LEED Bashing

When the U.S. Green Building Council first introduced its LEED program, a lot of Architects “drank the Kool Aid,” myself included.  I quickly ran out, attended all of the seminars, took the exam, and became a LEED-Accredited Professional (and still maintain it today).  I ignored calls by other Architects that LEED is an expensive, point-chasing system that doesn’t go near far enough in energy conservation.

I still believe that LEED has many stellar qualities, and is one of many reasons why Energy Codes and Green Construction Codes have made tremendous progress in recent years.  I commend it for bringing environmentally friendly design into the mainstream.  And, in USGBC’s defense, they have made considerable strides in improving the program, acknowledging themselves their many shortcomings, and making it tougher to earn and maintain points.

However, my interest in LEED specifically has waned considerably in recent years due to several reasons:

  • The added expense (easily $20,000 as a minimum) of the application and documentation process is frequently cost-prohibitive for small projects (unbeknownst to many, USGBC is not a government agency, but a non-profit, and is doing very well in this down economy).
  • Local governments jumped in completely without fully understanding the additional costs borne by tax payers.
  • And, many LEED-certified buildings, it turns out, didn’t perform as advertised.

Recent articles in USA Today highlight concerns:  Part One •  Part Two •  Video

Responses by USGBC:  USGBC Statement in Response to USA Today News Article  • •  Fact Check with USGBC’s Brendan Owens: USA Today

In the end, I still believe LEED is a viable program, but spending 5 figures for the additional paperwork is irresponsible.  That money would be much better spent on improving systems further, or adding features, or any number of options.

The costs that local governments are absorbing for LEED are obscene.  They were sold a bill of goods years ago without much research and forethought.  Between mandatory certification for publicly funded projects and tax breaks given to non-performing privately funded buildings, local municipalities are spending millions unnecessarily and without getting a return on their investment.

Green Building is a moral imperative – there should be no debate about that.  Energy conservation, water conservation, and natural resource protection should be mandatory for every building.  Much of what LEED advocates is becoming integrated into Green Building Codes, and, when adopted, may make LEED obsolete.  Until that time, the expense of LEED is unnecessary, unjustifiable.  Just my opinion.

New Energy Code in North Carolina

Believe it or not, your home pollutes twice as much as your car.  Quite simply, homes are energy hogs.  Incandescent lighting (that is left on), phantom energy usage, high tech electronics, poor building envelopes, and other items contribute to waste energy.  Commercial buildings are just as bad.  In fact, commercial buildings consume 40% of all energy used.  So, if you want to make a dent in energy consumption and oil dependancy, improve the energy efficiency of our buildings.  And, that is what North Carolina is attempting to do.

With the current edition of the NC Energy Conservation Code, now mandatory for all projects in North Carolina, the state is taking a giant leap forward.  In theory, buildings constructed this year should perform 30% better than buildings constructed in 2004.  This is accomplished several ways:

  • Greater roof insulation requirements (e.g. minimum above-roof insulation in Raleigh goes from R-15 to R-30).
  • Greater wall insulation requirements (e.g. minimum wall insulation in Raleigh goes from R-13 between metal studs to R-13 between studs AND another R-10 continuous outside of studs).
  • Higher efficiency ratings for equipment (e.g. small heat pump efficiency goes from 10.0 SEER to 13.0 SEER)
  • The Mechanical Engineer is now required to visit the job site, review the installation, and provide a “Statement of Compliance” to the Owner and Inspector prior to occupancy that the systems were installed properly and are working correctly, and that operations and maintenance manuals were provided to the owner.
  • And many other enhancements.

One of the single greatest improvements to the Energy Conservation Code, and the one provision that the rest of the country is watching with great interest is Section 506: Additional Prescriptive Compliance Requireemnts.  This section requires commercial buildings to comply with one additional requirement (we must choose one of the following and include it in the design of the project):

  1. More Efficient Mechanical Equipment (e.g. 15.0 SEER heat pumps instead of 13.0 SEER)
  2. Reduced Lighting Power Density (10% less than Code)
  3. Energy Recovery Ventilation Systems
  4. Higher Efficiency Service Water Heating
  5. On-Site Supply of Renewable Energy (3% of total building energy loads), or
  6. Automatic Daylighting Control System (for 30% of total floor area)

One of these must be incorporated into the project.  Specific requirements about how to comply with each can be found in the Code.

