On January 11, 1964, U.S. Surgeon General Luther Terry issued a report that linked smoking cigarettes with developing lung cancer. We then debated into the 1970’s if smoking was bad for people. As someone who often looks back to see forward, I had to read and re-read those two sentences together. Wait, what? We did not debate if smoking was pleasurable for some people or if it helped others to settle their nerves, we debated if the thing people were just told could be linked to cancer was bad for people’s health or not. It is sort of like if we debated the merits of asbestos exposure.
I have been seeing a plethora of discussions and debates around green building designations. Are they useful? The arguments against them seem to stand on the notion that the requirements for green designation are very close to the requirements of the standard building code or are achievable in certain areas by just following the code. This makes it a question as to whether the green certification actually indicates a better building or if the certification is merely a participation trophy.
Other arguments against green building designations are regarding older certified buildings which achieved their designations a long time ago. They may still have a certificate on display even though they might not be as efficient as newer buildings constructed to modern, more demanding standards.
I look at these discussions of the value of the green building designations and I cannot help but wonder what the debaters use to buy their groceries. No judgement if they are using something else like trading stamps, but I use money. I think a lot of us do. When we use the term “value” and “valuable” to describe a thing, like a building or a piece of cake, we are talking about its value in terms of money. I will often look at the size of a slice of cake versus its price to see if its value to me exceeds its cost.
Financial benefits of green
So here is where the debate regarding the value of green building designations gets weird to me. The financial benefits of a green designation can make a building that has one the prettiest, most popular building on the block.
Green loans, like those offered by Fannie Mae and Freddie Mac, offer benefits like discounted closing costs and reduced interest rates compared to conventional loans. Many green designations out there can qualify a property for a green loan without a single adjustment to the property. My first green loan resulted in $30 million saved over the term of the loan compared to the loan the property had previously.
In my world, $30 million dollars is a value worth pursuing.
Now let us talk about the value of a green building designation to renters. According to the 2023 Renter Preference Survey by the National Multifamily Housing Council, 84% of millennials and 74% of baby boomers consider sustainability a crucial factor when choosing a rental property.
In 2024, AMLI surveyed their residents and found that 78.9% of residents believe living in a sustainably built apartment benefits their health. This indicates that AMLI residents place value not only on having a sustainable home, but also on healthier living.
Lastly (but not least), in March 2022, Cushman & Wakefield Research Spotlight documented that green certified multifamily (Class A) properties achieved 3.1% higher rents and 9.4% higher sales prices (on a price per unit basis).
No matter how you look at it, there is a financial benefit to a green building designation.
This is why the debate over the value of green building certifications baffles me. As a sustainability practitioner, I believe that, when we lose sight of sustainability’s economic benefits, we are not being sustainable. If we leave economic benefits out of the conversation, we are not having a thorough discussion. We confuse people, and we lose our way. True, a building without a green designation can be as energy efficient as one with a designation, but the value of the building with the green designation is higher.
Let us stop debating the value of green building designations like it is the cigarettes of our time. It is not. If you want to debate something crazy, I am down for a deep debate over which mythical creature would win in an epic battle: a griffin or a minotaur cyclops. The winner gets a valuable piece of cake.
