Staying Sustainable As Stocks Slide

The housing bubble has popped, the mortgage crisis turned into the credit crisis and many are starting to wield the “R” word: “recession.” There is always something for economists to worry about when the market hits a trough, but for ecologists, there is one more—how do we keep the green building momentum from dissipating?
Perhaps those fears are unfounded, however. The National Association of Home Builders (NAHB) and McGraw-Hill Construction recently released an update to their 2006 study on trends in green home building practices with 2008 green home building data. The new report, The Green Home Builder: Navigating for Success in a Down Economy, covers market opportunities and obstacles from 2001 to 2007, including the impact of a depressed economy on the green sector.
Of those builders surveyed, 56% find that building green makes it easier to market in a down economy. Consumers are reluctant to let any cash out the door when budgets are tight, but if they must, they want to get the most for their dollar. A majority of those surveyed feel that green building offers that something extra.
“Builders can no longer ignore the benefits and market advantages of green building,” said Harvey M. Bernstein, McGraw-Hill Construction vice president of Industry Analytics, Alliances and Strategic Initiatives. “Especially considering today’s market and current economic situation, builders need to differentiate themselves from their competitors and hold steady or prosper in the down economy. Green building gives builders that opportunity to expand their market share and ride out this economic slump.”
Just about every developer has at least one green project in their portfolio, or one they can tout as green, but according to the survey, over 20% expect to be building 90% of projects green next year. “Green building has definitely reached its upper tipping point,” Bernstein says. The gap between builders with few or no green projects and those who build almost exclusively green is shrinking, with one in five planning to erect virtually all structures in a sustainable way in 2009.
“The market is moving toward more sustainable home building practices,” said Bob Jones, NAHB vice chairman and treasurer. The survey backs this up, with 60% of builders claiming that homebuyers are willing to pay more for green homes, a slight increase from 2006 when 56% made such an estimate. “Education, training, advocacy and other services that NAHB offers its members help ensure that home builders and remodelers are prepared to go green.”
The impetus for building green has changed also. Two years ago, “doing the right thing” was the main reason builders supplied for injecting sustainability into their projects. This year, “Quality” was the top driver behind green home building. This indicates that green homebuyers in today’s market are not just “green consumers,” but are also buying such homes for investment and performance reasons.
But instead of worrying that sustainability will get forgotten amid the economic crisis, Rick Fedrizzi, CEO and President of USGBC feels that a bear market is the perfect way to advance green practices. “USGBC estimates that a 100% commitment to greening existing commercial buildings alone would create more than 1.5 million new opportunities for employment for out of work Americans.”

In other words, green building and the economic downturn aren’t two unrelated problems, they are each other’s answer. “It’s time for the green building movement to deploy the expertise and capacity we’ve built in new construction to green what we’ve already got.”

According to market research firm Dig, headquartered in Evanston, the economy’s nosedive has turned what may have been a green explosion into merely a green expansion. “It might seem that the economic downturn will stymie the green movement,” said Teri Wadsworth, consumer psychologist at Dig, “but there is a surprising amount of overlap between green behavior and frugal behavior.”

“The driving force behind [the green] movement is what consumers see as threats to themselves, their families, and their environment. Those reactions may be muted, those purchases may be delayed, but they won’t disappear.”

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