project, renewable energy project, or research into renewable energy technology in order to offset their carbon emissions. Although sometimes positive, carbon offsets have come under fire for allowing people to essentially pay their way out of environmental responsibility.
Greenwashing: Selling something as green when it's not, i.e.,"Come check out our eco-friendly gas station!"
Photovoltaic (PV) Panels: Panels that can be fitted to a roof or a post in the ground, which convert visible light into direct current (DC). Once connected to the power grid, they can provide no-cost solar energy for decades. While the up-front costs of PV systems are still high, federal, state, and local incentives and rebates, as well as drastically reduced energy prices, help the systems pay for themselves more quickly.
Sustainable Forestry Products: Wood products certified according to standards set by the Forest Stewardship Council (www.fscus.org) or the Rainforest Alliance's SmartWood program (www.rainforest-alliance.org) come from responsibly managed forests, where biodiversity is conserved and local communities are supported.
Sustainability: The dictionary definition of sustainability is "A state or process that can be maintained indefinitely." In reference to building or business, it's an approach that evaluates environmental, social, and financial factors equally.
GREEN TEAMMATES
Build It Green
(www.builditgreen.org)
A professional, non-profit membership organization whose stated mission is to promote healthy, energy- and resource-efficient buildings in California, Build It Green developed the GreenPoint Rated system to evaluate and certify green homes in California. Its Web site is one-stop shopping for extensive information on its own and other certification systems, incentives for green building, case studies and marketing reports on residential green building, and information on an assortment of green building products. The Web site also hosts a database of green building professionals, which includes everything from architects to green home stagers.
U.S. Green Building Council
(www.usgbc.org)
The USGBC is the non-profit organization that created the Leadership in Energy and Environmental Design (LEED®) Green Building Rating SystemTM. While LEED® currently exists only for new, large residential buildings, it's useful for any real estate professional to have a working knowledge of LEED® criteria.
Green Globes
(www.greenglobes.com)
Green Globes provides a green building assessment tool similar to LEED®. In the early days of green building, Green Globes and LEED® were neck and neck, competing to become "the" green building standard. LEED® appears to have won out, but Green Globes is still attractive due to its lower price-point and long-time inclusion of existing buildings. It's beneficial to know what Green Globes is and how it relates to green building.
EcoBroker®
(www.ecobroker.com)
EcoBroker® provides educational training focused on green building for real estate agents nationwide. Its Web site also lists green properties and hosts a searchable database of green brokers.
The ReUse People
(www.thereusepeople.org)
A non-profit organization serving all of California, The ReUse People provides environmentally responsible demolition services, and sells reusable building materials to homeowners and contractors.