Position Paper:
Green Building and Affordable Housing / Development
June, 2008
What is Green or Sustainable Building
Green building, also known as sustainable building, is the methodology and resulting structures and land that are designed, built, renovated, operated, and/or reused in an ecological and resource-efficient manner. Green buildings are designed to meet certain objectives such as protecting occupant health; improving employee productivity; using energy, water, and other resources more efficiently; and reducing the overall impact to the environment.
Economic Benefits of Green/Sustainable Building
Green building methods and structures may cost somewhat more up front. However, lower operating costs over the life of the building and increased consumer value produce a more cost effective structure. The green building approach applies a project life cycle cost analysis for determining the appropriate up-front expenditure. This analytical method calculates costs over the useful life of the asset.
Example - A 2003 study conducted for the California Sustainable Building Task Force shows that an initial increase in upfront costs of approximately 2% for green design will yield lifecycle savings of more than ten times the initial investment, or 20% of total construction costs (based on a conservative estimate of a 20-year building life).
According to the US Green Building Council (USGBC), even the first costs of some green buildings are comparable to or less than prevailing construction prices in their areas, because of resource efficiency and correctly -sized mechanical, electrical, and structural systems. In standard buildings, these systems are often oversized, and therefore more expensive and less efficient. Typical reductions in energy operating cost for a green building are 25-40% when compared to conventional buildings. This translates into a $.050 to $1.25 /sqft/year savings.
Maximum savings can be fully realized when they are incorporated at the project's conceptual design phase with the assistance of an integrated team of professionals. The integrated systems approach ensures that the building is designed as one system rather than a collection of stand-alone systems.
It is important to note that, while add-on technologies such as insulation, E-windows, lighting, etc. contribute efficiencies of a green building program, the basic shell configuration, foundation and lot design will yield the greatest benefits, from economic, energy, and environmental/health perspectives.
Elements to Consider in A Green Building Program
Siting Elements
- Sites located to take advantage of mass transit, utilities, etc.
- Employing Low Impact Development (LID) processes to protect and retain existing landscaping, natural features, and surface water flow.
- Selecting plants that have low water and pesticide needs, and generate minimum plant trimmings such as the ornamental peanut; maximize use of recycled-content paving materials, furnishings, and mulches help close the recycling loop.
Energy Efficiency
- A proper building system, can expect to reach 40 percent less energy usage – or more
- Passive design strategies such as foundation and shell configuration can dramatically affect building energy performance and may include building shape and orientation
- Develop strategies to provide natural lighting. Studies have shown that it has a positive impact on productivity and well being.
- Install high-efficiency lighting systems and appliances including HVAC systems and task lighting to reduce general overhead light levels. Many structures utilizing ICF wall systems require HVAC systems that are sized 30-40% below those required in conventional structures for the same interior volume.
- Maximize light colors for roofing and wall finish materials; install high R-value wall and ceiling insulation; and use minimal glass on east and west exposures.
Materials Efficiency
- Select materials based on life cycle costs, evaluating several characteristics such as reused and recycled content, zero or low off gassing of harmful air emissions, zero or low toxicity, sustainability harvested materials, high recyclability, durability, longevity, and local production. Such products promote resource conservation and efficiency. Using recycled-content products also helps develop markets for recycled materials that are being diverted from landfills.
- Use dimensional planning and other material efficiency strategies. These strategies reduce the amount of building materials needed and cut construction costs. For example, design rooms on 4-foot multiples to conform to standard-sized wallboard and plywood sheets or other dimensions as appropriate.
- Reuse and recycle construction and demolition materials. For example, using inert demolition materials as a base course for a parking lot keeps materials out of landfills and costs less.
- Require plans for managing materials through deconstruction, demolition, and construction.
Other considerations Include
- Water Usage Efficiency
- Occupant Safety, Health and Comfort
- O&M Costs
Steps to a Successful Program
- Establish a vision that embraces sustainable principles and an integrated design approach.
- Develop a clear statement of the project's vision, goals, design criteria, and priorities.
- Develop a project budget that covers green building measures. Allocate contingencies for additional research and analysis of specific options. Seek sponsorship or grant opportunities.
- Seek advice of a technical/design professional
- Select a design and construction team that is committed to the project vision. Draft the contractor / vendor selection process to ensure that suppliers have appropriate qualifications to identify, select, and implement an integrated system of green building measures.
- Develop a project schedule that allows for systems testing and commissioning.
- Develop contract plans and specifications to ensure that the building design is at a suitable level of building performance.
- Create effective incentives and oversight.
