Presentation at BUDMA 2011

1. Current status and trends of sustainable
construction in the U.S.
The difficulty lies not in new ideas, but escaping
from the old ones.
John Maynard Keynes
Business Consulting & Training, Inc.
www.bctbiz.com
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2. Sustainability defined
Sustainable development is development that meets the needs of
the present without compromising the ability of future generations to
meet their own needs.
United Nations, March 20, 1987
Sustainability requires the reconciliation
of environmental, social and economic
demands - the "three pillars" of
sustainability.
2005 World Summit
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3. CO2
Driving force of sustainable construction.
Current level: ~ 380 ppm
Catastrophic level: 450 - 460 ppm coined SCENARIO 450
2° C rise in temperature
Prevention: reduction of CO2 emission by 60%-90% from 2006 level
3

4. International Cooperation
Latest: The Copenhagen Accord at the 15th session of the Conference of
Parties to the UN Framework Convention on Climate Change on 18 December
2009.
The Accord itself is not legally binding. Countries pledged to reduce CO2
by 2020 (caveat – different baseline):
United States: 17% reduction, 2005
Japan: 25%, 1990
China: 40% - 45%, per unit of GDP!, 2005
Russian Federation: 15% - 25%, 1990
EU: 25%; 30% conditional on others, 1990
Brazil: 36.1% - 38.9%, over projected trend!
Regardless, the trend is downward for CO2 and global.
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5. Why sustainability in buildings?
U.S. Inventories ~ 115 million of housing units
~ 70 billion m2 of commercial floor space
CO2 Emissions from Fossil Fuel Combustion, Tg CO2
1990 2006 2008
TOTAL US 4,735.70 5,652.80 5,572.80
Residential 932.2 1,152.90 1,184.50
Combustion 339.1 322.1 342.7
Electricity 593 830.8 841.8
Commercial 754.6 1,005.00 1,044.90
Combustion 216.7 206 219.5
Electricity 538 799 825.4
TOTAL BLDGS 1686.8 2157.9 2229.4
% TOTAL 35.6% 38.2% 40.0%
Source: U.S. EPA, author 5

6. Execution of Sustainability: Codes
 Sustainable construction is achieved by:
•
Mandatory statues:
 Codes
 Federal, State, and City legistlations
Municipal codes based on Model Codes:
 ASHRAE Standard 90.1 for commercial design community
 International Code Council for commercial & residential
International Green Construction Code – commercial
(Rhode Island is the first state to adopt the Code in 2012)
Federal: American Clean Energy and Security Act of 2009
The Act (has to be approved by Senate) calls for:
National building code energy reduction targets of:
• 30% below the baseline energy code (2006) in 2010,
• 50% below the baseline energy code in 2014-2015, and
• 5% additional reduction every three years to 2029-2030.
 Codes and mandates work best; incentives help.
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7. American Clean Energy and Security Act of 2009 (H.R. 2454)
The Act (has to be approved by Senate) calls for:
National building code energy reduction targets of:
• 30% below the baseline energy code (2006) in 2010,
• 50% below the baseline energy code in 2014-2015, and
• 5% additional reduction every three years to 2029-2030.
It does not matter that this example is for the U.S. Trend is similar in all
developed economies.
Two themes to investors:
 trend that will continue for decades (early entrance)
 state policies (incentives, direction, relative certainty)
Business opportunity:
 more appealing homes
 new construction technologies and materials
 knowledge-based services
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8. Execution of Sustainability: Voluntary Certifications
 Leadership in Energy and Environmental Design (LEED) – C&R
 Energy Star – C&R
 National Green Building Standard – Residential
 Passive Homes – C&R (mostly Residential)
It does not matter that those examples are for the U.S. Trend and
approaches are similar in all developed economies.
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9. Think globally, act locally.
U.S. Conference of Mayors Climate Protection Agreement
1044 cities signed the Agreement - as of 9/27/2010
(52 from Illinois)
Under the Agreement, participating cities commit to:
Strive to meet or beat the Kyoto protocol targets in their own
communities, through actions ranging from anti-sprawl land-use
policies to urban forest restoration projects to public information
campaign.
Each city has its plan – many different approaches and initiatives
 Key: cities include in codes LEED, or equivalent, standards!
Boston, MA: over 50,000 sf must be LEED certifiable
Babylon, NY: over 4,000 sf for commercial & multifamily
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10. Woodstock, IL – Sustainability Plan
 Population: 25,500
 82 km northwest of Chicago; area quite wild
 Environmental Plan for 2020 per UN definition of sustainability
The concept of sustainability holds the promise of long-term economic
security, social equity and environmental integrity. It suggests that
through increased self-sufficiency and responsibility, the production and
consumption of goods and services can be maintained without harming
the natural environment.
The Plan included matters that citizens of Woodstock deemed suitable
for sustainability, such as:
 Be a community of law abiding citizens with no tolerance for crime.
 Be a community of choice for residents, visitors & investors.
 Weave ethnic backgrounds together to celebrate diversity, promote
understanding, & support ―One Woodstock.‖
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11. 11

