Part 2 of 3

By Stephen Ashkin

There are lots of reasons for building and operating Green facilities, none necessarily better than others. The second part of this article continues its examination of these reasons, providing short explanations of the benefits. Even if many of these items are already familiar, this list may provide some new insights and help you convince your next clients to pursue an even deeper shade of green.

Increased property value
With any income-generating (rental) property, reducing operating cost can boost the property value. This occurs because the lower operating costs increase the building's net operating income (NOI). According to the publication Benefits Guide: A Design Professional's Guide to High Performance Building Benefits, published by the New Buildings Institute, increasing the NOI of a building increases the building's appraised value by ten times the annual cost savings-a capitalization rate (cap rate) of 10%.

For example, a 75,000 ft2 (7,000 m2) office building that saves $0.50/ft2 ($5/m2) per year in operating costs ($37,500 per year), will see the value of the building increase by $375,000. A higher building value (appraisal) can increase the loan amount available from lending institutions.

More rapid lease-out
Green buildings-whether office space or highrise residential property-often lease out more quickly than conventional buildings, and often with higher rental prices! Reasons for this include media exposure about environmental and health features, marketing materials that tout the low operating costs or enhanced comfort, and word-of-mouth comments about the look and feel of such buildings. Developer Joe Van Belleghem of BuildGreen Developments, Inc., in Victoria, British Columbia, credits green features for the rapid lease-out of his Vancouver Island Technology Park during a period of downtime in the hightech sector. Minimizing the number of months for which lease space remains unoccupied reduces carrying costs and increases profits.

More rapid sales of homes and condominiums
Green homes and condominiums often sell more quickly than their conventional counterparts. Developers Tom Hoyt of McStain Enterprises, Inc., of Boulder, Colorado, and Dennis Wilde of Gerding/Edlen Development Company of Portland, Oregon, report far more rapid sales of green buildings. Faster sales mean lower carrying costs and lower interest on swing loans, both of which increase bottomline profits.

Easier employee recruiting
Recruiting quality employees can be a challenge for any employer, whether a private company, government agency, hospital, or school. The quality of the space in which prospective employees will be working, including such features as daylighting, views to the outdoors, and indoor air quality, can have a significant impact.

Reduced employee turnover
Green, healthy, comfortable buildings are more pleasant to work in, and employers with such buildings are likely to experience less employee turnover. With the high cost of employee recruiting and training, this benefit can offer significant economic value. In Michigan, the firm Deloitte & Touche estimates the cost of recruiting and training employees to be $12,000 for a nonprofessional worker and $35,000 for a professional employee.

The Families and Work Institute estimates that replacing a nonmanagerial worker costs about 75% of his or her annual salary, with the figure closer to 150% for a manager. At the PNC Firstside facility in downtown Pittsburgh, employee retention was a major factor in the requirement that at least 90% of employees have views to the outdoors. Retention of military personnel in the U.S. Navy has been a major impetus for greening Naval housing.

Reduced liability risk
Lawsuits over mold in buildings and sickbuilding syndrome are increasingly common. Green buildings that have been designed with state-of-the-art knowledge about building science and moisture control pose a much lower risk of lawsuits related to these problems. It will surprise many building owners to learn that problems related to mold are increasingly being excluded from insurance coverage, and it is certainly within the realm of possibility that mortgage holders and commercial real-estate lenders will begin requiring some sort of quality-control certification relating to mold and durability.

Staying ahead of regulations
Many of the most expensive lawsuits faced by companies today (for example, lawsuits over asbestos and PCBs) could have been avoided if companies had been more proactive in avoiding practices that might later be banned. The same goes for building owners. Planning now for future stormwater control regulations, or bans of HCFC refrigerants, certain flame retardants, or other potential health or environmental hazards could save significant costs down the road. According to the Rocky Mountain Institute book Green Development, "it is almost always more expensive to comply with regulations after the fact."

Positive public image
The positive public image that can be realized through a commitment to healthy, environmentally responsible buildings can be tremendously beneficial. The development Dewees Island (see EBN Vol. 6, No. 2) garnered highly valuable press due to the project's leading-edge environmental policiesso much so that building lots almost sold themselves, even as their costs increased. Stanley Selengut's Maho Bay eco-resort in the U.S. Virgin Islands has realized millions of dollars' worth of free publicity through articles in the popular press about the facility's green features. Ford Motor Company's revitalization of its Rouge Plant was covered in dozens of national magazines, including five pages in Time magazine, due to the green features; purchasing that coverage would have cost hundreds of thousands, if not millions, of dollars.

New business opportunities
Specializing in green development and in green building design and construction has proven to be lucrative for many of the pioneers. As word has spread about the success of these buildings, new opportunities have fallen into the laps of many green building experts. Though difficult to measure, these benefits can be substantial.

Improved health
By virtue of the materials used, moisturecontrol detailing, pollution and contamination rejection strategies, and ventilation strategies, green buildings are healthier buildings. Americans spend 85-95% of their time indoors, so the quality of the indoor environment is extremely important. Indeed, in many building sectors, ensuring healthy living and working spaces is likely to become the single most important driving force for a transition to green building.

Enhanced comfort
Measures that reduce drafts, minimize floor-toceiling temperature stratification, and control noise improve comfort in buildings. With houses in particular, a well-insulated, tight building envelope not only reduces energy consumption but also increases comfort and the latter is just as important to many homeowners.

In commercial and institutional buildings, the controllability of individual workspaces-a feature in many green buildingsaddresses the fact that different people have different needs when it comes to temperature, ventilation, and light levels. Individuals often benefit psychologically just from knowing that they have this control over their workspace environment.

