Residential Green Build Report

Je Martin
Brian Swett
Doug Wein
A M A R K E T E N G A G E M E N T F R A M E W O R K
F O R D E V E L O P E R S A N D B U I L D E R S
Residential Green Building Report
E RB I NS TI TUTE
F OR G L OBAL S US TAI NABL E E NTE RP RI S E
UNI VE RS I T Y OF MI CHI GAN
)e Martin
Brian Swett
Doug Wein
A M A R K E T E N G A G E M E N T F R A M E W O R K
F O R D E V E L O P E R S A N D B U I L D E R S
Residential Creen Building Report
May 2007
With support from:
Cherokee
Erb Institute for
Global Sustainable Enterprise
Unversity of Michigan
Copyriglt 2007
Acknowledgements
Te autlors would like to tlank a number of organizations and individuals for tleir
critical support of tlis masters project. First and foremost, we would like to tlank
Clerokee for tleir nancial, logistical, and content support tlat was vital to tle
success of tlis project. Our lead contact and project advisor at Clerokee, Clris
Wedding, was particularly lelpful in providing tlougltful guidance, advice, and
encouragement tlrouglout tle last year. Katlerine Henderson and Holly Fling
of Clerokee also deserve tlanks for reviewing various documents and drafts
tlrouglout tlis projects development.
Te autlors would like to tlank tle Erb Institute for Clobal Sustainable Enterprise
at tle University of Micligan for its nancial support in publisling tle results of tlis
project. In addition, Professor Tom Cladwin of tle Erb Institute, tle projects academic
advisor, provided lelpful guidance and content suggestions in framing tlis project at its
outset. We also would like to recognize Tisl Holbrook and Caroline Eisner for tleir lelp
in graplic design and editing, respectively. Special tlanks to Corey Seeman for assisting
our researcl process. We also tlank Allen Associates and Barley & Pfeier Arclitects
for providing plotograpls of tleir green building projects for our report.
Tis project would not lave been possible witlout tle generous time and valuable
insiglts of tle green residential industry players and experts interviewed by tle autlors.
Te appendix includes a full list of interviewees, and tle autlors are profoundly grateful
for tleir willingness to slare tleir expertise witl tle project.
Lastly, tle autlors would like to tlank friends and family for tleir ongoing support,
understanding, and exibility tlrouglout tlis project.
Te residential green building movement is at an exciting moment in
its development from a nicle market to a more mainstream market
segment. According to some predictions, in 2007, more tlan lalf of
small and large lome builders will be building at least 15 of tleir lomes
to a local, regional, or national green standard. Witl a variety of major
rm- and market-level drivers of tle green residential market, lome builders
and developers must tlorouglly understand tle claracteristics and relative
strengtls of tle green lomes market witlin tleir operating locales.
Te purpose of tlis report is to investigate and advance tle foremost
tlinking in tle residential green building industry. Te reports objective
is to present a strategic Market Engagement Framework (MEF) for
examining a real estate market, so tlat a developer considering a local
project can gauge consumer demand, understand tle existing landscape,
form partnerslips for green building, and devise a marketing and sales
strategy appropriate to tle locale. Te MEF contains two fundamental
components: Analysis and Strategy.
A building market is most ripe for increases in green building market
penetration wlen numerous stakelolders pusl for tlose increases
togetler. Te tlree primary elements critical for growing a green lomes
market are (1) consumers, (2) industry (botl for prot and non-prot
organizations), and (3) government. A developer intending to compete
in tle residential green building space must lave a comprelensive
strategy designed to analyze and exploit tle elements specic to tle
potential developments location.
To gain a comprelensive understanding of tle marketplace and devise
appropriate entry and marketing strategies, builders and developers must
investigate all tlree of tle aforementioned elementsconsumers, industry,
and governmentin conjunction witl tle resource and economic
pressures inuencing tle overall landscape. Tis report develops and
presents tle Market Metrics Lens (MML) as an evaluative tool to lelp
confront tle complexity tlat tlis investigation necessarily entails. By
following a relatively simple prescriptive process, salient claracteristics
for eacl market element are identied and included as metrics in tle
MML. Once completed, tlis MML is able to identify strengtls and
weaknesses in a given market and in comparing one location to anotler.
Furtlermore, it lelps identify specic partnerslip and marketing strategies
to raise overall awareness and advance tle industry.
Executive Summary
Te MML was piloted in four dierent geograplic locations: Los Angelesi
soutlern California, HoustoniTexas, MiamiiSoutl Florida, and Newarki
nortlern New )ersey. In addition, four otler markets were reviewed to
add robustness to tle comparison pool: Denver, Atlanta, Indianapolis,
and Boston. Of tle four focus municipalities, Los Angeles stands out as
tle strongest overall in its relative strengtl in all tlree key elements of
a residential green building market. Wlile tle consumer and industry
elements of Miamis green residential market is relatively weak, tle
government element is relatively strong and growing. Te industry
element outside of tle city, including a strong residential green building
program and tle support of a leading builder, is relatively strong. Te
consumer element of tle Newark green residential market is relatively
strong, wlile tle government support element is moderate and tle
industry element is relatively weak. Otler towns in nortlern New
)ersey and tle state government are making strong progress in green
residential support. Wlile Houston las a relatively strong industry
element, it ranked weakest of tle four focus municipalities in
government and consumer elements.
Te strategy portion of tle Market Engagement Framework includes two
important aspects: (1) forging partnerslips and alliances to lelp advance
tle overall industry and raise consumer awareness and (2) targeting
purclasers of residential green lomes tlrougl a focused sales and
marketing eort. Witl tle results of tle MML, tlis project proposes
specic strategies for partnerslip, marketing, and sales in eacl of tle
four focus geograplies, as well as develops a number of green lomes
strategy best practices, including twelve teclniques for selling green
lomes.
Wlile tle residential green building market is rapidly growing and
maturing, mucl remains to be understood about tle dynamics of key
market elements, tle most likely buyer claracteristics and preferences,
and tle most eective marketing and sales strategies. Te MEF and MML
presented in tlis report can lelp builders, developers, researclers, and
otler green residential stakelolders better understand and strategize for
engagement in particular geograplic markets.
Chapter 1 OVERVI EW AND BACKGROUND 2
Te Creen Homes Clallenge for tle Industry 2
Te Market Engagement Framework Solution 3
Chapter 2 CURRENT STATE OF THE GREEN BUI LDI NG MARKET 6
National Trends 6
Expert Testimonials on Te Benets of Building Creen 8
Chapter 3 ELEMENTS OF A ROBUST GREEN HOMES MARKET 10
Consumers 11
Industry 17
Covernment 21
Acute Resource Pressures 23
Macroeconomic Trends 24
Chapter 4 ANALYZI NG MARKETS FOR GREEN HOMES 25
Market Metric Lens 25
Chapter 5 BUI LDI NG PARTNERSHI PS 27
Best Practices and Strategic Recommendations 27
Te Importance of Clampions 28
Chapter 6 MARKETI NG AND SALES STRATEGI ES 29
Crowing Concept Awareness in Nascent Markets 29
Selling Creen Homes 31
Chapter 7 APPLYI NG THE MARKET METRI CS LENS 38
Pilot and Comparison Cities 38
Chapter 8 ANALYSI S AND STRATEGI ES FOR FOUR PI LOT GEOGRAPHI ES 44
Los AngelesiSoutlern California 45
HoustoniTexas 46
MiamiiSoutl Florida 47
NewarkiNortlern New )ersey 48
Relative Analysis of Four Pilot Ceograplies 49
Chapter 9 CONCLUDI NG REMARKS 50
Use of tle Market Engagement Framework 50
LI ST OF FI GURES
Figure 1: Te Creen Homes Market Landscape 4
Figure 2: Creen Homes Adoption Concept: LOHAS Driving tle Market 5
Figure 3: Te Market Engagement Framework 5
Figure 4: Small Builders and Larger Builders 7
Figure 5: Demand Projection 7
Figure 6: Creen Building Consumer Croups 12
Figure 7: Creen Residential Industry Stakelolders 18
Figure 8: Trifecta Umbrella 34
Figure 9: Market Engagement Framework Analysis 49
LI ST OF TABLES
Table 1: Relevant Belavioral Dierences in Creen Homebuyers and Remodelers 13
Table 2: Te Market Metric Lens 38
Table 3: Residential Creen Building Market Strengtls and Weaknesses 49
APPENDI X
List of Interviewees 51
Table of Contents
R e s i d e n t i a l G r e e n B u i l d i n g R e p o r t
R
esidential green build-
ing developers and lome
builders lave traditionally
entered markets witl little
concrete information and
understanding of tle true
nature of consumer demand
for green lomes.
T
lis is attributable largely to tle
diculty in quantifying demand for
a relatively new product tlat is foreign
to or misunderstood by most traditional
lomebuyers. Nonetleless, tle proactive
eorts of industry leaders to deliver
products to market tlat tley believe are
inlerently desirable often tap into latent
demand for green lomes. Terefore,
a more rigorous understanding of tle
claracteristics of demand and otler
critical elements of tle residential green
building market will assist industry
players interested in expanding tleir
green building portfolios. Analysis sucl
as presented in tlis report will augment
protability of existing pipe-line projects
and can identify opportunities in areas
wlere competitors and tle rest of tle
industry may be lagging.
T HE GR E E N HOME S C HA L L E NGE
F OR T HE I NDUS T R Y
Overview & Background
2
Chapter 1
A M a r k e t E n g a g e m e n t F r a m e w o r k f o r D e v e l o p e r s a n d B u i l d e r s
T
o address industry- and
rm-specic clallenges,
tlis report provides an
evaluative tool for botl analysis
and strategy development.
We call tlis tool tle Market
Engagement Framework (MEF).
Te MEF enables an industry
player wlo seeks to extend its
presence in tle green lome
market to quickly and relatively
easily evaluate tle landscape,
identify gaps and leverage points
tlat can be lled and exploited,
and develop sales and marketing
strategies appropriate to
specic locales.
A building market is most ripe for
increases in green building market
penetration wlen numerous stakelolders
are all pusling for tlose increases
togetler. Te tlree primary elements
critical for growing a green lomes market
are (1) consumers, (2) industry (botl
for prot and nonprot organizations),
and (3) government. See Figure 1 for
a representation of tle green lomes
market.
In a perfectly robust green lomes
market, tlere would be a large number of
lomebuyers wlo are well versed in tle
attributes of green lomes, receptive to
tle green lomes value-proposition, and
discerning of tle many possible green
lome products available. Similarly, tlere
would be a strong local industry presence
tlat would consist of developers, builders,
sub-contractors, and otler professionals
familiar witl tle metlods for building,
marketing, and selling green lomes.
A local green lomes organization and
certication program would be active.
Lastly, a powerful government entity
would be present witl oces, resources,
and policies focused on supporting green
building and sustainable development.
Tese tlree elements working in concert
comprise a robust and active green lomes
market.
Conversely, in a nascent market, green
lomes lave yet to make serious inroads.
In sucl a market, several factors could
lave tempered green lome penetration.
For instance, consumer demand may
be ligl, wlereas industry capability
andior government support are
underdeveloped in relation to tlis latent
demand. Alternatively, industry and
government could be actively promoting
tle residential green building, but a
strong consumer preference las simply
not yet materialized. Even witl tlese
claracteristics, tle potential exists for
a market to evolve into one wlerein all
tlree elements are strong. Wlile advances
in tle green lomes market can be made
witl only two of tlese elements or witl
only minimal interest from eacl, green
lomes penetration will never be as rapid
or as complete as wlen all tlree work
togetler in a driven faslion. Furtlermore,
tle consumer element is critical to tle
success of any developing market.
Also aecting market dynamics in
any given location are a variety of
signicant external pressures. Tese
we lave organized into two distinct
categories: acute resource pressures
and macroeconomic trends. Acute
resource pressures can include water-
scarcity, trac congestion, land-density
constraints, air-pollution, and energy
capacity and price. Tese pressures will
aect consumer preferences, industry
innovation, media attention, and tle
regulatory environment. Macroeconomic
trends are factors sucl as uctuating costs
of lome ownerslip, job growtl rates,
interest rates, and migration patterns
into or out of tle area. Tese factors are
known to impact tle overall lousing
market, of wlicl tle green lomes market
T HE MA R K E T E NGAGE ME NT
F R A ME WOR K S OL UT I ON
A Robust Green Homes Market: Conceptual Overview
T HE MA R K E T E NGAGE ME NT F R A ME WOR K S OL UT I ON 3
Tree concepts are integral to a
fundamental understanding of tle
adoption claracteristics of green lomes.
First, green lomes can be sold to any
consumer via benets-based selling
(e.g. all lomebuyers want a lealtly living
environment), but some buyers are willing
to pay more or lave a faster absorption
rate for tlese benets. Second, potential
green lomebuyers are motivated by
personal interests wlen deciding on
wlicl lome to buy. Tese include lealtl
eects on inlabitants, durability and
ease of maintenance, environmental
friendliness, and energy eciency, in
addition to tlose perceived to be standard
for conventional lomes (sucl as location,
price, and size). Tird, eacl segmented
geograplically-based real estate market
las a dierent mix of lomebuyers witl a
variety of interests and demands. Based
on tlis, eacl market las moved to a
dierent point along tle green lomes
adoption curve.
Te adoption curve for green lomes is
very similar in nature to tle adoption
curves of otler major new products or
teclnologies. As described in Everett
Rogers seminal book, Diusion of
Innovations, innovators and tlen
early adopters tend to drive tle adoption
of a new teclnology or product in tle
early stages.
2
For green lomes, tlese
two categories are composed largely of a
market segment tle Natural Marketing
Institute (NMI) calls Lifestyles of
Healtl and Sustainability (LOHAS)
consumers. If tle LOHAS consumers
were to remain tle primary purclaser
of green lomes, tlen tle adoption
curve would largely follow tle blue
line in Figure 2, representing a plateau
of adoption at a very modest market
penetration. If tle green lomes market
penetration continues to grow rapidly,
as real estate experts sucl as McCraw-
Hill Construction predict, tlen green
lomes will become a product of cloice
for tle early majority buyer, and market
penetration would follow tle green curve.
Tis transition is occurring in markets
sucl as Denver, wlere green lome
penetration las now surpassed 20.
Lastly, if green lomes were perceived to
be a temporary fad, tlen tle adoption
is a part. Togetler witl tle tlree key
elements (consumers, industry, and
government), tlese pressures comprise
tle overall green lomes market landscape
depicted in Figure 1.
Often, one or two of tlese elements tends
to move faster tlan tle otlers, it is not
uncommon for one to take tle lead before
tle otlers catcl up. Usually, witlin one
element a specic organization or group
of individuals is at tle forefront of tle
green residential movement. As Cordon
Cooke, a green building marketing
consultant witl 25 years of experience,
notes, in any one area you can identify
tle person or tle organization tlat made
tle dierence.
1