12. Woodstock, IL
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13. Ecotourism
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14. LEED: Leadership for Energy & Environmental Design
In LEED 2009 there are 100 possible base points. Buildings can qualify for
four levels of certification:
Certified: 40 - 49 points
Silver: 50 - 59 points
Gold: 60 - 79 points
Platinum: 80 points and above
Huge range of certifications, for: schools, hospitals, commercial, interior,
new constructions, renovations, neighborhood development, and
operations & maintenance.
LEED has been continually evolving and modified, though the main
concept remains the same.
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15. LEED: Points – Sustainable Sites
Sustainable Sites 26 Possible Points
• Prerequisite 1 Construction Activity Pollution Prevention Required
• Credit 1 Site Selection 1
• Credit 2 Development Density and Community Connectivity 5
• Credit 3 Brownfield Redevelopment 1
• Credit 4.1 Alternative Transportation—Public Transportation Access 6
• Credit 4.2 Alternative Transp.—Bicycle Storage and Changing Rooms 1
• Credit 4.3 Alternative Transp.—Low-Emitting and Fuel-Efficient Vehicles 3
• Credit 4.4 Alternative Transportation—Parking Capacity 2
• Credit 5.1 Site Development—Protect or Restore Habitat 1
• Credit 5.2 Site Development—Maximize Open Space 1
• Credit 6.1 Stormwater Design—Quantity Control 1
• Credit 6.2 Stormwater Design—Quality Control 1
• Credit 7.1 Heat Effect—Nonroof 1
• Credit 7.2 Heat Island Effect—Roof 1
• Credit 8 Light Pollution Reduction 1
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16. LEED: Points – Water & Energy
Water Efficiency 10 Possible Points
• Prerequisite 1 Water Use Reduction Required
• Credit 1 Water Efficient Landscaping 2-4
• Credit 2 Innovative Wastewater Technologies 2
• Credit 3 Water Use Reduction 2-4
Energy and Atmosphere 35 Possible Points
• Prerequisite 1 Fundamental Commissioning of Building Energy Systems Required
• Prerequisite 2 Minimum Energy Performance Required
• Prerequisite 3 Fundamental Refrigerant Management Required
• Credit 1 Optimize Energy Performance 1–19
• Credit 2 On-site Renewable Energy 1–7
• Credit 3 Enhanced Commissioning 2
• Credit 4 Enhanced Refrigerant Management 2
• Credit 5 Measurement and Verification 3
• Credit 6 Green Power 2
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17. LEED: Points – Material & Resources
Materials and Resources 14 Possible Points
• Prerequisite 1 Storage and Collection of Recyclables Required
• Credit 1.1 Building Reuse—Maintain Existing Walls, Floors and Roof 1-3
• Credit 1.2 Building Reuse—Maintain Existing Interior Nonstructural Elements 1
• Credit 2 Construction Waste Management 1-2
• Credit 3 Materials Reuse 1-2
• Credit 4 Recycled Content 1-2
• Credit 5 Regional Materials 1-2
• Credit 6 Rapidly Renewable Materials 1
• Credit 7 Certified Wood 1
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18. LEED: Points – Indoor Environmental Quality
Indoor Environmental Quality 15 Possible Points
• Prerequisite 1 Minimum Indoor Air Quality Performance Required
• Prerequisite 2 Environmental Tobacco Smoke (ETS) Control Required
• Credit 1 Outdoor Air Delivery Monitoring 1
• Credit 2 Increased Ventilation 1
• Credit 3.1 Construction IAQ Management Plan—During Construction 1
• Credit 3.2 Construction IAQ Management Plan—Before Occupancy 1
• Credit 4.1 Low-Emitting Materials—Adhesives and Sealants 1
• Credit 4.2 Low-Emitting Materials—Paints and Coatings 1
• Credit 4.3 Low-Emitting Materials—Flooring Systems 1
• Credit 4.4 Low-Emitting Materials—Composite Wood & Agrifiber Products 1
• Credit 5 Indoor Chemical and Pollutant Source Control 1
• Credit 6.1 Controllability of Systems—Lighting 1
