Green Costs Create Roadblock to LEED Certification

May 13, 2009

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While many developers are working towards sustainable building practices, some are not seeking the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification because of the cost.

John Zinner, a Santa Monica, California-based LEED project manager, told the Santa Monica Daily Press, that soft costs — the design process — of going for certification could range roughly from $40,000 to $200,000, depending on the size of the project.

As an example, Community Corporation of Santa Monica (CCSM), a local developer of affordable housing, owns approximately 80 properties in the city, a combination of apartment rehabilitation and newly constructed complexes and is a supporter of sustainable design; however, only one of its projects is LEED certified, reports the Santa Monica News.

Joan Ling, the executive director of CCSM, said it doesn’t seek LEED certification for new construction because of the cost, although it’s committed to doing every project at LEED silver level equivalent or above. She estimates the additional cost at about $100,000 for certification per project.

According to the article, there are more than a dozen LEED-certified projects in Santa Monica, including The Ambrose Hotel, Public Safety Facility, Civic Center Parking Garage and two buildings on the Lantana media campus, as well as a series of other developments that could qualify for certification.

LEED certification costs breakdown as follows, according to the article:

Project registration fee: $450 for members and $600 for non-members.
Certification fee based on the size of the project and square footage: $1,750 to $17,500 for members to $2,250 to $22,500 for non-members.
Commissioning agent: Starts at about $15,000.

In addition there are extra costs which may include a consultant to help navigate the applicant through the certification process, reports the newspaper.

Yet owners of commercial buildings may be able to charge higher rents based on their building’s status. The Royal Institution of Chartered Surveyors (RICS) studied the financial performance of “green” office buildings in the United States, finding that a commercial building with an environmental certification will rent for about three percent more per square foot with the difference in effective rent estimated at about six percent per square foot. The increment to the selling price may be as much as 16 percent, according to the study.

Despite the additional cost for environmental certifications, more companies across all industries seek LEED certification and are designing their buildings to meet energy efficiency under the Environmental Protection Agency’s “Designed to Earn the Energy Star” program.

Columbia Credit Union in Vancouver, Wash., for example, recently earned the LEED Gold Certification for its Washougal Branch. Completed in April 2008, the branch is the first LEED Gold Certified financial institution in Clark County, Washington, according to the bank. The savings have been significant. The branch has used about half the gas and electricity and 40 percent less water on average than comparable branches in the first year.

Columbia earned 42 points toward Gold Certification for site selection, energy use, lighting, water and material use, waste management, air quality and innovation in design. It also achieved a 75 percent reduction in construction waste.

Green features include an omni-directional skylight, a cistern for rainwater collection, porous concrete, FSC certified lumber, corn fiber work station panels, and guest chairs made from recycled seat belts.

According to UK’s Waste & Resources Action Programme (WRAP), architects and designers can make a difference in reducing waste through their design decisions. WRAP has launched an International Open Ideas Competition to explore and develop the principles outlined in its Designing out Waste guide.

In addition to the environmental benefits, some companies can also realize financial gains through certification. According to a recent study by The Royal Institution of Chartered Surveyors, which evaluates the financial benefits of investing in green buildings that meet LEED and/or Energy Star requirements, a commercial building with an environmental certification will rent for about three percent more per square foot with the difference in effective rent estimated at about six percent per square foot. The increment to the selling price may be as much as 16 percent, according to the study.

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Reader Comments

100k additional cost for certification? on what a 10 million project?absent a gov standard thanks to bush and chaney the private sector has stepped up with green certification costs and ratings…for what free?
with real estate down 50% because of the financial sector that builds to convential construction and costs?
this is why we now have a lowering of the green bar by the nahb..for this exact reason.the cost…..and now what do we have? many competing certifications..because of the failure of bush/chaney.
and if any idiot anywhere had one brain cell in there head…sustainability is going to be the next mandate for the corporation the people want it.this is reason enough to certify green. never mind higher rents,lower
water costs,lower energy costs,15% improvement in productivity,market differenator,lower vocs, i could go on and on.

sustainable guy | May 14th, 2009

Although LEED certification is a little expensive now, its benefits will absolutely pay off in the end. LEED certification is catching on quickly in the building industry; LEED certification will soon become second-nature. As that happens, the price should go down a bit.

Lesley LEEDs | July 15th, 2009

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