Fi gur e 1. The Gr een Homes Mar ket Lands c ape
Consumers
Government Industry
The Green Homes Market
Acute
Resource
Pressures
Macroeconomic
Trends
Market Adoption Characteristics
Key Market Adoption
Principles:
1. Green homes can be
sold to anyone.
2. Homebuyers are motivated
by personal interests.
3. Each real estate market
has a diferent mix of
homebuyers.
Virtually all indications show that green homes are at a
tipping point where most major markets will have signicant
availability of product over the next several years.
4 Clapter 1: Overview & Background
curve would follow tle red line, witl
market penetration deteriorating
as LOHAS consumers move tleir
purclasing to otler products. Virtually
all indications slow tlat green lomes
are at a tipping point wlere most major
markets will lave signicant availability
of product over tle next several years,
and some leading markets will be moving
furtler along tle adoption curve to
capture early majority buyers, tlus
following tle green line in Figure 2. Te
clallenge for tle developer and builder is
to identify tle drivers of growtl in green
lomes in particular markets, and tlen
construct partnerslip, marketing, and
sales strategies to most eectively tap into
tlis growing market segment.
P
e
r
c
e
n
t
a
g
e

o
f

S
a
l
e
s
Time
LOHAS
Fi gur e 2. Gr een Homes Adopt i on Conc ept : LOHAS Dr i vi ng t he Mar ket
Complete market adoption
Adoption by LOHAS only
Eventual loss of interest by LOHAS
Capitalizing on Market Adoption Characteristics
T HE MA R K E T E NGAGE ME NT F R A ME WOR K S OL UT I ON
A developer intending to compete in tle
residential green building space must
lave a comprelensive strategy designed
to analyze and exploit tle elements
specic to tle potential developments
location. In keeping witl tlat goal, tlis
report provides tle Market Engagement
Framework (MEF) to guide developers in
gauging tle relative strengtls of localized
elements and to guide tlose same
developers in forming marketing and
sales strategies tailored to immediate and
long-term needs of tleir developments.
Tis process (and tlereby, tle MEF) is
divided into two sections: Analysis and
Strategy. (See Figure 3 below.)
Analysis: To properly analyze tle tlree
elements of tle green lomes market,
developers must know wlere to look and
low to read tle potential proxies of tle
existing elements. Tis process is covered
more fully in Clapter 4 of tlis report.
Strategy: Beyond analyzing tle existing
elements, developers must be able to sell
lomes tlat are appropriate to tle local
markets demands. Te marketing and
selling strategies tlat developers form
must be directly linked to tle results
of tleir analysis. Eectively gaining a
widespread understanding of tle benets
of green lomes is critical to successful
market penetration, and partnering
witl relevant government and industry
programs is often a critical step in green
residential market engagement. Tis
process is covered more fully in Clapters
5 and 6 of tlis report.
Fi gur e 3: The Mar ket Engagement Fr amewor k
Acute
Resource
Pressures
Macroeconomic
Trends
Growing skills and
competencies
Raising awareness
through outreach
New strategies for a new
product
Addressing the concept
(awareness) and/or the
product (brand)
Consumers
Government Industry
1.
Evaluating the landscape
2.
Seeking local partnerships
3.
Designing marketing
& sales strategies
Strategy Analysis
5
T
le green building indus-
try is growing rapidly
and las gained a great deal of
attention in botl mainstream
media and tlrouglout tle entire
building design and construc-
tion eld. Indeed, as far back
as 2003, Building Design &
Construction magazine was
calling green building tle most
vibrant and powerful force to
impact tle building design and
construction eld in more tlan
a decade.
3
Tree years later,
tle same publication states:
Wlat started out as a claris-
matic environmental crusade
las matured into an establisled
sector of tle U.S. construction
industry.
4

Te green building movement in tle U.S.
is nearing wlat many experts are calling
a tipping point, wlere tle majority of
residential and commercial builders will
be participating in green building projects
to a signicant degree (in wlicl more
tlan 15 of tleir projects will be green).
Te growtl and maturation of tlis market
is due to a variety of factors, including
external drivers. Te list below reviews
some of tle most signicant of tlese
drivers. For an in-deptl exploration of
tlese drivers, see tle full report Residen-
tial Creen Building: Identifying Latent
Demand and Key Drivers for Sector
Crowtl, available at www.erb.umicl.edu.
Non-Residential Green Building Market:
In 2004, non-residential green building
accounted for rouglly 2 of tle U.S.
market, resulting in a $3.3 billion
component of tle overall industry. By
2010, tlis market slare is predicted to
grow to between 5 and 10 of tle new
non-residential market, representing a
$10-20 billion industry. A 2005 McCraw-
Hill Construction survey found tlat 40
of tle builders, arclitects, engineers,
and designers surveyed report more
tlan moderate involvement witl green
building. More tlan 85 of tle arclitect,
engineers, and contractors report partici-
pation in green building activities. More
tlan 31 of all builders surveyed report
more tlan moderate involvement in green
building.
5

Residential Green Building Market:
A 2006 McCraw-Hill Construction
study projects tlat by tle end of 2007,
60 and 59 of all small and large
lomebuilders, respectively, will undertake
green construction projects, accounting
for at least 15 of tleir production (as
slown in Figure 4). Over 30 of lome
builders currently report more tlan
moderate involvement witl green
building.
6
As slown in Figure 5, tle
percentage of lomebuilders currently
doing at least 15 of tleir product to
a green standard eclipsed tlose witl
little to no engagement in tle sector in
2006. McCraw-Hill projects tlat in 2007
tle percentage of lomebuilders leavily
involved in green design and construction
will surpass tlose witl little or no involve-
ment, representing a second signicant
tipping point. McCraw-Hill also suggests
tlat tle residential green building market
is expected to grow to between $19 billion
and $38 billion by tle year 2010, up from
$7.2 billion in 2005. McCraw-Hill denes
green lomes as ones tlat meet tle
bronze tlreslold of tle NAHB Model
Creen Building Cuidelines, and tlat tle
predictions are based on self-reported
survey data.
7
Wlile otler nationwide
green lome standards, including LEED
for Homes and NAHBs Model Creen
Home Building Cuidelines, lave recently
entered tle pilot and distribution plases,
Current State Of Te
Creen Building Market
Emergence and Growth of
Residential Green Buildings:
External Drivers
Energy and Global Warming
Urbanization Trends
Emergence and Popularity of Green
Building Programs
Government Involvement
Socially Responsible Investing
Consumer Demand
6
Chapter 2
NAT I ONA L T R E NDS
local and regional green lome programs
lave been around for years. Since 1991,
wlen Austins green lome program was
launcled, over 62,000 lomes lave been
built according to a green building
standard nationwide.
8
Te NAHB
Researcl Center reports tlat at least
14,589 lomes were built to a local or
regional green building standard in 2004.
9

Recent Growth in LEED
One strong measure of tle recent and
rapid growtl in tle green building market
is tle growtl in Leaderslip in Energy and
Environmental Design (LEED) registered
and certied buildings. LEED is a green
building certication program developed
and run by tle United States Creen
Building Council (USCBC). Te value
of new LEED-New Construction
(LEED-NC) registered projects las
grown dramatically eacl year, from
rouglly $792 million in new projects
in 2000, to rouglly $10 billion in new
projects in 2006. Te growtl in square
footage of LEED registered projects is
also impressive. In 2002, tlere was
rouglly 80 million square feet of LEED
registered space.
10
As of February 2007,
USCBC estimates tlat over 829 million
square feet is certied or registered.
11

Crowtl in USBCC involvement las
also been profound. From 2000-2007,
member companies and organizations
grew from under 500 to over 7,675,
workslop attendees grew from under
600 to over 43,800, and LEED-accredited
professionals grew from 500 to
over 35,500.
12

Recent Growth in Energy Star
New Homes:
Energy Star is tle most widely recognized
environmental certication program
and product label in tle country. Tis
U.S. Environmental Protection Agency
certication program for products tlat
meet strict energy eciency guidelines
las separate certication standard for
new lomes tlat complements its well-
known appliance-rating standard.
13
In
2005, Energy Star aclieved an average
national market presence of nearly 10
in tle new lomes sector, witl 149,568
new Energy Star site-built, single-family
lomes built. Trougl 2006, more tlan
525,000 Energy Star qualied new lomes
lave been built nationwide.
14
From a sales
value perspective, residential Energy Star
building is an impressive market segment.
According to tle Natural Marketing
Institute, tle value of Energy Star-certied
lomes sold in 2005 was $26 billion.
15

Te green lomes of today will become
tle standard lomes of tomorrow, states
Harvey M. Bernstein, Vice President,
Industry Analytics and Alliances,
McCraw-Hill Construction.
16
David Ellis,
President of tle Creater Atlanta Home
Builders Association, agrees: Ten years
from now, were just going to call it low
we build louses.
17

David W. Milner, Vice President of
Haven Properties (an Energy Star award
winning builder tlat constructs 100 to
130 lomes per year)
18
in Alplaretta,
Ceorgia, recognizes tlat, In tle
Soutleast, green building is certainly an
emerging market tlat is coming into its
own. I feel like tlose wlo embrace it
earliest are tle ones tlat are going to
establisl tlemselves in tle marketplace
as builders tlat are leading edge. Dont
wait until its forced upon you. Begin
to investigate low you can get into a
program.
19

7
Fi gur e 4: Smal l Bui l der s and Lar ge Bui l der s
Fi gur e 5: Demand Pr oj ec t i on
35%
100
80
60
40
20
0
2005 2006 2007
50%
66%
SMALL BUI LDERS
Year
Green building involvement expected at 15% or more
Source: MrGraw-Hill 2006 Residental Green Building Smart Market Report
27%
100
80
60
40
20
0
2005 2006 2007
39%
59%
LARGE BUI LDERS
Year
NAT I ONA L T R E NDS
Ten years from now, were just going to call it how we build houses.
Dvii Eiiiis, Pvisiii1 oi 1ni Cvi1iv A1i1 Hori Buiiiivs Associ1io
65%
40%
15%
2005 2006 2007
20%
31%
69%
56%
45%
25%
35%
37%
63%
Upper
Tipping
Point
Lower
Tipping
Point
PROJECTION
Depth of Green Building
Involvement
Exploring Involvement to Moderate
Share of Projects (15% or less projects
are green)
Signifcant Share or More of Projects
(16% or more projects are green)
Largely to Fully Dedicated to Green
Building (60% or more projects are
green)
Source: MrGraw-Hill Construction 2006
P
o
p
u
l
a
t
i
o
n
Willingness to Pay and Absorption Rates
Te Solaire green condominium building
in Battery Park, New York City, is
attaining 10-15 rent premiums based
on green demand. Solaire Leasing
Manager Lydia Haran says tle marketing
strategy clanged over time: Wlen we
started, we were marketing a stunning
residential building witl ve-star services,
unsurpassed views, and condo quality
nisles. Te green features were an
added incentive. Haran continues, But
we learned from tle leasing process tlat
tle green features actually were primary
and tle otler factors secondary, and tlat
tlere was a pent-up demand for green
luxury ligl-rises. We leased 293 units
witlin ve montls. According to Haran,
tlose units aclieved a 10 premium in
rents, wlicl las risen to 15 since tle
building opened last year.
20

Overall interest for Terramor Village
(green lomes in soutlern California)
lomes was 32 ligler, and absorption
was 5 greater tlan lomes in
neiglboring Ladera villages tlat lacked
Terramors green elements. Terramor
Village lomebuilders also enjoyed a
5-10 price premium over lomes in
Ladera Rancl.
21

Protection During Market-Downturns
Despite tle lackluster local economy,
tle 15-story Henry condominium
building, designed by Portland CBD
Arclitects, sold out nine montls alead
of construction, and tle developers raised
tle price ve times. Dennis Wilde, Senior
Project Manager witl developer Cerding
Edlen, cautions tlat wlile tle buying
public may favor an environmentally
sensitive productespecially in tle Pacic
Nortlwesttley are not necessarily
willing to pay more for it. Still, in a
competitive market, lower utility bills
and tle promise of a lealtlier indoor
environment give tle developer a
way to dierentiate tle product in
tle marketplace, Wilde says.
22

Creen lomes are a little more isolated
from a downturn, says Clris Bartle,
President of Te Evergreen Croup, a
San Francisco green brokerage company.
Our market las softened too, but not
enougl to really make a dierence.
23

Reduced Warranty Costs and Reduced
Call-backs
According to David W. Milner, Vice
President of Haven Properties in
Alplaretta, Ceorgia: Between 2003
and 2004, our warranty costs went
down by about 11. . . . And we directly
attribute tlat to . . . tle green building
program.
24

Dennis Creecl, Executive Director of
Soutlface Institute, wlicl developed
tle EartlCraft green lomes certication,
says: If we can reduce tle number of
call-backs . . . tlats money in [builders]
pockets.
25

Attracting New Consumers
Creen communities bring in lomebuyers
wlo typically buy only in tle resale
market, says Brooke Warrick, President
of American LIVES, a consumer-focused
market researcl rm, so developers and
builders are creating a new market for
tlemselves.
26

Entitlement Process
Steve Kellenberg notes, Applying
Creen measures can denitely win over
communities and speed tle entitlement
process. Voluntarily restoring wetlands
and otler ecological areas, encouraging
alternatives to automobile use, and
creating open space for community use
go a long way towards building support
and reducing legal delays.
27

According to Landon Clristoplerson, a
project manager witl tle small developer
Landwell Company in Nevada, municipal
support is critical. [City ocials]
are eager to bring fortl a true green
development--one tlat embraces best
development practices tlat will stand
tle test of time.
28

E X P E R T T E S T I MONI A L S ON T HE
B E NE F I T S OF B UI L DI NG GR E E N
Clapter 2: Current State of tle Creen Building Market 8
9 E X P E R T T E S T I MONI A L S ON T HE B E NE F I T S OF B UI L DI NG GR E E N
Resale Value
According to tle National Resource
Energy Laboratory (NREL), SleaHomes
ligl performance lomes in San Diego,
experienced a mean dollar gain of 55.4
for a mean ownerslip lengtl of 22.5
montls. Comparison [non-green] lomes
experienced a mean dollar gain of 44.7
for a mean ownerslip lengtl of 28.1
montls. Te mean dollar gain per montl
owned was $14,500 for SleaHomes and
$9,300 for comparison lomes.
29

Increased Publicity and Improved
Reputation
By its own contractors estimate,
SleaHomes received, witlout cost, print
and broadcast media coverage on tle
San Angelo and Tiempo developments
tlat approximated one million dollars
in publicity value between )anuary and
August 2001 alone. Te coverage included
San Diego television evening news, local
newspapers, and trade journals.
30

Amy Bolten, of Clristoplerson Homes in
California, reported tlat tle companys
green reputation was a signicant factor
in attracting a land seller in Marin County
to approacl tle company to arrange a sale
of liglly valuable land for development,
ratler tlan putting it up on tle open
market. Coing green las created goodwill
witl municipalities and environmental
groups in addition to opening doors sucl
as better access to properties.
31

Alleviating the Cost Burden Perception
Te perception of increased costs is one
of tle most signicant impediments to
builders wlo are considering adopting
green building. After a tlorougl
review of tle current researcl and
studies, McCraw-Hill nds tlat most
literature suggests green building can
be aclieved for comparable costs to
standard construction, witl better
up-front planning andior energy or
otler cost savings as a result of green
construction.
32
Creen lome builders
lave also found tlat actual cost premiums
in building green are regularly less tlan
originally perceived. According to tle
Urban Land Institute, Practitioners
estimate tlat using green materials
tends to cost between 3-4 more
tlan using conventional construction
materials.
33
Most articles and industry
professionals agree tlat green building
cost premiums are in accordance witl
tle Urban Land Institutes estimates.
Creen construction can be successfully
completed at zero extra cost witl careful
design and a systematic incorporation
of many of tle green elements early in
tle development process.
34
Conversely,
piece-meal attempts at green construction
can result in costs exceeding tle typical
2-5. Altlougl tle costibenet issue
is central to any discussion about green
construction, it falls largely outside tle
scope of tlis report.
Green construction can be successfully completed at zero extra
cost with careful design and a systematic incorporation of many
of the green elements early in the development process.
D
evelopers and builders
seeking to add a green
component to tleir portfo-
liosor adopt green standards as
a fundamental element of tleir
businessmust possess eective
and comprelensive strategies
to aclieve success in tle green
lomes marketplace. Te existing
paradigm of delivering a known
product to a known consumer
becomes clouded wlen con-
fronted witl botl a product
witl less-familiar attributes and
benets and a consumer base
witl a diverse set of preferences
and priorities. Many of tle risks
associated witl jumping directly
into tle green lomes market
can be alleviated by a better
understanding of tle fundamen-
tal elements of tle marketplace.
Te process of industry- and
consumer-demand analysis in any given
locale can be burdensome and add to tle
complexity of tle product-to-market par-
adigm. However, by analyzing tle system
as a wlole, new opportunities and drivers
can be revealed tlat will lelp any entrant
maximize returns wlile lelping to reduce
costs and avoid frustrating obstacles. Te
Market Engagement Framework (MEF)
lelps builders and developers gauge tle
relative strengtl of tle marketplace and
identify leverage points from wlicl to
devise a comprelensive strategy for
market entry and growtl
Te MEF contains two fundamental
components: analysis and strategy. Te
Market Analysis component is described
in detail lere and tle Market Strategy
component is furtler explained in
Clapters 5 and 6.
Market Analysis. Te stakelolders in tle
residential green building marketplace
are numerous and are found across most
of tle major sectors of civil society, as
slown below:
Consumers, tle end users of tle product,
are at tle root of all activity in tlis arena,
as tle industry linges on tleir ability
to value tle fundamental nature of tle
product being delivered. Tis complete
landscape belaves as a complex system.
To simplify analysis of tle green lomes
marketplace, tle various stakelolders
lave been aggregated into tlree primary
elements: (1) consumers, (2) industry,
and (3) government. A proxy metlod of
analysis las been developed tlat enables
tle builder or developer to gauge and
evaluate tle relative strengtl of eacl
of tle dierent elements by examining
discrete features and claracteristics witl-
in eacl respective element. Furtlermore,
two otler external factors inuencing tle
residential green building marketplace
lave been identied: (1) acute resource
pressures and (2) macroeconomic trends.
Tese pressures are more subjective in
nature tlan tle otler elements, but are
no less signicant in contributing to tle
development of a comprelensive strategy
to aclieve tle market engagement goals
of tle company.
Elements of a Robust
Creen Homes Market
10
Chapter 3
Market Stakeholders
Government departments Material suppliers
Nonprofts and advocacy groups Media companies
Industry associations Community groups
Architecture frms Insurance agents
Construction companies Appraisers
Real estate brokers Home fnancing community
Homebuyers Research institutions
11
CONS UME R S
P
ardee Homes Marketing
Vice President )oyce
Mason indicated in a Marcl
2007 article tlat potential
lomebuyers lave recently
started to specically ask for
green features in tleir lomes.
Sle states: We saw [tle trend]
rst lappen in lybrid cars. I
tlink its probably going to slift
over to louses.
35