• Credit 6.2 Controllability of Systems—Thermal Comfort 1
• Credit 7.1 Thermal Comfort—Design 1
• Credit 7.2 Thermal Comfort—Verification 1
• Credit 8.1 Daylight and Views—Daylight 1
• Credit 8.2 Daylight and Views—Views 1
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19. LEED: Additional 10 Points
Innovation in Design 6 Possible Points
• Credit 1 Innovation in Design 1-5
• Credit 2 LEED Accredited Professional 1
Regional Priority 4 Possible Points
• Credit 1 Regional Priority 1-4
LEED certification covers almost all types of commercial & industrial development:
• New Construction & Major Renovation
• Existing Buildings: Operation & Maintenance
• Commercial Interiors
• Core and Shell Development
• Schools New Construction and Major Renovation
• Neighborhood Development
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20. LEED: Pros & Cons
Pros:
 LEED is a growing knowledge-based business:
- Sustainability Consultant
 Requirements create opportunity in supplies:
- cleaning products
 Mostly applicable to occupancy-based buildings: offices, schools
 Owners can differentiate properties
 It’s healthier and more pleasant to stay in LEED bldg.
Cons:
 Certification cost
 You are married for life to it >> maintenance & operation
 Cumbersome for residential homes
Bottom line: LEED will grow in the U.S. because of federal and state
mandates, and acceptance in commercial real estate.
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21. Passive House
Certified if:
 Airtight building shell ≤ 0.6 ACH @ 50 Pa pressure
 Annual heat requirement ≤ 15 kWh/m2/year (4.75 kBtu/sf/yr)
 Primary Energy ≤ 120 kWh/m2/year (38.1 kBtu/sf/yr)
In addition, the following are recommendations, varying with climate:
 Window U-value ≤ 0.8 W/m2/K
 Ventilation system with heat recovery with ≥ 75% efficiency with low
electric consumption @ 0.45 Wh/m3
 Thermal Bridge Free Construction ≤ 0.01 W/mK
Key principle: super-insulation and air-tightness
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22. Passive House
 There are over 20,000 passive homes (max 25,000) worldwide
 About 20,000 are in Germany, Austria, Scandinavia
 About 50 in U.S.
 Passive House favors cold climates – but applicable to all climates
 Success in Germany is attributed to incentives and policy
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23. Energy Star
 Originated in early 1990 by the US Environmental Protection Agency
 Designed primarily to promote energy efficiency.
 Appliances are assigned Energy Star labels.
Example. Low-slope (2:12) roof materials:
Initial Solar Reflectance > 0.65
Reflectance after 3 years > 0.50
Overall a useful standard and certification. But….
2008 audits of the Inspector General found:
 Claims regarding GHG reduction were inaccurate and based on faulty
data
 Energy savings were unreliable or unverifiable
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24. What Big Guys are doing?
 Leading Builders of America – coalition of 16 largest homebuilders
 Sold 99,000 homes in 2009, or 27% of total for U.S.
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25. What Big Guys are doing?
2009 2008 2007
Beazer Homes USA 4,330 6,697 10,160 eSmart
D.R. Horton 17,034 21,251 33,687
Hovnanian Enterprises 5,659 11,281 14,928
KB Home 8,488 12,438 23,743 Energy Star
Lennar Corporation 11,478 15,735 33,283
M.D.C. Holdings 570 409 1,350
Meritage Homes 4,039 5,627 7,687 Energy Star + super eff
NVR, Inc. 9,042 10,741 13,513
Pulte Group 15,013 21,022 27,540 Energy Star & LEED
Ryland Group 5,129 7,352 10,319 HouseWorks
Standard Pacific 3,581 5,025 8,051
Toll Brothers 2,965 4,743 6,687
M/I Homes 2,409 2,025 3,173
TOTAL 89,737 124,346 194,121
Source: 10K reports, author 25

