Jeff Kingsbury
Understanding the Dollars and Sense of Green Development and Construction 10.23.09
Overview
Trends and Observations
Case Study: Prairie Crossing, Grayslake, IL Case Study: Hidden Springs, Boise, ID Case Study: Stapleton, Denver, CO Case Study: McStain Neighborhoods, Boulder, CO
Lessons Learned
Where should/can/will growth occur? Source: U.S. Census; ‘Developing Greenfields without Sprawl,’ 2004
US Growth Projections 2000-2030:
+ 82 million more people + 36 million new housing units
FL Growth Projections 2000-2030: +13 million more people + 7 million new housing units
Greenfield ~ 60-65% Suburban Densification ~ 15-20% Urban Infill ~ 15-20%
Evolution of Community Development Source: UrbanGreen
Moral Imperative?
Regulatory Imperative? Source: Energy Information Association; U.S. Conference of Mayors
Over
30%
of Florida’s
1,010
energy comes from coal Legislative Horizon… Clean Energy, Security, Energy Conservation, Air Quality, Smart Growth, Fuel Standards…
U.S. mayors,
have adopted the Climate Protection Action Agreement representing a population of over 86 million Americans
Including 78 communities in Florida
Market Imperative? Source: Google October 19, 2009
“Michael Jackson” “Barack Obama” “sustainable” “recession” “climate change” “Angelina Jolie” “global warming” “balloon boy” “Iraq war” “U.S. economy” “Afghanistan war” “Jeff Kingsbury”
134,000,000 73,800,000 63,900,000 50,300,000 47,300,000 29,500,000 29,300,000 12,000,000 11,200,000 7,640,000 1,900,000 6,170
Market Imperative? Redefining ‘Quality’, ‘Value’
Market Imperative? Estimates of the Depth of the Market for Sustainable Development: LOHAS: 25% Cultural Creatives: 30% RCLCO: 35% +
Demand for Green Residential Real Estate Source: RCLCO 2008 If their investment pays back over time, buyers are willing to spend more money on their home if….
80% 70% 60% 50% 40% 30% 20% 10% 0%
If their investment may not pay back over time, buyers are willing to spend more money on their home if….
50%
75%
41%
40%
50%
46%
30% 20%
24% 18%
10% 0%
It Saves Energy If It Saves Energy
It Provides Health Benefits If It Provides Health Benefits
It ‘s Good for the Environment
Demand for Green Commercial Real Estate Source: CoStar Group 2008
LEED vs. Non-LEED
Energy Star vs. Non-Energy Star
$11.33 psf
$2.40 psf
$171 psf
$61 psf
Occupancy
4.1% higher
3.6% higher
Operating Costs
30-50% less
10-20% less
355
973
Rental Premium Sale Premium
Buildings Analyzed
Understanding the True Cost of Going Green Source: Davis Langdon 2005, 2007
8.0%
Average LEED Incremental Cost
6.80%
7.0% 6.0% 5.0% 4.0% 3.0%
1.90%
2.0% 1.0%
2.20%
0.70%
0.0% Certified
Silver
Gold
Platinum
Case Study: Prairie Crossing Grayslake, IL
Greenfield, 40 miles northwest of Chicago Surrounding landowners partnered to buy the site after an intense legal battle that would have allowed 2,500 units Zoning allowed up to 1,600 units 678 acres total 470 acres Open Space (69%) 395 units (.58 UPA Gross)
9% attached product 73 acres of commercial including TOD with commuter rail to Chicago and O’Hare Charter School Community Barn Community Supported Agriculture Boarding Stable 10 miles of trails
Case Study: Prairie Crossing Grayslake, IL
Case Study: Prairie Crossing Grayslake, IL
Price premium above market increased over time: 1995:
15% premium
2000: 33% premium 19% is the home 14% is the community 2005:
100% premium
LID practices yielded savings vs. conventional infrastructure: Reduced Road Width: $178,000 Curb & Gutter: $339,000 Storm Sewer: $210,000 Sidewalk Alternatives: $648,000 _______________________________ Total Savings $1,375,000
Case Study: Hidden Springs Boise, ID
Built around a 145 year old working farm 1,756 acres 1,047 acres Open Space (60%) 850 units (.5 upa gross; 1.4 upa net) 70-acre Town Center with Mercantile, Café, B&B Charter School Preschool Fire Station Branch Library
Community Barn Clubhouse, Pools Community-Supported Garden 24 local and regional trails .25% transfer fee funds open space stewardship programs Local heritage museum, on the National Register of Historic Places Wastewater reclamation system provides irrigation to common areas in semi-arid high desert climate
Case Study: Hidden Springs Boise, ID
Case Study: Hidden Springs Boise, ID
WWTP generates Class B reuse water for common areas, boulevards, parks, playgrounds, athletic fields, community garden, fruit orchard Sewer tap fees of $1,750 and monthly fees of $30 per month First of its kind in the State of Idaho and Idaho’s largest Class B wastewater reuse system
Case Study: Hidden Springs Boise, ID
2002-2006: 1% to 7% market share 37% price premium
2007-2008: 4% market share 61% price premium 35% market decline
Case Study: Stapleton Denver, CO
Former Stapleton Airport 4,500 acres 1,116 acres Open Space (25%) 12,000 units (3.5 upa gross; 7.0 upa net) 100% builder participation in Energy Star 54% attached product 13m sf of employment uses (10m office, 3m retail) 1.2:1 Jobs-to-Housing balance
Stormwater Design Guidelines with emphasis on landscape features and LID techniques Using reclaimed water for irrigation of parks and common open space areas 50% of terminal building demolition waste recycled 6 million tons of concrete from runways recycled (Staplestone) Construction waste recycling
Case Study: Stapleton Denver, CO
Stapleton
Canterbury Crossing
6.4
3.5
average lot price
70,000
70,000
gross revenue / acre
450,000
245,000
net infrastructure cost / acre
44,000
5,000
land cost / acre
45,000
10,000
gross margin per acre
361,000
230,000
density / acre
Case Study: McStain Neighborhoods Boulder, CO
Founded 1966 Master developer and production homebuilder Privately held 350 units per year > $100 million in annual sales Diverse products
Case Study: McStain Neighborhoods Boulder, CO
Redefining “Quality” and “Value”
Case Study: McStain Neighborhoods Boulder, CO
Sales Price Premium: Incremental “Green” Cost: Net “Green” Profit:
$10 per sq. ft. $3 per sq. ft. $7 per sq. ft.
Customer Satisfaction: Referral Rate:
97% vs. industry avg. of 70% 36% vs. industry avg. of 8%
Resale Premium:
11% vs. comparable homes
Lessons Learned
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Sustainability is about competitive strategy Listen to your market, but ask the right questions Commit to your “shade of green” Be authentic; avoid greenwashing and green “bling” Develop an enduring vision that is aligned with culture, mission, values Establish metrics/benchmarks that consider the triple bottom line Manage systemically, not by checklist Get the right team to the table at the right time Adopt integrated thinking/processes vs. linear thinking/processes Don’t assume green has to cost more
Questions?
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