Comments on: Thoughts On Green Real Estate (Report from the 2009 YAREA Conference) http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/?utm_source=rss&utm_medium=rss&utm_campaign=rss Conversations about the real estate industry, marketing, technology, and public policy Sat, 11 Feb 2012 02:48:33 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Real Estate news you don't see in the news -This Week's Real Estate News from The Cutting Edge – April 13,2009 | JoeSpake.com http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-2499 Real Estate news you don't see in the news -This Week's Real Estate News from The Cutting Edge – April 13,2009 | JoeSpake.com Sat, 03 Apr 2010 16:52:28 +0000 http://notorious-rob.com/?p=858#comment-2499 [...] at the EU Conference on Bernanke and Innovation April 7 at 8:15 am – calculatedriskblog.comThoughts On Green Real Estate (Report from the 2009 YAREA Conference) « The Notorious R.O.B. April 7 at 8:12 am – notorious-rob.com -For up-to-date real estate posts, subscribe, free, to [...] [...] at the EU Conference on Bernanke and Innovation April 7 at 8:15 am – calculatedriskblog.comThoughts On Green Real Estate (Report from the 2009 YAREA Conference) « The Notorious R.O.B. April 7 at 8:12 am – notorious-rob.com -For up-to-date real estate posts, subscribe, free, to [...]

]]> By: -Rob http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-1109 -Rob Mon, 13 Apr 2009 01:04:13 +0000 http://notorious-rob.com/?p=858#comment-1109 FWIW, I think you're on to something. If I were building a new house, I would probably insist on a fair amount of green features built-in. Because I like saving money, and I like preserving water. The issue, frankly, is whether consumers are willing to pay the 7-10% extra. On a 300K house, 10% premium for green is $30K. According to mortgage calculators, assuming a 5% APR, a 30-year $300K mortgage is $1610.46 a month. $330K is $1771.51 a month. Would consumers want to pay $160 extra per month? The answer depends in part on what sort of savings the buyer can see immediately on a monthly basis. If the cost savings is at or above $160 a month, then it's a no-brainer. If it's close, where the extra cost is only $20 a month or so, perhaps it's still a no-brainer. If it's not close, then I don't see consumers going that way. And the realtors I've spoken to confirm that they simply can't identify a market premium that buyers are willing to pay for green buildings. What has to happen, I think, is greater education all around. If lenders only want to lend for green buildings for new projects, that is certainly within their prerogative. The market will bear out their decision one way or the other. If more builders would educate their clients about the benefit of building green, I think it'll make a difference over time. -rsh FWIW, I think you’re on to something. If I were building a new house, I would probably insist on a fair amount of green features built-in. Because I like saving money, and I like preserving water.

The issue, frankly, is whether consumers are willing to pay the 7-10% extra. On a 300K house, 10% premium for green is $30K. According to mortgage calculators, assuming a 5% APR, a 30-year $300K mortgage is $1610.46 a month. $330K is $1771.51 a month.

Would consumers want to pay $160 extra per month?

The answer depends in part on what sort of savings the buyer can see immediately on a monthly basis. If the cost savings is at or above $160 a month, then it’s a no-brainer. If it’s close, where the extra cost is only $20 a month or so, perhaps it’s still a no-brainer. If it’s not close, then I don’t see consumers going that way.

And the realtors I’ve spoken to confirm that they simply can’t identify a market premium that buyers are willing to pay for green buildings.

What has to happen, I think, is greater education all around. If lenders only want to lend for green buildings for new projects, that is certainly within their prerogative. The market will bear out their decision one way or the other. If more builders would educate their clients about the benefit of building green, I think it’ll make a difference over time.