How does one identify tle likely
green lomebuyer: Te answer to
tlis fundamental question is not as
straigltforward as one would lope.
Unlike tle straw-bale or UFO-slaped
ecological and natural lomes of decades
past, green lomes today look and feel
like any otler conventional lome witl
regard to tleir basic attributes. However,
various national segmentation studies
reveal a few statistically signicant
dierences in attitudinal and belavioral
claracteristics tlat demonstrate an
identiable ligl-value buyer. Experts
interviewed during tle development
of tlis report agree on various patterns
found witlin tle green lome buying
population. Tese similarities include
ligler levels of education, greater overall
awareness of environmental issues sucl
as global warming, and concern over tle
lealtl and performance attributes of a
lome. Experts also express dierences
in consumer priorities based on
geograplical specicity. For instance,
California residents are more concerned
about energy eciency and air pollution,
wlereas tlose in tle soutleast part of
tle country are more concerned witl
issues sucl as mold and indoor air quality.
Lastly, certain project-level studies lave
been undertaken by developers to lelp
understand tle key factors aecting
peoples decisions to buy andior move
into a green residence. Tese pre- and
post-occupancy studies, reviewed later in
tlis clapter, reveal additional prevailing
claracteristics of tle green lome
consumer.
Government Industry
Consumers
Common Behaviors and Charac-
teristics of Green Homebuyers
Seek out healthy food options
Purchase green products
Participate actively in environmental
and cultural organizations
Desire holistic experiences and
authenticity
Look for multiple and extensive
sources of information
Pursue higher education
CONS UME R S
Te most notable national studies
conducted to lelp identify tle likely
green lomebuyer are tlose by tle Natural
Marketing Institute, American LIVES,
and Ropers ASW. Tis report focuses
on tle rst of tle tlree. Togetler, tlese
studies reveal tlat tle common claracter-
istics of green lomebuyers are generally
based on consumer attitudes, belaviors,
mindsets, and preferences (i.e. psyclo-
graplic claracteristics) ratler tlan
on easily-identiable demograplic
claracteristics. Tese studies rigorously
support tle notion tlat certain segments
of tle population are more likely to be
receptive to tle green building message
and are, tlerefore, more likely to buy
green tlan tle general population. Tus,
as toucled upon earlier in tlis report,
tlese ligl value potential green lome-
buyers are claracterized by a faster
absorption rate of green lomes and
a ligler willingness to pay.
Natural Marketing Institute
Te Natural Marketing Institute (NMI)
is a leading business consulting and
market researcl rm wlose comprelen-
sive consumer segmentation analysis
focuses on tracking consumer labits
related to tle LOHAS (Lifestyles of
Healtl and Sustainability) marketplace.
In its 2006 survey, ve consumer seg-
ments were identied: (1) tle LOHAS
consumer, (2) tle Naturalites, (3) tle
Drifters, (4) tle Conventionals, and (5)
tle Unconcerned. Te rst of tlese seg-
ments, tle LOHAS group, slows leader-
slip in tleir attitudes toward tle environ-
ment, society, and socially-responsible
business.
36
Tey tend to be passionate
and knowledgeable about tle products
tley buy, to be less price sensitive, and to
be more brand loyal. Tey also generally
consider tlemselves to be early adopt-
ers of new products and services. Te
second segment, tle Naturalites, wlile
less committed to environmental issues,
are claracterized by a general concern
for personal lealtl, an attitude reected
in tleir purclasing labits. Te NMI 2006
survey indicates tlat togetler tle LOHAS
and Naturalites comprise 90 million con-
sumers and represent 41 of tle general
population (16 and 25, respectively).
However, tlis group accounted for 51 of
tle Creen Building Users segment (24
and 27 respectively).
37
Te LOHAS and
Naturalite consumer is tlerefore more
likely to purclase green buildings and
products tlan is tle non-LOHASinon-
Naturalite consumer. Data from 2003 and
2005 also substantiate tle disproportion-
ate propensity of tle LOHAS consumer
to buy green building products. As identi-
ed by NMI, tle following are a few key
claracteristics of tle LOHAS consumer:
79 of LOHAS consumers consider
tlemselves eitler tle rst person to
start using new environmentally friendly
products or alead of most people,
compared to just 36 of tle general
population.
38

16 of LOHAS consumers possess
post-college degrees, compared to
only 10 of tle general population.
39

Te LOHAS customer is tlree times
more likely to useiown renewable power
or plan on purclasing renewable power
in tle next year as is tle general
population (6 vs. 2 in eacl case).
40

Furtlermore, NMIs 2003 researcl
study identied tle Creen Homebuyeri
Remodeler and compared specic
belaviors of tlat segment of tle
population to tlose of tle general
population. Te Creen Homebuyeri
Remodeler include tlose respondents
wlo indicated tlat tley plan to buy a
lome, renovate, or make an addition to
tleir current lome witlin tle next year
and indicated one or more of tle traits
important for tleir building products,
as slown below.
Fi gur e 6: Gr een Bui l di ng Cons umer Gr oups
Clapter 3: Elements of a Robust Creen Homes Market 12
Building Product Traits Desired
by Green Homebuyers
Biodegradable
Chemical-free
Contains recycled content
Energy efcient
Energy-Star certifed
Environmentally friendly
Formaldehyde-free
Low fumes
Natural
No chemical residues
No synthetics
Non-toxic
Sustainably harvested
41

10%
Gener al
Popul ati on
LOHAS
Naturalites
Drifters
Conventionals
Unconcerned
Green Bui l di ng
User s
25%
14%
27%
24%
14%
23%
23%
25%
16%
Source: Natural Marketing Institute 2006
Source: Natural Marketing Institute 2003
Table 1 lists examples of tle dierences in
purclasing belaviors of tlese consumers
versus tlose of tle general population, as
revealed by tle NMI researcl.
Te results of tle NMI study suggest
tlat tle green lomebuyer generally
demonstrates a multitude of signicant
dierences in certain purclasing belav-
iors tlat combine to make identication
tlrougl a proxy metlod of analysis
possible. Te results also reveal
possible ways to target tlese consumers
and develop appropriate marketing and
advertising materials. Te American
LIVES and Roper ASW studies, wlose
LOHAS-like consumer segments are
referred to as Cultural Creatives and
True Blue Creens respectively, furtler
support tlese concepts and ndings.
Behavioral Attribute General Population Green Homebuyer/ Remodeler
Purchases of Green Products * denotes statistically signifcant diference
Hybrid Vehicle 0.3% 0.4%*
Renewable Power 6.3% 8.8%*
Alternative Healthcare 31.8% 44.4%*
Socially Responsible Investing (SRI) 10.6% 18.3%*
Healthy Foods and Beverages 53.7% 64.0%
- Celestial Seasonings 24.6% 33.7%*
- Stonyfeld Farms 6.4% 8.2%
Natural/Organic Personal Care 61.5% 76.0%
- Aveda 9% 15%*
Cleaning Supplies and Household Products 77.0% 92.2%
- Seventh Generation 2.7% 4.2%*
Energy-Efcient Appliances 74.1% 85.5%
Energy-Efcient Electronics 52.3% 64%
Dietary Supplements 75.3% 86.3%
Memberships to Clubs/ Organizations
- Library 44.6% 50.7%
- The Nature Conservancy 4.6% 6.7%*
- Sierra Club 2.7% 3.4%
- Zoo 8.8% 12.0%*
- Museum 8.2% 11.2%*
- Performing Arts Center 5.4% 6.3%
- Horticultural Center/Garden Club 2.7% 4.4%*
- Science Center 2.6% 4.4%*
Readership and Viewership
Magazines
- Better Homes and Gardens 28.3% 39.4%*
- Consumer Reports 23.6% 34.9%*
- National Geographic 18.8% 28.8%*
- Good Housekeeping 20.9% 25.1%
- Newsweek 16.1% 21.3%*
- Prevention 10.0% 12.8%
- Cooking Light 8.7% 12.4%*
- Discover 7.3% 10.7%*
- Martha Stewart 7.3% 12.0%*
- Parents 6.3% 8.8%*
- Mens Health 5.6% 6.1%
- Money 5.5% 9.5%*
- Fitness 4.8% 5.5%
- Self 4.5% 6.5%*
- Health 4.4% 6.1%*
- Sierra Club 2.1% 2.5%
Newspapers
- The New York Times 7.7% 10.1%*
- The Wall Street Journal 5.7% 9.5%*
Television/Radio
- PBS 28.7% 37.7*
- Home and Garden Channel 26.4% 36.8%*
- NPR 19.9% 25.9%*
- This Old House 19.2% 28.4%*
Tabl e 1. Rel evant Behavi oral Di fferences i n Green Homebuyers and Remodel ers
We saw [the trend]
rst happen in
hybrid cars. I think
its probably going to
shift over to houses.
)OYCE MASON,
MARKETINC VICE PRESIDENT
OF PARDEE HOMES
CONS UME R S 13
Source: Natural Marketing Institute, 2003
Expert Opinions Regarding Characteristics and Motivations of the Likely Green Home Buyer
Primary interviews were conducted to
validate tle national segmentation studies
and provide additional insiglt as to wlo
is tle most likely green lome purclaser.
Assessing tle opinions of tlose at tle
forefront of tle green lome industry
allowed for tle creation of a more
robust consumer element of tle Market
Engagement Framework.
Market Segmentation:
Barr Hall, Director of Sales and Market-
ing at McStain Neiglborloods, one of
tle premiere green lome builders in
tle U.S., views lis target audience as a
subset of tle Cultural Creatives (simi-
lar to LOHAS). Tey do not need to be
rabid-green, but its good [for tlem]
to lave an increased level of awareness
about environmental issues.
42

Tom Paladino, President of Paladino &
Company-Creen Building Strategies,
indicated tlat tle Cultural Creatives
were a likely consumer due to tleir
propensity to ask a lot of questions.
He also posits tlat Traditionalistsi
Modernists would follow.
43

Mike OBrien, Creen Building Specialist
for tle Portland Oce of Sustainability,
agrees: People witl strong personal
values are most interested in green
building. Teyre creative. Its about
making informed cloices.
44

Mary Westcott, Administrative Director
for LEED for Homes witl tle Davis
Energy Croup, views many of ler
clients as innovators, early adopters,
and lolistic-tlinkers.
45

Green Product Purchasing Behavior:
Dennis Allen, President of Dennis Allen
Associates, a building company in Santa
Barbara and Ventura County, California,
indicates tlat le is constantly bumping
into clients and interested green lome-
buyers at local farmers markets in tle
Santa Barbara area.
46

Mike OBrien, Creen Building Specialist
for tle Portland Oce of Sustainability,
reects on tlere being only one farmers
market a decade ago, wlereas now tlere
are approximately 25 tlrouglout tle city
on dierent days of tle week. He furtler
postulates tlat restaurants witl menus
oering organic and natural foods lave
proliferated in tle last decade, giving
rise to a nicle specialty-farming indus-
try around tle city.
47

Botl Allen and OBrien liglliglt tle
concentration of lybrid car owners
in tleir regions as also indicative of
consumer demand and awareness for
green products in general. Indeed,
Portland ranks rst in tle country in tle
number of lybrids sold per tlousand
louselolds, witl Santa Barbara ranking
fourtl. Monterey and San Francisco ll
in tle second and tlird slots.
Education and Income Level:
McStain Neiglborloods conducted
a focus group study of 1,800 customers
and found tlat education attainment
was key, prevalence of masters
degrees or ligler among clientele
was signicantfour times tlat of tle
general population. Te study also
reveals tlat McStain clientele
demonstrate a propensity to attend
live tleater, visit art museums and
botanical gardens, and be active in
otler cultural clubs and events.
48

A study, performed by Tomas Taber
& Drazen for Built Creen in Colorado,
reveals tlat tlose more likely to be
aware of Built Creen are married and
college educated, lave a louselold
income between $100-$150K, and live
in louses costing $300k-$500k.
49

Dennis Allen, President of Dennis Allen
Associates, notices tlat lis clientele are
typically upper-middle class ratler tlan
upper-class. He feels tle liglest income
buyers generally do not slow a lot of
interest in green features and states tlat
ligler education is a distinguislable
attribute.
50

Amy Bolten, of Clristoplerson Homes,
states: Its not tle [liglest-income
earners] wlo dont really care about
operating costs and still want all of tle
bells and wlistles and square-footage
of luxury lomes. Its tle informed
upper-class consumer witl some
discretion and conservatism in low
tley spend money.
51

Motivations Underlying
Purchasing Decisions:
Cordon Cooke of Building Knowl-
edge speaks about quality: Consumer
expectations are constantly on tle rise,
wletler its a car or a louse or a piece
of fruit. Zero-defect louses are now in
demand. Customer service and comfort
will soon be demanded as well. [Te
green building movement] follows
trends seen in otler industries (cars
and appliances) wlere tle consumer
expects more.
52

Abbey Elman, a green building profes-
sional wlo is lelping pilot tle LEED
for Homes program in Texas, states:
Some [purclase green lomes] to slow
o to tleir friends. Some do it for tle
greater good. But most do it really only
if it makes sense for tlemselves rst.
Most want it for durability, comfort,
and energy savings. Tey want to be
comfortable, not pay too mucl for it,
and be able to resell it. Homebuyers will
pay a 5 premium for green features,
but tley also demand a 5-year payback.
Twenty- or 30-year paybacks simply
dont resonate.
53

14 Clapter 3: Elements of a Robust Creen Homes Market
Industry experts strongly believe tlat tle
LOHAS consumer, tle Cultural Creatives,
and tle True Blue Creens are motivated
and educated consumers and, tlerefore,
liglly receptive to tle green lome
message. Altlougl all tlree of tlese
segmentation groups generally desire a
lome tlat meets tleir more traditional
needs of location, space, and aord-
ability, tley often eitler seek out green
lome providers specically or are
already attuned to tle benets of green
lomes. However, it is often pointed out
tlat tlese groups are not tle only ones
buying green lomes and, tlerefore, not
tle only viable and attractive segments.
Successful engagement of tle market-
place linges upon tle ability of a builder
or developer to communicate product
benets to tle larger, more mainstream,
population. Indeed, Marc Riclmond, tle
former manager of Austins green building
program and one of tle principals belind
tle launcl of Build It Creen in California,
sees green lomes as appealing to anyone
wlo wants sometling better.
54

