The Housing Chronicles Blog: Is there really gold in building green?

Tuesday, April 22, 2008

Is there really gold in building green?

“Our greatest responsibility is to be good ancestors.”
-- Dr. Jonas Salk, developer of the polio vaccine

It was in early 1977 when a newly elected President Jimmy Carter donned a cardigan sweater on national television, urged Americans to do the same and then asked them to turn down their thermostats to conserve energy. But who could guess that he was on the forefront of a movement towards resource sustainability that would take another 30 years to coalesce? Not only has green building and conservation emerged as the most important trend in homebuilding, but according to some experts will help drive the U.S. economy once the current recession eventually rebounds.

So how can builders and developers hope to capture both the imagination and the dollars of homebuyers given the enormous complexity of ‘green’ building? Primarily through consistent and comprehensive education, not only for those executives making design decisions, but also for buyers throughout the entire marketing and sales process.

Fortunately, that hurdle has become much easier thanks to standards and practices adopted by the federal government (Energy Star, Building America), U.S. Green Building Council (LEED), American Lung Association (Health House), Masco (Environments for Living) and others. Not to be outdone, the NAHB officially launched its own National Green Building Program at this year’s International Builder’s Show. The hope for this plan is in providing a much-needed framework for a variety of local green building programs already operating throughout the country, many of which were started in association with local HBA/BIA groups as early as the mid-1990s.

The timing couldn’t be better: according to the NAHB 2007-2008 Consumer Preference Survey as analyzed by Jonathan Smoke at, nearly 90% of respondents are concerned about the impact their homes have on the environment. Yet because only 16% are willing to pay extra to address that concern, homebuilders would be wise to first target those consumer segments actually willing to spend a premium. Fortunately, Smoke thinks three of his defined consumer groups fit into this category, including “Feature and Location,” “Elite” and “Active Adult Elite” buyers, who share in common a desire for quality, prestige and community. To further increase the odds of success, he suggests builders focus on top-rated green items including Energy Star-rated windows, energy-certified appliances and generous insulation while getting rid of now-dated design features such as two-story foyers which are expensive to heat and cool.

In terms of marketing green building, selling the benefits more than the technology is the key, especially when they coincide with consumers’ existing focus on rising energy costs, an epidemic of allergies and asthma and the importance of sustainability. That’s also when partnering regionally with a local BIA makes sense; by leveraging its membership base, a local or statewide association can tap major product manufacturers as sponsors and create advertising campaigns that would be far too expensive for one builder to pursue alone. In Atlanta, for example, the “EarthCraft House” green building program developed by the local HBA in conjunction with the NAHB Research Center has become its own popular brand suggesting higher quality. In fact, recent buyers cited the EarthCraft certification as one of their top three reasons for buying a new home.

For those harried sales agents already under pressure to explain the specifics of a home plan and neighborhood, when it comes to explaining green building – or green mortgages, which allow buyers to qualify for higher loan amounts when they’re buying energy-certified homes -- it’s best to let simple displays in the model homes and colorful collateral in the sales office do the talking.

With some clever design elements, that collateral could easily double as a benefits list for comparison shopping – and pity the poor builder who thinks green building is just another fad, because they’re now in the minority. In a 2007 survey conducted by Professional Builder, 70% of homebuilders agreed that this is a trend that’s here to stay, and of those respondents, 83% considered it extremely important to their marketing strategy which has had a positive impact on sales.

Gold in building green? It certainly looks so -- and makes us good ancestors in the process.

No comments: