The #1 question for many is: Will green building continue to see explosive growth over the next several years – recession or not? In New York City, by at least one key metric, leading developers and builders are moving ahead full throttle on plans to obtain green certification for both commercial and residential projects.
“I would say green building as a general matter is recession-proof,” said Russell Unger, president of the U.S. Green Building Council of New York.
While Mr. Unger’s optimism is clearly subject to a healthy debate, many of the recent studies do suggest robust growth for the green sector over the next 4 to 5 years. Most notably, McGraw-Hill Construction published a “2009 Green Outlook Report” on November 19th - suggesting that the green building market should continue to see explosive growth. According to the findings of the report, the value of green building construction starts was up five fold from 2005 to 2008, with values increasing from $10 billion to $36-$49 billion. Looking ahead, the report estimates that construction starts could triple over the next five years and reach $96-$140 billion. McGraw-Hill attributes green building’s rapid expansion to: 1) growing public awareness, 2) an increase in government regulations, and 3) recognition of bottom-line advantages.
“Green growth is phenomenal across the globe,” said Harvey M. Bernstein, Vice President of Industry Analytics, Alliances and Strategic Initiatives, McGraw-Hill Construction. “The business opportunities afforded by green building, even in the midst of a global economic crisis, are real and recognized by industry players. Furthermore, green building has great potential to help tackle unemployment through green jobs, and can address other societal issues, such as creating healthier places where we live and work.”
For more information, read: Green Building Could Triple by 2013
Given the current state of the economy and credit markets, one of the important questions we’ve been asking ourselves of late is: “Will developers abandon green building in a recession, or is it here to stay?” Put another way, “Is building green viewed as an extra benefit, or, as we have come to believe, is it embraced as a fundamental building strategy who’s share of the total construction pie will continue to grow through up and down economic cycles?”
Some interesting survey results published by Turner Construction (largest GC in USA) last week largely answered these questions.
According to Turner’s results, 75% of commercial real estate executives will not change their green building plans as a result of the credit crunch.
And here’s why: 84% of executives said that energy costs were lower in green buildings, and 68% said overall operating costs were lower. Improved health and well-being of occupants (76%), increased building value (72%) and higher asking-rents (65%) were also cited as benefits of green buildings. Survey respondents noted several other benefits, including overall higher return on investment (52%), higher occupancy rates (49%), and increased worker productivity (46%).
What’s exciting about these results is that green building is no longer viewed as a “nice to have” ammenity, but rather is being viewed as a core building strategy. Based on conversations we’ve had with leading builders and developers, we also know that green building product can cost the same if you are smart up front in the design process.
As Phil Williams, VP of Sustainability at Webcor says, “the notion that green building has to cost more needs to be eliminated.”