The greening of real estate appraisal: as sustainable building gains momentum through standards, legislation and public desire, the appraisal community responds.(feature)(Cover story)
Publication Date: 22-MAR-07
Publication Title: Valuation Insights & Perspectives
Format: Online
Author: Nicolay, Claire

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Description

green building, a movement that has been steadily growing since the 1970s, is now rapidly emerging as a powerful force. Green, or sustainable, buildings are designed and built on environmentally friendly principles; they use natural and recycled materials, conserve energy and water and maintain high levels of air quality. While green principles may once have seemed unprofitable and utopian, they are being increasingly recognized as marketable. Noting that "interest in green building has grown geometrically," Peter F. Korpacz, MAI, of PricewaterhouseCoopers observes that it's "not just for 'good citizen' types anymore: Builders have developed new techniques, and the price has gone down with initial spending offset by significant savings." In a sign of the times, the April 4 CoStar Green Report's header splashily announced: "Building Green is the New 'Black.'"

The green building movement developed in response to problems caused by 20th century building technology. In the 1930s, the enclosed steel and glass building that relied on fluorescent lighting, reflective glass and an enormous HVAC system became the commercial building industry paradigm. Glamorous and functional, but energy inefficient, this model reached the height of its popularity in the late 20th century even as energy resources began to show signs of exhaustion. Indeed, gas shortages in the 1970s were a spur to the formation of the green movement, which has developed steadily through the millennium and now seems poised to reach a new level of relevance in the 21st century.

Rising energy costs and increasing concerns about global warming have helped catapult green building into the national (and world) spotlight. Buildings have a major impact on the environment and are generally agreed to be a primary factor for global warming: The U.S. Green Building Council (USGBC) estimates that buildings account for 12 percent of water use, 65 percent of waste output and 70 percent of electricity consumption in the U.S. The Environmental Protection Agency attributes 19 percent of greenhouse gas emissions in the U.S. to commercial buildings, and USGBC gives the number as 30 percent. Buildings also account for 39 percent of U.S. total annual energy consumption, according to the Department of Energy. It's no wonder that USGBC and other leaders in the green movement have trained their sights on energy inefficiency, especially in the commercial sector.

However, interest in the environment is not necessary for working with green buildings. Sustainable building is more durable and its features can be marketed as valuable amenities. As Leanne Tobias of Malachite LLC declares, "You are selling more natural light, better indoor air quality, a healthier environment with less toxic materials, and better temperatures and humidity controls." Moreover, as green building features become increasingly attractive to both commercial and residential buyers, the rapid evolution of sustainable building legislation will change today's "amenities" into tomorrow's standard requirements.

Legislation

One measure of the green building movement's new clout is the list of current and pending legislation. In recent years, the federal government has sought to promote business by relaxing environmental...



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