The Code became mandatory in North Carolina on March 1st, 2012.

Taking The Temperature of Green Building, Economics – Part II

In Part I, we reviewed some interesting findings within a survey of real estate developers and corporate executives conducted by National Real Estate Investor (in partnership with the U.S. Green Building Council (USGBC)) at the 2010 Greenbuild International Conference and Expo in Chicago.

We concluded that economics still wins out over “Green.” In order for developers and real estate professionals to fully embrace the green movement, one of two things must happen:

  • Make it mandatory (the “Stick”), and/or
  • Make it economically justifiable (“the Carrot”)

In this case, “mandatory” means “by Code” or “by legislation”.  In other words, by incorporating environmentally friendly requirements into the Building Codes, creating a separate “Green Construction Code” (as was recently enacted in California, and as is currently being proposed throughout the U.S.), or by simply dictating certification through a known program (such as USGBC’s LEED) for all new projects, “green” will be mandated.  By codifying green, it will not be optional, and the market will be forced to adapt.

Codifying green is a heavy-handed way of requiring buildings (and their developers) to embrace the environmental movement.  This is the same way they were forced to embrace insulated glazing (Energy Code), fire sprinklers (Fire Code) and handicapped-accessible restrooms (A.D.A.).  Bottom line is it works, but drags everyone kicking and screaming.

By way of a subtler approach, we currently have the option to strive to make it economically justifiable to choose to build green.

As we have heard many profess, it supposedly doesn’t cost more to be green.  This may be true for a small percentage of projects, even if you remember that “green” is a relative term.  But, in our experience, “green” costs green.

I recently attended a seminar with 60 other Architects.  The group was asked, “How many have worked on a LEED project?” 15-16 hands were raised.  “How many have completed a LEED project?”  Only two hands remained raised.  Since the cost of the certification process can raise the cost of the building substantially, that process is the first to go when budgets get squeezed.

Instead, it makes sense to offer incentives for developers and real estate professionals to pursue green.  By offering economic stimulants, green programs are not only affordable, but economically necessary. In the form of tax incentives, utility rebates, fee reductions, etc., developers can voluntarily choose “green” and fully embrace the movement.

Even in the current economic environment, governments can justify incentives.  Buildings conserving water require less infrastructure demands from the jurisdiction.  Same for power companies when the building’s peak load is decreased substantially.

That said, codes will continue to evolve, and energy standards will continue to restrict wasteful usage.  Developers and Landlords with “Triple Net” leases (where Tenants are responsible for their own utilities), tend to view energy efficiency as unnecessary since they don’t pay the utility bills.  It is for the sake of these folks that we need the “stick.”

As history has shown, the “stick” can be used when industry does not come willingly.  However, the “carrot” tends to produce a more positive experience all around.  In this case, however, I think we need both.

Taking The Temperature of Green Building, Economics – Part I

With the current state of the economy (very tired of saying those words, by the way), and the “green” building movement having passed the tipping point, it’s interesting to look at a recent poll of industry representatives that highlights some stark differences between corporate executives and real estate developers.

At last year’s (November 2010) Greenbuild International Conference and Expo in Chicago, a survey was conducted by National Real Estate Investor (in partnership with the U.S. Green Building Council (USGBC)) on green building and development.  Its findings are not surprising, and are probably equally accurate 6 months later.

When surveying corporate executives, it is apparent that companies are committed to investing in energy efficiency in their buildings.

  • 95% of corporate real estate executive respondents emphasized that green design is important in their site selection process
  • 82% of corporate executives state that energy efficiency is important in selecting green buildings to buy or lease — up from 2009’s 63%

However, when surveying developers, it is obvious that they are not as enthusiastic as corporate executives. Only 19% view green design as extremely important in future projects, down from 37% in 2009.

For more information about the survey conducted by National Real Estate Investor, check their Web site.

