Editor’s note: This is the second part of a two-part look at the costs associated with certification of sustainable building projects. The first part, “Worth the Green?”, appeared in the July 11 edition of the Vancouver Business Journal.
Certifying a sustainable building project is a bit like earning a college degree – it can bring solid returns on investment, but not without plenty of cost and paperwork.
Research and the experience of local builders show that sustainable building practices and the certification of green projects pay off eventually. Green building practices are shown to lower utility bills and even increase property value and employee health, according to industry experts.
And certification can be a powerful tool for marketing an environmentally-friendly image, as has been demonstrated by the Hilton Vancouver and Vancouver-based Columbia Credit Union.
But even with eventual pay-offs, there’s little question that green certification brings additional costs. Particularly under the U.S. Green Building Council’s Leadership in Energy and Environmental Design rating system, local project managers said it’s common for certification to increase a project budget by about 10 percent.
The LEED rating system is likely the nation’s most comprehensive and most commonly used, with about 4 billion projects certified or pending certification, said Michelle Moore, USGBC’s senior vice president of communications.
Of the 10 percent tacked on by LEED, an average of $4,700 goes directly to USGBC for certification costs, Moore said.
Associated costs can reach $200,000, so where does the rest of the money go?
Some goes toward the purchase of sustainable building materials that aren’t widely accessible in the current market. But sources said the majority of extra costs are attributed to consulting fees and administration needed for the documentation LEED certification requires.
The devil is in the details
It’s one thing to build a green facility. It’s quite another to prove that its construction and maintenance are truly sustainable.
A project earns LEED credits through documentation of successful sustainable efforts and their success can’t always be guaranteed, said Timothy Buckley, principal of Vancouver-based Greenstone Architecture and a LEED-accredited professional.
“Every single project will have an attrition of points,” Buckley said. “(And) because this is such a strict rating system, close doesn’t count.”
David Gottfried, a USGBC founder, said he would like to see software designed to guide projects through certification, similar to Quicken Help or QuickBooks for accounting and bookkeeping.
“It takes a lot of labor to document that you’ve made the credits in LEED,” Gottfried said. “There aren’t many software tools to help right now. … We’re still transforming standard practice.”
The process has become somewhat streamlined in recent years with the introduction of LEED-Online software. But related administration is still cumbersome enough to deter builders from pursuing certification.
“It’s really important to measure what you’re accomplishing,” Moore said. “If you’re not keeping track, you don’t know what happens to your goals at the end of the day.”
Costs of consultation
Meanwhile, industry consultants are in a bit of a scramble to meet ever-growing requests for green building plans.
“There aren’t many consultants out there that are experienced,” Gottfried said of the relatively new green building industry. “So those that are good are overwhelmed with projects.”
When involved professionals are familiar with the process, LEED-related costs can add as little as 1 percent to 3 percent to a project budget, Buckley said.
Gottfried hopes it won’t be long before architects and engineers see green planning and certification efforts as standard services without extra fees. He said the expertise of such professionals is key to keeping project costs down.
“You can achieve silver, or maybe even gold (certification) without any extra first costs of construction if you set it up early and hire a team with that goal in mind,” Gottfried said. “It costs more for documenting and consulting, but it’s all about how you do budget management.”
That means collaborating with consultants early in project plans.
“It gets more expensive the later they decide to go for LEED,” Buckley said, noting that if a project owner decides to pursue certification after the design process is under way, the owner likely will need to pay a design team to start the design process over from the beginning.
Getting professionals from different industries at the same table can also help, if it’s done early.
“You can’t set energy performance targets unless you have engineers and architects at the table, and manufacturers, too,” Moore said. “You need that two-way dialogue so they get to hear from other industries and (can) bring out even better products in the future.”
Changing the marketplace
The green sector is growing 30 percent in a declining economy, Gottfried said.
Part of that growth has come from corporate and individual consumers who are willing to pay for sustainable goods and services that tend to have higher prices.
