Analyzing Sustainable Design Costs

Sustainable design is the process of increasing the efficiency of energy, water and materials utilized in the various building functions. Environmentally conscious construction reduces the impact on the environment and overall human health through better design, building, operation and maintenance.

Sustainable building continues to face scrutiny over the discrepancy between upfront costs of a green building compared to the costs of a traditional building. The answer is green building. While some start-up costs for a green building are higher, long-term costs are exponentially lower. Owners strive to reduce operating costs and maintain a competitive edge, providing occupants with the best environment.

Through integrated whole-building design, owners can remain competitive, realizing the premium to pay for sustainable design is decreasing. The most cost-intensive features in sustainable construction are upgrades related to building systems for energy optimization. Examples of unconventional and expensive upfront options include high-efficiency, low-energy systems such as geothermal systems and photovoltaic panels. As systems further develop, so does the subsequent return on investment. These systems provide for savings over the lifetime of the building.

DMR Architects currently has three LEED-registered buildings and three New Jersey schools designed to LEED standards. In all of these, the sustainable features have not increased the project budget. Bids for all of these projects came in within budget, and three of the four buildings are designed to obtain at least 26 LEEDTM points, which is Certified Level, and one is planned to achieve Silver Status.

There is a premium to be paid by the owner to the architectural/engineering team for some of the design services related to LEEDTM Certification. For one, there is a cost associated with the LEEDTM documentation process, as this is an additional effort for the architect and engineer.

There is also additional cost involved with building commissioning, a prerequisite, and energy modeling. Energy modeling is required to document energy savings and obtain energy optimization points. In addition, there is a standard LEEDTM registration and certification fee to be paid to the United States Green Building Council for their review and certification.

As part of a national initiative, many cities have started to offer tax incentives for developers who build green buildings. These programs help owners justify the use of newer, energy-efficient or environmentally sustainable technologies that could potentially be cost-prohibitive.

Recently, for example, we worked with the New Jersey Greenhomes Program, run by the New Jersey Department of Community Affairs, which provides grants for affordable housing projects to offset costs of sustainable upgrades. For one, they will provide an allowance per square yard to upgrade carpeting from standard to low-volatile organic chemical carpeting with recycled content. This incentive will essentially pay the difference between the standard carpet and the upgraded, environmentally friendly carpet.

Another example is a subsidy to pay the difference between standard light fixtures and Energy Star-rated, energy efficient light fixtures. Currently, NJ Greenhomes will subsidize the costs of sustainable upgrades for up to $7,500 per dwelling unit.

A similar program of a helpful initiative is the NJ SmartStart Buildings Program, sponsored by the NJ Board of Public Utilities. This program, a statewide energy-efficiency initiative available through New Jersey's electric and gas utility companies, offers incentives for upgrading to high-efficiency equipment, providing similar grants for energy-saving upgrades for buildings in state-designated Smart Growth areas.

Our philosophy at DMR is to be the leader in green design in order to offer clients the best possible solutions. In line with our dedication to redeveloping and revitalizing communities, we are committed to incorporating sustainable design principles in all of our buildings to further benefit the community and the lives of those inhabiting these structures, doing our part to transform the marketplace and in the process transform our business.

The views expressed here are those of the author and not of Real Estate Media or its publications.