It is my belief that developers and corporate executives have similar motivations, and that the current state of the economy and simple business practices account for the executive and developer responses above, which are more similar than you might think.  For instance, when considering green design within the context of site selection, choosing to redevelop an existing site (the “greenest” of “green” options) over a greenfield (undeveloped) site can just as easily be credited to the old adage of “Location, Location, Location.”  Most existing sites were previously located in desirable areas, and simply redeveloping them is not only green, but good real estate development.

Also, energy efficiency is not only “green” but economically imperative.  Energy efficiency is the one “green” concept that just about everyone can get behind due to simple economics.  Additionally, energy rebates and tax incentives can entice companies to become energy-efficient.  Some Developers may not be completely on board since for them, energy expenses can be a pass-thru expense to their Tenants.

In my opinion, while corporate executives constantly consider the bottom line, they have also found valuable marketing opportunities by “going green.”  Selling “green” to consumers has been profitable.

Real estate developers, on the other hand, have not found those marketing opportunities as fruitful.  In my own informal poll of corporate individuals, real estate agents and developers, it seems that green properties are desirable, but only when it makes economic sense.  When everything else (lease terms, rate, tenant improvement allowance, etc.) about two competing properties are equal, “green” can then become the deciding factor between properties.  However, at this time, not many prospective tenants are willing to pay extra for it.

In order for developers and real estate professionals to fully embrace the green movement, one of two things must happen:

  • Make it mandatory
  • Make it economically justifiable

We’ll explore both in Part II.

NC Energy Code rewritten by Governor, Home Builders

As published in the 12/15/10 version of the “News & Observer,” our local paper in Raleigh, recent developments in the review process for the upcoming Energy Code have some folks, myself included, a bit concerned.  Entitled “Energy saved, safety lost?” the reporter informs us that the NC Building Code Council has approved new regulations for the soon-to-be-issued, 2012 NC Energy Code.

It’s not surprising that in March of 2012, North Carolina will have a new Energy Code (we do every 3 years, like clockwork).  It’s also not surprising that the new Code will mandate a 30% increase in energy efficiency for commercial buildings.  (Various “green” programs have been requiring 30% minimum for several years already.)

What is surprising is that, residential construction may get a pass.  Worse yet, the costs associated with a watered-down efficiency increase may be offset by the removal of provisions which may affect life safety.

Turns out that the NC Home Builders Association and the Governor have lobbied the NC Building Code Council requesting that consideration be made for home builders “in these tough economic times,” (my quotes, not theirs – really, has a phrase other than “green” been more overused?).  They argue that now is not the time to burden home builders with additional expense when they’re trying to build and sell homes.

So, the HBA and the Governor requested that the energy efficiency requirement be reduced to 15%, and that the cost of those upgrades (valued around $3,000 – by someone) be offset through the elimination of code requirements deemed expendable.  The Governor’s office was kind enough to furnish the Code Council with a list of 20 suggestions, including some affecting smoke detectors and other life safety requirements.

Several thoughts come immediately to mind:

  • Wow, the Home Builders Association is a powerful organization, with friends in high places.  The commercial building industry is certainly not getting this kind of support.
  • Regardless of the percentage, how in the world will it be enforced for residential construction?  Even if it’s designed and engineered properly, how will the homeowner know it was installed properly?  Will it be tested?  Just because the windows have the right label on them doesn’t mean they were installed correctly.  I swear my own house (less than 10 years old) has multiple walls without ANY insulation, but it was supposedly built “to Code.”
  • And, yes, ALL sectors of construction are hurting.  But 14 months from now, when this Code is enacted (with or without the customary 6-month phase-in period), if the home building industry is back to going gangbusters, will HBA then agree to the 30%?  I’m not holding my breath.
  • And, most importantly, safety.  Obviously, the NC Building Code Council cannot sacrifice safety just so Track Home Builder XYZ can give their shareholders a warm, fuzzy feeling.  I will be very interested in seeing what’s cut, and why it’s no longer important to have in the Code.

International Green Construction Code: Codified sustainability a good thing?

The International Code Council (ICC) has released the International Green Construction Code (IGCC).  Some jurisdictions are already adopting the IGCC for use.  Some folks are applauding it’s creation, while others are crying foul.  All hell is breaking loose!  (Well, that last one’s a bit of an overstatement.)

