Has Green Hit a Tipping Point?

Green home building isn't a fad, but a trend, and one that's increasing at a rapid rate.
By: Camilla McLaughlin: REALTOR® Magazine Online
More builders are getting onto the green bandwagon, even though consumers are still hesitant to join the parade.

The number of home builders producing environmentally responsible homes increased by 20 percent in 2005, according to a McGraw-Hill Construction/National Association of Home Builders survey. In 2006, the study forecasts, that number will grow by another 30 percent.

Although green construction is rapidly moving into the mainstream, unwillingness by consumers to pay higher upfront costs for energy conserving materials and technologies is perceived as a major obstacle by 79 percent of the builders surveyed.

Green building doesn’t always translate into higher costs. Callie Barker Schmidt, NAHB's director of environmental communications, points out that construction costs for Elevation 314, a mixed-use building in Takoma Park, Md., that won NAHB's National Green Building Award for Multifamily Home Design of the Year, were about $70 per square foot — a figure she categorizes as “really low.”

“Green home building isn’t a fad, but a trend, and one that’s increasing at rapid rates,” says Harvey Bernstein, vice president of Industry Analytics and Alliances for McGraw-Hill Construction. “The data we recently collected indicates builders will reach the tipping point by early next year, where more builders will be producing green homes compared with those who aren’t.”

This finding is a powerful one, Bernstein says. “With more builders creating green homes and more consumers buying them, other [builders] will increasingly begin to incorporate green features into home building products and green practices into building processes.”

How can builders and real estate practitioners convert consumers? Appealing to their altruism in upscale and urban communities might work, says Schmidt. Potential energy savings might carry greater weight in suburban locales.

Some builders, such as Don Ferrier in Fort Worth, Texas, believe consumer values are already undergoing a change, one that he describes as a “paradigm shift.” At his company, he says, calls from potential consumers with green-building inquiries are coming in at 10 times the rate they did just three years ago.

And the leading reason that builders are considering green? “It’s the right thing to do,” say the 92 percent who identified this factor as very important or somewhat important influence behind the decision to go green.”