On March 18, the National Association of Home Builders (NAHB) began selling copies of the National Green Building Standard, capping off a collaborative effort by NAHB and the International Code Council (ICC) to issue the first ANSI-approved green building rating system in the country. The next day, the U.S. Green Building Council (USGBC), a Washington, D.C.-based group that oversees the (somewhat) competing LEED green building rating system (that’s Leadership in Energy Efficiency and Design, for the last time), announced that it had made its own significant achievement: It had nailed certification for its conferences and events team under BS 8901:2007, the new British standard purported to be the world’s first sustainability rating system for the events industry. Applauded by the National Multi Housing Council and the National Apartment Association, the National Green Building Standard supposedly goes a long way towards addressing an alleged lack of multifamily centrism in the design and administration of other rating systems. That doesn’t mean, though, it’s multifamily specific. In fact, as currently written, the standard applies not only to multifamily low-rise, mid-rise, and high-rise developers, but also to single-family home builders and homeowners; remodelers; and motel and hotel developers and operators. In the few short weeks since it’s been available, the NAHB estimates that 173 multifamily projects have been initiated based on the new ANSI guidelines.
LEED’s recent announcement, meanwhile, speaks volumes: The USGBC clearly sees marketability and bottom-line net worth in having a green rating system for the events industry, but the necessity of creating a green building standard specific to multifamily? Well, that’s still being evaluated. Even with the launch of its revamp in late April, USGBC’s LEED Version 3—and its LEED 2009 component—do not have separate, dedicated multifamily tracks. However, the USGBC has begun a pilot program for “mid-rise” projects, under the LEED for Homes certification standard, that is intended to address some multifamily disparities. The pilot program—which runs through 2009—applies to projects between four and six stories that include two or more units. Still, this hardly seems inclusive of the scope of multifamily development in the landscape today.
If you’re lost between all of these numbers, acronyms, systems, and certifications, you’re not alone. Even the USGBC feels your pain—sort of. “As we have this proliferation of LEED for different markets, we don’t want people to have to think about what rating system that they have to use—it should be easy and obvious,” says Joel Todd, chairperson of the LEED steering committee, which largely decides which real estate sectors deserve their own LEED standard. “One of the things we have tried to do with LEED 2009 is to get a better alignment of credits to make the differences clear for different markets. We will be pursuing that over the next couple of years, and, hopefully, multifamily residential will be one of those markets [that are clarified]—but I cannot guarantee it.”
“No guarantees” pretty much sums up the current end game for green efforts in multifamily real estate. Despite the relative commonality of green building and operating practices in the industry, the payoff—economic, social, or environmental—for engaging in one sustainable initiative or rating program over another remains uncertain. Feel-good proponents backed by anecdotal evidence abound, but empirical comparative analysis about the value of green to multifamily owners and operators remains elusive. At first blush, certifications seem highly marketable, but they nevertheless remain multifamily-obtuse. Meanwhile, green hungry consumers who seem to marinate every decision in the sustainability zeitgeist still seem paradoxically blasé to the green marketing of multifamily real estate and reticent to pony up for green rent premiums. Yet none of this matters: Green is careening towards multifamily development in an unavoidable—and unstoppable—way.
An Elusive Endeavor
That’s not to say there are no multifamily green success stories. The industry is replete with examples of apartment and condo projects that have done everything from launching recycling programs to achieving zero energy consumption or even pumping energy back to the municipal power grid. Hundreds of projects have gained various green certifications by implementing a wide variety of green features involving new techniques, products, and processes for managing electrical consumption, HVAC, lighting, water and sewer systems, indoor air quality, and the use of recycled and/or sustainable materials in construction and development. Consider 5600 Wilshire, the latest green community from BRE Properties, a San Francisco-based REIT. From a marketing standpoint, virtually all new multifamily green developments are the “first” to do something—whether it’s the first green high-rise on the street or the first to achieve LEED Silver, Gold, or Platinum certification in the city or state—and 5600 Wilshire is no different. Boasting access to public transportation and bicycle storage; water-efficient landscaping and water-use reduction; high-performance thermal windows; recycled content in construction materials; low-VOC paints, coatings, and carpets; and innovation in building design, 5600 Wilshire was the first multifamily property in Southern California to receive both LEED-NC (version 2.2) Silver certification and a GreenPoint-rated certification by California’s Build It Green nonprofit when it opened last year.
“5600 Wilshire represents our vision for energy-efficient, environmentally-conscious multifamily development,” says BRE chief investment officer Stephen Dominiak. “Everyone involved—our neighbors, our residents, and our BRE associates and shareholders—benefits from sustainable, green development.” Indeed, by all indications, 5600 Wilshire stakeholders will likely love their new community. In fact, the company says the building is stabilized, but if you’re looking for actual metrics, think again. There are no real numbers to back the claims—as is the case with most green multifamily projects. That’s despite the fact that sustainability proponents swear that buildings such as 5600 Wilshire lease up faster, retain residents longer, operate more efficiently and less expensively, command a higher rent premium, and realize greater disposition gains than their nongreen peers.