The ICC (the association responsible for developing the International Building Code, the code upon which the NC Building Code is based, as well as most of the other state building codes in the U.S.)  has now released the IGCC for public comment, and public comments are coming fast and furious.  However, I venture to guess that most Owners and Contractors, along with an embarrassingly large number of designers, are not even aware that this document exists!

For those that don’t, the IGCC is a Code, that is intended to be adopted by jurisdictions as mandatory (law), and is filled with both mandatory and voluntary language.  It is actually up to the jurisdiction enforcing the Code to decide what’s important and what’s not.

(That makes sense since what’s environmentally important elsewhere may not be as important in North Carolina.  For example, we’ve suffered through many recent droughts in North Carolina lately.  Water conservation may be something we’d be a bit more interested in than another state that has clean, fresh water coming out of their ears.)

A few highlights.  The IGCC:

  • Applies to New AND Existing buildings.
  • Is NOT a rating system (in contrast to LEED and other similar “checklist” systems.  Instead, it incorporates “electives” to allow designers and owners to pick and choose certain strategies while encouraging them to go “above and beyond” the minimum, stringent requirements of this Code.
  • Provides an opportunity for jurisdiction to specify enhanced building performance in many specific areas of local concern.
  • Is composed of mostly mandatory requirements, a number of which are set by the local jurisdiction.  LEED and other systems are mostly voluntary.
  • Should be formally available in 2012.

As released by the ICC, “This will be the first time code officials, owners and designers will have an integrated regulatory framework to put into practice that meets the foal of greening the construction and design of new and existing buildings, ” according to Code Council CEO Richard P. Weiland.  “Only a code that is useable, enforceable and adoptable will have the capability of impacting our built environment in dramatic ways.”

Obviously, this may be a disturbing event for some, but I welcome the codification of environmentally friendly and sustainable buildings.  Gasp!

First, take a deep breath and relax.  As far as North Carolina goes, it will be a few years before we see something similar here for private projects.  However, state and local municipalities are already requiring USGBC’s LEED certification for many public projects.  So, in essence, we already have a mandatory “Code” for certain projects.  I personally believe that the IGCC is a better avenue for sustainability than LEED (Quick aside:  While I consider this a well-intentioned act by our local governments to require LEED certification, I’m not quite sure requiring LEED compliance is the proper route to take given its added expense and other issues associated with this one program.  I suspect that will change in the near future as code requirements and other programs come on-line.)

For those against bigger government, and I count myself among you, consider the following…If it were not for codes, some buildings would still be built today with single-pane windows, minimal insulation, inaccessible restrooms, and too few fire exits.  The fact is, if left to the marketplace, building design would be unacceptable, discriminatory, and hazardous in many instances.  Codes were originally created, and have evolved over the years, out of necessity – out of an acknowledgement that the status quo sucked.

So too, in my opinion, is the reason for the inevitable adoption of a North Carolina Green Building Code, in one form or another……many years from now.  Just because a building owner or tenant can afford to waste massive amounts of energy and water doesn’t mean that they should.  In fact, it’s our duty to protect the environment from ourselves.

Suffice to say that a Green Building Code is not the end of the world.  It is, however, the only real way to effect change.

You can read more about the IGCC by going to http://www.iccsafe.org/cs/igcc/pages/default.aspx

LEED Not Right for Everyone

The U.S. Green Building Council has done an admirable job bringing environmentally friendly design and construction into the main stream.  Due in part to the efforts of USGBC, “Green” (voted most overused word in 2008) is now a well-used adjective, rarely used to describe someone’s eyes, but more often used to describe someone’s recycling habits.  Green is not going away.   And that’s good!

It is believed that the American public reached the tipping point in 2009 with regards to their opinion on green.  A GfK Roper Consulting Report found that three-quarters of consumers believe every large company should be required to prepare an annual report on its impact on the environment.  The same study found that a large majority of consumers say a company’s environmental practices are important in making key decisions, including the products they purchase, where they shop, where they work and where they invest their money.  Four in ten Americans are willing to pay for a product that is perceived to be better for the environment.  Source:  2007 GfK Roper Green Gauge® Report.