26. What Big Guys are doing?
 LBA estimates that additional costs for ―typical‖ new home are:
• $5,000 for 30% energy reduction
• $15,000 for 50% energy reduction
 LBA worries that increased up front costs will eliminate many potential
buyers. Proposes to include Energy in mortgage (PITI + E).
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27. Benefits of certification
 All certifications for a private sector are voluntary - be it LEED,
BREEAM, or passive homes.
Residential:
 Energy & water savings: payback in minimum circa 10 years
 Greater likelihood of selling a house
 Usually incentives provided by government
Commercial:
 Positive differentiation against competitors
 Assured better indoor air quality and healthy environment
 Increased productivity
 Energy & water savings
 Lower vacancies
 Greater rents
 Incentives from government
 Why certify? To prove the claim.
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28. Why certify?
Certification makes sense when there is a transactional benefit between
SELLER BUYER
or
OWNER TENANT
When you plan to build a property for you own benefit and do not plan to
sell it or rent to others, certification brings limited benefits.
but….
IT DOES NOT IMPLY THAT THE STRUCTURE SHOULD NOT ADHERE TO
SUSTAINABILITY STANDARDS!!! IT IS JUST NOT CERTIFIED BY
THIRD PARTY.

29. Why certify: developers & investors
If you are a developer or an investor, a transaction always takes place –
be it an office building, residential home, or industrial property.
tenants & renters
A transaction always takes place in the form of a lease.
homeowners
(a) NO TRANSACTION - If you do not plan to sell a home for, say,
minimum 15 years and do not plan to rent it.
(b) TRANSACTION – otherwise
industrial company
It depends on a type of a property. But if you want to be perceived as a
good citizen, pursue certification.

30. Why certify: public property
Certification of public properties such as schools, universities, city halls,
and hospitals gives warranty per expected performance, provides
leadership in sustainable development , and creates healthier
environment.
In summary - real estate is mostly transactional. After all, that’s why we
have a thriving business of real estate agents.

31. Certification: Statistics
In God we trust, all others bring data.
Dr. W.E. Deming
Number of certified properties/units in U.S.
Energy Star (1999) LEED (2000) Passive House (2000)
~12,720
Commercial 11,787 (Worldwide)
Residential 1,111,856 7,882 ~50
For LEED residential: 594 has Certified designation
3,628 Silver
2,056 Gold
1,604 Platinum
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32. How to market ecological homes?
Passive House – Kansas City, KS, May 2010
1,700 square foot
$190,000 (worth at least double)
Still waiting for a buyer!
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33. How to market ecological homes?
Passive House – Urbana, IL, 2007
1,450 square foot
$120,000 sold ($25k City + donations)
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34. How to market ecological homes?
1. Be a resident of Champaign County, and
2. Be at 80% or below the median family income (see the chart)
Energy efficiency alone is not enough to differentiate
yourself in the marketplace!!!

35. Culture clash

37. EU
Europe leading the world - an Action Plan for Energy
Efficiency: Realising the Potential.
European Parliament resolution of 2008 January 31st
…calls on the Commission to propose a binding
requirement that all new buildings needing to be
heated and/or cooled be constructed to passive house
or equivalent non-residential standards from 2011
onwards, and a requirement to use passive heating
and cooling solutions from 2008.

38. Life-Cycle Cost Analysis
 BUDMA 2011: Sustainable Construction - Investment in the Future
LCCA is most comprehensive. Includes all costs over life time.
LCC = I + Repl — Res + E + W + OM&R + O
LCC = Total LCC in present-value (PV) dollars of a given alternative
I = PV investment costs
Repl = PV capital replacement costs
Res = PV residual value (resale value, salvage value) less disposal costs
E = PV of energy costs
W = PV of water costs
OM&R = PV of non-fuel operating, maintenance and repair costs
O = PV of other costs (e.g., contract costs)
Problems:
 It’s expensive and time consuming.
 Assumptions about future (e.g., prices) are subject to huge variance.

