New York – Green building as a cause has united disparate parties from environmental groups to big business to policymakers, but one key industry has struggled to react to the change in public sentiment.
The major homebuilders, who account for 80 percent of all homebuilding activity in the nation, face a unique challenge in implementing green building on a widespread scale. Many have added energy-saving features and experimented with environmentally friendly materials but have not yet been able to sign on a critical mass of buyers willing to pay more for them.
The National Association of Home Builders and McGraw-Hill Construction predict a rise in green building to 10 percent of homes by 2010 from 2 percent today, but experts say the large-scale residential builders have been slower to respond because of the extra costs and availability of materials.
“The residential market as I see it is the last one to take off,” said Mary Ann Lazarus, sustainable design director of the architectural firm HOK.
Homebuilders are crucial to reducing greenhouse gas emissions believed to cause global warming, according to Ed Mazria, founder of environmental activist group Architecture 2030. He estimates that buildings – their construction and operation – contribute 48 percent of overall emissions while transportation adds 27 percent and industrial activity 25 percent.
Certainly, there has been frustration among some of the largest homebuilders about finding the right cost formula. Estimates vary widely for how much green building can add to the final price, with the lower estimates at 3 percent to 5 percent versus higher predictions of 10 percent to 15 percent.
Ara Hovnanian, head of one of the nation’s biggest homebuilders, said that all other things being equal, consumers would choose green. But, he said, all is not equal.
“Consumers have not been willing to make the investment,” said the CEO and president of Hovnanian Enterprises Inc.
Hovnanian was one of 10 homebuilders that developed an all-green community called Terramor in Orange County, south of Los Angeles.
He said the results of that venture were frustrating; consumers were unwilling to pay extra for green features such as solar panels to generate electricity.
“The disappointing thing is we were all hoping consumers would embrace it and at least be willing to pay a substantial part of the premium,” he said. “I can’t say we were overwhelmed by the results financially.”
Recouping that premium is more of a problem for developers who build properties for sale, as opposed to those who can benefit later from lower electricity bills or being able to charge higher rents. Investing in green features ultimately benefits the homebuyer, so if the consumer is unwilling to pay more, the cost-benefit formula makes no sense, in Hovnanian’s view.
Bill Valentine, chairman of architecture firm HOK, said the main goal for architects who support green building is to get sustainability into the common man’s budget.
“The real action is in suburbia, in reconstructing suburbia,” he said.
