Reader Question: How Much Is Built Green Worth

A reader wrote in asking about my thoughts on how much Built Green is worth:

I’m looking at new construction in Seattle, and at least one builder I have found is not targeting any level of built-green status… Normally, I see builders like Build Urban, Dwell, Steele, gProjects, etc. who advertise the usual perks of 4-star or 5-star Built Green status [extra insulation, HRV units, radiant heating, triple-pane windows, etc.] My question is – How much emphasis do you think a buyer should place on this when looking at new construction, and how does it affect price?

As an example, one new construction home I toured is using hydronic heating instead of radiant and has efficient double-paned Atrium windows, and presumably however much insulation is required by code, but no radiant heating, no triple pane windows, etc. How much more is Built Green status worth (in terms of long-term savings and also in terms of how much more it would cost to buy)? Is it foolish to buy new construction that doesn’t have a 4-star or 5-star built green status?

I pointed them to some previous blog posts I wrote for Redfin based on some research by Sterling Hamilton, 14% premium for green marketing and Built Green Homes on the Rise and Hold Value Better. Unfortunately that research is now at least three years old.

Anyone have some thoughts?

About Matt

Matt , Urbnlivn's publisher, has a love for lofts, floating homes and mid-century moderns.

For years Matt resisted becoming a real estate agent preferring to be an executive in the startup world but he recently caved in the spring of 2014 and became an agent.

You can also find Matt on Twitter or skiing.

  • Tom

    Built green up to 3 star does not cost the builder anything more than they would already have to do by Seattle Building Code standards.  It does not even require inspections. 4 and 5 star require inspections that a lot of developers opt out of because there does not seem to be any measurable marketable difference between the levels the inspections cost a fair amount of money.

    I am personally one of those folks who recommends avoiding LEED completely when looking at Sustainable construction for Mixed-use/multifamily projects.  Implementing green building standards is a great idea and one that I fully support.  LEED certification however has little to do with actually developing a green/sustainable building and more to do with filling out a checklist.  It can also cost HUGE amounts of money to certify that you did something that you were going to do anyways.  In fact most every mixed-use/multifamily building built in Seattle since the 2006 Seattle Building Code came out would meet some level of LEED standard with virtually no cost impact….save for certification/inspection costs.

    Why not take that money that you would have spent on certification and expand a roof deck? upgrade every appliance and plumbing fixture in the building?  better windows? upgrade the unit finishes?

    Long answer to a short question, but when purchasing/leasing, pay attention to the sustainable features, and not the Built Green/LEED “ranking”.  It truly means very little.

  • Agent_in_Seattle

    3-4 star green built isn’t worth much… considering it’s a green wash. However, 5-star green built, or LEED certification, is worth something… I’d say 5% for 5-star, 10-20% for LEED Silver or higher.

  • Guest

    I recently bought a home in Seattle that claims to be 4 star BuiltGreen which it indeed may be but the more I looked into any verification that took place or how DPD tracks verification the less I valued the stars.
    DPD’s website talks about how documentation is to be submitted to verify stars prior to final inspection but in reality there’s no mechanism to track this in their system.  I wouldn’t involve DPD in this discussion but as long as builders are getting expedited permit review for claiming to build green then it seems DPD needs to tighten up their processes.  Similarly, real estate agents need to tighten up processes when they list a star rating in the first line of the listing but don’t have any documentation available to back up the claim after several requests.

  • Wartdc

    I think the important thing is to be knowledgeable about the checklists/processes  and ask the questions from there. There is a lot of new construction out there that says its LEED, but isn’t.  LEED targeted maybe.  I just saw a development in Tacoma, platinum targeted, and the finishes were great, and the systems (geothermal for their radiant) were. But the truth is, a builder could use the evergreen standards or LEED standards or what have you, but you won’t know per se unless you ask.  And in terms of sustainability I would look over the various standards to find out what’s important to you -big ones for me are air flow/ventilation, direction the house is sited in, and drainage, and  I’d be curious to know why did they choose hydronic over radiant, something particular in the design? And then you have some folks who are like hey I used energy star appliances that’s sustainable right?  And to Tom, there are some things on the LEED checklist that require a lot of thought and planning and honestly some people without looking at it may never have thought of heat islands or costing out permeable pavement vs impermeable and its impact on water. I think its most important as Tom and others have said, for you and we the consumers, to understand what’s behind the veneer and ask real questions about the sustainable components that matter to you.

