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back to green buildingGreen Building Costs

Investing in alternative materials, energy-efficient technologies, system upgrades, or improvements to the building envelope can increase capital and construction costs. Going green requires builders to look beyond first costs and to factor in the long-term operational savings resulting from green building practices, along with any associated environmental, productivity, health, and community-related benefits. Incorporating the costs or economic value of these variables into a life-span analysis will often prove that initial project costs are worth the investment over the long run.

The first costs of constructing green buildings have substantially decreased over the years due to the marketplace's growing experience level in the green building arena. According to the NYC Chapter of the U.S. Green Building Council's Estimated Costs of LEED Construction in NYC, first costs used to be 5 to 15 percent higher for green (LEED-certified) commercial and residential buildings. Based on an assumed average cost of $200 per square foot, first costs now range anywhere from 0.25 to 3 percent higher (for commercial buildings), and 3 to 18 percent higher (for residential buildings). There are examples of green buildings that cost the same or less than a non green building. In most cases, when there are higher initial costs, they are offset by decreases in operating costs over the life span of the building.

It is anticipated that building costs for LEED-certified green buildings will continue to decrease as the architectural and engineering communities become more knowledgeable, construction firms gain more experience, materials become more competitively priced, and the LEED Building Rating System evolves to serve specific market segments, such as large urban areas.

When determining the cost effectiveness of going green, it is important to look beyond initial building costs. Operational cost, worker productivity, and real estate market trends should be included in the cost analyses. While the use of green technologies can reduce the energy costs and other operational costs of a building; it is estimated that increased productivity, higher rents, lower turnover rates, and other real estate benefits create a much larger return on investment than cost savings from operational costs alone. With all of these factors accounted for, the Royal Institution of Chartered Surveyors (RICS), an international organization for surveyors, has determined that a green building "can provide significant competitive advantage to business."

Costs for building green can also be offset by a variety of government- and utility-sponsored economic incentive programs for businesses, institutions, homebuilders, and homeowners who invest in energy-efficient technologies or renewable energy resources. The NYC Department of Buildings proposed building code revisions include rebates for various green design options. Go to helpful links about green building to learn more about economic incentive programs for green building.

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