Building green pays off: not all rewards for protecting the environment are ecological--some are financial.

"It's not easy being green," laments Kermit the Frog in his plaintive 1970s trademark song. Some 30 years later, being "green" in the design and construction field is not only easy, but it is becoming imperative--and often financially rewarding. Instead of being a financial drain, as some once believed, sustainable building development actually offers financial benefits--provided this approach is incorporated into the earliest planning stages, well before bricks are ordered or ground is broken.

Not only is sustainable building development good for the environment and beneficial to the health of those who will occupy buildings thus developed, as would be expected, but it also offers direct cost savings, such as lower utility costs, and indirect positive effects in the areas of financing, city/municipal planning, and marketing.

Achieving an environmentally appropriate design begins with site selection and planning, and continues throughout the project, with emphasis on:

* increasing efficient water usage,

* maximizing energy savings,

* promoting clean air,

* using materials and resources wisely, and

* paying heed to indoor environmental quality.

This article highlights some of the financial benefits of sustainable building development and will examine some environmentally friendly steps that designers and builders can take to achieve it.

Financial Benefits

Direct cost savings. Because most owner/operators of long-term care facilities and senior housing are "in it for the long haul," they have more time over which to spread their initial building costs than developers of "spec" housing, who must sell their projects soon after they are completed in order to realize a profit.

Many strategies for sustainable development can pay for themselves within three to five years. For example, by choosing energy-efficient lighting and appliances, Esperanza Apartments (independent living) and Park Place Assisted Living, part of a low-income housing project sponsored by Retirement Housing Foundation in Seattle, have saved more than $36,000 per year in electrical costs, as well as receiving a $181,688 rebate offered by the local electric company as an incentive for energy efficiency.

In addition to reducing these facilities' annual operational costs, this strategy is expected to pay for their upgrade in fixtures within three to five years. And the direct cost savings resulting from energy conservation aren't limited to lower electric bills and utility company rebates. Some states, such as New York, are attempting to reduce the tax burden for green projects. New York is looking to implement a Green Building Tax Credit, equaling 7% of the capitalized cost of construction, in an effort to encourage the incorporation of a wide range of sustainable strategies into construction projects.

Financing. Bankers are attracted to projects that are designed to control operating costs. In fact, they try to determine whether owners can increase their borrowing capacity, quicken their payback, or lower the cost of capital by showing past annual cost savings, thus making them better candidates for loans for any new projects or renovations.

In addition to rewarding strategies that will reduce operating costs, lenders also respond favorably to being shown a basis for predictable operating costs. Designing with an eye to return-on-investment strategies can help make operational costs more predictable. For example, one California community is studying getting off the electrical grid by providing its own electricity by cogeneration. It is also possible to reduce peak load demands that may cause unpredictable spikes in the cost per kwh. In the past few years, according to Fitch's 2002 median ratio for CCRCs, operational costs have increased at a faster rate than long-term care organizations' ability to generate more income. With the median utility costs for CCRCs--as identified by B.C. Zeigler and Co., for example--hovering at approximately 7 to 10% of all operating expenses, having a predictable cost base for utilities will help streamline yearly budgeting.

The need for this was highlighted by the recent spikes in West Coast energy costs, which forced projects to reallocate money from other budgets to pay the unexpectedly high costs. Having solid expectations of future utility costs not only allows resources to be budgeted for other, more worthwhile, endeavors but also makes a project more appealing to lenders.

City/municipal planning. Some cities require a sustainable approach to site development. For example, a city's zoning may limit site-paving coverage, or its engineering department may require onsite purification of storm water.

Even for those municipalities that do not have such requirements, there may be other specific advantages to being environmentally sensitive with your development. One is that sustainable building development can help shorten the approval process. The city of Portland, Oregon, for example, will expedite permit approvals for LEED (Leadership in Energy and Environmental Design) projects.

Working with city officials can benefit both the city and the project. For example, on a Masonic Retirement Community project, in an effort to minimize the amount of pavement, which disturbs ground water recharge and increases heat islands,* Mithun convinced the city to reduce the width of its standard city road by several feet and to allow a sidewalk on only one side of the roadway. This saved significant site-development costs.

Critical support from neighbors is invaluable and can be garnered by being a good neighbor environmentally. For instance, by preserving about 25% of the significant trees on a heavily wooded site, the Masonic Retirement Community in Des Moines, Washington, preserved the important existing character of the site. As a result, that owner got approval for a critical Environmental Impact Review in record time with no adverse community comments.

