News
11.10.2008
What Recession?
Green firms see bright future in dark times

Consumers may be relieved that energy prices have fallen in step with the wider markets, but cheap oil has many environmentalists worried that the hard fought gains of the recent “green revolution” could be wiped out. As companies and consumers alike feel the pinch, there have been reports that hybrid cars and LEED ratings could become luxuries we can no longer afford. Fortunately for architects, many in the building industry seem to be drawing the opposite conclusion.

“So far, we haven’t seen any slowdown,” said Michelle Moore, senior vice president for policy and public affairs at the U.S. Green Building Council. “Our green buildings numbers are really strong, our membership numbers remain strong. In fact, we’re at record levels across the board, from registrations and certifications of projects to the number of people taking the LEED AP test. They’re all way up.”

The council is not the only one continuing to see growth in the face of a cooling construction market. In interviews with a number of architecture, development, and construction principals, the story was the same: There is no turning back. In fact, sustainability might be the industry’s salvation.

“Just because the credit is hard to find, you’re not going to build a bad building,” developer Douglas Durst said. “You’re not going to leave out an efficient HVAC system or a co-gen elevator. You’re still going to build that in because that is now what the market demands.”

As the man who was a driving force in bringing sustainable design to the city’s office market at 4 Times Square, Durst should know. He said that in this day and age, all the top tenants demand green projects, a fact the banks know, making financing such projects easier, not harder. With credit so difficult to come by, a few sustainable features or a LEED application may be the deciding factors on that eight-figure loan.

The same is true of housing, especially mixed-income and affordable housing projects. Jonathan Rose, president of the Jonathan Rose Companies, one of the city’s largest affordable housing developers, said that many financiers not only favor sustainable projects but often award more money to them, such as James Rouse’s Enterprise Community Partners. He also pointed to the special tax credits that are available. Rose said that because publicly funded housing is less susceptible to market swings, it will see continued investment, which translates to continued green growth.

Besides falling demand, the other complaint about green design is that it costs more, at least up front, an intolerable burden during a downturn. But just as demand has risen in recent years, so have costs fallen. “Green is still a good play, even in this market, because we have gotten the so-called cost burdens down to one or two percent, which is negligible,” said Michael Dean, chief sustainability officer at Turner Construction. Bruce Fowle, principal at FXFowle, said that a slowdown can give architects the time they need to devise new, cheaper, and smarter sustainable solutions that do not raise costs.

The one area where there could be some decline is on the bleeding edge of the industry, where cost still drives innovation. “You might not see as many photovoltaics or integrated wind turbines or other bells and whistles,” Durst said, “but that doesn’t mean the projects will be any less green.” He predicted any lag in technical development would last no longer than the recession itself, and might subside sooner.

One area where such high-level design could see a boost is from Washington. President-elect Barack Obama trumpeted “green collar” jobs on the campaign trail as a way to revive the country’s moribund industrial sector, a commitment that could feed into more R&D for sustainable building technology and construction methods. “You can’t outsource this stuff,” Dean said.

In many respects, the Feds have fallen behind state and local governments, which have begun to find creative ways to require projects, and particularly those drawing public money, to go green. New York, California, and Washington are among a number of states requiring all government buildings to achieve some level of green certification, usually LEED Silver.

New York City now makes the same requirement of any cultural institution using more than $2 million in city funds. Schools have also taken up the banner because of the desire to provide healthy environments for children.

Lately, the U.S. Green Building Council has put its weight behind rehabilitation work, something it sees as especially viable during a recession. “This is an incredible opportunity for the industry to turn its focus to existing buildings,” she said. “In any given year, new construction makes up only 10 percent of the overall building stock. But now, there will be fewer people building but just as many people wanting sustainable living or working environments. We hope architects will respond accordingly.”

As they should, Rose said, since sustainable work can help insulate companies from future downturns. He cited the Vance Building, a green office renovation his firm undertook in Seattle, which raised its occupancy rate from 68 to 96 percent, even with a significant rent increase.

Between traditional and sustainable work, architects involved with both said that those projects boasting green features seemed to be doing better at the moment, too. George Miller, president-elect for the AIA, said he had heard as much from a number of his colleagues; it is also the case at his firm Pei Cobb Freed & Partners, where nearly every project has some sustainable feature. “Everyone’s looking for it, and they will continue to do so, no matter what,” he said.

And deep down, the name says it all. “One hopes this isn’t a movement tied to boom and bust cycles,” said Colin Cathcart of Kiss+Cathcart, Architects. “One hopes that sustainability actually promotes sustainability.”

Matt Chaban