Wednesday, September 8, 2010

Green Building Economic Benefits

When it comes to green buildings the benefits far outweigh the costs. The costs of these buildings are about the same as traditional development projects. One study indicates that green buildings are 2 percent more expensive than conventional buildings.

A large number of economic advantages more than offset the minor increase in costs. Here is a summary of the research on the economic advantages of green building.

According to a study from Syphers, Geof, et al. titled "Managing the Cost of Green Building," higher construction costs can be avoided by the inclusion of green design from the outset of the project. The investment of an additional 3% of project costs in the design phase can reduce construction costs by 10%.

A business case titled "Making the Business Case for High Performance Green Building," by the U.S. Green Building Council, indicates that energy and water savings allow an average green premium recovery period of 3-5 years.

The same business case makes the point that green buildings increase property values. The low operating costs and easy maintenance of green buildings make for lower vacancy rates and higher property values. Investment in energy efficiency and low-priced power at the USAA Realty Company's La Paz Office Plaza in Orange County, CA led to an $0.80-per-square-foor-market value improvement, or a $1.5 million increase in value.

Green buildings improve employee health and prevent absences. According to a U.S. Green Building Council report titled "Making the Business Case for High Performance Green Buildings," Lockheed Martin's green facility in Sunnydale, CA, had a 15% drop in employee absenteeism, a savings which made up for the building's green premium in the first year alone.

A January 2000 report from the US Environmental Protection Agency titled, "Energy Cost and IAQ Performance of Ventilation Systems and Controls," demonstrates that major reductions in health care costs and work losses result from improvements to indoor environments.

Employee productivity has been positively correlated with indoor environmental conditions. According to a report titled, "Health and Productivity Gains from Better Indoor Environments and Their Relationship to Building Energy Efficiency," improvements to indoor environmental conditions are estimated to have generated $20 to $160 billion nationally in workforce productivity gains.

A 1999 study from The Heschong Mahone Group, showed increased sales in stores that utilized natural light. The study called "Skylighting and Retail Sales: An Investigation into the Relationship Between Daylighting and Human Performance," surveyed 108 outlet stores and found that sales were 40% higher in stores using skylights instead of electric lighting.

For useful tools to help assess the economic benefits of green building go to the US EPA.
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