Marketing. Marketing the sale of units to reach the critical 70% presale required for bond financing for a CCRC often takes 18 to 24 months. Sharon Brooks, president of the retirement and senior-product marketing firm Sharon Brooks and Associates, Inc., says, "A project designed with the environment in mind offers one more tool in the marketing team's sales arsenal." Stronger sales should mean shortening the marketing time on a CCRC, for which each month of marketing can cost $70,000 to 80,000; obviously, even a week less is a significant savings. This can be achieved by showing potential clients that your project has something the competition doesn't--in this case an environmentally friendly facility that is more pleasant to live in and more favorable to the health of residents. In short, incorporating sustainable goals into a project can help set it apart from other facilities. In fact, more than 96% of homeowner respondents when queried in a recent professional builders' poll said they would pay an additio nal $500 to 5,000 in total cost for "green" construction.

In many of today's long-term care facilities, residents grow gardens, participate in bird watching, and engage in and enjoy nature as an ongoing life choice. Kendal at Oberlin, a CCRC in Ohio, has many activist residents who advocate saving wetlands or other wildlife habitats. The residents report on their social accountability in a display in the front lobby.

Research conducted by Maria Dwight, president of Gerontological Services, Inc., shows that key populations of the long-term care market have been affected by the frugality of the Great Depression or by the social and ecological activism of the 1960s. Marketing efforts can reach both groups by emphasizing a project's environmental soundness. Potential residents who endured the Depression will want to know that their costs will be kept as low as possible, partly because of the cost savings associated with sustainable building. Because of their frugality, it's likely that they will appreciate measures taken to save water and electricity.

The second group--who might be either children of prospective residents or prospective residents themselves--can be reached by the appeal of a facility in a beautifully preserved, natural setting, and by being made aware of the environmentally protective way in which it was achieved.

Some of the more sophisticated residents and board members are beginning to ask questions such as, "Is this project LEED accredited?" as awareness of efforts toward green design continues to grow.

Achieving Sustainability

Site selection/planning. The first step in sustainable building development involves site selection and site planning. In terms of environmental concerns, one factor in site selection is accessibility to transportation. For instance, planners can choose a site located close to public transportation, to give employees and guests--and residents, in the case of independent living facilities--an alternative to driving their own cars and parking there.

Another possibility is for owners to provide vans for transporting residents, to reduce the number of cars and thus minimize the use of gasoline and the amount of space needed for parking lots. Where practical, an area for bicycle storage can be provided within the facility, for employees who might want to "bike it" to work.

For any project, construction should be planned so that it disturbs the site as little as possible. Wherever possible, designers should "plan around" significant trees, so that they can be preserved and enjoyed in years to come. The slope of the ground also can be used to minimize the need for cutting and filling. Working with the existing slopes saves money, as well as maintaining the original character of the site. If a creek bed is disturbed, it can be restored and included in the landscape design. There also should be a plan in place for the dispersal of storm water, which can become a picturesque feature of the development.

Storm water should be treated on-site before being released into the storm sewer system. Many municipalities require this as a matter of course. With judicious planning, a project can turn this requirement into an affordable amenity. Rather than costly underground filtration chambers, a beautiful water feature can be created that becomes the focal point of the project. If there is not enough acreage for this, bioswales (vegetated depressions along roadways) can be used to slow and filter the water ecologically.

Finally, sustainable sites should include reduction of the heat island. This can be done by increasing the amount of landscaping and reducing the amount of paving as much as possible. At Mary's Woods at Marylhurst, a CCRC in Lake Oswego, Oregon, for example, the client chose to locate some of the parking under buildings to reduce the impact of asphalt on the site.

Efficient water usage. Several measures can be taken during planning phases to reduce water usage. For landscaping, irrigation costs can be reduced by using well water or "gray water" (the water previously used in sinks and showers) to sprinkle lawns and plants. Also, indigenous plants can be chosen that thrive on less water.

An additional key to increasing water efficiency is using equipment and fixtures (e.g., front-loading washing machines, toilets and urinals, showerheads, and faucets) that use less water. Savings, and hence payback, associated with this approach vary greatly around the country. In some areas of the drought-stricken Southwest, proving minimal water utilization may give a project the edge it needs to gain approval.

Maximizing energy savings. Three areas to consider in examining energy savings include the building "envelope," the mechanical system, and the lighting system. The most cost-effective way to save money is to create an efficient and tight building envelope. Generally this means adding insulation to walls, crawl spaces or slabs, and roofs, using efficient windows and caulking at key air-infiltration joints. This allows the heated or cooled air to stay in the building, while reducing the amount of unwanted cold air or excessive heat that enters from the outside.

Payback duration depends on the severity of the climate, but this is easy to calculate prior to construction. At Esperanza Apartments and Park Place Assisted Living, upgrades to insulation and the use of efficient windows have saved more than $14,000/year in energy costs, at today's Pacific Northwest rates.

