LEED-Certified Condos Yeild Higher Return
The new generation of buyers are demanding green built features when shopping for their first home, even though it can cost them up to 25% more. Builders are now being forced to make the additional up front investment in construction costs (averaging 2%), but Wikipedia states that they will eventually yield over 10 times that amount over the life cycle of the building. Additionally, developers receive additional incentives from state/local government that help boost press and public interest. Studies also show that LEED-certified buildings average $11.24 more per square foot, and have a 3.8% higher occupancy than non-LEED built homes.
So what is LEED-Certified?
Developed and administered by the U.S. Green Building Council of Washington D.C. (a nonprofit coalition of building industry leaders), The Leadership in Energy and Environmental Design (LEED)™ uses a rating system which offers 4 levels of certification — Certified, Silver, Gold and Platinum. Each certification is designed to represent an “environmentally responsible, profitable and healthy place to live” by measuring building sustainability.
Each level is measured by points in five design categories: sustainable sites, water efficiency, energy and atmosphere, materials and resources, and indoor environmental quality. The higher the level, the higher the expenditure. However, LEED-certified buildings:
- Lower operating costs and increased asset value.
- Reduce waste sent to landfills.
- Conserve energy and water.
- Healthier and safer for occupants.
- Reduce harmful greenhouse gas emissions.
- Qualify for tax rebates, zoning allowances and other incentives in hundreds of cities.
- Demonstrate an owner’s commitment to environmental stewardship and social responsibility.
Here’s a look at what downtown area projects have been, or are striving to be LEED-certified:
It is surprising that many of the new construction projects haven’t applied for any level of LEED-certification considering that it’s proven to increase sale prices and occupancy. At the same time, an up front investment of 2% for a builder can be quite a bit.
While reports on the Internet support that buyers will pay more for a LEED-certified home, and builders will yield higher profits, I’ve had experience where buyers are actually turned off by the idea of having recycled materials integrated into their home’s interior. Buyer’s also seem to prefer to get more square feet for their dollar rather than a smaller green built home. What would you do if you could get a new construction 2 bedroom condo for the same price as LEED-certified 1 bedroom?