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Just a few years ago, a vanguard of environmentally-conscious builders in New York thought they could spur a mainstream “green building” movement on grounds of good business practices alone. But now, as the trend matures and interest in green everything accelerates, developers are saying market forces aren’t enough, and more help from government is needed.
At a conference called “Making Green Building a Mainstream Practice” at the American Museum of Natural History on Thursday, both market-rate builders and their affordable-housing counterparts seemed to agree that government subsidies, if not government oversight, is a must if green approaches are to become the norm. Developers like Douglas Durst, a pioneer of green office towers in New York, and Ara Hovnanian, one of the nation’s largest developers of single-family housing, were clear on that – even though they face a very different set of hurdles than those in the affordable housing business.
“Right now it’s a boutique product that you pay premium prices for,” Hovnanian told moderator Tom Brokaw, in response to a question about what “green” means to him. “If all is equal, consumers will choose green, but not all is equal and [most] consumers are not willing to pay more.”
A major issue for both affordable and market-rate housing developers is the higher upfront costs of LEED (Leadership in Energy and Environmental Design) -certified green buildings. The U.S. Green Building Council, which administers the certification process, grades buildings on their performance in a number of assigned areas, including energy efficiency, water savings and construction materials. A developer can pick and choose which areas to focus on and how to manage them, but in New York doing well – which in the LEED system means a silver rating or better – is probably going to entail paying 4 to 8 percent more for the technology.
One of Durst’s new projects, for instance, is the Bank of America headquarters in midtown. A sleek 64 stories, the building promises to be one of only 20 buildings – and the only skyscraper – in the world with a platinum rating. Once it’s finished in 2008, it will have a state-of-the-art “cogeneration plant” that produces electricity on the premises, plus waterless urinals, toilets using rainwater collected from the roof and full-length windows that allow in sunlight while dissipating its heat. Other high-end apartment buildings like Battery Park City’s Solaire, The Helena in Hell’s Kitchen and TriBeCa Green all use expensive new technologies such as photovoltaic cells and electrostatic filter systems.
Proponents argue that higher upfront costs will be more than made up for by long-term energy savings, higher property values and, in the case of office buildings, increased worker productivity due to the healthier indoor environment. But at least as important to some developers is the certification itself, since a high LEED rating is essential for those who depend on green tax credits and green marketing to meet their bottom line.
Carlton Brown, chief operating officer of Full Spectrum New York, a Harlem-based mixed-income developer, said that though getting LEED certification may not help in marketing individual units, it’s important for creating a brand in the long run. “It’s important for people to know that Full Spectrum does buildings that do ultimately get LEED certified,” he said.
In late 2004, Full Spectrum opened 1400 on 5th, a mixed-income development in Harlem that was funded by the city’s Department of Housing Preservation and Development (HPD) and Bank of America. It earned a silver LEED rating on the basis of a heating and cooling system that operates on water stored in geothermal wells and eco-friendly materials like bamboo floors and recycled drywall. According to Brown, high demand for the building’s 43 market-rate units helped subsidize the 85 units reserved for low- to moderate-income buyers. There are now more than 6,000 families on the waiting list for just 128 total units, all presently occupied, and, according to Brown, that has made it much easier to get capital investment on a new mixed-income green development next door.
Not all affordable housing developers are convinced they can afford the technology. Full Spectrum’s creative public/private partnerships may work in the hot neighborhood of Harlem, where young professionals, especially, are willing to pay premium prices for the prestige and good conscience of green. But others wonder: what about in the South Bronx?
And in the case of New York’s affordable housing players, landlords may indeed reap benefits on lower heating costs and renters may save on electricity bills – but the financial benefit to the developer isn’t as clear.
According to Joanne Derwin of the New York Apollo Alliance, an organization that brings together labor unions and business leaders to set environmental sustainability goals, what’s needed to overcome incentive problems like these is smart new government legislation.
Last month a new high-performance buildings law, called Local Law 86, went into effect amid fanfare from sustainability experts and community leaders. It requires all new construction using $2 million or more of city funds to meet sustainability standards that are at least as strict as LEED silver – a move projected to cover $12 billion in construction over the next decade.
“Because of this law, anybody who wants to build a school now has to build green,” said Derwin. “That’s a great example of government policy helping to move the market. It may even help build a market for local manufacturers.”
Affordable housing developers successfully defeated attempts by legislators to make the law apply to them, however. Derwin said they were justifiably concerned about high upfront costs. “But an even bigger problem was their ignorance about what building green truly requires.”
“If the city goes to LEEDs, I can’t afford that,” said Mary Spink, executive director of the Lower East Side People’s Mutual Housing Association. “Getting LEED-certified is expensive. It takes a lot of paperwork and time. And it sometimes doesn’t even address what really matters.”
“The Solaire is LEED-certified, but they’re using more energy on their filter systems than a normal building would,” Spink maintains. “They have solar panels but it doesn’t even come close to covering their energy costs.”
Yet Spink and her longtime architect Chris Benedict and mechanical engineer Henry Gifford are among the few who have figured out how to cut energy costs dramatically while using the same old construction technology everyone else does. They fork over a little extra for essentials like cellulose insulation and a special glazing on the windows that helps reflect heat in summer and retain it in winter. But most of what they do has nothing to do with special gadgets. A specially designed gas boiler is installed on the roof instead of in the basement; weep-holes in the brick exterior allow excess moisture to escape from the building’s walls where mold might otherwise grow; and a rooftop garden further insulates the building and strengthens the roof.
Few cutting-edge materials, and yet, according to Spink and a cadre of third-party observers such as Green Home NYC, the result is a building that costs no more than standard construction but uses only one-sixth the energy. This might be an environmentally positive result by most standards, but Spink’s buildings aren’t LEED-certified and she doesn’t get those prized green tax credits as a result.
Both Derwin and Rob Crauderueff of the environmental justice group Sustainable South Bronx agreed that the first thing the city could do to counterbalance the affordable housing industry’s lack of initiative is offer training.
“HPD should be training these developers,” said Derwin. “Not everything that’s sustainable costs more, but you have to know how to do it.” Crauderueff further suggested they offer free structural analysis and work with New York State Energy Research and Development Authority to develop a New York City-based technical assistance program.
Meanwhile, many industry insiders think the LEED certification system needs significant tweaking. The first and most obvious problem is a lack of sensitivity to context.
“What works in Phoenix or Chicago may not work in Manhattan because of what it costs,” said Mary Spink. “It’s one thing if I can sell energy back to Con Ed, but right now that’s not possible. So I have no incentive to use solar paneling. Water recycling is not feasible here, and using 80% recycled material costs too much. My buildings were designed according to what works in Manhattan.”
Back at the symposium – which was sponsored by Bank of America, The Rockefeller Foundation, and The Next American City, an urbanism magazine based in Philadelphia – another worry was whether the LEED system puts too much emphasis on technological innovation when old technology coupled with new consumer habits might do just as well, or better.
Kath Williams, former president of the World Green Building Council, the organization that created the LEED system, agreed with that worry and suggested everyone would do well to read “Platinum Buildings In Ancient India,” a forthcoming book on how ancient Indian construction methods meet the sustainability standards of the highest LEED rated buildings. Amid drinks and cheese trays, she commented: “But, look, we’re all learning here. LEED is a work in progress. With a little luck and ingenuity it’ll improve with every new year.”