The cost of building green

Sustainable design, also called “green” or high-performance building, provides economic, human and community benefits as well as reduced environmental impacts.

• Economic benefits. Green buildings may be easier to finance because they are designed to be durable, flexible, and healthy. In addition, the lifetime costs are lower. Energy efficient and water conserving strategies yield operational savings for the lifetime of the building. Integrated design strategies allow tradeoffs that can reduce first costs. For example, strategies such as passive solar allow heating equipment to be downsized. Chiller size can be reduced with the use of high efficiency lighting, which generates a smaller heat load in the building.
• Human benefits. Daylighting, improved air quality, greater thermal control, and other indoor environmental quality strategies typically improve occupant satisfaction. Greater satisfaction often leads to increased productivity and morale, decreased turnover, and reduced absenteeism. Potential risk and liability may be reduced as well. Integrated design strategies reduce the risk of sick building syndrome and minimize callbacks.
• Community benefits. Green buildings often result in less wind/water erosion and sedimentation of waterways during construction. Sustainably designed sites permanently reduce stormwater runoff and watershed pollution. Furthermore, resource-efficient buildings place less demand on the community infrastructure for potable water, sewage conveyance, and power generation.

Nonetheless, concerns about the potentially higher first costs of building green have overshadowed the acceptance of sustainable building strategies. Now, however, several new studies demonstrate that green buildings are not more expensive to build, and the lifetime benefits of these buildings are significant.

In Minnesota, the state will begin tracking the costs and benefits of sustainable building—economic, human, community, and environmental—as part of the Buildings, Benchmarks, and Beyond (B3) pilot studies conducted to implement the Minnesota Sustainable Building Guidelines.

Resources

High Performance Building Design in Minnesota (150Kb)   The Weidt Group was contracted to develop an assessment of the air pollution savings results from high performance buildings in Minnesota, using their database of Xcel Energy Design Assistance custom-consulting projects. The building performance results are based on energy simulations of the building during the design phase. The study quantifies how the 41 high-performance buildings are both saving energy dollars that otherwise would leave the state economy and preventing pollution that otherwise would contaminate our air and water. (June 2005) Top 6 benefits of high-performance buildings (500Kb)   A companion piece to the June 2005 study by The Weidt Group, this four-page brochure highlights the benefits of the studied high-performance buildings to the economy and the environment.

What Does Green Really Cost? (Peter Morris, PREA Quarterly Summer 2007)
   It is clear from the substantial weight of evidence in the marketplace that reasonable levels of sustainable design can be incorporated into most building types at little or no additional cost. Advanced or innovative sustainable features can add significantly to the cost of a project, however, and these must be valued independently to ensure that they are cost- and/or environmentally effective.

The Cost of Green Revisited (Lisa Fay Matthiessen/Peter Morris, Davis Langdon, 2007)
   This update to "Costing Green" research from 2004 shows there is no significant difference in average costs for green buildings as compared to non-green buildings. Many project teams are building green buildings with little or no added cost, and with budgets well within the cost range of non-green buildings with similar programs. This study provides cost analyses by building type and implications for each LEED 2.2 credit.

The Costs & Benefits of Green Affordable Housing
  This 2005 study undertaken by New Ecology and the Tellus Institute is comprised of 16 case studies of affordable housing projects from around the country. The 200-page report includes in-depth analysis of the long-run financial implications of greening each project, and Net Present Value projections for each project. Total development costs for the green projects reviewed in the report ranged from 18% below to 9% above the costs for comparable conventional affordable housing. On average, the sixteen case studies showed a "green premium" of just 2.42% in total development costs, largely due to increased construction (as opposed to design) costs. From a life-cycle net present value perspective, the case studies show that the benefits of green affordable housing are real and, in some cases, substantial. Web access to the Executive Summary is free; download the full report ($20) or get a printed copy ($49).

The Costs and Financial Benefits of Green Buildings (3Mb)
  This October 2003 report to California’s Sustainable Building Task Force by Capital E, in collaboration with the U.S. Green Building Council, concludes that minimal increases in upfront costs of about 2% for green design, on average, result in life cycle savings of 20% of total construction costs—more than ten times the initial investment. The financial benefits include lower energy, waste disposal, and water costs, lower environmental and emissions costs, lower operations and maintenance costs, and savings from increased productivity and health. The data from this report is national in scope and conclusions are broadly applicable to other types of buildings.

In addition to this groundbreaking study, the California Integrated Waste Management Board web site provides web links for a variety of green building cost and benefit issues: www.ciwmb.ca.gov/greenbuilding/design/costissues.htm

Doing Well by Doing Good: The Benefits of Green Development
  There is widespread perception in the development industry that it is difficult to make money if a project is going to concern itself with environmental and social issues. Many developers fear that following a green agenda will delay project schedules and raise costs. The reality, however, is that well-executed green development projects perform extremely well financially. Check out the book Green Development: Integrating Ecology and Real Estate, a Rocky Mountain Institute (RMI) publication.

“Green” Sounds Great - But Is It Affordable?
www.postwritersgroup.com/peirce.htm
  Two articles, June 27 and July 11, 2004, by Neal Peirce of The Washington Post Writers Group, discuss several prominent corporate examples of cost-effective green development.

GSA LEED™ Cost Study | www.wbdg.org/ccb/browse_doc.php?d=90
  The U.S. General Services Administration (GSA) commissioned this study, completed in October 2004, to estimate the costs to develop "green" federal facilities using the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Building Rating System, Version 2.1. The report reviews both the cost implications of achieving Certified, Silver, and Gold LEED ratings. Two GSA building types, new courthouse construction and office building modernization, are evaluated. The study concludes that the selection of credits used to achieve a LEED rating can result in a wide range of costs. When projects take advantage of many "no cost" or "low cost" credit opportunities, the overall construction cost premium can be surprisingly limited, even at higher rating levels. Under certain conditions it is possible to show a slight cost decrease overall.

Making the Case for Green Building (Environmental Building News)
www.buildinggreen.com/auth/article.cfm?fileName=140401a.xml
   The publishers of EBN have posted short descriptions of 46 green building benefits. The list showcases the vast potential of using a systems-design approach to building. Categories include first-cost savings, reduced operating costs, other economic benefits, and benefits to health & productivity, community, the environment, and society.