Green_roof_house Some cities require LEED or green buildings.  Some cities fast track the permitting process for green buildings.  Some cities provide tax incentives or some sort of creative financing for green buildings.  Nevertheless, developers say the economics of green buildings don’t work–they say the government needs to do more to support green buildings.  On the other hand, the EPA says the government provides enough support via federal tax breaks up to $1.80 per square foot and other miscellaneous energy conservation programs.  What do you say? 

The fact is, the boom in green buildings is being driven by (1) tenant demand and (2) federal, state, and local incentives.  But are there any other drivers pushing the green movement? 

  1. Social Pressure – depending on your business model, green buildings may be required to keep the sustainable message consistent corporate wide. 
  2. Lower Operating Costs – even if green buildings are more expensive to build, they are cheaper to operate, in terms of maintenance, water consumption, and energy consumption. 
  3. Marketing Advantage – this is related to #1, but a little different.  Caution on the green washing, but a green strategy can be good for (re) positioning according to the competition or targeting specific consumers. 
  4. Recruiting Magnet – instead of developing a corporate presence on Myspace or Second Life, why not do something substantial by making a difference?  Some of the best talent is going to companies that have a presence in savvy, green buildings. 
  5. Impairment – I’ve read from both Harvard Business Review and Ernst & Young that non-green buildings are going to be obsolete and could face big-time impairment charges. 

Green buildings are leasing up and other buildings tend towards higher vacancies (lower rents).  The best talent is going to the greenest companies.  Oil and coal companies are irritating customers and worrying shareholders because they won’t change their ways.  People are choosing companies with their wallets–they stop frequenting environmentally insensitive companies.  Water and energy is becoming a constrained resource and businesses that lower their costs by using less resources have a competitive advantage over competition.  These intangibles need to be considered when thinking about green buildings, because after all, it’s about value not cost.