39. Life-Cycle Cost Analysis
The most misquoted example of LCCA!
Personnel Salaries refers to salaries of
persons working in the occupied space.
Excellent book, and in 1994.
Lean & clean management, Joseph Ramm
Example is given to emphasize that a lot of savings could come from
improved productivity of employees.
Indeed, studies show that designing of buildings per LEED certification
increases productivity.

40. Zero energy building (ZEB)
In U.S., zero energy building refers usually to net zero site energy use: the
amount of energy provided by on-site renewable energy sources is equal
to the amount of energy used by the building.
Passive House + Clean Energy = Killer Application
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41. Clean energy: geothermal, solar, wind.
Renewable Portfolio Standards. Selected States.
State Amount Year
Policy and incentives are primary
drivers for clean energy. Arizona 15% 2025
California 33% 2020
But incentives are often in under- Colorado 30% 2020
developed localities.
Connecticut 27% 2020
Delaware 20% 2019
Technology choice comes
afterwards. Hawaii 40% 2030
Illinois 25% 2025
Utilities will opt for large projects
(e.g., wind farms) to satisfy reqt’s. Oregon 25% 2025
Pennsylvania 18% 2020
Utilities are to make profits for
Rhode Island 15% 2020
shareholders.
Utah 20% 2025
Costs will be passed to
Virginia 12% 2022
customers.
Washington 15% 2020
West Virginia 25% 2025
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42. Geothermal (Ground Source) Heat Pumps
 Proven technology, stable, can work 24/7, and be installed ~ anywhere
 Over 600,000 units installed in the U.S. But EU grows faster.
Per research from Oak Ridge National Laboratory (ORNL/TM-2008/232),
key barriers to growth of GHP are (in order of importance):
1. High first cost of GHP systems to consumers
2. Lack of consumer knowledge and/or trust or confidence in GHP system
benefits
3. Lack of policymaker and regulator knowledge of and/or trust or
confidence in GHP system benefits
4. Limitations of GHP design and business planning infrastructure
5. Limitations of GHP installation infrastructure
6. Lack of new technologies and techniques to improve GHP system cost
and performance.
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43. Solar
 Implementation totally driven by incentives.
Germany, Italy: feed-in tariff system
U.S.: market-driven rebates
 Poland: no incentives for PV >> no implementation
 PV not at parity with grid yet
 Market in U.S.: mostly affluent households and industrial applications
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44. Wind
 Limited potential for small turbines in a city because of obstructions
from other dwellings disturbs wind patterns
 Wind farms: very feasible and profitable endeavor
44

45. Moce wytwórcze energii elektrycznej brutto [MW]
KRAJOWY PLAN DZIAŁANIA W ZAKRESIE ENERGII ZE ŹRÓDEŁ ODNAWIALNYCH
Ministerstwo Gospodarstwa
Paliwo/technologia 2006 2010 2015 2020 2025 2030
W.Brunatny-PC/Fluidalne 8,819 9,177 9,024 8,184 10,344 10,884
W.Kamienny-PC/Fluidalne 15,878 15,796 15,673 15,012 11,360 10,703
W.Kamienny-CHP 4,845 4,950 5,394 5,658 5,835 5,807
Gaz ziemny-CHP 704 710 810 873 964 1,090
Gaz ziemny-GTCC - - 400 600 1,010 2,240
Duze wodne 853 853 853 853 853 853
Wodne pompowe 1,406 1,406 1,406 1,406 1,406 1,406
Jadrowe - - - 1,600 3,200 4,800
Przemyslowe Wegiel-CHP 1,516 1,411 1,416 1,447 1,514 1,555
Przemyslowe Gaz-CHP 51 50 63 79 85 92
Przemyslowe Inne-CHP 671 730 834 882 896 910
Lokalne Gaz - - 22 72 167 278
Male wodne 69 107 192 282 298 298
Wiatrowe 173 976 3,396 6,089 7,564 7,867
Biomasa stala-CHP 25 40 196 623 958 1,218
BiogazCHP 33 74 328 802 1,293 1,379
Fotowoltaika - - - 2 16 32
RAZEM 35,043 36,280 40,007 44,464 47,763 51,412
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46. Cost of Energy Production
1 QBtu (1015) of Delivered Energy
1 Btu = 1055.06 J
 COAL Plant: $256.0 Billion
 NUCLEAR Plant: $222.0 Billion
 BUILDING EFFICIENCY: $42.1 Billion
Reduction of GHG via building efficiency is much less
expensive than building power plants.
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47. Sustainability in construction
 Sustainability is being adopted by all forms of construction –
not only in buildings.
 City of Chicago renovates neighborhood employing principles of
sustainability in a formal way.
 In practice it means: preserving environment & saving energy
 O’Hare airport (~$20 bil project) is renovated employing sustainability
 Transportation: manuals are being developed for building roads
Implication:
 To get a contract for municipal work, one has to know sustainability or
be certified as LEED (or equivalent) contractor.
 Proposing a development (any) that does not have sustainability
features is not welcome, especially for downtowns.
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48. Sustainability: Municipalities
48