Project-Level Surveys
Homebuyer Willingness to Pay:
Strong indications exist that homebuyers in markets across the country are increasingly
willing to pay premiums for green homes. Cahners Residential Group, American LIVES,
Christopherson Homes, and others have all contributed to this body of research.
The 2001 Cahners survey reveals that 96% of homebuyers claim they are willing to
pay extra for green features, and 68% would be willing to pay $2,500 to $5,000 extra.
Twenty percent would pay up to $10,000 for green upgrades. A 2005 Christopherson
Homes study fnds that roughly half of its survey respondents are willing to pay over
$100 a month in additional mortgage payment for a green home, equating to an
additional $15,821 in purchase price, assuming a 30-year loan and a 6.5% APR.
An October 2005 survey by American LIVES of homebuyers in the Terramor section
of the Ladera Ranch development in Orange County, California, fnds that 23% of
respondents are willing to pay over $100 a month in additional mortgage payment
for green home features they think are important. Interestingly, this fnding is identical
to a larger 2004 survey of recent homebuyers in the northern California, Denver,
Salt Lake City, and San Diego.
Homebuyer Willingness to Pay:
15 CONS UME R S
Several project-level surveys lave been
conducted to lelp determine tle principle
drivers and attitudes related to tle green
lome purclasing decision witlin specic
communities tlat lave been built to a
green standard and marketed as sucl.
For instance, tle results of surveys
green lome buyers in tle Ladera Rancl
development in California indicate tlat
most lomebuyers want to see builders
do more in tle area of green building and
tlat a majority of lomebuyers is generally
willing to pay an additional $50 or more
on tleir montlly mortgage payments for
green features. Eiglty-tlree percent
respond in tle armative to tle state-
ment: I would spend money to save
energy, if I could recover it in lower
utility bills. Only 10 of tle respondents
indicate tley are not concerned about
energy-saving features. More specically,
new teclnologies tlat improved indoor
air quality are indicated as being very
important or essential to lave in tle
lome by a majority of tle respondents.
55

A consumer survey conducted by Polaris
Inc. in 2005, on belalf of Clristoplerson
Homes in Nortlern California, wlicl
is responsible for over 3,500 lomes in
30 communities,
56
slows similar results
among tle 192 respondents: 22 of
respondents indicate tley would spend
extra money wlen purclasing a lome
to save energy even if [tley] knew [tley]
miglt not be repaid in savings on utility
bills. An additional 72 say tlat tley
would spend extra money wlen
purclasing a lome to save energy, if I
could recover it in lower utility bills.
To tle respondents, tle term green
building typically means good for tle
environment, witl a small majority
(51) equating it to reduced energy
bills. Furtlermore, only 42 link
green building to a lealtlier indoor
environment, and only 22 link it to
better built lomes. Lastly, 74 of
respondents are eitler somewlat
aware or very aware of green
building teclniques and features.
57

Creen lomes, wlen viewed as a
consumer product, possess features
tlat allow tlem to be absorbed into tle
marketplace. However, tle green building
consumer often demonstrates a variety
of demograplic, psyclograplic, and
belavioral claracteristics tlat cannot
be easily placed into any one segmenta-
tion prole. Altlougl many purclasers
of green lomes understand and value
tle associated attributes and benets,
many otlers may just enjoy tle look
and feel of tle louse regardless of tle
features tlat make it green. Because tlere
is no single prole of tle green lome
consumer, sizing tle market becomes
dicult. However, tle proxy metlod of
consumer-demand analysis is still relevant
and provides a multi-faceted approacl
tlat identies: (1) wlicl geograplies to
specically target, (2) tle level of maturity
of consumer awareness, and (3) low to
best leverage prevailing attitudes in a
marketing and sales strategy.
Many experts interviewed agree in
principle tlat green lomes can be sold
to just about anyone as long as tle green
lomes message is delivered correctly.
However, tle ability to identify likely
green lome buyers provides a two-fold
benet: lowering transaction costs associ-
ated witl making sales and identifying
appropriate marketing messages tlat will
resonate most eectively witlin a closen
geograply. Terefore, a proxy analysis,
altlougl not witlout limitations, is still
a wortlwlile endeavor for tlose looking
to understand tle nature of consumer
demand witlin particular locations.
Te belaviors tlat can be relatively
easily gauged for dierent locales lave
been winnowed down from tle list of all
associated and relevant belaviors in order
to quickly and easily measure tle relative
strengtl of tle consumer market for
green lomes.
Te researcl suggests tlat tle green
lomebuyer is more likely to own a lybrid
velicle or slop at natural food stores
tlan is tle general population. Obviously,
buying a lybrid velicle or slopping at
Wlole Foods does not guarantee tlat
tle consumer will tlen purclase a green
lome. However, tle proxy analysis does
provide a relative basis for gauging
potential consumer demand. Most
importantly, a large number and
percentage of people in a given area
buying lybrid velicles and slopping at
Wlole Foods can be seen as a positive
sign tlat tlere is a viable consumer base
in tle area liglly receptive to messaging
about tle benets of green lomes.
SustainLane comprelensively assesses
a citys greenness. Founded in 2004,
SustainLane publisles rankings on U.S.
city sustainability covering sucl topics as
population mobility, trac congestion,
air quality, government innovation,
and climate clange initiatives. For tle
consumer proxies, tle city ranking
on local food and agriculture use is
particularly informative because it
considers tle number of farmers markets
and community gardens per capita.
58

Use of the Market Engagement Framework for the Consumer Element
Consumer Proxies and Indicators
Purchase of Green Products
Sales of hybrid vehicles
Number of existing Whole Food Markets
Number of Whole Foods Markets slated for development
Number of natural food stores carrying Celestial Seasonings products
Number of natural food stores carrying Stonyfeld Farms products
Wholesale clubs and specialty shops carrying Stonyfeld Farms products
SustainLane: Local Food & Agriculture
Number of Aveda stores
Number of Aveda salons/spas
Number of stores selling Seventh Generation products
Readership
Readership of certain magazines
Readership of certain newspapers
Conceptual Exposure
Green construction conceptual exposure
Education
Educational Attainment: Bachelors Degrees
Educational Attainment: Graduate or Professional Degrees
I NDUS T R Y
T
le industry element
of tle green lomes
market carries tremendous
importance because it provides
tle expertise, labor, and capital
required to deliver lomes to tle
end-user. In addition, industry
often provides tle vision and
initiative necessary for market
transformation and growtl.
In tlis case, industry refers
not only to businesses, but
also to non-governmental
organizations, nonprots and
industry or trade associations,
including green lome certica-
tion programs run by nonprots
or industry groups.
Dennis Creecl, Executive Director of
tle Soutlface Institute and clampion of
tle EartlCraft green lomes standard in
Atlanta, Ceorgia, states tlat tlere are two
primary metlods for builders to make
money from green building. Te rst is to
improve construction science in order to
reduce waste, increase energy eciency,
riglt-size meclanical systems, etc., witl
tle ultimate goal of reducing costs. Te
second is to improve building quality in
order to dierentiate tle product and
to gain a market advantage by growing
a price premium or increasing market
slare.
59
Fortunately, tlese metlods are
not mutually exclusive and tend to
support eacl otler if done properly.
Industry professionals will always lave
tle need to increase (or at least maintain)
prots wlile building green.
Primary Methods to Make
Money from Building Green:
1. Improve construction science
in order to reduce waste,
increase energy efciency,
right-size mechanical systems,
etc., with the ultimate goal
of reducing costs.
2. Improve building quality
in order to diferentiate
the product and to gain
a market advantage by
acheiving a price premium
or increasing market share.
Government
Consumers
Industry
17 I NDUS T R Y
Industry Stakeholders
Industry is complicated and multi-
faceted, but also resilient, ingenious,
and fast-moving. As witl conventional
real-estate development, residential
green building is tle result of tle
combined eorts of developers,
builders, specialists (including arclitects,
engineers, landscape arclitects, urban
planners, and otlers), lome nanciers,
brokers and realtors, councils and
associations, and otler organizations.
Furtler information regarding specic
industry players and tleir activities in tle
four geograplies piloted witlin tle scope
of tlis report can be found in Clapter 8.
See Figure 7 for a visual diagram of tle
key green residential stakelolder
categories witl examples.
Fi gure 7. Green Resi dental I ndustr y Stakehol ders
I N D U S T R Y S T A K E H O L D E R S
Leadership examples from the feld:
Rancho Mission Viejo
4,000-acre master-planned community
in Southern California
Incorporates sustainability in all of its decisions
for housing, site planning, and transportation
WCI Communities
Florida developer
Incorporates green building into mainstream
housing productions
Cherokee
National brownfeld developer
Incorporates substantial design (water conserva-
tion, on-site agriculture, green building materials
and techniques, and geothermal energy) in its
Kanawha development in South Carolina
Advancements in the feld:
Eco-broker International
Based in Colorado
Trains and certifes brokers
Educates builders and homebuyers
Energy efciency in Multiple Listing Services (MLS)
Began in Pacifc Northwest
Logs data on purchasing rates and premiums
paid for energy efcient homes
Leadership examples from the feld:
Allen Associates
Has built passive solar-designed houses
in Santa Barbara, CA since the early 1970s
Goal to produce homes that generate energy, purify
waste water, produce zero waste, and purify the air.
McStain Neighborhoods
Premium green builder in Boulder, CA crafting
400 homes each year
Sets records for consistent customer satisfaction
of over 90%
Green professionals are appearing
at an exponential rate, including:
Architects
Engineers
Urban planners
Ecologists
Landscape architects
Other professionals
Varying levels of expertise and ability
Sources to fnd experts:
USGBC website
Energy Star website
Whos Green?publication
Many fnanciers provide Energy Efcient Mortgages
(EEM)
Loan money for energy improvements
Validated according to Home Energy Rating System
(HERS) Accreditation Standard
Banks and other providers vary by region
Many green building leaders exist throughout the
country:
US Green Building Council
National Association of Home Builders /
Green Building Initiative
Urban Land Institute
Over 40 regional programs, including:
Built Green Colorado
Austin Energy Green Building Program (Texas)
Southface Institute (Georgia)
Build It Green (California)
Developers Brokers & Realtors Builders
Specialists Home Financiers Councils & Organizations
Companies lave successfully transitioned
from conventional building and real estate
to incorporating green building practices
into tleir standard operating procedures.
Tese rms are driven by an interest to
dierentiate tleir products, a dedication
to ligl quality, a commitment to lelping
tle natural world, and even a curiosity
for exploring an exciting new avenue of
business opportunity.
Wlatever tle motivation, tle transition
and internal drive lave a better clance of
success if tlere is a clampion (or team of
clampions) pusling tle process forward.
Te likelilood of success increases even
more if tle clampion is encouraged,
supported, and rewarded in tlese eorts.
Very often witlin organizations tlat lave
embraced tle green building market, tle
initiative can be traced back to a strong,
internal clampion for tle cause. In
Florida, tle large-scale developeribuilder
WCI Communities began its rst green
prototype lome in 2001 because tle
tlen-current Clief Executive Ocer
Al Homan decided tlose eorts
would be wortlwlile for tle company.
After lis departure as tle lead of tle
company, tle green projects would not
lave continued witlout a dedicated group
of leaders pusling progress forward.
60

Te clampions tlemselves can frequently
be classied as LOHAS or Cultural
Creatives in tle same way tlat tle green
lomes buyers can.
Reasons for Success
Challenges for the Green Building Industry
19 I NDUS T R Y
Witlin tle industry element, one
considerable clallenge tlat tle green
lomes market faces is successfully
mesling national certication or guideline
programs (e.g. LEED or tle NAHBs
guidelines) witl its local counterparts
(e.g. Built Creen Colorado or EartlCraft).
As it stands, tlere are estimated to be in
excess of 40 local green building standards
in tle United States.
61
Tis obviously
causes confusion for tle lomebuyer, as it
is dicult to discern wlicl standard las
ligler requirements and wlicl weigls
energy use, water use, recycled content,
and otler aspects of green buildings
leavier tlan otlers.
Anotler common diculty is tle myriad
of actors aecting tle value clain in tle
residential market. Usually a developer
purclases or gains riglts to a piece of
land, tlen contracts building riglts to a
builder (or series of builders), and tlen
tle builders sales sta (or even a fourtl
entity: a selling agent) is responsible
for selling tle constructed lomes to
tle end-users. Even if tle developer is
interested in and dedicated to building
green, tle builder may demand or expect
tlat tle buyer is willing to pay a premium
to cover not only any potential increase
in building costs, but also tle learning
curve necessary to incorporate new green
building practices. As Bob Taber, Manag-
ing Partner of Tomas, Taber, & Drazen,
and marketing consultant for Built Creen
Colorado, describes:
For a high-volume production builder
in the $150-$200 thousand cost range,
there can be signicant costs in switch-
ing over. From specing and purchasing,
all the way over to inspection, theres
so much associated with the transition
that there will be signicant start-up
costs (since all of their systems must be
re-worked). Tis is a big challenge for
production homebuilders. Tey dont
want to go through that transition
without consumer demand for it.
62

Tis learning curve relates to yet
anotler clallenge for tle residential
green building industry skill and
capacity building. It is not uncommon
for a large portion of lome building to
be completed by sub-contractors. Often,
tlese sub-contractors employ workers
ill-prepared to institute green build-
ing teclniques on job sites. Additional
training is frequently necessary to enable
workers to complete tle tasks because
tley tend to be dierent tlan conven-
tional practices and developers may not
lave direct control over sub-contrac-
tors. Tis results in a re-structuring of
tle standard operating procedures of
sub-contractors, builders, and developers
driving tle process. Overcoming learning
curve clallenges is often most eective
tlrougl partnerslips witl industry and
government players wlo lave greater
green building experience. Tis is furtler
discussed in Clapter 5.
Overcoming learning curve challenges is often most eective through
partnerships with industry and government players who have greater
green building experience.
T
le Market Engagement Frameworks
analysis component (encapsulated
in tle Market Metrics Lens or MML)
is designed to provide tle information
tlat developers need wlen building in
a specic geograply. Te information
is botl quantitative and qualitative for
tle industry element. It is necessary to
consider tlese developments and tle
quantitative data provided in tle MML
to gain a comprelensive view of tle
geograply in question.
Use of the Market Engagement Framework for the Industry Element
Industry Proxies and Indicators
Green Building Associations/Coalitions
Residential Green Building Programs
- Year founded
Green Building Organizations
- Year founded
US Green Building Council (USGBC) Chapters
USGBC organizational memberships

Market Penetration
LEED-existing buildings
LEED-registered projects
Energy Star Homes (market penetration percentage of new homes built in 2005)
SustainLane: Green (LEED) Buildings
SustainLane: Green Economy

Green Building Service Providers
USGBC LEED-Accredited Professionals (APs)
- LEED APs per Capita
Energy Star Site-Built Home Builders and Developers
- Energy Star Site-Built Home Builders and Developers per 1,000 housing units
authorized in 2006
Energy Star Home Energy Raters
- Energy Star Home Energy Raters per 1,000 housing units authorized in 2006
Energy Star Lenders (mortgages)
- Energy Star Lenders (mortgages) per 1,000 housing units authorized in 2006
Energy Star Utilities/Sponsors
- Energy Star Utilities/Sponsors per 1,000 housing units authorized in 2006
GOV E R NME NT
T
le support of govern-
ment institutions and
public agencies, including
utilities, is critical to tle market
growtl and support for green
lomes. Several residential green
building experts, including
Miclele Russo, Directory of
Industry Communications
at McCraw-Hill Construction,
view municipal polices, pro-
grams, and mandates as critical
to tle growtl of green build-
ing.
63
As mentioned earlier,
government involvement in promoting
green building is on tle rise. Expanding
on lessons learned from earlier incentives
in commercial green buildings, govern-
ments are now exploring and implement-
ing meclanisms for promoting residential
green building. Tese meclanisms in-
clude expedited permitting, mandate and
grant policies, density and tax incentives,
aordable lousing bonuses, and public
recognition. In addition to tle tangible
benets to botl builders and buyers tlat
incentive programs aord, government
programs and initiatives indicate an eort
by elected ocials to serve an interested
public.
64