  • http://twitter.com/annshi Ann Shi

    Hi! Ann Shi here — Program Manager at Built Green. I’m glad to see that people are having these discussions! 

    I’ll help to clarify a few things:
    1. value of green homes: Ben Kaufman over at GreenWorks Realty uses data from the NWMLS every month and has found that, on average, environmentally certified homes consistently, month over month, they do sell faster and for more in King County. Since we started tracking this information since 2008, despite the drop in home sales in recent years, environmentally certified homes still comprise 30% of homes sold, of which Built Green is the primary certification program used. While having a certification from Built Green doesn’t guarantee higher resale value for each individual home, we do see the appraisal market starting to change in favor of more energy efficient and green homes in general. Having a third-party certification helps with communicating a certain higher value in terms of resource efficiency, health and indoor air quality, durability, and build quality in general as builders who take the time to get their homes certified, tend to care more about their product and want to demonstrate that it means more than just installing an EnergyStar appliances and calling the home green. We publish these numbers in our newsletter every month. (http://www.builtgreen.net/news/news.html)

    2. cost of Built Green certification – not to specifically compare our program with LEED, but to get a home enrolled and certified is very cost-effective in comparison. For new builders getting started with Built Green, there is a bit of a learning curve, but after using the checklist for a few projects, additional certification cost at the 3-star level isn’t very much. To achieve 4- an 5-star level will take a bit more effort, as well as the cost of third-party verification. 

    3. DPD does check in with us every other month or so to make sure that homes that they’re putting through Priority Green are enrolling and certifying with our program. While the process may not be as linear to ensure an air-tight process, there is double-checking going on to make sure everyone is being honest.

    We have also been actively working with the NWMLS to help ensure that properties being checked off in the listing as a green home, is indeed certified. It is DEFINITELY important for consumers to ask for the certificate from the realtor or builder. They can also call us and we can look into it for you. 

    4. as for differentiating between star levels, here’s a quick rundown:
    at the 3-star level, it’s self-certified — meaning builders use the checklist, mark off completed items and certify the project. if anything looks suspicious, we’ll touch base with the builder to verify the item. at the 4- and 5-star level, they are required to have the project be documented and verified using one of our approved list of third-party verifiers. These verifiers have to meet a strict set of requirements before being approved — including having BPI or HERS certification, field experience, and green building education. at the higher star levels, we do have performance requirements for energy; at the 4-star level, homes must be modeled to be 15% better than 2009 WA state energy code. and at the 5-star level, 30% better.

    our checklists are geared towards builders (in particular, of residential projects) and looks significantly different from LEED’s checklist. However, we have comparable rigor and both hope to move our building industry towards greener construction methods. 

    whew. that was a lot of information. Hopefully, you at least skimmed through it and learned something about our program you didn’t quite know before!

    contact me at builtgreen@mbaks.com if you have any more questions! I’d be happy to chat more!

  • Richard Letts

    If I 

  • Guest

     Wow great Ann! Thanks for your deliberate long comment.
    Sarah@ a meticulous

    white
    furniture
    world.

  • john cocktosin
  • http://twitter.com/BlueFernRE BlueFern Real Estate

    There is certainly a market out there for this. I believe that the market has grown to where it is worth more than it has in the past.  I found the buyers that are coming in are more educated about it. “They’re more savvy about what the benefits are” says Eickelbeck. Read more in this article: Building Green in a brutal market. http://westfaironline.com/22262/building-green-in-a-brutal-market-2/ 

  • Madawa

    I live in a 1100 sq ft 2-bdrm apartment, all electric, and work at home so I use appliances, lights, 4 computers, printers, heating (in winter), etc. all day; 10 year old highrise bldg.  I just added up my electricity bills for the last 12 months – $345 total/<$30 month. 

    Certainly there's a whole lot more to Green than saving electricity, but I suspect some people will look at the cost/benefit trade-off.   For those, Green may be worth no more than what they save as a consequence.  In my case, I wouldn't have saved much had my bldg been built green.