-rsh

]]> By: -Rob http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-4322 -Rob Mon, 13 Apr 2009 01:04:00 +0000 http://notorious-rob.com/?p=858#comment-4322 FWIW, I think you're on to something. If I were building a new house, I would probably insist on a fair amount of green features built-in. Because I like saving money, and I like preserving water. The issue, frankly, is whether consumers are willing to pay the 7-10% extra. On a 300K house, 10% premium for green is $30K. According to mortgage calculators, assuming a 5% APR, a 30-year $300K mortgage is $1610.46 a month. $330K is $1771.51 a month. Would consumers want to pay $160 extra per month? The answer depends in part on what sort of savings the buyer can see immediately on a monthly basis. If the cost savings is at or above $160 a month, then it's a no-brainer. If it's close, where the extra cost is only $20 a month or so, perhaps it's still a no-brainer. If it's not close, then I don't see consumers going that way. And the realtors I've spoken to confirm that they simply can't identify a market premium that buyers are willing to pay for green buildings. What has to happen, I think, is greater education all around. If lenders only want to lend for green buildings for new projects, that is certainly within their prerogative. The market will bear out their decision one way or the other. If more builders would educate their clients about the benefit of building green, I think it'll make a difference over time. -rsh FWIW, I think you’re on to something. If I were building a new house, I would probably insist on a fair amount of green features built-in. Because I like saving money, and I like preserving water.

The issue, frankly, is whether consumers are willing to pay the 7-10% extra. On a 300K house, 10% premium for green is $30K. According to mortgage calculators, assuming a 5% APR, a 30-year $300K mortgage is $1610.46 a month. $330K is $1771.51 a month.

Would consumers want to pay $160 extra per month?

The answer depends in part on what sort of savings the buyer can see immediately on a monthly basis. If the cost savings is at or above $160 a month, then it’s a no-brainer. If it’s close, where the extra cost is only $20 a month or so, perhaps it’s still a no-brainer. If it’s not close, then I don’t see consumers going that way.

And the realtors I’ve spoken to confirm that they simply can’t identify a market premium that buyers are willing to pay for green buildings.

What has to happen, I think, is greater education all around. If lenders only want to lend for green buildings for new projects, that is certainly within their prerogative. The market will bear out their decision one way or the other. If more builders would educate their clients about the benefit of building green, I think it’ll make a difference over time.

-rsh

]]> By: Roy Taylor http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-1108 Roy Taylor Sun, 12 Apr 2009 23:59:27 +0000 http://notorious-rob.com/?p=858#comment-1108 Rob, It makes no sense that the green movement has not made it down to the local S&L financing the next spec or even custom home. I am a green architect. I can show any builder how to take any house design and make it more green and only spend 7-10% more in the process. The Green that I am talking about is not the slapping on of a solar panel (which is the last thing you should do if you want to build a green house, no I mean it, the last thing) Energy efficiency is the green that I am talking about: infiltration, insulation, conservation, efficiency, in that order. Net result is energy bills that are less than half. So here's the financial magic for all mortgage lenders. The cost of the 10% increase over thirty years is less than the cost of half the the utility cost and so on a monthly basis the payback is immediate. So it actually costs less to build green than to not, even in suburbia. Why would a banker allow their money to be used without requiring it to be built green in this manner,it makes the loan safer by resulting in a lower impact on the monthly nut and is a better house for a resale value. On top of the financial reasons are that the house is less drafty, more comfoartable, and has a healthier indoor air quality. win-win. Roy Rob,
It makes no sense that the green movement has not made it down to the local S&L financing the next spec or even custom home. I am a green architect. I can show any builder how to take any house design and make it more green and only spend 7-10% more in the process. The Green that I am talking about is not the slapping on of a solar panel (which is the last thing you should do if you want to build a green house, no I mean it, the last thing) Energy efficiency is the green that I am talking about: infiltration, insulation, conservation, efficiency, in that order. Net result is energy bills that are less than half.
So here’s the financial magic for all mortgage lenders. The cost of the 10% increase over thirty years is less than the cost of half the the utility cost and so on a monthly basis the payback is immediate.
So it actually costs less to build green than to not, even in suburbia. Why would a banker allow their money to be used without requiring it to be built green in this manner,it makes the loan safer by resulting in a lower impact on the monthly nut and is a better house for a resale value. On top of the financial reasons are that the house is less drafty, more comfoartable, and has a healthier indoor air quality. win-win.
Roy

