January 28, 2010
Developers Earning Green for Building “Green”
Despite a struggling real estate market, a relatively healthy demand for “green” buildings exists. Some interest stems from consumer’s concern for being environmentally friendly, while other demand is attributable to rebate incentives, tax credits, and energy cost savings. For developers and builders, “green” building construction provides an opportunity to earn a premium on a relatively high demand product.
There are three well-known organizations that certify “green” homes in Minnesota. They are: Minnesota GreenStar (www.mngreenstar.org), the U.S. Green Building Council’s Leadership in Energy and Environmental Design (also known as “LEED”) (www.usgbc.org), and the National Association of Home Builders’ National Green Building Program (“NGBP”).
Minnesota GreenStar, which is located in the Twin Cities, has developed a set of standards tailored to meet Minnesota’s cold climate housing. NAHB’sNational Green Building Program applies a national standard recently approved by the American National Standards Institute (“ANSI”). LEED applies the standards developed by the U.S. Green Building Council.
Each of these organizations offer different levels (e.g., bronze, silver and gold) of certification based on an objective checklist. Areas of interest include: sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation and design process.
In addition to the green certification organizations, the federal government’s Energy Star program provides helpful information on tax credits available to home owners and builders. More information can be found at www.energystar.gov.
Protect Yourself From “Green” Building Lawsuits
It is often difficult for home buyers and owners to ascertain the credibility and understand the implications of “green” building claims. The Federal Trade Commission (“FTC”) has grappled with “green” claims as well. The FTC has held workshops examining “green” building claims, and is expected to issue “Green Guides” regarding green building.
Builders should avoid making general and unsubstantiated claims regarding the environmental benefits of green building. Such claims may violate federal and state laws. Instead, developers and builders should enhance their credibility and marketing efforts by obtaining certification through Minnesota GreenStar, LEED or the NAHB’s National Green Building Program. These organizations provide builders and consumers with third party verification and a recognized set of standards against which to measure green building practices.
Green building offers benefits to both consumers and builders. As is true with any new venture, credibility is important. Consumers who seek green building for social and economic reasons may seek legal recourse if they later discovery green building claims fall short of recognized standards.