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.