Green Building and Affordable Housing - Literature Review Summary
Green building has emerged over the past decade as a robust movement to create high-performance, energy-efficient structures that improve occupant comfort and well-being while minimizing environmental impacts. Supported by organizations such as the U.S. Green Building Council and its Leadership in Energy and Environmental Design (LEED) standards, both public and private entities are increasingly pursuing green buildings in the institutional, commercial, and residential sectors.
While this progress is impressive, for a number of reasons it has not included significant numbers of affordable housing projects. These reasons, several of which are unique to affordable housing, include: an almost exclusive focus on “first costs,” the existence of per unit cost caps, regulatory rigidity that limits green innovation, and a finance system that fails to recognize the long-term value of green investments.
A common perception has been that green costs more and is, therefore, not suitable for affordable housing. Recent studies have documented the costs and benefits of green building in the commercial and institutional sector,1 reporting that green buildings have a modest initial cost premium, but that long-term benefits far exceed the incremental capital costs. These findings have bolstered green building activity in these sectors, but their applicability to affordable housing development has been viewed with considerable skepticism.
Until recently few or systematic studies evaluated the costs and benefits of greening in the affordable housing sector. This summary addresses this data gap. We have surveyed green affordable housing projects around the country and conducted detailed case study analyses of the costs and benefits of sixteen projects for which adequate data was available.
Notwithstanding significant data gathering and methodological challenges, analysis of these case studies have led to several key findings, including:
- Community development corporations (CDCs) and other mission-driven community-based organizations are natural leaders in the effort to build green affordable housing.
- The current system to assess financial viability of green affordable housing, focused on initial capital costs, is deeply flawed.
- Life-cycle costing in which both capital and operating costs are considered over the expected life of a building provides a better understanding of project economics.
Using a life-cycle approach, green affordable housing is more cost effective in net present value (NPV) terms than conventional affordable housing.
1 The existing financing system for affordable housing is complex and rigid, and typically does not recognize the long-term value of green investments. This serves as an impediment to widespread development of green affordable housing.
Total development costs for the green projects reviewed in this report ranged from 18% below to 9% above the costs for comparable conventional affordable housing. On average, the sixteen case studies show a small “green premium” of 2.42% in total development costs.
2 These incremental costs are largely due to increased construction (as opposed to design) costs. From a life-cycle net present value perspective, the case studies show that the benefits of green affordable housing are real and, in some cases, substantial. In virtually all the cases, energy and water utility costs are lower than their conventional counterparts. In many cases, decreased operating expenditures alone more than pay for the incremental initial investment in greening the project in present value terms.
3 The use of more durable materials and equipment in several of the case study projects result in reduced replacement costs and provide additional life-cycle financial benefits. Moreover, the value of improved comfort and health for residents, as well as reduced environmental impacts, is substantial, although not captured quantitatively in the analyses.
While the case studies indicate that up-front costs are nominally higher, life-cycle green building benefits exceed costs in almost all cases, those economic impacts are not the same for all parties. Developers, owners and residents experience different life-cycle costs and benefits of green affordable housing.
For example costs to developers surveyed range from about $9,700 more per unit to $34,800 less per unit in net present value terms than the non-green alternative. This wide range and whether developers experienced gains or losses depends largely on whether the developer retains a long-term ownership interest and whether the owners or residents are responsible for utility costs (and savings). In five of the sixteen case studies, developers received net benefits from greening, in two cases greening the project had no net financial effect on the developers, while in nine cases the developers experienced net losses relative to investing in comparable conventional projects.
4 For residents of affordable housing units, the life-cycle financial outcome is almost always positive, ranging from a NPV of -$140 to $59,861 per unit. This is the case largely because owners/residents are not responsible for the incremental capital costs of greening, but they receive the benefits of lower utility costs, not to mention the unquantified benefits of improved comfort and better indoor air quality. In 14 of the 16 cases owners/residents receive a net benefit from greening; in one case, there is no impact on the financial condition of residents, since they are not responsible for any of the utility costs; and in one case residents experience higher net costs from greening, though the project developer attributes this to anomalies in project design and resident demographics.
5 Several factors have limited the scope of this research. First and foremost, there are a limited number of completed green affordable housing projects with comprehensive data, particularly with respect to green operating costs and the capital and operating costs of comparable conventional projects. With this small data set, broad conclusions from this research must be made cautiously.
Moreover, when cost data are available they are often in non-standard formats and stored in disparate locations.