]]> By: Roy Taylor http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-4321 Roy Taylor Sun, 12 Apr 2009 23:59:00 +0000 http://notorious-rob.com/?p=858#comment-4321 Rob, It makes no sense that the green movement has not made it down to the local S&L financing the next spec or even custom home. I am a green architect. I can show any builder how to take any house design and make it more green and only spend 7-10% more in the process. The Green that I am talking about is not the slapping on of a solar panel (which is the last thing you should do if you want to build a green house, no I mean it, the last thing) Energy efficiency is the green that I am talking about: infiltration, insulation, conservation, efficiency, in that order. Net result is energy bills that are less than half. So here's the financial magic for all mortgage lenders. The cost of the 10% increase over thirty years is less than the cost of half the the utility cost and so on a monthly basis the payback is immediate. So it actually costs less to build green than to not, even in suburbia. Why would a banker allow their money to be used without requiring it to be built green in this manner,it makes the loan safer by resulting in a lower impact on the monthly nut and is a better house for a resale value. On top of the financial reasons are that the house is less drafty, more comfoartable, and has a healthier indoor air quality. win-win. Roy Rob,
It makes no sense that the green movement has not made it down to the local S&L financing the next spec or even custom home. I am a green architect. I can show any builder how to take any house design and make it more green and only spend 7-10% more in the process. The Green that I am talking about is not the slapping on of a solar panel (which is the last thing you should do if you want to build a green house, no I mean it, the last thing) Energy efficiency is the green that I am talking about: infiltration, insulation, conservation, efficiency, in that order. Net result is energy bills that are less than half.
So here’s the financial magic for all mortgage lenders. The cost of the 10% increase over thirty years is less than the cost of half the the utility cost and so on a monthly basis the payback is immediate.
So it actually costs less to build green than to not, even in suburbia. Why would a banker allow their money to be used without requiring it to be built green in this manner,it makes the loan safer by resulting in a lower impact on the monthly nut and is a better house for a resale value. On top of the financial reasons are that the house is less drafty, more comfoartable, and has a healthier indoor air quality. win-win.
Roy

]]> By: -Rob http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-1106 -Rob Wed, 08 Apr 2009 20:11:22 +0000 http://notorious-rob.com/?p=858#comment-1106 Thanks for the comments, Erin. FWIW, I think you're correct about resource constraints. But I don't have any information on how those constraints translate into economics. In other words, shouldn't running water in Las Vegas or Phoenix be more expensive? The minute that a Las Vegas resident is paying $2/gal for running water is the same minute he'd be investing in greywater recovery systems. I think regulation is a particularly poor way to handle things, even for green issues which mostly deal with externalities, when market-based incentives will work just as well most of the time. For example, I believe that deregulating utilities (including water) or privatizing them so that those utilities have to turn a profit to stay in business would immediately create massive demand for green buildings and green technology in numerous areas of the country. -rsh Thanks for the comments, Erin.

FWIW, I think you’re correct about resource constraints. But I don’t have any information on how those constraints translate into economics.

In other words, shouldn’t running water in Las Vegas or Phoenix be more expensive? The minute that a Las Vegas resident is paying $2/gal for running water is the same minute he’d be investing in greywater recovery systems.

I think regulation is a particularly poor way to handle things, even for green issues which mostly deal with externalities, when market-based incentives will work just as well most of the time.

For example, I believe that deregulating utilities (including water) or privatizing them so that those utilities have to turn a profit to stay in business would immediately create massive demand for green buildings and green technology in numerous areas of the country.