Consumers
Industry Government
Institutional/Policy Dynamics
In some cases, government programs are
being enacted in municipalities tlat lave
not yet lad signicant green building
activities. Bostons recent private-sector
green building mandate is one sucl case.
Otler times government programs can
be viewed as lagging indicators of
signicant green building activities in
a city, sucl as increasing building-code
standards to recognize increasing building
performance. Regardless, a signicant
attribute of government programs at tle
local and regional level is tleir staying
power. Unlike federal tax credits for en-
ergy eciency, wlicl usually expire after
only a few years, most local and regional
government programs last for many years.
Te USCBC does a good job of catalog-
ing sucl programs and policies at tle
state and local levels, and provides tlese
resources publicly.
65
In addition to
meclanisms for supporting green
building, tle existence of departments
and oces devoted to promoting green
building is an important indicator of
government support.
SustainLanes government measurements
provide annual rankings of tle top 50
cities along a number of sustainability
metrics, including land-use policy, city
innovation, and knowledge base.
66
Te
land-use policy component ranks cities
based on park space and sprawl. Creen
building expert Creg Kats of Capital
E sees smart growtl and planning
policies as strong indicators of likely
support for green residential building.
67

Te city innovation ranking incorporates
green building incentive programs and
support for car slaring and carpooling.
Te knowledge-base component
includes tle existence of a sustainability
department in city government and tle
establislment of sustainability goals.
21 GOV E R NME NT
Climate-clange eorts at tle city level
lave played a major role in focusing
attention on tle built environment.
68

Te setting of global-warming emissions-
reductions targets by cities represents
a signicant step and, recognizing tlat
tle buildings are a large contributor to
greenlouse-gas emissions, will likely be
followed by policies to increase energy
eciency in tle built environment.
On )une 13, 2005, tle U.S. Conference
of Mayors unanimously passed tle
Mayors Climate Protection Agreement.
As of Marcl 1, 2007, 431 mayors across
tle country signed tle agreement, wlicl
includes setting reduction targets and
implementing action programs.
69
Mayors Agreement on Climate Change
Use of the Market Engagement Framework for the Government Element
For tle government element, tle Market
Engagement Frameworks analysis
component is composed of largely
qualitative indicators to assess tle
strengtl of government attention to and
support for residential green building.
Te indicators cover a governments
attention to tle environmental impacts of
development in general, sucl as policies
and programs on climate clange and land
use planning, as well as specic initiatives
around promoting green building.
Botl carrots (incentives) and sticks
(mandates) for green building are critical
policy meclanisms of city and state gov-
ernment tlat developers need to be aware
of in assessing tle government element of
tle green residential market. Overall, tle
indicators listed below provide a robust
lens into tle current or likely government
support for residential green building.
Government Proxies and Indicators

Government and Planning Authorities
Discrete city-level sustainability committees and/or departments
SustainLane: Knowledge-Base
Kyoto buy-in from leadership (Mayor, City Council)
SustainLane: City Innovation
Incentives, Targets, and Mandates
Municipal support for green building
- Fast-tracking for green or LEED
- Density bonuses (Floor-to-Area Ratios)
- Taxes credits and grants
Municipal Mandates
- Target for public buildings
- Requirement for public buildings
- Target for private buildings
- Requirement for private buildings
State Level Support/Requirements
SustainLane: Planning/Land Use
AC UT E R E S OUR C E P R E S S UR E S
I
n planning potential projects,
developers must consider
topics of immediate interest
and tlose tlat may lave become
consumer lot-buttons. Often,
tlese topics can become acute
pressures on decision makers
in tle area, wletler tlose
decision makers are consumers
or potential building partners
for tle developer. Tese
pressures frequently stem from
real or perceived tlreats in
resource scarcity of one or
more types, and will aect
consumer awareness, industry
innovation, and government
environmental, building, and
urban limit policies.

For example, in tle soutlwest United
States, water-use riglts and water-use
reduction are particularly clarged
issues. As a result, native landscaping
(as opposed to Englisl-style lawns) las
become tle standard expectation in
many cities in tle soutlwest. Develop-
ers working tlere slould be particularly
interested in otler water-conserving or
stormwater-runo teclniques, sucl as
greywater systems, permeable pavements,
or natural rain catclments. Consum-
ers and builders may botl value and be
particularly receptive to tlese inclusions,
even to tle degree tlat absorption rates
andior consumer willingness to pay may
be enlanced.
SustainLane is useful in gauging tle
claracteristics of certain resource pres-
sures, it ranks tle 50 largest cities in tle
U.S. on street and freeway congestion,
public transit riderslip, and air-quality.
70

Furtlermore, tle Energy Information
Administration of tle Department of
Energy provides state averages for tle
price of electricity and natural gas by
end-user.
71
A more qualitative approacl
to understanding pressures in an area
includes reading local newspapers and
municipal publications. Websites sucl
as Factiva.com are useful in locating
articles pertaining to green building,
sustainability, and environmental issues
tlrougl key-word searcles.
Consumers
Industry Government
Acute
Resource
Pressures
Macroeconomic
Trends
Emergence of the Countrys
First Green Building Program
Acute resource pressures occasionally spur the
creation of new green building programs. In the
1970s, forward-thinking leaders from Austin,
Texas within the local utility, the city govern-
ment, the professional builder community, and
the active citizenship realized that an alternative
to building additional power plants would be to
set an aggressive energy-use reduction program.
These eforts spawned the Austin Energy Green
Building Program, which has since grown to
become one of the most successful programs
of its kind in the country.
72
This turn of events
is mirrored in recent years in Californias energy
crisis and the resulting energy-reduction
initiatives in the state.
73
23 AC UT E R E S OUR C E P R E S S UR E S
MAC R OE CONOMI C T R E NDS
D
evelopments slould not
be planned witlout
paying close attention to
macroeconomic trends of
tle surrounding area.
Tese macroeconomic issues include,
but are not limited to:
)ob growtl rates.
Home ownerslip cost
uctuations.
Population growtl or loss.
Current lousing supply
and vacancy rates.
Interest rate clanges.
Income and wage growtl.
Construction and material expenses.
Tese trends slould be considered
seriously wlile designing marketing
and sales strategies. For instance, in a
down-turned lousing market in wlicl
buyers lave signicant bargaining power,
developers and builders slould look to
green building teclniques even more
tlan in otler circumstances in order
to dierentiate tleir products. Tis is
particularly true for green lomes tlat use
components to provide more nancial
value by reducing operating costs.
It is important to note tlat real estate
developers must focus on tlese trends in
any business decision and slould always
include tlem in tle due diligence
process. As a result, tlis report does
not investigate tlem in deptl.

Consumers
Industry Government
Macroeconomic
Trends
Acute
Resource
Pressures
T
o gain comprelensive
understanding of tle
marketplace and devise
appropriate entry and market-
ing strategies, builders and
developers must investigate all
tlree of tle aforementioned
elementsconsumers, industry,
and governmentin conjunction
witl tle resource and economic
pressures inuencing tle overall
landscape. We lave devel-
oped tle Market Metrics Lens
(MML) as an evaluative tool to
lelp witl tle complexity tlis
investigation necessarily entails.
By following a relatively
simple prescriptive process, salient
claracteristics for eacl market element
are identied and included as metrics in
tle MML. Once completed, tlis MML
identies strengtls and weaknesses in
a given market and can compare one
location to anotler. Furtlermore, it
identies specic partnerslip and
marketing strategies used to raise overall
awareness and advance tle industry,
topics discussed in detail in Clapters
5 and 6 of tlis report, respectively. Te
Market Metrics Lens can be viewed as
Table 2 on pages 38-43.
Te complete analysis of tle four pilot
geograplies can be reviewed in tle full
report Residential Creen Building:
Identifying Latent Demand and Key
Drivers for Sector Crowtl, available on
tle Erb Institute for Clobal Sustainable
Enterprise website: www.erb.umicl.edu.
Metrics for tle consumer element are
easily quantiable, wlereas tle metrics
under tle government element are more
qualitative in nature. Te industry
element possesses a mix of qualitative
and quantitative metrics. Te dual
quantitativeiqualitative claracteristic
of tle MML is intentional and liglliglts
tle fact tlat tle MML is not provided
to be used as a scorecard tlat proposes
a metlod of weiglting metrics witl
respect to one anotler. For instance,
Te New York Times readerslip can not
be weiglted equally to access to Wlole
Foods markets or to tle existence of a
strong green building program in tle
local government. Ratler, tle intent of
tle MML is to provide a snapslot of tle
landscape and to liglliglt strengtls and
weaknesses tlat are most prevalent. No
matlematical algoritlm can be eective
at evaluating tle intricate nature of tle
green building marketplace. Te MML
is a tool used for an informed evaluation
using quantitative data and qualitative
information, it is a guide for developers
interested in gauging residential green
building activity and growtl potential in
a variety of locales.
Te Market Metric Lens las been piloted
in four dierent geograplic locations:
(1) Los Angelesisoutlern California,
(2) HoustoniTexas, (3) MiamiiSoutl
Florida, and (4) Newarkinortlern New
)ersey. Many of tlese locations consist
of a conglomerate of multiple cities,
townslips, and otler municipalities,
a claracteristic tlat furtler complicates
Analyzing Markets For
Creen Homes
25
Chapter 4
Te Market Metric Lens is a tool used for an informed
evaluation using quantitative data and qualitative
information; it is a guide for developers interested in
gauging residential green building activity and growth
potential in a variety of locales.
MA R K E T ME T R I C S L E NS
a strictly quantitative evaluation. As sucl,
a few metrics, particularly tlose under tle
industry and government sections, men-
tion attributes of adjacent, but equally
relevant, locations. Te results of tle pilot
study for eacl of tle four locations are
discussed in detail below, witl tle excep-
tion of tle consumer proxy analysis re-
sults, wlicl are all quantiably tabulated
in Table 2 on pages 38-43. Evaluation
and interpretation of all metrics, includ-
ing analysis of tle interplay and relative
strengtl of eacl element (consumers,
industry, and government), are included
in Clapter 8 of tlis report. Te full MML
table for tlese four pilot geograplies, as
well as four comparative geograplies, is
slown in Table 2.
In addition to tle qualitative and
quantitative nature of tle MML, only a
limited number of potential proxies were
used to assess eacl of tle elements of a
green lomes market. Particularly in tle
consumer element, numerous potential
proxies address tle attributes of eacl of
tle tlree elements tlat make a strong
residential green building market. Eorts
were made to select proxies and indica-
tors tlat would most directly claracterize
eacl attribute wlile avoiding signicant
duplicability. In addition, tle proxies and
indicators tlat make up tle MML are
largely readily available and easy to
obtain at little or no cost tlrougl public
websites or common library resources.
For instance, altlougl television
viewerslip was discovered to be a strong
potential proxy for tle most likely green
lome buyer, acquiring consumer data
at a metropolitan level is fairly costly.
Conversely, readerslip is relatively
easy and inexpensive to obtain at many
libraries and eectively captures similar
consumer claracteristics to TV view-
erslip. In otler areas, sucl as socially
responsible investing, geograplical trend
data is liglly proprietary. As sucl, tle
MML is a robust but not comprelensive
compilation of proxies and indicators to
assess tle strengtl of tle tlree key
elements of a green lomes market.
26 Clapter 4: Analyzing Markets for Creen Homes: Market Metrics Lens
T
le two aspects of tle
strategy portion of tle
Market Engagement Framework
are to: (1) forge partnerslips
to lelp advance tle overall
industry and raise consumer
awareness, and (2) target
purclasers of residential
green lomes witl a focused
marketing and sales eort.
After analyzing tle green lomes market
in a given area, tle developer must
create a strategy to properly engage tle
market to successfully sell green lomes.
In forming tlis strategy, developers must
consider potential partners tlrouglout
tle industry and government sectors. In
keeping witl tle process designed in tle
Market Engagement Framework (MEF),
developers slould analyze tle Market
Metrics Lens (MML) to gain an under-
standing as to wlicl of tle tlree elements
(consumers, industry, and government)
are well developed and wlicl are weak.
Te developer slould tlen consider tle
opportunities related to forming partner-
slips witl tlose industry and government
entities slowing potential strengtl in tle
green lomes market and complementing
tle developers own abilities.
Building Partnerslips
Best Practices And Strategic Recommendations
Te guiding principal to form tlese
partnerslips slould be to nd entities
witl aligned interests. Benets could
be aclieved in tle form of collaborative
marketing and outreacl (raising
awareness andior specic-brand
strengtlening), employee or sub-
contractor training programs, and
even simply leveraging tle various skills
of tle many stakelolders of tle lome-
building value clain. Te EPAs Energy
Star program, for instance, las
demonstrated tle eectiveness of
partnering in marketing and outreacl
eorts. It las successfully lelped develop
a strong consumer preference bias for
tle Energy Star label in many markets
tlrougl a cooperative advertising model
(described in more detail in Clapter 6).
74

Developers forging partnerslips slould
not limit to focusing on lomebuilders.
Partners could include regional
developers and builders, nonprot
organizations, green building programs
or certication systems, nanciers,
city and state ocials, activist and
environmental consumer groups,
realtors and brokers, arclitects,
engineers, and utility companies.
Considering tle industry element
specically, companies using tle MEF
must seek partners tlat contribute to tleir
green building goals. Tis means nding
builders tlat are appropriately sized and
able to build at tle requisite scale, at tle
needed quality level, and in tle necessary
timeframe. In many parts of tle country,
tlis may mean striking a balance between
large-scale production lome builders tlat
may not lave green building experience
and smaller, more skilled green building
companies.
To determine tle builders dedication and
experience to green building, questions
a developer slould ask include:
Does tle builder lave an internally
mandated recycling program during
demolition and construction:
Does tle builder use low Volatile
Organic Compound (VOC) paints
and sealants as a matter of practice:
Does tle builder use a tlird-party
commissioning or certication standard
for its green lomes:
27
Chapter 5
By no means slould tlese positive
practices be tle extent of a potential
builders green building practices. Ratler,
basic questions sucl as tlese slould begin
a conversation on goals and metlods to
incorporate green building into a project.
Furtler questions slould be asked in
accordance witl tle developers project
goals. Tese do not lave a riglt or
wrong answer:
If tle builder uses a commissioning or
certication standard, is tle standard
focused on reacling a minimum set of
goals or reacling a ligl mark: Is it a
nationally or locally based standard:
Is tle builders green building practices
focused on purely energy eciency or
are tley focused on a lolistic sustain-
ability approacl to building:
Has tle builder received any grants,
funding, or public recognition of its
green building eorts or completed
projects:
How do tle builders green building
practices dier from otler builders in
tle same geograplic area:
In asking potential building partners botl
sets of questions, tle developer slould
begin to form a comprelensive under-
standing of tle skills, motivations, and
goals of tle builders in tle area. Furtler,
tle builders slould also be evaluated
based on wletler tleir decision-making
processes are agile or slow-moving,
often inuenced by wletler tle rm is
privately or publicly owned. Certainly, tle
dedication of tle top management plays
a large role in determining a companys
green building practices. Te results of
internal eorts are aected extensively
by tle origin of tlose eorts: if tley are
top-down or bottom-up and if tley are
engrained in tle corporate culture.
Finally, green builders slould be judged
by tle preconceived standards to wlicl
any builder would be leld, sucl as
reputation, cost, experience, size, and
management practices.
Tese questions slould also be applied
to otler industry partners, including
arclitects, engineers, and urban planners.
Te developer needs simply to slift tle
questions to reect tle particular
discipline more directly.
Wlen engaging tle government element
of a green lomes market, tle developer
slould look for partners witl missions,
resources, sta, and policies tlat support
green building eorts. Tese government
resources could be a part of a city sustain-
ability oce, an urban planning oce, a
zoning and development board, or any
number of otler local oces or associa-
tions. Te key is to determine tle extent
of support available to green building
projects, especially residential projects.
Tis support can come in tle form of fast
tracking green-lousing permits, increased
density allowances, tax increment nanc-
ing for green building, or even city and
state supported green lomes certication
programs. Witl regard to tle latter, it is
important to determine tle metlods for
certication (self-driven or tlird-party), if
tle program las tiers (and, if so, wlat tle
criteria are for aclieving tlem), and wlo
tle founding and governing partners are
because many programs are partnerslips
in and of tlemselves. Tis latter point
is exemplied well by programs like tle
EartlCraft lousing standard in Atlanta,
and its parent organization, tle Soutlface
Institute. Tis nonprot organization
las built a partnerslip among tle local
lome-builders association, retailers like
Home Depot, local government oces,
and dozens of local builders in order to
advance and promote its green building
program.
75

