Real estate and the environment

Sustainability is gaining traction in the real estate industry

"Within 15 years, I predict green building goes away," says Steve Glenn, founder of Santa Monica-based Living Homes, which "weds profit with purpose," working with leading architects to create sustainable, modern, prefabricated homes. The way Glenn sees it, going green will be a given "because resources, energy prices and water prices will be such that you sort of have to, either because consumers demand it and/or cities require it."

The environment is at the forefront of the nation's consciousness. According to a recent Tufts University report commissioned by the Natural Resources Defense Council, a comprehensive estimate concludes that by 2100, doing nothing about global warming will cost the U.S. economy more than 3.6% of the GDP. In today's dollars, that's $3.8 trillion.

Because of its tremendous consumption of energy and resources, the real estate community has the potential to put a serious dent in that figure.

"Buildings use something like 40% of the energy we use (in the U.S.)," says principal Henry Siegel of Emeryville, Calif.-based Siegel & Strain Architects, a firm committed to sustainable design. "So if we can make a major reduction there, we can make a major reduction in energy use and greenhouse gases."

As Glenn points out, however, consumer demand is key. Fortunately, despite the real estate industry's current gloomy climate, interest in sustainable architecture and development has been growing at a healthy pace.

"The market has become much more aware of environmental issues within the last five years," says George Penner, co-founder and principal of brokerage firm Deasy/Penner & Partners, which specializes in architecturally significant, design-forward homes. "The demand has really gone from zero to being top-of-mind with many environmentally conscious home buyers," he says.

Joe Harberg, principal partner at Dallas-based Current Energy, which specializes in commercial and residential energy-efficiency solutions, says he's seen "a groundswell of energy-efficiency products, green thinking and an overall concern for the planet's sustainability over the past seven years."

Harberg is so convinced of the importance of sustainability that, as an AFI Dallas International Film Festival board member, he partnered Current Energy with the festival to create the Environmental Visions Competition's Current Energy Earth Friendly Award, a $10,000 prize.

It's far from the first time that environmental activists and the entertainment community have joined forces to raise awareness. In fact, members of the real estate community cite envirodocs like 2006's "An Inconvenient Truth" as one of the major reasons for the growing market for sustainable development.

"That's why (Al Gore) got a Nobel Peace Prize. There is no question that those movies -- 'An Inconvenient Truth' more than anything -- really helped a more mainstream audience, not just the tree huggers, appreciate issues involved in climate change," Living Homes' Glenn says.

"I think for some people 'Inconvenient Truth' was a big moment in their realization of the scope of the problem," says Greg Reitz, a principal and founder, with Steve Edwards, of Culver City-based ReThink Development, a real estate development and consulting firm that specializes in sustainable building practices.

As awareness and market demand have increased, so has homeowners' environmental savvy. Understandably, many first turn to products like solar panels. But for homeowners and developers building sustainable structures from the ground up, products -- and even entire building systems -- should be among the final considerations.

As Siegel explains, sustainability starts with the simple principle of passive design. "We look at how a building would work without any electricity, without any propane or gas or fossil fuels of any kind, and try to design the building itself -- its orientation and its envelope -- so that it performs without any building systems," he says.

"Sustainability is not a concept for design. Sustainability is a technical issue of solving problems, meaning our buildings respond to the environment and try to use less resources and less energy," explains Lawrence Scarpa, a principal at Santa Monica-based Pugh + Scarpa Architects, which won a host of awards for

Colorado Court, a 44-unit affordable-housing development on the West Side that is the first 100% energy-neutral building of its type in the country and holds a LEED Gold rating. (The Leadership in Energy and Environmental Design Green Building Rating System is a third-party certification program administered by the U.S. Green Building Council and is the national standard for green high-performance buildings.)

Scarpa put that idea to work on his own home, dubbed the Solar Umbrella. Strategically situated on its small Venice, Calif., lot, the home features a stormwater-retention system and an 89-panel photovoltaic array. "I think our power bill is about $500 a year," Scarpa says.

Similarly, Kovac Architects principal Michael Kovac's in-the-works Pacific Palisades home, Sycamore House, will serve as a laboratory for his firm's ongoing research into sustainable design, and it's expected to be one of the first California homes to receive a LEED Platinum rating. Kovac and his wife even opted for grazing goats instead of "guys with chain saws" to clear the foliage from the site. Then, rather than demolish the existing structure, Kovac had nonprofit organization the Reuse People "deconstruct" the house, donating more than 75% of its materials to Habitat for Humanity and low-income housing in Mexico.

That practice is directly in keeping with another principle influencing the direction of design in general and sustainable real estate in particular: Cradle to Cradle. The brainchild of renowned architect William McDonough, founding partner of William McDonough + Partners, the principle dictates that materials should be perpetually circulated.

"We use Cradle to Cradle thinking to drive our approach to architecture," McDonough says. "That means that we start with nature's principles -- waste equals food, use current solar income and celebrate diversity -- as the driving principles for our projects."

But while many in the real estate community are striving to work with nature's principles as a matter of course, the industry has a long way to go, and the biggest obstacle isn't bureaucracy or technology or even cost, which ReThink's Reitz notes can often be "a lot smaller than most people would think." It's attitude.

Scarpa sees it as a cultural mind-set. "In this country, we're always comparing the payback. That's always the question: How long is the payback? And comparing what is our capital investment relative to when we get our money out of it -- that's wrong how we determine that," he says. "We have to look at the true cost of not being sustainable."
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