-rsh

]]> By: -Rob http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-4319 -Rob Wed, 08 Apr 2009 20:11:00 +0000 http://notorious-rob.com/?p=858#comment-4319 Thanks for the comments, Erin. FWIW, I think you're correct about resource constraints. But I don't have any information on how those constraints translate into economics. In other words, shouldn't running water in Las Vegas or Phoenix be more expensive? The minute that a Las Vegas resident is paying $2/gal for running water is the same minute he'd be investing in greywater recovery systems. I think regulation is a particularly poor way to handle things, even for green issues which mostly deal with externalities, when market-based incentives will work just as well most of the time. For example, I believe that deregulating utilities (including water) or privatizing them so that those utilities have to turn a profit to stay in business would immediately create massive demand for green buildings and green technology in numerous areas of the country. -rsh Thanks for the comments, Erin.

FWIW, I think you’re correct about resource constraints. But I don’t have any information on how those constraints translate into economics.

In other words, shouldn’t running water in Las Vegas or Phoenix be more expensive? The minute that a Las Vegas resident is paying $2/gal for running water is the same minute he’d be investing in greywater recovery systems.

I think regulation is a particularly poor way to handle things, even for green issues which mostly deal with externalities, when market-based incentives will work just as well most of the time.

For example, I believe that deregulating utilities (including water) or privatizing them so that those utilities have to turn a profit to stay in business would immediately create massive demand for green buildings and green technology in numerous areas of the country.

-rsh

]]> By: Erin http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-1107 Erin Wed, 08 Apr 2009 19:22:37 +0000 http://notorious-rob.com/?p=858#comment-1107 Interesting points Rob - we're starting to see green homes pop up in downtown Chicago, but of course, the premium to build is a hurdle. I think you may have missed another driver, aside from a reduction in cost, which is the impending scarcity of resources for select communities. With the impending water issues facing Las Vegas, and increasingly frequent droughts across the southeast, I believe many families will start to turn to, at least, water conservation technologies just to be able to continue living in those cities. Interesting points Rob – we’re starting to see green homes pop up in downtown Chicago, but of course, the premium to build is a hurdle. I think you may have missed another driver, aside from a reduction in cost, which is the impending scarcity of resources for select communities. With the impending water issues facing Las Vegas, and increasingly frequent droughts across the southeast, I believe many families will start to turn to, at least, water conservation technologies just to be able to continue living in those cities.

]]> By: Erin http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-4320 Erin Wed, 08 Apr 2009 19:22:00 +0000 http://notorious-rob.com/?p=858#comment-4320 Interesting points Rob - we're starting to see green homes pop up in downtown Chicago, but of course, the premium to build is a hurdle. I think you may have missed another driver, aside from a reduction in cost, which is the impending scarcity of resources for select communities. With the impending water issues facing Las Vegas, and increasingly frequent droughts across the southeast, I believe many families will start to turn to, at least, water conservation technologies just to be able to continue living in those cities. Interesting points Rob – we’re starting to see green homes pop up in downtown Chicago, but of course, the premium to build is a hurdle. I think you may have missed another driver, aside from a reduction in cost, which is the impending scarcity of resources for select communities. With the impending water issues facing Las Vegas, and increasingly frequent droughts across the southeast, I believe many families will start to turn to, at least, water conservation technologies just to be able to continue living in those cities.

]]> By: Daily Digest for 2009-04-07 | Joe Spake - Memphis Real Estate http://www.notorious-rob.com/2009/04/07/thoughts-on-green-real-estate-report-from-the-2009-yarea-conference/#comment-1105 Daily Digest for 2009-04-07 | Joe Spake - Memphis Real Estate Wed, 08 Apr 2009 08:30:05 +0000 http://notorious-rob.com/?p=858#comment-1105 [...] Posted an item Joe Spake: Thoughts On Green Real Estate (Report from the 2009 YAREA Conference) « The Notorious R.... [...] [...] Posted an item Joe Spake: Thoughts On Green Real Estate (Report from the 2009 YAREA Conference) « The Notorious R…. [...]

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