The Importance of Champions
In forming partnerslips, it is equally
important to nd strong organizations,
and clampions witlin tlem. Sucl
clampions often know of otler clam-
pions in otler area organizations and
companies. Tapping into tlese networks
lelps gain a rapid understanding of
leading green building practices in an
area. In addition, tlese clampions were
often originally drawn to green buildings
from a value-oriented perspective and
would likely be considered members of
tle LOHAS segment.
Ultimately, tlis practice of asking
questions and forming partnerslips
slould become part of a developers
standard operating procedures and best
practices. Tis process provides devel-
opers a deeper understanding into tle
opportunities of green building at a local
level witlin eacl building market.
28 Clapter 5: Building Partnerslips
29
A
ltlougl ample evidence
suggests tlat growtl
in tle residential green building
market is progressing sig-
nicantly at tle national level,
several clallenges remain at tle
local level and for individual
developers and builders wlo
lave yet to carve out a success-
ful nicle witlin tlis eld. Even
for establisled green lome
builders, tle desire and
imperative to increase sales
and protability and to retain
a slare in tlis industry
mandates robust and targeted
marketing and sales eorts
specic to tle nature of tleir
particular geograply and
consumer. For instance, certain
geograplic markets will possess
a more robust infrastructure
of industry knowledge and capabilities,
consumer awareness, and government-
support programs and incentives. In tlese
more mature environments, tle most
eective marketing and sales strategies
are inlerently dierent from tlose in
more emerging locations, wlere con-
sumer demand and preferences, as well as
stakelolder awareness, are more nascent.
Ultimately, tle clallenge lies not in
wletler viable consumers for green
lomes exist. Te growtl in tle market
is indicative of sucient interest in and
awareness of tlese products and teclnol-
ogies. Te clallenge is in low to deliver
tle value-proposition most eectively to
tle most receptive buyer.
Marketing and Sales Strategies
Growing Concept Awareness In Nascent Markets
In any given location, a segment of tle
population will be quick to value tle
benets and attributes of green lomes
and will seek out tle green lome
specically wlen purclasing a new
lome. Similarly, at least a small
landful of dedicated builders and
arclitects lave embraced tle tenets
of sustainability wloleleartedly and
are pusling tlis teclnology alead of
mainstream adoption. However, creating
awareness among potential consumers
and industry professionals wlo are not
actively seeking knowledge and expertise
in tlis area or are reticent to commit
is vital to progressing tle industry and
improving market penetration. Drawing
in tle more mainstream consumer and
engaging tle more traditionally-focused
builders and developers is crucial. In
September 2006, Miclael McCuinness,
Executive Director of tle National
Association of Oce and Industrial
Properties, New )ersey Clapter, states
in an article publisled in New )ersey
Business:
Tings have to happen at multiple
levels for [green building] to become
mainstream. Youve got to get the word
out there more often so that municipal
ocials and building owners say, Oh,
yeah, I know what green building is.
Ten, secondly, to demonstrate that, yes,
this can mean some substantial cost
savings and better environment and air
we breathe, et cetera. Lastly, the users
need to connect with vendors and say,
Tis is what you need to start using.
[Te vendors] have to be trained on how
to build with this stu and how to use
this technology.
76

McCuinness likens tle awareness trends
of green buildings to tlose of recycling
or automobile seatbelt use: Wearing
your seatbelt is very mainstream now. I
tlink we arent quite tlere witl tle green
building stu, but we are getting tlere.
Publicity and marketing across a variety of
sectors is key to narrowing tle knowledge
gap about green building benets and
Chapter 6
30
driving take-up by multiple sectors witlin
tle industry. Creg Stine, of Polaris Inc.,
asserts tlat Publicity tlrougl articles,
events and word-of-moutl marketing
builds credibility, creates a buzz and plays
a big role in building a successful brand.
By employing tlis strategy eectively,
Build It Creen [in California] . . . las
become tle go-to organization and a
tlouglt leader for tle local and national
media on green building. Tis fact isnt
unrelated to tleir success.
78

In Colorado, Built Creen las aclieved
success by incorporating similar market-
ing tactics. It embarked on a tlree-year
marketing program tlat lelped increase
tleir market slare from 6 in 2003, to
22 in 2005. Its marketing program in-
cluded television ads, consumer print ads,
broclures, website information, certied-
lome certicates, tour lome placards,
internet promotion, and additional public
relations sucl as by-lined articles in local
newspapers and magazines about Built
Creen lome builders and green building
practices. As a result, it was successful
in raising tle awareness of Built Creen
among prospective lomebuyers from
34 to 46, between 2004 and 2006.
79

Furtlermore, Built Creen conducted a
focus-group study of prospective new
lomebuyers and current owners in
Colorado in 2004, to determine (and
quantify) tle perceptions of tle Built
Creen standard related to green lomes.
Of tlose tlat were aware of tle Built
Creen program, nearly four-in-ten
indicated tlat tle Built Creen standard
was an inuence in tleir recent new-
lome purclase decision. Nearly six-
in-ten indicated Built Creen would
inuence tleir next new-lome purclase.
Te 2004 focus-group study also revealed
tlat many of tle participants equated
Built Creen witl environmentally friendly
construction, wlicl was perceived to
mean lower quality. Even if lower quality
was not tle perception, people generally
felt tlat a louse tlat was environmen-
tally-friendly was not very meaningful,
and tlerefore not wortl any extra costs.
As a result, Built Creen clanged tleir
positioning statement to:
A Built Green home is a better built
home. For homebuyers looking for
quality, Built Green means a better
built home because its built to a higher
level by dedicated builders providing
quality workmanship and materi-
als, with attention to environmental
details.
80

Built Creen tlen tailored its marketing
eorts to deliver tlis message and were
successful in increasing tle percentage
of people wlo believed tlat Built Creen
lomes are better built tlan non-Built
Creen lomes from approximately 37
in 2004, to 45 in 2006.
81

One of tle best success stories in tle
green lome movement comes out of
Austin, Texas, wlere tle Austin Energy
Creen Building Program (CBP) las been
in operation since 1991. Participating
builders, arclitects, and designers lave
built more tlan 7,000 CBP-rated lomes
over tle past decade. One of its main
initiatives was to educate tle public about
tle value of green lomes to create a
preference-bias among all lomebuyers.
In addition to providing free marketing
and publicity materials and consulting
witl tle industry, it currently oers public
green building workslops four times
eacl year. According to Ricl MacMatl,
an arclitect wlo las been witl tle CBP
as Residential Program Specialist for ve
years, tlese Creen By Design workslops
were initially slow to take o but tley
now sell out.
82
One of tle main market-
transformation publicity teclniques
employed by tle CBP was tle placement
of full-page advertisements every week
in tle Sunday edition of tle local daily
newspaper. As a result, tle CBP standard
became a label-of-excellence, and con-
sumers began asking potential builders
if tley incorporated tlese features into
tleir lomes and built tlem to tle CBP
standard.
Anotler successful robust marketing
eort is associated witl EPA Energy Star
Homes. Sam Raslkin, National Director
of tle program, describes tle basic tenets
and results of its outreacl campaign:
If at least 3 energy star partners,
including at least two builders, agree
to place energy star advertisement for
8 to 13 weeks, EPA agrees to place an
advertisement for the same 8 to 13
weeks. Te results have been dramatic,
both in educating the consumer and in
attracting more builders to Energy Star.
New builders see the partner builders
getting impressive recognition and [are
moved to] join on to be competitive.
83

Sucl marketing and outreacl is instru-
mental in developing a strong consumer
preference tlat las lelped progress tle
industry in eacl respective locale. An
establisled preference bias among tle
consumer base will not easily fade away.
In fact, it will likely grow stronger as tle
eects of viral-marketing and word-of-
moutl advertising take lold.
Clapter 6: Marketing and Sales Strategies
31
Creen lomes possess a variety of
attributes tlat appeal to potential lome-
buyers. Consequently, a focused and
targeted sales eort tlat addresses one
type of consumer may not resonate as
well witl anotler equally desirable and
viable type of consumer. However, certain
claracteristics of tle overall market
landscape in a given location will point to
sales strategies tlat will be most eective.
For instance, wlere tle market las been
identied as more nascent, witl limited
penetration of green lomes, it is most
advantageous for a rst-mover builder
or developer in tle green lome space to
ensure tlat tley capture tlose consum-
ersLifestyles of Healtl and Sustain-
ability (LOHAS), Cultural Creatives,
and True Blue Creenswlo are more
inlerently drawn to tleir new product
oering. Conversely, in a more mature
market, wlere tle industry and govern-
ment involvement las been more robust,
sales strategies will want to capture any
remaining LOHAS-type consumers as
well as tle more mainstream consumer.
Wlen selling to any consumer, discern-
ing exactly wlicl needs tle buyer is most
concerned witl and lopes to address witl
tleir purclasing decision is essential. Is
tle buyer purclasing to address concerns
about lealtl, to capture energy savings, or
to express a lifestyle statement: Perlaps
tle lome is simply tle riglt place, riglt
size, and riglt price, and tle green at-
tributes areat least initiallyirrelevant
to tle consumer. Te combination of
features and benets tlat resonate most
eectively witl tle buyer obviously dier
from individual to individual and from
one location to tle next, two aspects tlat
are not entirely unrelated. Altlougl
certain lot buttons may be predominant
in certain locations, variations occur at
tle individual level. Consequently, it is
impossible to devise a one-size-ts-all
sales strategy. However, trends and
best-practices lave emerged, wlicl we
lave compiled into tle following list.
1. Sell on benefits, not features.
Promotional material and sales pitcles
slould liglliglt tle lealtl benets,
energy-cost-savings, maintenance-cost-
savings, increased comfort, and otler
benets of a green lome. Altlougl tle
salesperson needs to be knowledgeable
about tle specic features tlat deliver
tlese benets and cost-savings, tle
features tlemselves are less likely
to resonate witl tle mainstream
consumer tlan are tle overall benets
associated witl tlem. In advertising
language, tlis means sell tle sizzle,
not tle steak.
84
In more concrete terms,
it is not enougl to say tlat a louse las
a tiglt envelope. It must be emplasized
tlat tlis results in lower energy bills,

increased comfort in all rooms, and
probably no insects. Dennis McConnell,
President of McConnell Homes, an award
winning custom lome builder in Atlanta,
las adopted tle Soutlface Institutes
EartlCraft program into its custom-
lome building operation. However, le
indicates tlat laving a label is not entirely
sucient to drive sales: I cant say, Im an
EartlCraft builder. Let me clarge you an
extra two percent. You lave to be able to
take tle virtues of wlat you incorporate
and slow it as benets and features tlat
are valuable to a customer. I can prove
to you tlat well leat and cool tlis 4,000
square foot louse for $60 a montl. Tat
las a value.
85

Selling Green Homes
Twelve Techniques for Selling Green Homes
1. Sell on benefts, not features.
2. Sell on total cost-of-ownership, not payback period.
3. Be authentic and knowledgeable.
4. Build relationships with consumers.
5. Demand excellence from sales staf.
6. Gain strong familiarity with geography-specifc drivers.
7. Identify each homebuyers Hot-Buttons.
8. Sell using a self-selecting Quiver-of-Arrows.
9. Incorporate a label of excellence.
10. Bundle features into a package rather than ofering options.
11. Use the environment not to drive the sales pitch, but simply to make it stickier.
12. Empower the buyer.
S E L L I NG GR E E N HOME S
You have to be able to take the virtues of what you incorporate
and show it as benets and features that are valuable to a
customer. I can prove to you that well heat and cool this
4,000 square foot house for $60 a month. Tat has a value.
Diis McCoiii, Pvisiii1 oi McCoiii Horis
32
2. Sell on total cost of ownership,
not payback.
Te term payback period, wlen
applied to tle lome, often does not carry
weiglt witl tle lome-buying consumer,
particularly wlen referring to paybacks
in tle 15-30 year timeframe. It is simply
not a benet tlat resonates well witl
average consumers because luman
nature tends to undervalue tle idea of
future energy cost savings, and lengtly
time lorizons may be meaningless wlen
tle average duration of lome ownerslip
is signicantly less. Te total-cost-
of-ownerslip argument las a more
immediate and timely implication.
Furtlermore, data may support tle
assertion tlat overall montlly payments
on a lome will be less witl a quality-
built green lome and are enougl to
counter-balance any montlly mortgage
premium. For instance, if tle additional
price paid for a green lome adds an
incremental montlly mortgage premium
tlat is less tlan tle typical reduction
in montlly utility bills, tlen espousing
tlat argument is certainly recommended
because it appeals directly to tle Wlat
does tlis do for me: question from
many mainstream consumers. Durability
and lower-maintenance costs are otler
nancial benets of green lomes tlat
lave ligl universal appeal. Conversely,
Net Present Value (NPV) is likely to
resonate witl only a limited segment
of tle population.
In addition, total cost of ownerslip
incorporates many intangible expenses
and tradeos tlat are liglly marketable.
As green building marketing expert
David )olnston of tle rm Wlats
Working, states:
Some in the public health industry say
there is a direct correlation between
the air that children breathe today
and the crisis were having in
our schools with attention decit
disorder. And California has dened
formaldehyde as a carcinogen. So
what we start getting into is not an
aordability conversation, but a
MasterCard commercial. Whats the
cost of a kitchen cabinet upgrade? $275.
Whats the cost of low VOC paint? $12.
Whats the cost of formaldehyde-free
berglass? Nothing. Whats the cost of
preventing your children from suering
from learning disorders? Priceless.
86

3. Be authentic and knowledgeable.
Wlen addressing consumers potentially
interested in a green lome, autlenticity
in sales and marketing messages is
critical. Tese consumers are likely
to already possess a favorable bias
towards purclasing a green lome and
will be liglly receptive to tle green
lome message. However, because
tlese consumers are well-informed and
conscientious about tleir purclases, tley
demand a great deal from tleir lome-
builder and often tlink more lolistically
about tle total sustainability of tle lome.
Tey place a ligl value on integrity and
lonesty, will be quick to identify any
type of green-wasling, and will likely
be turned away by any perceived lack
of transparency. Terefore, despite wlat
may be initially seen as an easy-sell,
failure to recognize and cater to tle
unique knowledge-seeking and lolistic
attributes of tlese ligl-value consumers
may drive tlem away. Barr Hall, Director
of Sales and Marketing for McStain
Neiglborloods, a premiere green lome
design and build rm in Colorado,
indicates tlat in sales and media
campaigns, it lays out all of tle attributes
and benets and lets people draw tleir
own conclusions. Hall points out,
lowever, tlat it is important to refrain
from being preacly: Do not presume to
tell tle consumer tlat tley slould also be
passionate tlese tlings. Let tlem come
to tlat conclusion tlemselves. Let tlem
devise tleir own reasons internally.
87

Tis lolds true especially for tle LOHAS
consumer, one of McStains main target
segments, but also applies to tle more
mainstream consumer.
Whats the cost of a kitchen cabinet upgrade? $275.
Whats the cost of low VOC paint? $12. Whats the cost
of formaldehyde-free berglass? Nothing. Whats the
cost of preventing your children from suering from
learning disorders? Priceless.
Dvii )ons1o, Wn1s Woviio
33
4. Build relationships with
the consumers.
Being able to develop some degree of
a relationslip witl tle consumer is
important to solidifying tle sale in ways
similar to tlose associated witl tle
autlenticity mandate described above.
Paul Ray, Executive Vice President of
American LIVES indicates tlat sales
sta must be able to take time to talk to
[LOHAS] customers and know tlem, to
see tlem as friends and allies, people to
slare tleir excitement witl. . . . Dont stop
witl oering decent value for tle money.
Tats just [tle] ticket to entry. . . . Cet
into stories, wlole process and systems.
88

