Engineering News-Record (ENR) recently reported in its July 5, 2010 issue that revenue from projects registered with and actively pursuing green building certification by a third-party sustainable-design standard organization–like LEED and Energy Star–rose 16.8% in 2009 for ENR’s Top 100 Green Design Firms. According to ENR, the total revenue from these projects rose to $3.3 billion, up from $2.85 billion in 2008, and includes both private and public projects, though revenue was largely generated from private sector markets such as retail, hospitality, multi-unit residential and health care. This is pretty remarkable given that funding for private construction projects has all but disappeared since the banking industry bailout and since the recession hit the development and construction industries like a “ton of bricks.” (pun intended)
It would be reasonable to expect that the demand for green building and third-party certifications would decrease during these tough economic times because of the additional cost associated with green building and sustainable certifications. So, why is green building bucking the recession trend? Here are my thoughts:
- Owners are taking advantage of tax credits and other government economic incentives designed to promote reduced energy use and encourage alternative energy production
- Owners are recognizing that green building is not simply a status symbol or marketing tool to lure tenants—they are understanding that the implementation of many of these green building initiatives will reduce energy and operating costs
- The cost to build green has come down—the old notion that green building was significantly more expensive than traditional design and construction techniques is no longer true
- More state and local governments are including green building rating systems in their building codes for both public and private construction
There are probably many more factors that have contributed to the rise in green building revenue despite the recession, which I haven’t mentioned. What all of this tells me is that we are thinking green now. Green building initiatives are becoming the baseline for design and construction rather than extraordinary and unique features.
Do you believe that green building and sustainability is the new way of doing business for the design and construction industries?
Construction and Green Building Law Blawg 
August 5, 2010 at 2:25 am
We believe completely that architects, contractors and developers are more and more drinking the green kool-aid stimulated by marketplace demand, as exemplified by the CoStar Group study showing that LEED buildings rent for more, sell for more, and have higher occupancy rates. This trend will continue to follow the typical bell curve that starts with early adopters (we’re past that now) and into the middle phases for the foreseable future until green design becomes the de facto standard for all buildings. Follow our tweets @energyacewayne.