Is Now a Good Time to Build Green?

December 16, 2008

With real estate headlines full of doom and gloom, we thought we’d spread some holiday cheer by highlighting a number of reasons to be optimistic about the state of green building. The recently released McGraw-Hill Construction's Green Outlook 2009 considers green building a bright spot in the current financial climate. Here are some of the reasons why.

Going Up?

Incentives for green building are on the rise. The incoming administration made a campaign promise to create five million jobs in the clean technology field. This bodes well for green projects. Consider that the President-elect is from Chicago – a city that has earned high marks for green building, having four buildings with Platinum LEED ratings. It remains to be seen if Chicago’s efforts will carry over into the administration, but so far President-elect Obama has stayed true to his energy policy. His plan is to use $150 billion as incentive for clean energy technology in the private sector.

Going Down…

Transportation costs have plummeted in recent weeks. As of this writing, the price of gasoline is down roughly $2.40 from this year’s high. Copper is down 63%. Aluminum is down about 40%. Steel also appears to have hit a high in July and has been falling ever since. Concrete prices have been the last to fall. They are starting to slide, although off only a fraction of a percentage compared to other building elements. Conclusion: building costs are shockingly low. While it is true that some recycled elements of green building carry a premium, their overall price is falling along with everything else.

The Double Edge Sword…

Given the state of the economy, labor costs are lower than they have been in years. Concern for American families prevents us from presenting this fact as a positive, but it is something to consider when looking at the bottom line. It also means there are many available contractors from which to choose.

If You Build It, Will They Come?

In this tough economy, which businesses are thriving or doing well enough to take advantage of a green move? Government, education, medical, architectural and technology firms are all good candidates for green tenants.  Admittedly there are government mandates fueling some of these potential moves, but don’t underestimate the value of health benefits to occupants of a green building. As previously stated, health care costs are rising.

There is evidence of new global competition and commitment in green building. On Monday December 8, Arnold Schwarzenegger delivered an impassioned speech to the UN.  "The green rules and regulations that will help save our planet will also revive our economies.” 

Doubt regarding the future of green building? Terminated.