Reduced absenteeism
Keeping workers healthier-for example, through control of contaminants and displacement ventilation strategies (as achieved when raised access floors are used for conditioned air supply)-can significantly reduce work lost to illness. In the oft cited Lockheed-Martin Building 157, absenteeism dropped 15% (see EBN Vol. 14, No. 3).

William Fisk, P.E., head of the Indoor Environment Department at Lawrence Berkeley National Laboratory, has demonstrated that improved ventilation systems would reduce respiratory illness by 9-20%, yielding a savings in the U.S. of $6-$14 billion per year (see EBN Vol. 13, No. 10).

Improved worker productivity
The economic benefits of boosting productivity are tremendous, with salaries and benefits costing on average $318 per ft2 per year in a U.S. office building-compared with $50 for technology, $16 for the mortgage or lease, $2.35 for energy, and $1 for churn ($3,420, $540, $170, $25 and $11 per m2, respectively). Just a 1% increase in productivity, for example, will more than offset the total energy costs in the average building.

Studies by Carnegie Mellon University have shown productivity increases in green buildings ranging from 0.4% to 18%. As more companies come to appreciate the value of productivity improvements, this is likely to become an increasingly important driver of green building. For more on productivity benefits, see EBN Vol. 13, No. 10. Improved learning In schools, such green features as daylighting, noise control, and views to the outdoors are being shown to increase rates of learning. A landmark 1999 study by the Heschong Mahone Group (HMG) found that daylighting in the Capistrano, California, school district increased the rate of learning by 20-26% (see EBN Vol. 8, No. 9).

More recent studies by the same group in a different school system found a positive correlation between views to the outdoors and learning rates. Awareness of these benefits will influence school boards in their decision-making about school building design.

Faster recovery from illness
Views to the outdoors and connections to nature have been shown to promote more rapid healing in hospitals, while displacement ventilation can dramatically reduce the spread of illness through airborne viruses and bacteria-an increasing problem in many hospitals. Green building features such as these are increasingly being viewed as strategies for reducing healthcare costs. The nation's largest healthcare provider, Kaiser Permanente, which plans to build more than two dozen hospitals in the next decade, is committed to a comprehensive green building agenda.

Increased retail sales
A 1999 HMG study of 108 big-box stores in California found that daylighting increased sales by 40% (see EBN Vol. 8, No. 9). A more recent HMG study of another retailer's 74 stores in California found a 1-6% increase in sales that was correlated with daylighting.

While less dramatic than the earlier study, the new study showed the increased sales benefit of the daylighting to be worth at least 19 times as much to the company as the energy savings provided by that daylighting. As this sort of information trickles down to the management of retail chains, daylighting and other green building strategies are likely to become the norm.

Reduced demand on municipal services
Many green buildings have lower water demands and produce less wastewater than conventional buildings, thus reducing demand on municipal services. In areas where droughts are frequent or where municipal water utilities are already pushed to capacity, this benefit of green building can be significant. With Oakes Hall at the Vermont Law School (see EBN Vol. 9, No. 5), a moratorium on new hook-ups to the town's wastewater treatment plant drove a very aggressive water conservation agenda, which included composting toilets in the building. Even when capacity is not a problem, the use of energy and chemicals in sewage treatment plants is proportional to treatment volume, so reducing sewage volumes is environmentally attractive.

Reduced erosion and stormwater runoff
Some of the most localized environmental impacts of buildings are the erosion that occurs during construction and the increase in stormwater runoff that results from added impervious surface. Site management, landscaping, and other features of green building can dramatically reduce both of these problems. By incorporating green roofs (see EBN Vol. 10, No. 11), rooftop rainwater harvesting systems (see EBN Vol. 6, No. 5), porous pavement (see EBN Vol. 13, No. 9), and other practices to provide for on site stormwater infiltration (see EBN Vol. 3, No. 5), the environmental impacts of stormwater runoff can be significantly reduced.

Reduced automobile use, traffic congestion, and sprawl
Green building should look beyond the individual building to how well that building is integrated into the community and the regional highway infrastructure; a high priority should be to lessen dependence on automobiles. Clustering buildings, mixing residential and commercial uses, linking buildings by pathways, building near light-rail and bus routes, and providing facilities and incentives to encourage commuting by means other than private automobiles can all help to reduce automobile use and traffic congestion.

Reduced traffic congestion in an area improves the quality of life, boosts productivity (because people spend less time in traffic), and reduces air pollution. Such changes can also keep people healthier by enabling them to get more exercise (see EBN Vol. 13, No. 2).

Creating "community"
Development patterns that have been common during the last half of the 20th century have contributed to a loss of community in many areas. Green development, when implemented on a community scale, can help to reverse these trends and return to people-focused neighborhoods in which residents interact with their neighbors. Safety increases with more "eyes on the streets" and dependence on automobiles decreases.

These ideas are among the key principles of New Urbanism or neotraditional development-design and planning ideas advanced by the Congress for the New Urbanism. While not all New Urbanist development is as green as it could be, green building and new Urbanism should go hand-inhand.

Support of local agriculture
A key feature of green development is the preservation of open space-both for ecosystem benefits (see below) and to protect farmland. Some of the most exciting green developments that have been created over the past few decades, such as Village Homes in Davis, California, Prairie Crossings north of Chicago, and numerous cohousing projects, incorporate sustainable agriculture as a key component of the development. Often, houses are located on steeper topography so that the flatter land best suited for agriculture can remain in productive use.