Environmentalists, policymakers, building professionals, big businesses are united in acceptance of green buildings. Green = Good! But what about the group that matters most, the buyers?
Are buyers on board with green building benefits?
The introduction of rating systems that certify the green features and energy efficiency of buildings has helped to grow the public awareness of the benefits of green building.
Surveys indicate that today, the public is generally aware of green buildings and associates them with features such as:
- Lower operating costs and utility bills due to higher energy and water efficiency.
- Higher quality construction, since green rating systems often go beyond building codes.
- More comfortable and stable indoor temperatures.
- Healthier indoor air quality.
In the words of Ara Hovnanian, CEO and president of Hovnanian Enterprises, one of the nation’s biggest home builders, all things being equal, consumers would choose green.
However, things are not equal. To build green, developers have to invest more upfront. It is true that the cost of green construction has been going down: the premium today is 7%, as compared to 10% in 2008 and 11% in 2006.
Still, the builders will be willing to incur the additional expense only if they believe that the buyers are willing to pay extra for lower electricity bills and better indoor environment.
Are buyers willing to go the extra dollar for green?
How much more?
The data used to gauge buyers’ price sensitivity can come from industry surveys, regional research and even anecdotal information from real estate agents. One of the primary resources of information about buyers’ preferences is the National Association of Home Builders (NAHB), which regularly surveys builders and home buyers to get feedback on buyers’ demands.
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