“The other side of the coin is definitely that LEED is very tedious,” says Ortega. “It is an intensive task to keep track of materials, the recycling of materials, et cetera. It is difficult and adds more overhead, so if there is no incentive on the project other than just to get the LEED plaque, it is going to be a hard sell to a multifamily owner. We needed two more clerks just to keep track of paperwork and processes.”
According to Emily Mitchell, assistant program manager for LEED for Homes, the program should offer some additional admin alleviation by streamlining it through local offices. “In LEED for Homes, that local relationship with a provider allows for quick interaction, because ideally they are just down the street from each other,” she says.PUSHING THE ENVELOPE
By all accounts, aspiring to LEED is difficult. Developers who have achieved certification, however, say that difficulty makes them better builders and better business people, forcing them to think of larger issues and make harder decisions within more finite timeframes. “If you have a LEED-certified building at any level, you have gone above and beyond the norm,” Baker says. “It is third-party verified. You can't cut corners.”
“The attention to LEED and the owner wanting to achieve the points and do well drives decisions that don't happen in other projects,” agrees Ortega. “The mechanical, electrical, and plumbing subcontractors work harder to optimize energy design. You are having discussions about adjusting the direction of the building, changing the spin, adjusting the appropriate level of window tinting. You always evaluate the cost versus the will, but it is great to have projects that do that rather than just doing what is easiest or cheapest or what we have always done.”
Those higher standards are expected to translate to higher premiums on both rents and on the resale value of buildings as LEED continues to gain popularity, observers say. “LEED is advantageous in a soft market in both for sale and rental, and LEED-certified should fetch a premium on resale within the multifamily community of portfolio traders,” says Don Neff, president of construction risk management, third-party peer review, and quality assurance firm La Jolla Pacific in Irvine, Calif. “The operating income efficiencies alone should translate into a price premium.”
Neff, who will oversee the LEED certification of La Jolla Pacific's headquarters, encourages builders to shoot beyond basic certification. “There's not much of a difference in design features between certified and gold. It is relatively easy to come by,” he notes. “Do you want to make a statement, or do you want to go along with the crowd?”
And if you choose not to build green at all, it just may be the rental crowd that is leaving you and your properties behind. Although there's no evidence that prospective residents are coming into the leasing office asking for green features in their buildings yet, the intense marketing of green features by the industry could change that quickly. “If it were perceived by the development community that green features were a marketing advantage, you'd have more LEED buildings,” Baker says. “I think that is indeed what is happening right now.”
Editor's note: To participate in the LEED for Multifamily pilot program, tentatively scheduled to begin in fall 2007, visit the U.S. Building Green Council's Web site at www.usgbc.org.
Despite gains in its popularity and acceptance among the U.S. residential and commercial construction and development community, the U.S. Green Building Council's LEED program is not the only game in town. When it comes to certification, the Portland, Ore.-based Green Building Initiative, in particular, offers builders and developers an alternative route to certification on a national basis. In addition, green building certification bodies are common at the local and regional level and are often tied into home builder associations and other industry groups.
Gary Gerber, founder of Sun Light and Power in Berkeley, Calif., and a proponent of green building and affordable housing, also is a founder of Build Green, a local green building consulting firm that plans to conduct third-party verifications for sustainable projects. “I'm thrilled at LEED's success as a voluntary certification body, but I still don't think it treats energy, and in particular sustainable energy, with as much weight as it ought to.”
As one of the project leaders on LEED certification for Alameda County's stopwaste.org headquarters, Gerber notes that they only had to satisfy 12 percent of the building's energy demand with sustainable alternatives to get the building a platinum LEED certification. “That's not a very stringent standard at all.”
Green building also need not be certified by any particular body, though industry experts warn against marketing an environmental bill of goods to prospective tenants that you ultimately might not be able to fill. “If builders are forced to spend it, they want to market it,” says Jay Freedman, an attorney who specializes in construction defect litigation for Newport Beach, Calif.-based Newmeyer & Dillion. “But regardless of what certification you have, be careful of what you say. From the outset, communicate with designers and subcontractors so you are all on the same page, and document every step you take in order to guide your marketing message and also deflect any future claims.”
Even the national council's proponents have not entirely consumed the LEED Kool-Aid, and some remain open to changes in the process of how green buildings are certified. Indeed, the LEED system itself is in near-constant flux as stakeholders within the development community revise and approve the council's standards. “Green building does not have to be LEED,” says David Baker, partner at San Francisco architectural firm David Baker and Associates. “Maybe it will shake out that it does not become the gold standard. But it is right now. For its flaws, it is the most widely recognized.”