Primary factors to consider when pursuing some degree of certification are cost, logistics, market and the potential impact to the bottom line, according to Mill Creek Residential Senior Managing Director of Development Sam Rodriguez.
By Sam Rodriguez (MultiHousingNews.com Article) — As businesses continue to become more environmentally conscious, many of their efforts are done with their carbon footprint in mind. In the multifamily industry, a large part of that green mission is rooted in the way communities are developed.
Lowering carbon emissions and conserving water are making green buildings increasingly more attractive to residents and local communities. With that in mind, many developers are opting to pursue LEED Certification, a process that requires due diligence but is important to consider and can be well worth the effort.
LEED stands for Leadership in Energy and Environmental Design, an internationally recognized certification that a development project meets the guideline set by the U.S. Green Building Council for achieving high performance and sustainability through green design, construction operation and maintenance. The non-profit USGBC first began developing the concept in 1993, and it has evolved to include several different types of certification programs (new construction, retail, schools, etc.) and four different levels – Certified, Silver, Gold and Platinum.
While the concept undeniably is gaining in popularity, particularly in certain markets such as the Pacific Northwest and Chicago, the adoption rate isn’t as high elsewhere. For instance, Utah’s first LEED Platinum certified apartment building just arrived in 2018. On a nationwide basis, developers are often content to incorporate green features but might not go as far as seeking certification due to financial or logistical aspects.
Primary factors to consider when pursuing some degree of LEED Certification are cost, logistics, market and the potential impact to the bottom line. There is an art to pursuing LEED certification, and the results can certainly justify the efforts.
Cost and logistical considerations
LEED certification is not without cost, with fees for registration and certification that vary based on whether or not your organization is a USGBC member. Those fees should be factored into the decision-making process. Cost considerations should also be allocated to the consultants that help explain the processes and ensure construction teams are building up to certification standards.
For those aiming to pursue LEED certification, it’s highly advised to make the decision early and to be aware of the early prerequisites. It’s much more difficult to adapt a building into a LEED Certification program than to design it that way. Many early meetings to educate construction, architectural and development teams are necessary to create a universal understanding of the concept moving forward.
When considering green features for the building, keep in mind that many are solid practices whether or not you’re developing a green building. For instance, two decades ago, finding carpet with a low-VOC sealant took a fair amount of research. But in current times with more widespread awareness for allergies and respiratory issues, such products are much more commonplace. Most carpets, sealants and caulks are low-VOC.
Seattle and Portland always seem to be entrenched in a race to have the most LEED Certified buildings. Those cities were early adopters of the LEED standards and have generally shown a strong sensibility toward environmental stewardship despite no compulsory requirement. Even non-certified communities in those regions attempt to meet some of the USGBC requirements.
While the Pacific Northwest may serve as an epitome of green-building practices, it’s not the only noteworthy locale. In 2018, the USGBC recognized four new LEED certified cities (Chicago, San Diego, San Jose and Lancaster, Pa.). Developers in those green-heavy markets have a firm understanding of sustainability initiatives, but a learning curve could exist in other jurisdictions.
For instance, Portland has statutes in place for procedures that must take place in all buildings―LEED certified or not. Construction material recycling is mandatory, for example. Local waste management teams understand that recycling is part of the rules. When Portland-based developers receive a price for waste management, recycling is already factored in because it’s a regulation.
In a different market, however, it might cost extra for waste management teams to separate materials to be recycled because it’s often not a part of their everyday process. That makes it vital to understand your market and how it aligns with the certification process early on.
The bottom line
A common inquiry is whether green buildings command a rent premium. While it might be difficult to convince residents to pay more to live in LEED Certified communities, that doesn’t mean they don’t result in other ROI-boosting positives. A green community can result in increased leasing velocity, which means it will fill up quicker even if residents aren’t necessarily willing to pay extra for the green features. Many residents relish the opportunity to breathe healthier air and lessen their own carbon footprint.
LEED Certification can also serve as a tiebreaker to these discerning renters, who will notice if yours is the lone green building in your area. Granted, green features may not result in a competitive edge in markets where it’s extremely common and expected.
Many of the green methods associated with the LEED program will produce cost-savings on their own. Water conservation measures can trim a resident’s utility bill―even if by a small sum. For communities that absorb the cost for water, the more energy-efficient and green-minded their residents are, the better.
That makes resident education at LEED-certified communities extremely important. It doesn’t matter how energy-efficient your showerheads are if residents consistently take two-hour showers. And even if the lights in their home are LED, they will still consume energy if constantly left on.
Depending on how stringent the certification parameters, onsite teams might also require specific training to cater to the building’s green facets. For example, teams might be required to disperse green cleaning products as residents move in as part of the program. Those products serve as a regular reminder to residents that the building is green. An informational wall describing the community’s green features/initiatives is also a helpful concept.
Becoming LEED Certified was an exotic thing to do two decades ago. But as it becomes more ubiquitous in markets nationwide, it will likely become more commonplace. The USGBC consistently aims to strike the balance of calibrating certification standards not to be too stringent or cost-burdensome. As that continues, expect to see more and more LEED Certified communities arrive in various markets across the country.
Sam Rodriguez is the senior managing director of development, Portland for Mill Creek Residential.