49. Sustainability: Transportation
49

50. Sustainability: Airports
50

51. Sustainability permeates through all fabrics of U.S. society
 Seattle's Office of Sustainability and Environment
 Portland Office of Sustainability
 City of Cleveland: Office of Sustainability
 Office of Sustainability for the City of Indianapolis
 Maryland Office of Sustainability
 City of New Haven Office of Sustainability
 City of Palm Springs Office of Sustainability (California)
 Lee County’s Office of Sustainability (Southwest Florida)
 The Office of Sustainability, Columbia, MO
 The Office of Sustainability, Evanston, IL
 Sustainability at Texas A&M University
 Yale Office of Sustainability
 Office of Sustainability, The University of Chicago
 Office of Campus Sustainability Michigan State University
 Office of Sustainability University of Illinois at Urbana-Champaign
 Office of Sustainability of the University of South Florida
 Princeton University Office of Sustainability 51

52. CO2 reduction by compact development
Transit-oriented development: key preference for municipalities,
especially in affordable housing
52

53. Conclusions
 Whether you like ―green building‖ or not; or if you agree or disagree
with the concept of sustainability, it does not matter much.
You will be sucked into it by the global trend. The sooner you embrace
it, the sooner you may rip off benefits, or at the minimum enhance your
professional credentials.
 Sustainability is business: first entrant advantage
 Sustainability trend will permeate through all fabrics of construction
 Technology follows policy.
 Certification - be it LEED, Energy Star – provides a tool for systematic
analysis, and implementation, of sustainable solutions.
 Technology follows policy.
 Government should play a big role:
 provide incentives
 promote best practices
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 incourage innovating and reward those who do better

54. Conclusions
 Government should play a big role:
 provide incentives
 promote best practices
 incourage innovating and reward those who do better
 actively implement sustainable solutions
54

55. Construction
Standards INNOVATIONS
PROGRESSIVE POLICY
EDUCATION
1. Standards will merge.
LEED 2. Why not utilize LEED now.
Current
Codes
2011 2030?

56. Innovations
Chinese workers build 15-story hotel in just six days
56

57. Conclusions
.
Jako odpowiedzialny deweloper, rozumiemy znaczenie zrównoważonego
budownictwa. Dlatego decyzja, aby zgodnie z jego zasadami realizować
inwestycje Skanska Property Poland, jest spełnieniem naszych
zobowiązań wobec pracowników, przyszłych i obecnych najemców, a
także lokalnych społeczności.
Nicklas Lindberg, dyrektor generalny Skanska Property Poland.
That statement epitomizes attitudes of corporate America.
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58. GREENBUILD 2011
IN TORONTO
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59. Impact of PITI + E
P - servicing of principal
I - interest
T - property taxes
I - insurance Affordability = f(PITI)
In the current Energy Efficiency Mortgage, interest rate is the same as for
regular applicable mortgage. Only greater amount can be loaned.
To qualify for Energy Efficiency Mortgage, the property must have Home
Energy Rating System (HERS) report.
Pending S. 1379, the Energy Efficiency in Housing Act of 2009, would
likely lower interest rates on mortgage. Lenders are reluctant – more work
Implications: passive houses, and net-zero energy homes could flourish
Very bad for existing stock of homes if E permanently in PIPI. Buyer of a
home with low HERS will pay higher interest rates >> pressure on prices
>> but increased activity in renovation to meet current standards.
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