What are some of the biggest challenges facing America’s green builders?
Without a doubt the biggest challenge for America’s green builders is the real estate transactional process that has created significant barriers to building green-certified homes. First, the mortgage application process qualifies a borrower for the purchase of a home on income and the ability to pay the principle, interest, taxes, and insurance (PITI). There is no consideration of the expected utility costs. When you realize that most households spend more on heating and cooling their homes than they do on real estate taxes and insurance, you can see how energy costs impact affordability and should impact mortgage decisions.
Lenders and the secondary mortgage market (such as Fannie Mae, Freddie Mac, FHA, and the VA) don’t even require the data on high-performance features to be collected in the appraisal process, limiting our ability to better understand whether consumers are willing to pay more for green homes. As a result, many builders who construct green-certified homes have them appraised using nearby new code-minimum homes as comps, or worse, using older energy-hog homes as a basis of comparable value. Lastly, few of the 850 Multiple Listing Services nationwide report on national green certifications and green features. So for buyers that are interested in a green-certified home, there is no easy way to find and compare their options.
Since the NGBS first went into effect in 2009, have you seen an increase in demand for healthy and sustainable building products?
Yes. Architects and builders who are seeking certification for their projects are increasingly on the lookout for products that can help earn them points toward certification. Finding appropriate products can be a challenge, and we identified that early on as a potential barrier for builders who want to build green homes. As part of our mission to overcome barriers to innovation, we created the Green Approved Products program which is specifically designed to help builders meet the green practices in the NGBS.
For example, one of the practices gives builders points toward certification if they use building materials with more than 75 percent recycled content. It is a great practice because it helps to increase the demand for building materials that use recycled content. But how many builders know which building materials would meet this criterion? Few can as it is not usually easy to locate such information. Our Green Approved Products program allows manufacturers to submit independent, third-party research and data confirming their products meet specific criteria for practices in the NGBS and we pre-approve those products to earn builders the eligible points for that practice. It is a very specific program and does not speak at all to the overall greenness of a product or the greenness of the product’s manufacturing process. There are a number of other excellent product certification programs that concentrate on those elements. Instead, our program aims to provide a free resource for builders and designers to help them find the products they need for the green certified homes they are building.
Does a sustainable building project have to cost more?
I like to manage expectations appropriately because if you don’t then people feel like they have been deceived. The answer to that question depends on how you define sustainable and at what level of sustainability you are talking about.
With experience, the incremental cost of building an NGBS Green Certified home is minimal. In 2009 we estimated that a Bronze-level home would cost roughly 1.7 percent more than a code-minimum home. Our experience has shown us that this estimate is accurate, particularly for a builder new to the program. However, we also know that with experience builders can reduce this cost as they become familiar with the practices, products, and process. An Emerald-level NGBS Green-certified home is an entirely different story. We estimate that the cost will be approximately 16 percent more than a code-minimum home, although we have seen builders do it for roughly 10 percent more. We have also seen Habitat for Humanity homes achieve Emerald, most notably by the Bay-Waveland chapter in Mississippi. But an Emerald-level certified home is an extremely high-performing home and, while not required, it is likely to have renewable energy systems like solar or geothermal technologies.
The second thing I would add is that because the NGBS is a comprehensive green rating system, as opposed to just an energy-efficiency program, you can help better balance costs. For example, higher efficiency equipment and lighting often costs the builder more upfront. However, resource efficiency practices and green land development practices can take costs out of the construction process. I think that is why the National Green Building Standard is so successful in providing a blueprint for builders to design and construct affordable and sustainable homes.