Every two years, NAHB works with Dodge Data and Analytics (formerly McGraw Hill), to release a Green Residential SmartMarket Report. The report takes a look at green building market trends and activities among home builders and remodelers for single-family, multifamily and remodeled homes. Topics include level of green activity, changes in green building practices, use of green methods and materials, drivers and obstacles to green building, green building marketing, and several more. Repeating the survey every couple of years helps show where activity is growing and declining.
Data for the Green Multifamily and Single-Family Homes 2017 SmartMarket Brief was collected from December 2016 through April 2017. The survey had 342 respondents from all over the United States, with companies of any size that are either single-family or multifamily builders or remodelers. This article discusses some of the key findings, as well as a glimpse into the future of green and high-performance home building.
The respondents expect green building activity to increase in the upcoming years, with 59 percent of the responding firms reporting 31 percent or greater of their home building activity being green by 2021. This is a big change from 2014, when only 32 percent of firms reported that same level of activity.
Green building triggers: single-family
When it comes to building green homes, many factors are seen as being relevant to increasing the number of green single-family homes and are referred to as triggers. Customer demand and affordability top the list of single-family triggers for green building.
Green building triggers: multifamily
The list of triggers for green multifamily building looks somewhat different than single-family. The primary factors seen as being relevant to increasing the building of green multifamily homes are much clearer than in the single-family market, for which nearly all the drivers are fairly close in importance. In multifamily housing, third-party incentives, customer demand, and code changes are seen as potential major drivers to increasing green multifamily home building.
Obstacles for building green
The anticipated increase in green home building could be because since 2014, respondents are starting to see an increase in consumers’ willingness to pay for green features and homes. Plus, respondents feel that first costs are not as high, and lenders and appraisers are beginning to better understand the long-term value of a green home. Yet these three issues still top the list of obstacles.
Paying for green homes
Builders and remodelers do not see customers as being willing to pay much of a premium for green homes or renovations. The median expected premium is in the 3 to 4 4 percent range, while renovations appear to have more high-end flexibility in price premiums than either single- or multifamily homes.
Marketing green homes: effective terms
When it comes time to sell a green home, builders and developers should make sure they are effectively communicating its value to their potential home buyers. The homebuilding industry is filled with green jargon, and consumers typically do not understand most of it. Word choice and phrasing are key when it comes to making the sale.
According to the report, the top terms for marketing green homes are consistent between single-family and multifamily homes; they include “long-term utility cost savings,” “operating efficiency,” and “healthier home.” Phrases and terms such as “recyclable,” “sustainable,” “durable construction,” and “reduced environmental impact” are much less effective and not as wellunderstood by home buyers.
Other key findings in the brief cover net-zero, renewable energy, and green product brands, as well as regional breakdowns. The Green Multifamily and Single-Family Homes 2017 SmartMarket Brief can be viewed for free at nahb.org/smr.
The original article, written by Jaclyn S. Toole, was published in the 2017 Fall Issue of Best in American Living.