Builder Survey Shows Energy-Efficient Construction is Here to Stay
by the National Association of Home Builders
Homes are increasingly being designed, constructed, and operated toward the greener end of the construction continuum and many of the design features associated with green building carry direct consumer benefits, such as greater comfort, lower utility bills, reduced maintenance, and increased value. New research only continues to reinforce the benefits of green building. For example, a recent study by the American Council for an Energy-Efficient Economy found that every dollar invested in energy efficiency yields $1.24 to $4 in benefits. An Environmental Protection Agency analysis of upgrading homes to ENERGY® STAR insulation and air-sealing requirements showed that owners saved an average of 11% on annual utility bills. Also, a sales price analysis in a recent building performance association study showed that high-performance homes, on average, have a 9.5% higher sale price.
Is green here to stay? All indications are yes. Single-family green residential construction market share has continued to grow, rising from 2% in 2005 to 33% in 2017. Approximately one-third of the builders surveyed in the 2017 SmartMarket Brief: Green Multifamily and Single Family Homes said that green building is a significant portion of their overall activity, more than 60% of their portfolio. Also, 88% of builders reported they are incorporating features to make their homes greener than they did two years ago. Ongoing research by The National Association of Home Builders (NAHB) and its partners also shows that many home buyers are interested in green.
The NAHB’s report, Housing Preferences of the Boomer Generation: How They Compare to Other Home Buyers, asked home buyers across four generations, which included millennials, Gen Xers, baby boomers, and seniors, what features they consider essential and desirable in a new home. Energy-efficient strategies, including ENERGY STAR appliances and windows and above-code insulation, made the most-wanted list and would positively influence the purchase decision of 80% or more of all home buyers.
The 2017 Green Practices Survey was conducted to gather information on sustainable and high-performance building practices being used in single-family home building in 2016. Responses were aligned with practices found in the National Green Building Standard to determine how green the typical single-family home is regardless of whether it obtains certification under the standard.
The survey results showed that resource efficiency, site, and lot design currently are the most challenging aspects of residential green building. On average, typical homes did not meet the thresholds for bronze in these categories. As homes must meet the minimum requirements across all sections of the National Green Building Standard for certification, these gaps prevented more homes in the survey from being eligible for certification. The NAHB National Green Building Program was unveiled in February 2008; the subsequent National Green Building Standard is now in its third iteration, with another update anticipated in early 2020.
Dodge Data & Analytics’ Green Multifamily and Single-Family Homes 2017 report surveys home builders about the level of their green building activity, the costs and benefits of building green, the drivers and obstacles influencing their decision to build green, and the green practices and features that they most widely use and value. The current study demonstrates that a high percentage of single and multifamily builders and remodelers are engaged in green building and even more expect that involvement to grow. It also reveals lively growth in the use of renewable technologies, which is helping to drive more construction of net-zero homes by builders. The increased maturation in the green residential market is also evident in the reduced influence of obstacles that previously hampered the market, and in the moderate influence of a range of drivers encouraging builders to build green. All findings suggest that residential green building is a strong market with vigorous growth expected in the future.
One-third of single-family home builders currently build a majority of their homes green, a slight increase from the previous study in 2015. Over half of them are dedicated green builders, doing more than 90% of their projects green. As they have in all the previous studies, home builders have high expectations about growth in the number of green homes they expect to build in the next five years. Most of the growth anticipated is among those who expect to be dedicated green builders, specifically doing more than 90% of their projects green. By 2022, that percentage grows from 19% to 31%, nearly 1/3 of all single-family builders surveyed.
The percentage of multifamily builders doing more than 60% of their projects green increased dramatically from the study published in 2014 from 23% to 36%. This growth suggests that multifamily builders’ experience with green building increased dramatically through the recent boom in that sector. That high-level growth is expected to continue through 2022, with nearly 1/2 of multifamily builders expecting to be doing the majority of their projects green. Even more encouraging is the growth among builders dedicated to green building. By 2022, the percentage who expect to be building green at that level increases dramatically from just 29% in 2017 to 40% in 2022.