Oct
13

Capturing the Value of Green Buildings

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Talk to any green building expert and he or she will tell you that high-performance buildings—those that save energy and water—can be built with modest or no increases in cost. And the list of benefits for doing so is long: lower utility bills for owners and tenants, healthier work environments, and a more valuable asset for owners (and investors), among other positives. So what’s stopping high-performance buildings from becoming the norm?

For those unfamiliar with this debate, stubborn barriers exist. In the commercial sector they include split incentives, short investor hold periods, a knowledge gap, and others—you can find out more about these barriers in the first chapter of IMT & MIT’s (yes, you read that correctly) Guide to Energy Efficiency Finance for Cities.

A key barrier in the residential sector is proper appraisal. An inherent part of real estate is internal valuation (as in, hands rubbed together eagerly: how much is my building worth?). Real estate appraisers are in a critical position to translate an owner’s hard work on green upgrades into hard currency and developers and owners need to work more conscientiously with appraisers to highlight the value of energy-efficient features.

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