In Colorado, McStain Neiglborloods
las embraced tle idea of relationslip
building, centering many of tleir
outreacl activity on a Customer for Life
plilosoply. In addition to losting and
organizing Halloween parties and trail-
building environmental-service retreats
for tleir lomebuyers, it las also built a
Discovery Center in an inll community.
By inviting people to just go in, look
around, and learn about tle exlibits and
tle lome features, it las botl increased
awareness of tle benets of green lomes
and fostered an element of good will
witlin tle community. Consequently,
38 of its lome sales come from repeat
customers and direct referrals, tle
national average is less tlan 10.
89

5. Demand excellence from
the sales staff.
Consumers expect sales sta to be more
knowledgeable tlan tley are regarding
tle product being sold, a notion tlat
lolds particular signicance wlen selling
to tle LOHAS consumer. )erry Yudelson,
green building marketing expert,
describes one builders lard-line approacl
of appropriately mandating tlat eacl sales
person deliver a 20-minute sales pitcl
to potential buyers of green lomes (tle
industry-average is only 10-minutes), or
else face being red. Te rationale is tle
sale of a green lome requires more eort
and attention tlan tlat required for tle
sale of a traditional lome. Mainstream
consumers may not probe as deeply
into sucl issues as wlere materials are
sourced or low tley are made, but will
likely demand in-deptl knowledge of
tle product in order to understand its
inlerent value. Conveying tle message
of value is paramount for builders to
maintain lealtly margins on tleir lomes.
6. Target geographic-specific drivers.
Local and regional builders likely will
already possess a working knowledge
of tle general claracteristics of tleir
potential buyers and of wlat drives sales
in tleir area, but tley may not connect
tlese drivers to tle benets of green
lomes. Sara Lamia, a green building
marketing coacl in Ft. Collins, Colorado,
uses an interesting teclnique to lelp ler
clients in tle building and development
community make tlis connection. Sle
provides a list of all of tle benets of
green lomes and asks ler builder-
clientele to indicate tlose tlat tley tlink
will resonate most witl tleir consumers.
Sle tlen devises sales materials to speak
to tlose interests. Similarly, existing
industry knowledge and sales best
practices can be leveraged in anotler
way. For instance, if tle conventional
builders advocate lifestyle elements and
state-of-tle-art features in tleir sales and
promotional material, it is important to
not deviate too far from tlose messages
in green lome specic marketing eorts.
Te idea is to link tle benets of green
lomes to tlose of conventional lomes
prevalent in mainstream material by
taking advantage of tle inlerent overlaps
tlat exist between tle two. Tese
kinds of teclniques emplasize tlat tle
industry is generally aware of wlat sells
best in its region but may be unaware
of low green lomes t into tle overall
picture. Lastly, by using a proxy metlod
of consumer analysis as portrayed in tle
MML, it is possible to claracterize tle
consumer landscape and identify specic
sales strategies. Te readerslip statistics
from tle MML are especially valuable
in identifying issues of interest to tle
consumers.
Dont stop with oering decent value for the money.
Tats just [the] ticket to entry. . . . Get into stories,
whole process and systems.
Pui Rv, Exicu1ivi Vici Pvisiii1 oi Arivic LIVES
34
7. Identify each homebuyer s
Hot-Buttons.
It is nearly impossible to predict a
persons individual needs and preferences
or low tle person balances tlose witl
elements of lome purclase factors sucl
as price. Tus, it becomes imperative to
develop an array of materials tlat appeal
to a variety of needs and preferences. Te
key is to comprelensively, creatively, and
artfully demonstrate tle various green
elements of a lome and communicate
tleir benets wlile respectfully
obtaining valuable information about
tle consumer and insiglt into wlat is
likely to drive tleir purclasing decision.
Sam Raslkin, National Director of EPAs
Energy Star Homes program, suggests
tlat eacl salesperson, upon greeting a
prospective lomebuyer, slould ask a
few simple questions to get to know tle
consumer and wlat may ultimately drive
a purclasing decision. Ask questions sucl
as: Wlat did you like least about tle
lome you are coming from: and Wlat
are you looking for most in a new lome:
Tese provide valuable insiglt into wlicl
features and benets to liglliglt in tle
sales pitcl. Marc Riclmond, tle former
manager of Austins green building
program and one of tle principals belind
tle launcl of Build It Creen in California,
believes green building will not sell as well
to tle liglest income bracket based on
environmental features, and asserts tlat
any attempt to sell to tlem must be based
more on tle principles of quality or state-
of-tle-art.
90

8. Sell using a self-selecting
Quiver of Arrows.
)erry Yudelson references a teclnique
used by tle large production builder,
KB Home, in one of its developments.
KB Home placed a green kiosk in
a slowroom tlat allowed potential
lomebuyers to peruse tle green features
and benets of its lomes. Te consumer
was able to navigate tle kiosk at lis or
ler leisure and could cloose to dig
deeper for more information on
attributes most interesting to tlem or
to skip over tlose tlat were not. Time
was not wasted and consumer interest
was not lost.
Anotler successful slow-and-tell
teclnique similar to tle kiosk involves
a more comprelensive interactive
slowroom tlat demonstrates tle features
of tle green lome. According to Ricl
MacMatl of Austin Energys Creen
Building Program, people retain 10
of wlat tley lear and 90 of wlat tley
experience. Demonstrations are tle
most eective sales tools, e.g. compact
uorescent bulbs connected to a meter,
liglt tlrougl low-E glass striking a
radiometer, etc.
91
Insulation cutaways and
otler displays tlat allow tle consumer
to directly compare green products to
conventional products are also useful, as
are infrared pictures tlat dramatically
display areas in a conventional lome
wlere cold air is leaking inside. Tis latter
example, in particular, las a signicant
amount of positive slock-value. By
incorporating dierent features tlat speak
to sucl benets as durability, energy
eciency, indoor air quality and lealtl,
tle slowroom metlod of selling allows
potential lomebuyers to self-select tlose
benets tlat matter most to tlem. An
aware and attentive salesperson can tlen
focus tle sales pitcl on tlose elements
tlat resonated most witl tle customer,
based on wlicl displays leld tleir
attention tle longest.
)ennifer Languell, a Florida Creen
Building Coalition consultant and
principal for tle rm Trifecta
Construction Services, las identied
seven essential elements tlat comprise
tleir Trifecta Umbrella and slould be
included in sales materials and building
exlibit space. See Figure 8, above.
92

Fi gure 8: The Tri fec ta Umbrel l a
T
h
e

T
r
i
f
e
c
t
a

U
m
b
rel l a o
f

G
r
e
e
n

B
u
i
l
d
i
n
g
Energy
Efciency
Water
Quality &
Efciency
Site &
Landscape
Construction
Process
Materials
Selection
Indoor
Environmental
Quality
Passive
Design
35
9. Incorporate a label-of-excellence.
Designing and building lomes to a
national or regional standard sucl
as Energy Star, LEED for Homes, or
EartlCraft can be extremely eective
in driving sales. In a more nascent
market, partnering witl a green building
brand (or brands) conveys a message of
autlenticity to tle discerning consumer
and dispels concerns over green-wasling,
or promoting false green attributes.
Furtlermore, aligning witl a brand
slould provide increased publicity
and marketing because tle partner
organization can slare or cover many of
tle associated costs. In a more mature
market, a preference-bias already may
lave developed and tle brand may
be almost a requisite for entry, as las
lappened in Austin, Texas, and Denver,
Colorado. In tle San Francisco Bay
Area, an online survey commissioned
by Clristoplerson Homes revealed
tlat 84 of tle respondents felt tlat tle
rating of a lomes green features by an
independent organization was eitler very
important or somewlat important.
93

10. Bundle elements into a package
rather than offering discrete options.
Te building science belind green lomes
is governed by tle principle tlat all
elements of tle lome must function as an
integrated system. Incorporating merely a
few features (e.g. bamboo ooring, solar
panels, etc.) does not equate to delivering
a comprelensive and lolistic green
lome. Incorporating several features tlat
work symbiotically is also a fundamental
metlod of keeping costs down. Premiere
green lome providers, sucl as McStain
Neiglborloods, incorporate into tleir
lomes as many aspects of sustainability
as possible and deliver tle entire package
to tleir buyers, being sure to convey tle
McStain Premium. Otler builders,
sucl as Pardee Homes, acknowledge tlat
dierent consumers will value dierent
attributes and lave several basic packages:
Living Smart, Energy Smart, and Water
Smart.
94
Similarly, tle U.S. EPA las
developed complementary lines to its very
robust and successful Energy Star energy-
centric program: an indoor air-quality
package and a Water Sense label.
95
Many
of tle national certication programs
mandate packaging and bundling because
certain points in eacl environmental
category must be attained to aclieve
certication up to its standards.
11. Use the environment not to drive
the sales pitch, but simply to make it
stickier.
Many experts in tle industry assert
tlat leading a sales pitcl witl a strictly
environmental message will only be
eective witlin a relatively small segment
of tle population. However, even in
tle case of tle mainstream buyer, tle
environmental message can make tle
sales pitcl become stickier.
96
Tis is
particularly true wlen tle mainstream
media is lled witl stories on global
climate clange, energy security, and
resource pressures. Business Week, Te
Economist, Te New York Times, and
Business 2.0 lave all run extensive series
covering environmental issues. Even
Sports Illustrated put global warming on
tle front page of its Marcl 2007 issue.
Terefore, even tlougl tle primary
message delivered to tle consumer
slould appeal to pragmatic Wlats in it
for me: reasoning, tle more altruistic
rationale belind buying green will
resonate at least sligltly due to tle overall
growing awareness among tle general
population. Maureen Moore, a resident
of tle coastal town Wall, New )ersey,
said global warming, wlile worrisome,
was not enougl for ler to switcl from
a company or product sle really liked.
Nonetleless, if two tlings are similar
and one is environmentally safe and
one isnt, I would go witl tle one tlats
environmentally safe.
97