Reports suggest that developers focus on assembling an experienced green team, employing an integrated design approach, and utilize life-cycle costing in evaluating the economics of a project. For policymakers - create innovative funding mechanisms that recognize the long-term value of green projects, instituting higher mandatory standards for energy efficiency in building codes, and adoption of minimum green standards for affordable housing.
For success it is recommended that a broad range of actors involved in developing affordable housing be educated as a solid starting point for a better understanding of the costs and benefits of greening these projects. Field experience and appropriate accounting methods makes a strong case that greening affordable housing is cost effective and should be pursued with vigor.
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References
1 Sustainable Building Task Force, The Costs and Benefits of Green Buildings, by Greg Kats of Capital E, et al October 2003.
2 This premium drops to 1.73% if photovoltaic panels are not included. Often inclusion of such technologies would not have
occurred without targeted grant funding support from public agencies or utilities. We calculated the first-cost premium of greening based upon the non-subsidized costs.
3 Life-cycle costs and benefits are reported in present value terms to account for the time value of money and express the net results in present day dollars. We assume a 30-year life for projects studied.
4 These results change when green subsidies are included. After grants and rebates specifically for green building features, seven developers have green building benefits that outweigh costs, three break even, and six have costs that outweigh benefits.
Section 2 Building Systems
Exterior Shell
Building systems are now being employed which offer most of the properties required to meet green building program criteria. Additional elements which are desirable for a sustainable community based approach includes:
- Affordability
- Eligible for various financing mechanisms
- Consistent with community needs
- Ease of installation in the field – by both skilled and unskilled labor
- Adaptable to different housing/commercial needs
Representative Shell Systems
Consistent with current discussions between Taxis Group, LLC and the One to One Foundation, two primary building systems have been identified for evaluation. These include insulated concrete forms ( ICFs) and structural insulated panels (SIPs). A comparison of the two technologies is indicated which will allow the selection to be based on the project requirements.
Of course, the selection of another building system(s) is always an option, however only ICFs, and SIPs are included in this discussion.
The two technologies are similar in that each uses an integrated insulating layer of expanded polystyrene, or EPS and an additional structural component. The primary difference is the fact that the SIP systems use the laminate structure of exterior sheathing – interior foam core – exterior sheathing as the structural component. ICF walls use concrete poured into the interior of the EPS form as the primary structural component.
Structural Insulated Panels
SIPs are an engineered prefabricated laminated panel system consisting of a structural sheathing such as oriented strand board (OSB) or cement fiber board or metal sheathing bonded to a EPS foam insulating core. These panels can be used for wall and roof panels and are available in varying dimensions and core thicknesses. SIPS made with cement board from one manufacturer meet the static wind load tests (ASTM 330) and the Southern Building Code Congress International(SBCCI) standard for large missile impacts ( SSTD 12-99).
Considerations for use include:
- Manufacturing process – materials, process conditions, etc
- Ease of installation
- Environmental conditions during construction which may influence performance
- Cost of installed system including typical labor costs
- Other
Insulating Concrete Forms (ICF)
ICFs are permanent cast-in-place forms made of expanded polystyrene (EPS) which become an integral part of the poured concrete wall system. There are three basic configurations which are employed.
- Flat panels are a monolithic concrete core sandwiched between two EPS panels. Panels are connected using plastic connectors
- Post and Beam walls create a wall with discrete concrete columns and a concrete beam at the top of the wall.
- Grid ICFs create a waffled concrete core between a latticed EPS form.
These wall systems are also engineered to meet and exceed the applicable building codes including the Florida Building Code, Chapter 19 on ICF wall systems.
Among the three basic ICF systems the most widely used design is the flat panel. This is largely due to the ease of manufacture and design of the basic product. The post and beam design is employed to a much lesser degree.
The design which offers all the benefits of the basic ICF concepts but uses less concrete in the structural core is the grid design ICF. One manufacturer has refined the grid design ICF concept to achieve the maximum strength in the form as afforded by the mechanical properties of the EPS materials used in its production.
Reddi-Wall Inc manufactures this product which has the internal cross section configuration resembling an aircraft wing. This design maximizes the strength to weight ratio and provides unsurpassed strength in the field during the pour where form failure might occur. No form failure has been observed when installing the wall system according to manufacturer instructions.
The engineered performance characteristics of ICF walls includes:
- High strength
- Wind resistance - > 250mph static load
- Mold resistant – inhibits moisture migration through wall
- Quieter - Healthier
- Energy efficient - HVAC systems can be downsized, saving energy and dollars
- Ease of field installation using non-skilled labor
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1. Complete Reddi-Wall test data available. Please contact us for more information.