But Brandon Tauscher, founder of La Center-based Project GreenBuild, hopes to see those prices fall as green goods and services become more accessible, particularly in the building industry.
He founded the nonprofit in 2006 to promote education of sustainable practices and help stimulate the market for sustainable products and services.
The organization recently embarked on the Mainstream Green House project with Vancouver City Councilman Tim Leavitt. The goal is to green-build Leavitt’s home for less than $400,000 and to use the Vancouver construction site as an education center.
“We’re using LEED certification as a framework,” Tauscher said. “We chose systems and materials that might represent the Mainstream Green (idea) because we’re trying to make a reproduceable project and meet LEED certification on a budget.”
Tauscher is seeking local organizations and businesses to partner on the project. So far, $37,500 worth of in-kind contributions have come from businesses such as Vancouver-based Décor and Portland-based Light Benders.
“In order to have the green products’ prices come down, people will have to demand it,” Tauscher said. “Builders aren’t going to do LEED projects right now because they’re more expensive. … We’re trying to show people what they can do.”
The effort reflects Gottfried’s vision, which he shared at the Vancouver Business Journal’s Top Projects awards event July 24.
“The ethic of the industrial revolution is sinking the ship,” Gottfried said in an interview. “We can create another industrial revolution based on principals of Earth … learning about what we have done to exceed its cap and what we can do to remain here in a way that’s economically viable.”
FROM THE GROUND UP
David Gottfried, Mike Italiano and Rick Fedrizzi founded U.S. Green Building Council in 1993. They started with about 50 charter members, including Armstrong World Industries, Herman Miller, Anderson Windows, US Gypsum, Turner Construction and the Rocky Mountain Institute.
“We named it USGBC to try to sound national – not to sound like a government agency, but to sound big when we were tiny,” Gottfried said.
In 2000, the LEED certification program was introduced and membership jumped to 1,000. Today USGBC has 71 chapters and thousands of member organizations. So far in 2008, it has gained more than 700 members each month, said Michelle Moore, USGBC’s senior vice president of communications.
“We didn’t know it would become the U.S. standard,” Gottfried said. “No one can project this kind of growth, not even Bill Gates when he started Microsoft.”
Each member organization gets to comment and vote on proposed changes to the certification process. Recently proposed changes for LEED drew more than 5,000 public comments, Moore said.
“It is an extraordinary example of a broad-based participatory democracy at work,” she said. “Getting everybody together under one big tent was pretty revolutionary.”
The nonprofit employs 150 people and its budget this year is $70 million, up $20 million from 2007. About 95 percent of its funds come from earned income, Moore said, with membership fees, project certification fees and educational programs as the biggest sources.
WHERE LEED POINTS ARE GAINED
•Energy performance: up to 17 points
•Indoor environmental quality: up to 15 points
•Site selection: up to 14 points
•Material and resource selection and source: up to 13 points
•Innovation and design process: up to 5 points
• Water efficiency: up to 5 points
Source: Timothy Buckley, LEED-accredited architect
GAIN POINTS, SAVE ENERGY AND SAVE COIN WITH:
Efficient lighting systems and fewer light fixtures
Boosted insulation levels
Photo sensors to adjust electric lights as natural light changes
Pre-cast hollow core cement floors to store night air for daytime cooling
Decorative concrete floors that don’t need waxing, stripping or carpeting
New solar energy technologies that are more efficient, providing long-term savings as energy prices change
Materials from local sources, or even from a project site, that reduce shipping costs and help the local economy
“It’s very easy to chase points or a rating without understanding the implication,” said Timothy Buckley, principal at Vancouver-based Greenstone Architecture. “Grab those strategies that will be the cheapest and best first and then approach the ones that are more extreme.”
Source: Timothy Buckley, LEED-accredited architect
Charity Thompson can be reached at cthompson@vbjusa.com.
