A report published by Enterprise Green Communities (EGC) on October 16 assesses the cost-effectiveness of incorporating green energy-efficient measures in a range of housing developments. The conclusion of the report is that, in general, the lifetime savings generated through green building outweigh the upfront costs, though this can vary by building type.
As part of their “Green Communities” initiative, launched in 2004 in partnership with the National Resources Defense Council, EGC established a building standard with 38 mandatory building criteria and 13 optional criteria. The criteria address areas such as site improvements, water conservation, and operations and maintenance.
The study was based on a sample of 27 single- and multi-family housing units that met all of EGC’s mandatory criteria and earned at least 25 of the 125 points accorded through the optional criteria.
The study found that the average predicted lifetime utility cost savings for the entire sample of $4,851 per unit in today’s dollars exceeded the initial average $4,524 cost per unit of complying with the criteria. This is in addition to improving residents’ quality of life and cutting an average of two tons of carbon dioxide emissions per unit per year.
The study also found that supportive housing developments in particular benefitted from implementing the standards as compared to rental and for-sale homes. While all three building types had similar upfront costs of compliance, the resulting lifetime savings for supportive housing were predicted to be $5,441, compared to $3,608 and $2,878 for rental and for-sale units respectively. The report finds that providers of special needs rental housing who pay all the utility bills have the most immediate and measurable incentives to embrace green building measures.
A policy finding in the report is that current federal rules governing rents and utility payments for subsidized housing do not reward developers and operators for a building’s energy efficiency, limiting their interest in these reforms. The report concludes that to provide a greater incentive for affordable housing developers to employ green technology, public housing authorities need to establish special utility allowance schedules for buildings that agree to meet higher efficiency design criteria such that both the owner and the residents share the cost savings.
Another policy finding is that federal assistance also currently factors into the financial benefits of installing photovoltaic (PV) panels. With high upfront costs, their implementation is cost-effective only when outlays are offset by government subsidies. Investment in PV panels shows a return on the cash investment of 194% per year. This is compared to just 3% when subsidies are not taken into account.
EGC’s full report is available at: http://tinyurl.com/ylqmp32