Wednesday, 18 November 2009 13:51

Community Health: The Missing Value Proposition in Green Development

Sustainable development has reached a turning point in many parts of the country.

On the one hand, it has penetrated mainstream design and construction practices to the point where many architectural and construction firms design to meet minimum LEED certification as a matter of course – whether or not the building owner chooses to pursue third party verification (example). Local jurisdictions are beginning to expand LEED certifiability requirements beyond the public sector to include privately financed buildings, as well.

On the other hand, the debate over the cost effectiveness of green buildings and developments continues to rage on. In fact, it has reached, if possible, a higher pitch after the release of the New Building Institute’s study comparing LEED certified projects’ actual energy efficiency performance to the predictions in their energy model. While average energy usage of LEED certified buildings was shown to be 25-30% better than the national average, over half of the buildings in the study deviated from their design projections by more than 25% (some positively, some neagively). The U.S. Green Building Council responded to these findings by issuing Minimum Program Requirements requiring LEED projects certified under the new 2009 rating system to provide energy and water usage data if requested. This change will allow USGBC to study green building performance in greater detail than has been possible to date; however, it will not provide a definitive answer to the question of whether or not green buildings provide more value than conventional development.

This column will reframe the green development value proposition by focusing on the value that this type of development can provide to community health.  This broader value proposition is often an order of magnitude greater than the calculated efficiency savings predicted by design tools focused exclusively on building operations. Projects expanding their research to include co-benefits to community health will have access to both increased public sector assistance and enhanced property value.

Green Development Value Proposition: The Current Model

Green developments have traditionally used one or several of the following mechanisms to evaluate potential construction premiums associated with an environmentally sensitive design:

First Cost

The cost of building products is typically estimated during the design process on a product-by-product basis. By bundling design strategies into building systems, a green strategy can be shown to cost less than the conventional building assembly. For example, designing a house with exposed ceiling structure and wood paneling may appear at first to cost more than conventional construction, because wood is a costly finish, and steel structure is not typically painted to interior finish standards. However, when the savings associated with avoiding installation of a drop-down ceiling and extra ductwork are included in the calculation, the green strategy is found to cost the same or less than the conventional solution.  When the additional daylight entering the apartment due to higher ceilings is included, resulting in fewer lights needed to illuminate the space, the first cost associated with the green strategy is further reduced.

Life Cycle Cost Analysis

A life cycle cost analysis takes into account both a product or building system’s first cost and the cost or savings associated with its full life cycle. Life Cycle Cost Analyses can take into account operational considerations such as: utility costs, cleaning and maintenance costs, and the cost associated with replacing the item (once or multiple times) over the life of the building. Some Life Cycle Cost Analyses can go into a great deal of detail. However, the most common use of this tool continues to be an analysis of comparative energy and water efficiency across Heating, Ventilating, Air Conditioning, and Refrigeration equipment.  Some sustainability projects have started developing Life Cycle Cost Analyses across the triple bottom line: economics, environment, and social equity.

Hurdle Rate

Some building owners have targeted their use of Life Cycle Cost Analyses by identifying an internal rate of return for green strategies on building projects. Green building measures meeting that hurdle rate are automatically funded. In some cases, owners allow Life Cycle savings from energy and water efficiency measures to help fund sustainability measures that do not offer a direct return on investment.  As long as the entire group of sustainability measures meets the hurdle rate, the basket of measures is safe from construction budget cuts. Providence Health’s hurdle rate, for example, is a 22% internal rate of return (roughly a 5 year payback).

Carbon Footprint

Carbon reduction initiatives such as Architecture 2030, the Chicago Climate Exchange, and California Assembly Bill 32 have started to build the case for ascribing value to a low- or zero-carbon development.  Earlier this year, the U.S. EPA also initiated the process of regulating greenhouse gases under the Clean Air Act by finding that they endanger to human health. By setting steadily reducing caps on carbon emissions, these programs are laying the foundation for carbon emissions to join energy and water as an efficiency measure for building operation.  As a result, project teams have begun to calculate their designs’ likely carbon emissions using calculators such as: EPA Energy Star Portfolio Manager and Green Footstep, as well as services such as the Global Footprint Network.

All of these approaches focus exclusively on savings within the development, ignoring value generated off-site. Incorporating community health co-benefits in the value proposition increases the total value of the development as well as the roster of beneficiaries.

Characteristics of a Green Development

Tools and programs such as the U.S. Green Building Council’s LEED for Neighborhood Development, the Living Building Challenge, and the U.S. Centers for Disease Control and Prevention’s Healthy Places program have begun to lay out the links between an environmentally sustainable development and a healthy community.

This column will build on existing research to focus in greater detail on the specific economic, environmental, social, and public health co-benefits of developments that prioritize topics such as:

  • Urban Infill and Brownfield Redevelopment

  • Transit Oriented

  • Mixed Use/Pedestrian- and Bicycle-Oriented

  • Zero Net Water Use

  • Biodiversity and Local Habitat

  • Local Business and Urban Agriculture

  • Climate Change Mitigation and Air Quality

  • Green Infrastructure

How Can Community Design Impact Public Health?

Many Public Health priorities are influenced by land use and development decisions.  A series of reports and articles (visit the “Background Reading” section of this blog for more information) have begun to establish a framework for collaboration between the Public Health and Sustainability industries. For example, in 2006 the LEED for Neighborhood Development Core Committee published a report on the topic, “Understanding the Relationship Between Public Health and the Built Environment.” This report and others have outlined traditional areas of public health intervention that intersect with sustainable design priorities.

A few examples include:

  • Chronic Illness – obesity, diabetes, asthma

  • Transportation Injuries – car, bicyclists, pedestrians

  • Vulnerable Populations – children, elderly, low income, disabilities

  • Mental Health – social isolation, road rage, stress, depression

  • Waterborne, Vector-borne, and Foodborne diseases Legionella, Cryptosporidium, West Nile Virus, Lyme Disease, E. coli

At first glance, the relationship between these public health topics and the sustainable development activities listed above may not be clear. However, as this column will establish through specific examples, the linkages between the Public Health and Sustainability industries are close, multi-faceted, and in some cases conflicting.

When introducing his Master Speaker address at Greenbuild 2008, Dr. Howard Frumkin, Director of the CDC’s National Center of Environmental Health, delivered a call to action to the design and construction industry, saying: “You are all health professionals.”  This column is designed to help design and construction professionals meet that challenge.


Copyright: © Biositu, LLC, and Building Public Health, 2010.

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