Consumers Coming On Board

Interesting post on Consumers Buying Into Sustainability
on Bulider Online. Builder Online reports that "energy efficiency" garnered an 88 percent favorability rating among consumers. This reflects, I believe, a growing opportunity for green buildings to command higher rents and be more robust in a declining real estate market.

California Dreamin'

California has been on the cutting edge of climate change regulation, including passing the first state-wide code for green building and a new measure to limit sprawl. http://www.jetsongreen.com/2008/10/california-find.html

I have discussed here before that regulation of environmental issues can have a positive benefit--http://greenlaw.blogspot.com/2007/09/regulation-it-really-works.html--and there has been much discussion on the campaign trail about the healing power of green jobs for the economy. The Berkeley Center for Energy, Resources and Economic Sustainability had a study out today which reveals that California's climate change regulation, and the accompanying reduction in energy use, has been very good for the economy. http://are.berkeley.edu/~dwrh/CERES_Web/index.html

The Value of Density

Two articles this morning brought to mind the the classic urban theory that the density of urban environments creates cross-pollination and agglomeration benefits. GreenBuildingsNYC had an article about four closely located green businesses in New York City's Lower East Side http://www.greenbuildingsnyc.com/2008/03/05/the-lower-east-side-nyc%e2%80%99s-emerging-green-retail-district/ and another about a proposed green industrial park http://www.greenbuildingsnyc.com/2008/02/29/new-york%e2%80%99s-first-green-industrial-park-breaks-ground-on-long-island/ .

Essentially, the argument goes like this--cities are places where people are densely packed together. As a result of the clustering of people and businesses, innovation increases and there is a benefit in human capital externalities (ie more businesses, more jobs, more money, etc.). If it all seems a bit esoteric, think about fashion. You can get a lot more ideas about what to wear to work on the subway in New York City than alone in your car on a suburban commute.

The same concept should work with green businesses and green building--the more of these entities grow up in a small geographic region, the better they will be able to feed off one another and innovate. This is a good argument for local government incentives to stimulate green building and businesses. One green building is good, but a cluster of greeen buildings with workers in green businesses will foster more carpools, more sharing of ideas, more emulation--in short more innovation which will lead to the afforementioned human capital externalities. With the growing concerns over a faltering economy, fostering dense clusters of green innovation is one way to combat the tide.

Economic Value of Sustainable Communities

Individual green buildings are important, but the long term goal should be to develop sustainable communities. A new report by the Price of Wales' foundation demonstrates the economic and social value of walkable, mixed use and mixed income communities. The report is available here http://www.princes-foundation.org/index.php?id=8.

Among the most interesting analyses is a comparison among new urbanist communities in different supply and demand markets. The report concludes that the new urbanist model "appears to provide the greatest value enhancement where development is taking place in a moderate demand market." However, it records a 30% premium for the new urbanist community in a high supply market, which may be an even more important conclusion.