In an interview a few weeks ago I was asked what our premium was for building LEED Platinum. The reporter had done some research and found that the highest level of LEED for Homes usually carried a 15-20% markup and wanted to know what the added cost was for our project. It was a difficult question since we don’t have a non-LEED version of the house with which to compare, but eventually I said, “Um . . . I guess . . . negative 5%” (an estimation of my interview articulacy). I went on to explain that, with the average new home built in Philadelphia coming in at a minimum of $125 per square foot in hard construction costs and our, admittedly more sparse, home hitting $100 psf, I figured that number was defensible.
The next question of course is why? Why do production home builders and established developers, people who have been building homes for many years, have to spend 15% more to get to LEED Platinum while us rookies are getting there at a discount? It was a question I had no concise answer to until a few days ago when an acquaintance, who wishes to remain anonymous, gave me a piece of her grandmother’s wisdom in explanation . . . “It is because they’re polishing a turd.”
OK, so it’s a bit harsh. Turd is, maybe, an unnecessarily rude word to use to describe what are often pretty nice homes, but the concept is sound. Most of the builders and developers reporting high premiums for pursuing LEED are still trying to build the exact same home they have always built. They are simply adding features to make that same house energy efficient, healthy and sustainable. This addition gets expensive.
Builders, successful ones anyway, often have a basic home that they build over and over. They know how it goes together. They can build it quickly and inexpensively, and most importantly, they know it will sell. When they are suddenly faced with the need to “go green,” they are understandably reluctant to make significant changes to the design of their proven house. Location, interior fixtures, numbers of bedrooms and bathrooms, square footage and window placement are all tested and successful specs. The familiar methods of construction they use are easy for them to estimate and well known to every sub-contractor and laborer on the site. There is, in their minds, less management and less risk.
So, they polish the turd. Rather than redesign the house that has been successful for them in the past, they add solar panels, geothermal systems, high end interior fixtures, extra insulation and other green features. The house gets greener. It gets certified, but it also increases significantly in cost. Since the features are add-ons and extras, the price rises as each one is tacked on.
To avoid these extra costs, one must start the home design process with affordability and sustainability factored into every decision. One simply can’t, in most instances, build the same home in the same place using the same techniques and expect to accomplish those goals. For example, one can’t:
- build on arable land 20 miles from the nearest amenities.
- build a 5000 square foot single family home.
- have more windows than walls, particularly on the north and west side.
- add a garage.
- have giant spa tubs in each bathroom.
And so on . . . Of course, one can do some of these things and still get a LEED certification, but it is going to take some expensive turd polish.
Well, all that said, I am nothing without the wisdom of your comments so . . . What do you think is the single biggest stumbling block for established builders trying to move toward affordable green? Why is there a premium on LEED? What process would you recommend to a developer trying to make the change to sustainable building? Who would you suggest the developer involve?
My apologies to the linguistically sensitive among you for the prevalence of a certain scatological aphorism throughout this post. You may scold me for that in the comments as well.
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