Mechanical systems also possess various efficiency ratings. Typically, electric baseboard heating is the least costly to install in terms of "first cost" during construction but provides less control of operating costs than natural gas systems. The last few decades have seen the cost of electricity rise faster than all other energy sources. Using electricity in a project also increases the overall demand on the local electric company, and all-electric facilities could be subject to blackouts and brownouts. Gas heating systems use energy more efficiently and, in some relatively mild climates, heat pumps that take advantage of ambient temperature are another energy-efficient and cost-saving option.

It is becoming more cost-effective to use alternative energy sources, such as geothermal heat pumps, solar hot-water heating and, perhaps in some climates, wind power. On a design for the Benjamin Rose Institute campus in Cleveland, Ohio, a glazed, three-story corridor oriented west was developed. Excess passive solar heat was captured from the sun and designed to be directed into the garage to warm the air, thus minimizing the need for heating. On a project in Jerome, Idaho, which enjoys sunshine almost year-round, roofs were oriented and pitched at an angle to allow for solar panels to be added when they became cost-effective.

Electric lighting costs can be defrayed by using the new energy-efficient lamps and fixtures. These are available in a wide spectrum of color temperatures, so that fluorescent lighting need not look blue anymore. Using energy rebates offered by their electric utility as an incentive to install energy-efficient lights, Esperanza Apartments and Park Place Assisted Living saved an additional $23,000 per year.

Using materials/resources wisely. Construction can generate more than two pounds of waste per square foot--the equivalent of more than 400 tons for a typical CCRC. Most locales charge substantial dumping fees, so rather than spending money to dump waste, projects can save money by recycling. Typically, 75% of a project's waste can be recycled, including wood, masonry, dirt, asphalt, drywall, and carpet. Looking into the availability of these services is worthwhile. By directing contractors to separate waste, one 600,000-square-foot project recently saved $242,630.

Recycling construction waste, besides saving money, reduces the impact of a project on the environment. The same is true once a facility is in operation. A 150-bed nursing home, for example, generates more than 200,000 pounds of trash per year. A dining room in a retirement community seating 300 people for two meals a day generates more than 400,000 pounds per year. Recycling and composting programs would benefit the environment and, in municipalities that charge for trash pickup, could mean cost savings, as well.

Renovating a building, or "deconstructing" rather than demolishing it so that materials can be reused, are additional ways to save materials. For example, Mary's Woods reused an old convent as the centerpiece of its new CCRC. The restored woodwork, staircase, stained-glass windows, and high ceilings were preserved, giving the project an instant connection to history and a feeling of quality.

Finally, products made from recycled materials can be specified without adding cost to a project. Designers and builders should consider using recycled-glass tile, recycled carpet, and bamboo or reclaimed wood floors, for example. These are beautiful and durable materials that are readily available.

Paying heed to indoor environmental quality (IEQ). The quality of the indoor environment greatly enhances elders' lives. In thinking about IEQ, designers should consider daylighting, the views, and air quality.

A growing body of evidence is showing that day lighting and providing views have a beneficial effect on the health of patients and residents. Designing buildings narrower to allow light to penetrate deeper into spaces makes more areas accessible to light, as does enlarging windows and adding clerestories and skylights to flood interior spaces with daylight. In a postoccupancy evaluation of Esperanza Apartments and Park Place Assisted Living, where we included a three-story atrium, it was noted that residents tended to congregate under the large collection of skylights.

"Sick building syndrome"--in which inadequate ventilation combines with biologic contaminants, such as certain types of molds, to make occupants of a building physically ill-must of course be avoided. Strategies should be developed to reduce an owner's risk of this occurrence, particularly since seniors are more susceptible than younger people to airborne irritants. According to a CDC National Vital Statistics Report published in 2002, seniors 65 years and older have a high prevalence of respiratory issues, such as asthma (15.2%), chronic bronchitis (10.3%), and sinusitis (44.4%). Moreover, with this population's tendency toward compromised immune systems, seniors need environments that are carefully designed and constructed with this in mind.

Owners should direct their designers to use low-emitting materials and follow special indoor air quality procedures during construction. They also should hire special construction inspectors to ensure that water does not penetrate into wood cavities where mold and other contaminants can grow. Cigarette smoking should not be allowed, ducts should be cleaned, and air intakes should be properly located so as not to draw in noxious fumes.

Conclusion

Although this article focuses on the monetary benefits of sustainable building development--whether from direct savings, future savings, or risk-avoidance strategies--it is also important to consider the impact a building project can have on the health of the planet. Sound environmental practices promote healthy environments and are an ethical response to how we live within our world. These practices are imperative for future generations, and it is easy to start now. When you think about it this way, Kermit had it wrong: It is easy being green.

* higher-temperature areas around buildings, complexes of buildings, or urban areas.

Leslie Moldow, AIA, is a principal with Mithun Architects + Planners + Designers in Seattle. For more information, phone [phone], fax [phone], or visit www.mithun.com. To comment on this article, please send e-moil to [e-mail].