Green Building Value Should Not Be Calculated Based On Short-Term Payback Analysis

BuildingGreen.com’s Peter Yost has a provocative post entitled, Capture Green Value Over Time, Not with Short-Term Payback Analysis. He makes a good point:

If we let simple or even net-value payback analysis alone drive the economics of high-performance buildings, we might as well throw in the towel. It is truly crazy to apply just this approach to long-lived durable goods, such as homes. Yes, it is critical that the lower operational costs are factored into a home’s value. But homes deliver their value over time to a series of owners. The initial owner or renovator needs to know that all those involved in the financial process will recognize their investment in high performance. And they need to be certain it will fully transfer when they eventually sell their green home.

While I agree that real estate agents, appraisers and lenders need to be better informed so as to better inform their clients, I still think that a critical factor is being overlooked: Quality. The NAHB, whom Yost cites in his article, has done a lot in recent years to promote green building practices, but at the end of the day, it is still an organization that exists solely to support builders. I encourage green building professionals to take a hard look at the NAHB Residential Performance Standards. These standards set a bar for quality and performance that fall below the expectations of many in the green building movement.

For homes to be truly sustainable, the standards for quality need to be raised significantly from the current standards of practice.