The USGBC (no, it’s not an arm of the United States government as its name might suggest) has become a leader in green design mostly through it’s L.E.E.D. (Leadership in Energy and Environmental Design) program, an intense certification process where buildings are submitted for review and awarded points based on various environmental criteria.  The more points awarded, the higher the level of certification, from “Certified” (lowest), “Silver”, “Gold”, and “Platinum” (highest). The USGBC certification has become a symbol of achievement and a source of pride for owners and architects alike.  It represents the successful completion of a long, arduous process that does not come cheaply.  The plaque on the wall can:

  • Attract knowledgeable tenants/buyers
  • Increase a building’s value
  • Bring much-needed publicity to a project, although this is decreasing with the increase in number of LEED projects.
  • Paint the producer in a favorable light.

Those are not bad reasons to pursue LEED certification.  In my opinion, these are the ONLY reasons that make economic sense, however.

The problems that my clients have with USGBC and its LEED program deal with their cost-to-benefit analysis.  The LEED certification process costs money – a LOT of money, relatively speaking.

By way of example, let’s take a 20,000 sq. ft. speculative office building:

  • USGBC Project registration fee:  $900 for members, $1200 for non-members
  • USGBC Design & Construction Review:  $2250 for members, $2750 for non-members (add $10,000 for expedited review)
  • USGBC Credit Appeal:  If you want to appeal a denial of a particular credit – $500 each.
  • A/E Coordination:  In speaking with many Architects and Engineers, they have stated that they have to charge increased fees to deal with the mountain of paperwork involved with the “back-and-forth” with USGBC, detailing recycled materials documentation, sources of material production, etc.  On our example 20,000 sq. ft. building, that can add $5,000-10,000.
  • Commissioning:  The cost for an independent, 3rd party to review documents, perform system testing, and prepare reports can cost $0.50-$1.50 per square foot, and add $15,000 to $20,000 to a 20,000 sq. ft. office building.  (Admittedly, Commissioning is a necessary, but often omitted service, and one not uniquely appropriate for LEED projects.  Commissioning can help give the Owner a sense that all building systems are performing as specified:  HVA C equipment, the building envelope, electrical systems, etc.) 
  • Once leased, each subsequent office suite fitup would be certified separately, each with their own LEED application fees, certification fees, etc.

So, even if you forget about Commissioning, USGBC LEED projects can cost up to $15,000 to 25,000 (and up) more than a project designed the exact same way, but without the certification process.  Now, when looked at as an overall percentage of construction cost, LEED certification is a miniscule cost:  1/2 of a percent.  That is not a bad deal if you are doing it for marketing purposes.  In our experience, when everything else is equal, LEED certification can tip the scales in one building’s favor over another.  But, the vast majority of tenants are not willing to pay extra for the LEED certification at this time.

Options?  Other green programs exist that can have similar marketing potential but also have other benefits that USGBC’s LEED program does not.

For instance, U.S. Environmental Protection Agency’s Energy Star program is a well-known program in the construction and real estate communities.  It is based on superior energy performance criteria, acknowledging that maximizing energy efficiency is one of the best ways to protect the environment.  Energy Star is a FREE program, as it is government-sponsored.  It is also possible to obtain favorable home mortgage arrangements based on a project’s Energy Star status.  More detail regarding the differences between LEED and Energy Star can be found here.

Green Globes is another alternative to LEED.  In the U.S., Green Globes is run by the Green Building Initiative.  Green Globes is a software-based, online tool for certifying green buildings.  It appears to be much more user-friendly than LEED, and at significantly lower cost.  An informative blog documenting the differences can be read here.

Many more options exist, but are certainly lesser-known than those mentioned above.

USGBC’s LEED program is certainly the most popular program in the United States right now, and is getting the majority of the press.  The LEED program makes the most sense for building owners IF the primary reason for achieving some level of certification is for marketing purposes.  However, it is still the most expensive and most complicated process, in my opinion.  Ultimately, none of these programs are perfect, none guarantee a high performance building, but ALL can be utilized to take the ever-important steps to designing and constructing a sustainable building.