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    Real Estate
    Friday, September 29, 2023

    Builders increasingly adopt green home practices in 2017

    More home builders are placing importance on energy efficiency and other green building practices, according to a study conducted by the National Association of Home Builders.

    The study, part of a series undertaken with Dodge Data & Analytics, found that an increasing share of builders used green practices in a majority of their projects. The study also indicated that the share of builders who give more attention to green building practices is expected to increase in the near future.

    "These findings show that green building has become an established part of the residential construction landscape," said Granger MacDonald, chairman of the National Association of Home Builders. "It is no longer a niche business; our members recognize the value of building green and are incorporating these elements into their standard business practices."

    Green building popularity

    One-third of the builders surveyed for the study said a majority of their work—at least 60 percent—involved green home construction or remodeling. This included 19 percent who identified as "dedicated green builders" who used green building practices for at least 90 percent of their work.

    This share was up from 31 percent in 2015, while the share of dedicated green builders rose from 18 percent. The study projects that 38 percent of builders will use green practices for a majority of their projects in 2019, with the share of dedicated green builders increasing to 22 percent. The share of majority green builders is expected to grow to 44 percent in 2022, including 31 percent as dedicated green builders.

    Small building firms with 10 projects or less each year were more likely to be dedicated green builders, with 24 percent saying 90 percent or more of their homes used green practices. Only 12 percent of large builders, who complete 25 or more projects a year, were classified as dedicated green builders. However, the study suggests that the dedicated green builder share for both groups will be just over 30 percent in 2022.

    One out of five single-family home remodelers said a majority of their work involved green building practices, up from 14 percent in 2015. In 2022, the green building share among these remodelers is expected to reach 35 percent.

    Among multifamily builders, 36 percent said a majority of their projects used green building practices. This share was up from 23 percent in 2015, and is projected to grow to 47 percent in 2022.

    Green practices

    Nearly all builders in the study identified energy efficiency as a top feature to improve performance in a green home. Ninety-five percent of single-family builders and remodelers and 90 percent of multifamily builders considered this to be important.

    Among single-family builders and remodelers, 63 percent named a healthy indoor living environment as a top feature. This was followed by durability (50 percent), efficient use of natural resources (32 percent), water efficiency (30 percent), a reduced carbon footprint (13 percent), and lower impact development (5 percent).

    Multifamily developers were more likely to consider water efficiency to be important, with 48 percent naming this as a top quality. Fifty-two percent cited a healthy indoor living environment, followed by durability (31 percent), efficient use of natural resources (23 percent), low impact development (17 percent), and a reduced carbon footprint (10 percent).

    Some green home features were nearly ubiquitous, with all or almost all builders saying they were using the practice. These included efficient lighting, HVAC systems, water heating, and appliances; windows and insulation exceeding code minimums; increased moisture control and ventilation; durable materials; reduced construction waste; and materials with low volatile organic compounds.

    Although less common, between eight and nine out of every 10 builders used efficient practices such as efficient plumbing, drought-tolerant landscaping, recyclable or renewable materials, reclaimed materials, and certified sustainable lumber.


    Renewable energy systems remained less common. Two-thirds of single-family respondents, along with three-quarters of multifamily builders, said they did not offer renewable systems or only included them at the customer's request.

    One out of four single-family respondents and 16 percent of multifamily builders said they offered renewables as an option. Nine percent of single-family respondents and 8 percent of multifamily builders included renewables in all of their projects.

    A higher share of builders said they expect to incorporate more renewable options into their work in the next three years. Thirteen percent of single-family respondents said they would include it in all of their homes, while 39 percent said they would offer it as an option. Twenty-two percent of multifamily builders said all of their homes would incorporate renewables, while 19 percent said they would have it as an option.

    Ground source heat exchange systems were the most popular renewable system used by single-family builders, with 25 percent saying they used them in 2016 and 45 percent expecting to use them in 2019. Twenty-three percent said they used solar photovoltaic systems, but the share expecting to use this technology in 2019 leapt to 43 percent.

    Multifamily builders were more likely to use solar power, with 27 percent saying they had installed a photovoltaic system. The share expecting to use solar PV systems doubled for 2019. Nineteen percent said they used solar water heating systems, with 38 percent expecting to do so by 2019.

    Twenty-nine percent of single-family builders said they have built a net zero home, or a "near net zero" or net zero ready residence, in the past two years. This type of home produces enough renewable energy to cancel out the building's energy use each year. Forty-four percent said they expect to be building this type of home within two years.

    Eighty-nine percent of these builders said they believe there is more consumer demand for net zero homes. Eighty-two percent thought net zero homes had a competitive advantage, and 81 percent considered them more cost effective.

    Influences and obstacles

    No overarching influence was identified as driving builders' decision to use green building practices. Some factors cited by a majority of respondents included government and utility incentives, customer demand, the prospect of producing a higher quality product, and potentially higher appraisals.

    The higher cost of building green was cited as a key obstacle to green building. Sixty-four percent of single-family respondents and 63 percent of multifamily builders said the unwillingness of consumers to pay higher costs was a concern. Seventy percent of multifamily builders and 56 percent of single-family respondents said they considered higher upfront costs for green building to be a concern.

    Although respondents were also slightly more likely than in recent years to say they thought homeowners would be unwilling to pay more for green building features, the majority thought consumers would be willing to put down more money for future savings. Seventy-one percent of multifamily builders and 58 percent of single-family builders thought homeowners would pay 1 to 4 percent more for green features, while 45 percent of single-family remodelers thought they would pay 5 to 10 percent more.

    The study was based on responses from 342 building firms, including 231 single-family builders, 63 single-family remodelers, and 48 multifamily builders.

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