The Value of Going Green

Written By Daniel Muhlenberg | October 10, 2011
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It may be trite, but it’s truer than ever: green features save money. Or, in this case, make money. Acording to RealDeal Magazine, an addendum passed on September 29 by The Appraisal Institute, one of the most influential real estate organizations in America, will codify environmentally-friendly building features into market appraisals. So condo owners in green buildings have reason to celebrate; energy saving features will probably raise property values significantly. Crafted in response to the fact that standard appraisal forms fail to adequately account for costly energy saving measures, the addendum will ensure that their value is reflected in financial terms. This gives developers and building owners in Manhattan a financial incentive to be good to the environment, and it could very well change the norm for environmental standards in Manhattan.

The green building trend (and green roof trend in particular) has grown substantially in recent years, and not just because people started to care about the environment. Energy-saving technologies grew by leaps and bounds during that time, and just as importantly, the formal infrastructure is firmly in place. For example, New York City offers a one-year tax abatement for buildings with green roofs. More importantly, The U.S. Green Building Council created an internationally recognized green building certification system called LEED (Leadership in Energy and Environmental Design). Currently, 12 newly constructed buildings in Manhattan are LEED certified by the Urban Green Council, a chapter of the USGBC, in addition to the 13 existing buildings in Manhattan that are LEED certified. Taking a closer look at these buildings reveals that the changes needed to obtain this status are not hard to do. Whether or not we have the will to do it is the real issue.

Let’s get specific. The luxury apartments at The Helena, a LEED certified building, have a few basic features that are easy to imitate. Each apartment has a master switch that saves energy when residents leave. 50% of their energy is purchased from wind generated sources, and another portion comes from solar panels. Many of the materials used in constructing the building were recycled, and rooftop vegetation reduces water runoff. All of those features are  very basic and could be implemented in most luxury buildings, even pre-war buildings, without too many problems.

All of this has a wider significance than simple economics; New York City buildings devour an embarrassing amount of energy. According to the Urban Green Council, buildings account for 79% of greenhouse emissions in New York City and consume 95% of it’s energy. A typical LEED certified building emits 35% less greenhouse gases and consumes 30% less energy. Right now only 25 buildings are LEED certified in Manhattan out of the thousands of buildings on this small island, so there’s plenty of room for improvement. Buyers should be wise to this because condos in green buildings are only going to appreciate in value (although renters should be wary that rents in green buildings will probably go up in turn). While the effects of the addendum have yet to manifest themselves, it’s more than likely that this may be the spark that starts the green movement in earnest.

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