Stephen Lacey, writing in Climate Progress and cross-posted in Grist, reviews the preliminary results of a study by McGraw Hill on the green homebuilding and remodeling industry. Grist titles its version House fit for a green: Sustainable home construction booms; the problem is: It isn't green, it's not sustainable and it isn't booming.
McGraw Hill defines green building as:
built to national green standards, (IC700, LEED, etc), or one that incorporates numerous green building elements across five category areas: energy efficiency, water efficiency, resource efficiency, responsible site management and improved indoor air quality.
Location, Location and Location
The trouble is, that is a lousy definition, because it may be a greener house, but unless we know where it is, it isn't necessarily sustainable. In his devastating post that I considered the best of 2010, Kaid Benfield demonstrated that green sprawl is just as bad as any other sprawl, that "One can earn LEED building certification pretty much in the middle of nowhere."
In the last few years study after study after study has shown that where you build matters more than what you build, and this definition, and the McGraw Hill research as presented, completely ignores that fact.
Green GrowthThe data show that green building is a growing portion of the market. If you look at McGraw Hill's graph, the market has completely cratered, to a third of its 2005 peak. Surprisingly, reen building looks almost immune to the real estate crash (it wasn't) and has grown in actual volume and even more as a percentage of the industry. But are their industry projections into 2016 believable, or even desirable?
There are 20 million empty houses in America. LEED or anyone else can certify all the houses they want and call them green, but until the country deals with the fundamental problems of housing, the empty houses and the displaced former occupants of them, I am not certain that you can call any new house green, we just don't need them. A $ 315 billion market was not sustainable, and a return to a $ 300 billion market is a fantasy.
The Cost of Going Green
Many factors are driving the green homes market, with “higher quality” and “increases in energy costs” topping the list, indicating that today’s green home buyer is not just a green consumer. Buyers recognize that green homes have lower bills due to higher building performance. The reported costs of building a green home have also gone down significantly. Builders report that the cost to go green is now 7 percent, as compared to 10 percent in 2008 and 11 percent in 2006.
Except the data from McGraw Hill show that 41% of the customers willing to pay more for "green" won't pay more than 4%. Only 4% will pay more than 10%. What can you do for a 10% premium? To be perfectly blunt, you can't do shit. You can build a green house for the same or 10% more, but it is a different house, designed from the bottom up to be green. It's not what the builders are building. Nic Darling nailed the problem when he said Building Green Houses is Like "Polishing a Turd"
OK, so it's a bit harsh. Turd is, maybe, an unnecessarily rude word to use to describe what are often pretty nice homes, but the concept is sound. Most of the builders and developers reporting high premiums for pursuing LEED are still trying to build the exact same home they have always built. They are simply adding features to make that same house energy efficient, healthy and sustainable. This addition gets expensive....
So, they polish the turd. Rather than redesign the house that has been successful for them in the past, they add solar panels, geothermal systems, high end interior fixtures, extra insulation and other green features. The house gets greener. It gets certified, but it also increases significantly in cost. Since the features are add-ons and extras, the price rises as each one is tacked on.
The housing industry really isn't interested in change; they like adding stuff and selling extras, on single family lots in suburban sprawl, like KB Homes does when they put a solar panel on top in California and Florida and calls it green. It's not.
The news on the renovation and remodeling side is more impressive. People get that if they invest in a green renovation, they should save money over the long term. We desperately need to fix the housing stock that we have, so that is very good news. But while I wish I could get excited about what Stephen Lacey has written about the McGraw Hill study, I can't, because the definition of green single family new construction is tuned to an industry model that no longer works. The data do not support Grist's title; it is not sustainable, and it is hardly booming.