Housing panelists see opportunity in green building
Amid the gloom of the housing market downturn, the green building sector is one bright spot, according to panelists who spoke on green building trends in housing construction at Standard & Poor's housing summit Thursday in New York. Harvey Bernstein, vice president, industry insights & alliances, McGraw-Hill Construction, noted that in 2010, a third of all commercial real estate construction was green, as was 16% of residential construction. The share of green construction is only likely to go up in the future, he said. This means that homebuilders opting for green construction are holding their own or have seen their market share rise slightly. Green construction now tends to be a homeowner’s first choice as they assume a green home has more potential for appreciation. One negative note is that many appraisers don’t properly understand how to appraise green buildings, and education is key in this respect, Bernstein said. Jeff Mezger, president and CEO of KB Home (KBH), a volume builder of affordable homes, sees a challenge in introducing products for the starter and move-up market without raising costs. He sees significant savings in energy costs for homeowners who buy green construction and would like lenders to take this into account. Instead of looking at the cost of homeownership in the conventional way by taking into account principal, interest, tax and insurance costs, Mezger would like them to instead consider the additional factor of energy costs — in particular the savings to be had via green building. The green building wave isn't unique to home starts. Eric Belsky, executive director of Harvard University’s Joint Center for Housing Studies, said green remodeling has surged. While a federal tax credit first enacted in 2009 for energy efficient improvements factored into the rise, the trend was under way before the credit was offered. The federal tax credits, although lower in 2011 than past years, still provide an opportunity for homeowners to make improvements such as upgrading appliances, installing insulation and upgrading their heating and air conditioning systems. Stockton Williams, senior adviser for urban policy with the Department of Energy, said he expects as much as $20 billion in total savings for consumers who go with green buildings. This savings could be channeled back to the economy. Not everyone is sold on green building, however, panelists noted. Among the reasons consumers haven’t embraced green building yet include a lack of information about the energy savings, as well as a lack of confidence about finding a qualified person to do the work. Taking this into account, the government is working on standards and protocols for home energy workers, Williams said. Poonka Thangavelu is a HousingWire contributor based in New York.