I remember an old Bill Cosby routine in which he casts himself as a skeptical and reluctant Noah who forces God to convince him to build the Ark. The punch line that finally gets Noah’s attention is “Noah, how long can you tread water?” I have to say that worsening market conditions and projections for recovery have architects, builders, contractors, and suppliers across the country asking themselves the same question. And, while there may be a few rare healthy pockets where local economics are bucking the national trend and those niche markets that have slowed but not stopped, for the most part we’re all in the same boat.
In light of the challenges, another question comes to mind: “Can green building offer a lifeboat to architects and builders to help them survive?” (Weigh-in with your own answers to our economic survey update here.) Every week there are new factors that affect the answer to this question--beyond anything to do with green building, including the availability of credit, the fluctuating cost of energy, and deepening insecurity in the economy overall--that dampen the outlook. Instead, veteran California green builder Turko Semmes likens green building more to a life vest than a lifeboat. “A lifeboat implies that green building can save anyone who gets into it,” Semmes says. “A life vest is different,” he adds, “you have to strap it on.”
But even some of the greenest builders in some of the greenest markets are struggling, and everyone is faced with the fact that you are a builder first and a green builder second. By this I mean that your survival will depend on your business and management skills before they rely on your green building reputation in your market.
What are the best builders doing to survive? Across the board everyone is looking at their overhead for ways to reduce costs, from closing central offices and operating “virtually” from sales centers and home offices to pulling back on marketing and putting the brakes on new starts. And of course many have already laid off even long-time employees and are operating with skeleton crews.
Hard costs for projects are getting close scrutiny too because any qualified buyers still out there are seeking bargain prices. This is a tricky area for green building as a whole, because most builders we’ve surveyed attribute a premium of 10% to 20% to their green features, and I worry that they’ll turn to these in search of savings. Already we’ve seen how recent drops in energy prices have led at least one national builder to retract solar PV system installations from its lists of standard features.
I know we’ve all seen articles and reports supporting how green building offers great market opportunities and market differentiation, and how it’s a segment that’s sure to grow even in a down market. And I believe that green building and remodeling can strengthen your position especially on the way out of the recession. That said, I don’t think anyone can state so simply that green building alone will help you survive. I do think green building can help your business weather this storm, and depending on your skills and survival instincts as a businessperson, you’ll be able to prove how long you can stay afloat.
Rick Schwolsky is Editor in Chief of EcoHome.