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April 24, 2003
Image by Anita Lehmann
More developers are taking advantage of public incentive programs designed to promote sustainable projects. This Seattle University bookstore and student housing development will receive a Seattle City Light grant of up to $20,000 for its environmentally sensitive design.
In business, we’re used to thinking of the bottom line. xThe sustainable design movement is advocating the “triple bottom line” — a measurement that balances financial performance with social and environmental goals. In Seattle, we are seeing a new wave of sustainable housing projects pursuing this balanced approach.
Sustainable development incorporates design, construction and maintenance practices that minimize environmental impact — to land, water, air, material use and energy consumption.
The environmental and social benefits are clear, but what about the economics? Developers continuously seek a competitive edge. Some are finding that sustainable design features can offer economic value in addition to environmental benefit.
Institutional and commercial owners and developers, led by the city of Seattle, have already made the connection. Quantifiable savings in energy and water consumption, and increased employee productivity, translate into long-term cost savings.
For multifamily housing developers, who measure success in rental income or sell their completed projects to investors or residents, the formula can be different.
Improvements in building energy performance of over 30 percent above code requirements are readily achievable. Sustainably designed materials and systems can result in reduced maintenance costs. Improved performance means lower utility and maintenance expenses, but the challenge remains to justify this benefit to a developer who needs to translate these savings into increased project value.
The answers may lie in the convergence of several influences: education, trends, financial incentives and local project examples.
Voluntary benchmark programs have been established at national, state and local levels. New programs focus on specific project types, financing sources and jurisdictions. For example, “SeaGreen,” introduced by Seattle’s Office of Housing, is directed to low-income affordable housing.
Other examples include the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system, and “Built Green,” a local environmental building program.
Benchmark programs create common definitions of green building and development, communicate these practices to the marketplace, and educate both buyer and seller about sustainable design.
These programs are reaching an interested public. A 2001 study by Professional Builder magazine indicated a majority of buyers perceive quality as the greatest benefit of green building, with durability and environmental health also seen as benefits. Of the buyers surveyed, over half would pay $2,500 to $5,000 for green upgrades, with 10 percent willing to pay $10,000.
New regulations have promoted density, controlled environmental impacts and engendered a new sensitivity to issues, including site design and construction practices. Seattle, a national leader in both the quality of its natural environment and the pursuit of environmental design, currently boasts 14 publicly funded projects pursuing a LEED rating.
While the Seattle city government has provided leadership by requiring LEED ratings for city-funded buildings since 2000, the housing market has been less constrained, beyond code requirements for land use and energy efficiency (both sustainable goals).
The majority of Seattle multifamily housing produced in this century has been a product of private sector housing development. It is now influenced by incentives encouraging, but not yet by regulations requiring, sustainable design practices.
Seattle City Light’s “Built Smart” program provides financial incentives to developers to design and build energy and resource efficiency into new multifamily projects.
The program also provides technical assistance to design teams and contractors. Thirteen thousand units have received subsidies since 1991 at amounts approaching $0.55 per square foot.
In fall of 2001, City Light began to offer a financial incentive of up to $20,000 per project participating in the LEED rating program, to assist with administrative costs associated with program participation. In mid-2002, this incentive was extended to projects participating in the Built Green program.
The incentive programs, reinforcing growing awareness and interest on the part of design teams and owner/developers, seem to be helping the market leap forward. Peter Dobrovolny, Seattle City Light’s administrator for LEED and Built Green incentives, provided examples of current Seattle housing projects receiving City Light incentives of up to $20,000:
Green from the outset
Developers preparing to navigate the sea of design rating systems and incentive options are advised to integrate sustainable guidance into the design approach from the outset. Architects and engineers, regulatory agencies, contractors and users all can offer valuable insight from the beginning of the project.
Designers can testify to the difficulty of trying to “add on” sustainable design considerations, but an integrated design approach can produce multiple benefits. Computerized energy modeling, for example, can demonstrate the projected savings in utility costs associated with differences in insulation levels or window specifications during the design process.
Multiple forces are transforming the housing marketplace. But one thing is clear: educated consumers will seek out — and pay a premium for — sustainable features that offer long-term cost savings in utility bills, insurance fees and even mortgage rates.
Clayton O’Brien-Smith is the principal in charge of the sustainable design group at GGLO.