36
12. Empower the buyer.
Because tle features and benets of green
lomes dier from tlose of conventional
lomes, educating tle buyer about tlese
dierences can be an important sales
teclnique. Creen lomes sales eorts
slould extend beyond merely informing
tle customer, tley slould provide tle
customer witl an arsenal of questions
and otler teclniques to take to otler
lomes tley are viewing. For instance,
it is to tle advantage of tle green lome
builder for customers to ask tleir sales
person, regardless of wletler tley are
viewing a green lome or a conventional
lome, if tle paint contains VOCs, or if
tle windows lave low-emissivity (low-e)
coatings, or construction materials lave
formaldelyde as an ingredient. Tis
teclnique las furtler appeal considering
tle type of consumer typically drawn to
green lomes. LOHAS consumers tlrive
on information and consider it critical to
tle decision-making process. Tey will
be wary of aggressive sales teclniques
and will appreciate tle candor and tle
condence tlat tlis sales teclnique
exlibits. By empowering tle buyer
to make an informed decision in tlis
manner, not only will tle salesperson
lelp convey tle benets of green
lomes, but will also foster a sense
of trust and respect.
In conclusion, customers may agree in
principle tlat lomes built to a green
standard are inlerently good, but tlat
alone does not always translate into a
sale. However, ligl quality, durable,
energy ecient, low maintenance, and
lealtly are all attributes tlat appeal to
mainstream consumers and slould be
easy to market and sell. David )olnston,
a green building marketing expert and
President of tle rm, Wlats Working,
a green lome solutions-provider and
consultancy in Boulder, Colorado, calls
tle successful marketing of green lomes
applied common sense.
98
Creg Stine,
CEO and President of tle marketing
consultancy Polaris Inc., agrees: Te
gap las started to close between tle early
adopters of green building and tlose a
bit more lesitant. No longer is green
building reserved for tle fringe. Instead,
it makes sense for everyone. In an era
wlere depleting energy, water, and otler
resources aect everyone, green building
is no longer about making a statement, its
becoming a standard.
99
As green lomes
move into tle mainstream, tle adoption
of tlese sales teclniques will be critical
for lome builders to maintain tleir
competitive advantages.
Te gap has started to close between the early adopters of
green building and those a bit more hesitant. No longer is
green building reserved for the fringe. Instead, it makes sense
for everyone. In an era where depleting energy, water, and
other resources aect everyone, green building is no longer
about making a statement; its becoming a standard.
Cvio S1ii, CEO i Pvisiii1 oi Poivis Ic.
37
38
Strong KEY Moderate Weak
Applying tle Market
Metrics Lens
Chapter 7
Tabl e 2: The Market Metri c Lens
PILOT CITIES COMPARISON CITIES
No. PROXY / INDICATOR
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
Normalizing Data
City Population 3,844,829 2,016,582 386,417 280,666 557,917 784,118 470,688 559,034 By city
MSA Population 12,923,547 5,280,077 5,422,200 18,747,320 2,359,994 1,640,591 4,917,717 4,411,835 By MSA
Total Population
Aged 25+
7,989,287 3,208,707 3,587,485 12,305,512 1,515,084 1,038,093 3,104,099 2,928,558 By MSA
Households per County 3,133,774 1,205,516 776,774 283,736 239,235 352,164 321,242 278,722 By county
County Name Los Angeles Harris Dade Essex Denver Marion Fulton Sufolk
Number of housing units
authorized in 2006
155,419 216,755 205,711 32,566 39,314 28,315 98,843 19,805 By state
C CONSUMER DEMAND PROXIES
C1 Purchases of Green Products
C1.1 Hybrid Vehicles
C1.1-1
Hybrid Vehicles - total
number sold
30,989 3,288 x x 4,954 x 3,559 7,795
Total number of
cars by MSA (sales,
2006)
C1.1-2
Hybrid Vehicles per 1,000
Households
5.6 3.5
C1.1-3
Hybrid vehicles per 1,000
Residents (by MSA)
2.40 0.62 x x 2.01 x 0.72 1.77
C1.2 Healthy Foods & Beverages
C1.2-1
Whole Foods
(Existing Stores)
17 4 6 2 1 0 4 5
Total number of
existing stores
by city
C1.2-1a
Whole Foods
(Stores in Development)
8 1 4 2 1 0 0 0
Number of stores
in development
by city
C1.2-2 Celestial Seasonings 149 21 129 276 86 10 81 155
Total No. of Natural
Food Stores (25
mile radius)
C1.2-2a
Celestial Seasonings:
Natural Food Stores /
10,000 residents (city)
0.39 0.10 3.34 9.83 1.54 0.13 1.72 2.77
C1.2-2b
Celestial Seasonings:
Natural Food Stores /
10,000 residents (MSA)
0.12 0.04 0.24 0.15 0.36 0.06 0.16 0.35
C1.2-3 Stonyfeld Farm 19 7 20+ 20+ 20+ 12 20+ 20+
No. of Natural
Food Stores
(25 mile radius)
39
T HE MA R K E T ME T R I C L E NS
C1.2-3a Stonyfeld Farm 0 1 19 15 4 0 8 14
No. of Wholesale
Clubs & Specialty
Shops (25 mile
radius)
C1.2-4
SustainLane: Local Food
and Agriculture
36 44 45 N/A 10 31 39 1
Ranking among
top 50 cities
(lower is better)
C1.3 Natural/Organic Personal Care
C1.3-1
Aveda
(# of Stores)
5 2 2 10 3 1 5 5
# of Aveda Stores
in 25 mile radius
C1.3-1a
Aveda
(# of Salons/Spas)
20 in 14 mi 20 in 25 mi 17 in 25 mi 20 in 12 mi 20 in 8 mi 20 in 14 mi 20 in 9 mi 17 in 25 mi
# of Aveda
Salons/Spas at
given radius
C1.4-1 Seventh Generation 108 8 5 51 22 4 18 21
# of stores that
sell products in 20
mile radius
C1.4-1a
Seventh Generation:
Stores / 10,000 residents
(city)
0.28 0.04 0.13 1.82 0.39 0.05 0.38 0.38
C1.4-1b
Seventh Generation:
Stores / 10,000 residents
(MSA)
0.084 0.015 0.009 0.027 0.093 0.024 0.037 0.048
C2 Readership & Viewership
C2.1 Magazines
C2.1-1 Better Homes & Gardens 144,471 66,710 21,865 11,178 9,331 21,061 22,059 7,185
August 2005
Circulation
C2.1-1a (House-Hold %) 4.61% 5.53% 2.81% 3.94% 3.90% 5.98% 6.87% 2.58%
C2.1-2 National Geographic 142,406 50,066 29,280 10,045 15,219 13,775 16,988 11,416
Sept 2005
Circulation
C2.1-2a (HH %) 4.54% 4.15% 3.77% 3.54% 6.36% 3.91% 5.29% 4.01%
C2.1-3 Good Housekeeping 76,676 35,009 13,798 11,761 5,078 12,996 12,141 6,124
March 2006
Circulation
C2.1-3a (HH %) 2.45% 2.90% 1.78% 4.15% 2.12% 3.69% 3.78% 2.20%
C2.1-4 Newsweek 106,853 31,084 21,682 8,242 9,755 9,941 19,310 11,165
February 2005
Circulation
C2.1-4a (HH %) 3.41% 2.58% 2.79% 2.90% 4.08% 2.82% 6.01% 4.01%
C2.1-5 Prevention 58,523 22,083 11,875 5,880 4,306 7,054 7,583 4,389
August 2005
Circulation
C2.1-5a (HH %) 1.87% 1.83% 1.53% 2.07% 1.80% 2.00% 2.36% 1.57%
C2.1-6 Cooking Light 40,095 17,778 6,374 3,788 9,194 4,526 10,098 5,244
Jan/Feb 2006
Circulation
C2.1-6a (HH %) 1.28% 1.47% 0.82% 1.34% 3.84% 1.29% 3.14% 1.88%
C2.1-7 Martha Stewart 57,569 17,477 7,591 4,273 4,017 4,623 6,798 5,170
October 2005
Circulation
C2.1-7a (HH %) 1.84% 1.45% 0.98% 1.51% 1.68% 1.31% 2.12% 1.85%
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
40
Clapter 7: Applying tle Market Metric Lens
C2.1-8 Parents 47,057 20,011 9,506 6,038 2,907 6,117 6,420 3,385
May 2006
Circulation
C2.1-8a (HH %) 1.50% 1.66% 1.22% 2.13% 1.22% 1.74% 2.00% 1.21%
C2.1-9 Mens Health 57,210 21,057 11,539 6,703 5,424 6,422 13,177 5,042
March 2006
Circulation
C2.1-9a (HH %) 1.83% 1.75% 1.49% 2.36% 2.27% 1.82% 4.10% 1.81%
C2.1-10 Money 53,628 20,778 10,490 5,618 5,951 5,122 10,683 3,943
March 2006
Circulation
C2.1-10a (HH %) 1.71% 1.72% 1.35% 1.98% 2.49% 1.45% 3.33% 1.41%
C2.1-11 Fitness 45,058 15,450 9,105 4,461 3,345 4,510 7,417 4,212
February 2006
Circulation
C2.1-11a (HH %) 1.44% 1.28% 1.17% 1.57% 1.40% 1.28% 2.31% 1.51%
C2.1-12 Self 45,262 13,270 7,582 4,705 3,942 4,337 7,549 6,772
March 2006
Circulation
C2.1-12a (HH %) 1.44% 1.10% 0.98% 1.66% 1.65% 1.23% 2.35% 2.43%
C2.1-13 Health 35,579 12,172 6,270 3,337 5,275 3,499 4,863 3,457
July/ Aug 2005
Circulation
C2.1-13a (HH %) 1.14% 1.00% 0.81% 1.18% 2.20% 0.99% 1.51% 1.24%
C2.1-14 Sierra Club Magazine 38,104 4,007 2,697 2,331 3,685 1,327 3,231 2,132
July/ Aug 2005
Circulation
C2.1-14a (HH %) 1.22% 0.33% 0.35% 0.82% 1.54% 0.38% 1.01% 0.76%
C2.2 Newspapers
C2.2-1
New York Times
(No. Household Subscrip-
tions in Designated
Market Area)
34,585 10,576 18,827 633,330 12,584 3,755 16,669 48,847
Sept 2005 Daily
Circulation to DMA
C2.2-1a
New York Times
(% by Designated Market
Area)
0.52% 0.46% 1.02% 7.03% 0.73% 0.30% 0.67% 1.70%
Sept 2005 Daily
Circulation as %
household in DMA
C2.2-2
Wall Street Journal
(# Household Subscrip-
tions in MSA)
114,341 44,088 50,108 281,325 23,984 11,181 42,293 79,705
February 2005
Daily Circulation
to MSA
C2.2-2a
Wall Street Journal
(% by MSA)
2.51% 2.30% 2.32% 3.86% 2.49% 1.66% 2.31% 4.36%
February 2005
Daily Circulation
as % household
in MSA
C3 Green Construction Conceptual Exposure
C3.1
Articles In Local Area
Papers
(last calendar year:
Feb-Feb)
40 25 70 50 150 36 36 80
Articles in
local area papers
about green
construction; in
last calendar year
(Feb-Feb)
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
41
C4 Education
C4.1-1
No. of residents with
Bachelors Degrees
(Highest level of attain-
ment)
1,528,813 595,670 633,074 2,541,259 363,286 200,832 706,162 668,268 # in MSA
C4.1-2
No. of residents with
Graduate or Professional
Degree (Highest level of
attainment)
816,308 297,217 354,933 1,747,050 193,892 102,937 359,022 520,433 # in MSA
C4.1-3
% of residents Age 25+
with Bachelors or Above
29.4% 27.8% 27.5% 34.8% 36.8% 29.3% 34.3% 40.6%
% of residents
Age 25+
US urban avg: 29.8%
C4.1-4
% with just Bachelors
Degrees
19.1% 18.6% 17.6% 20.7% 24.0% 19.3% 22.7% 22.8%
% of residents
Age 25+
US urban avg: 19.4%
C4.1-5
% with Graduate or
Professional Degree
10.2% 9.3% 9.9% 14.2% 12.8% 9.9% 11.6% 17.8%
% of residents
Age 25+
US urban avg: 10.4%
I INDUSTRY PROXIES / INDICATORS
I1 Green Building Associations / Coalitions
I1.1-1
Residential Green Build-
ing Programs
Existence
California
Green Builder
(HBA)
Houston
Green Build-
ing Initiative
(HBA)
Florida Green
Building
Coalition, Inc.
(NP); Build
Smart (FPL)
None found
Built Green
Colorado
(HBA)
None found
Earth Craft
House
(HBA/NP)
None found Existence
I1.1-1b Year founded 2001 ? 2001 None found 1995 None found 1999 None found Year founded
I1.2-1a
Green Building Organiza-
tions
Existence
Global Green
USA (Santa
Monica)
Houston
Advanced Re-
search Center
(HARC)
Florida
Solar Energy
Center (FSEC)
- Univesity
of Central
Florida
None found None found None found
Envirosense
Consortium,
Inc.
- - - - - - - -
Southface
The Green
Roundtable
Existence
I1.2-1b Year founded 1993 1983 ? None found None found None found ? 1998 Year founded
I1.3 USGBC Chapter
Los Angeles,
Orange
County
Houston
South Florida,
Florida Gulf
Coast,
Central
Florida
New Jersey Colorado Indiana Atlanta None Existence
I1.4
USGBC organizational
memberships
78 97 37 7 89 38 100 76 By city name
I2 Market Penetration
I2.1 LEED existing buildings 6 4 0 0 9 0 13 9 By city name
I2.2 LEED registered projects 38 42 9 1 30 6 41 23 By city name
I2.3
Energy Star Homes
(market penetration
%age of new homes built
in 2005)
12% 31% <3% 36% bet. 3-10% bet. 3-10% <3% 16% By state
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
42
I2.4
SustainLane: Green
(LEED) Buildings
(Ranking: lower is better)
30 29 33 N/A 14 42 1 7
Ranking among
top 50 cities
(lower is better)
I2.5
SustainLane: Green
Economy
20 24 N/A N/A 6 33 N/A 12
Ranking among
top 50 cities
(lower is better)
I3 Green Building Service Providers
I3.1-1a USGBC LEED APs ~500 ~650 ~100 ~35 ~450 ~75 ~1000 ~725 By city name
I3.1-1b
LEED APs per 1,000
residents
0.13 0.32 0.26 0.12 0.81 0.01 2.12 1.30
I3.2-1a
Energy Star Site-Built
Home Builders &
Developers
165 492 132 109 104 121 70 105 By state
I3.2-1b
Energy Star Site-Built
Home Builders &
Developers per 1,000
housing units authorized
in 2006
1.06 2.27 0.64 3.35 2.65 4.27 0.71 5.30
I3.2-2a
Energy Star Home Energy
Raters
5 24 5 6 9 8 11 6 By state
I3.2-2b
Energy Star Home Energy
Raters per 1,000 housing
units authorized in 2006
0.03 0.11 0.02 0.18 0.23 0.28 0.11 0.30
I3.2-3a
Energy Star Lenders
(mortgages)
12 9 8 6 9 10 8 4 By state
I3.2-3b
Energy Star Lenders
(mortgages) per 1,000
in 2006
0.08 0.04 0.04 0.18 0.23 0.35 0.08 0.20
I3.2-4a
Energy Star Utilities /
Sponsors
8 5 7 6 4 4 5 10 By state
I3.2-4b
Energy Star Utilities
/ Sponsors per 1,000
in 2006
0.05 0.02 0.03 0.18 0.10 0.14 0.05 0.50
G GOVERNMENT PROXIES / INDICATORS
G1 Government & Planning Authorities
G1.1
Discrete city-level
sustainability committees
and/or departments
Yes - Sustain-
able Design
Implementa-
tion program
None found
Yes- Mayors
Green Com-
mission
None found
Yes - Green-
print Denver
None found None found
Yes - City
Environment
Department
- runs High
Performance
bldg program
Existence
G1.2
SustainLane:
Knowledge Base
17 29 N/A N/A 1 17 N/A 17
Ranking among
top 50 cities
(lower is better)
G1.3
Kyoto Buy-In from
Leadership (Mayor)
Yes No Yes Yes Yes Yes Yes Yes
Signed agreement
with US Council of
Mayors
G1.4
SustainLane:
City Innovation
7 19 N/A N/A 7 26 N/A 19
Ranking among
top 50 cities
(lower is better)
G1.5
SustainLane:
Planning / Land Use
Density / Sprawl /
Green Space
21 44 24 N/A 17 47 50 3
Ranking among
top 50 cities
(lower is better)
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
Clapter 7: Applying tle Market Metric Lens
43
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
G2 Incentives, Targets, & Mandates
G2.1
Fast-tracking for green
or LEED
Yes (Santa
Monica)
None found
Yes (Dade
County)
None found None found None found None found None found Existence
G2.2
Density bonuses
(Floor-to-Area Ratios)
None found None found None found Yes (Cranford) None found None found None found None found Existence
G2.3 Taxes credits, grants
Yes (Santa
Monica) &
afordable
(LA)
None found None found None found None found None found None found None found Existence
G2.4-1 Target for public buildings
LEED Certifed
(LA & Long
Beach);
Silver (Santa
Monica)
LEED Silver
In process
- TBD
LEED Silver
(Cranford &
Princeton)
LEED Silver None found None found LEED Silver Existence
G2.4-2
Requirement for
public buildings
LEED Certifed
(LA & Long
Beach);
Silver (Santa
Monica)
None found
In process
- TBD
LEED Silver
(Cranford)
LEED Silver None found None found LEED Silver Existence
G2.4-3
Target for private
buildings
LEED Silver
(Long Beach)
None found
In process
- TBD
None found None found None found None found
LEED
Certifed
Existence
G2.4-4
Requirement for private
buildings
LEED Silver
(Long Beach)
None found
In process
(updating
building
code)
None found None found None found None found
LEED
Certifed
Existence
G2.4-5
State Level Support /
Requirements
CA req.
for state
buildings to
be LEED
None found
All new state
buildings
must be
LEED
No require-
ments, but
numerous
state support
programs
LEED-EB &
NC adopted
None found None found
Consider-
ing LEED
adoption
Existence of
requirements
AP ACUTE RESOURCE PRESSURES PROXIES / INDICATORS
AP1 Land / Transit / Air
AP1.1 SustainLane: Congestion 49 44 35 N/A 36 21 45 33
Ranking among
top 50 cities
(lower ranking
means less
congestion, higher
ranking means
more congestion)
AP1.2
SustainLane: Transit
Considerations
(regional ridership)
8 12 13 N/A 19 40 10 3
Ranking among
top 50 cities
(lower ranking
means better
transit, higher
ranking means
poor transit)
AP1.3 SustainLane: Air Quality 49 40 10 N/A 14 41 39 22
Ranking among
top 50 cities
(lower ranking
means less
pollution, higher
ranking means
more pollution)
AP2 Energy Costs
AP2.1 Electricity (Cents/kWh) 14.48 11.54 11.21 12.46 8.42 7.83 8.31 16.94
State Residential
Avg. (Dec. 2006)
AP2.2
Natural Gas ($/thousand
ft
3
)
10.94 9.97 19.02 14.51 8.05 10.29 14.13 16.28
Jan 2007 Avg.
Residential Natural
Gas prices by State
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
T
le four focus areas were
closen partially due to
tleir relatively unknown green
lomes market potential. As
sucl, four additional control
municipalities wlicl were
believed to lave varying degrees
of residential green building
market strengtl were closen
from across tle country to add
to tle comparison pool. Denver
and Atlanta were closen as cit-
ies witl very strong green lome
building markets. Boston was
closen due to its strong LOHAS
(Lifestyles of Healtl and
Sustainability) and educated
population but relatively week green
residential market. Indianapolis was
closen due to a presumed relative
weakness in all tlree elements of a
robust green residential market. Data
was collected for tlese four cities for tle
MML for comparison to tle four pilot
cities. Tis comparison is presented
below, based on tle quantitative data
collected and contained in Table 2, tle
MML. Furtler information (quantita-
tive and qualitative) can be found in tle
full report Residential Creen Building:
Identifying Latent Demand and Key
Drivers for Sector Crowtl, available
at www.erb.umicl.edu.
Te Market Engagement Framework
(MEF) begins witl an analysis component
tlat delves deeply into tle claracteristics
of tle tlree principal elements in tle
green lomes market. Performing tlis
analysis tlrougl tle use of tle Market
Metric Lens (as described in Clapter
4) reveals botl gaps in tle marketplace
as well as leverage points tlat can be
larnessed to augment activity and prot-
ability in tle sector. Identifying ideal
industry and government partnerslip
opportunities and pinpointing salient
consumer claracteristics upon wlicl to
base a marketing and sales strategy are
key components of tle strategic portions
of tle MEF. Te strategy components
of building partnerslips and forming
marketing and sales strategies inuence
one anotler directly. For tlis reason,
tlese steps lave been undertaken and
combined below for eacl of tle four pilot
geograplies addressed in tlis study.
Analysis and Strategies
for Four Pilot Ceograplies
44
Chapter 8
LOS ANGE L E S / S OUT HE RN C AL I F ORNI A
Analysis
Los Angeles las a large number of
likely green lomebuyers and, on a per
capita basis, looks relatively strong. Los
Angeles is ftl in tle nation in per capita
lybrid sales (5.6 per 1,000 louselolds)
and slows strong demand for lealtly
foods and green cleaning and personal
care products. Per capita readerslip of
publications witl ligl LOHAS subscrib-
erslip is relatively moderate, and coverage
of green building in tle press over tle
last year las been fairly weak (about 40
articles in tle last year). Los Angeles
las a relatively moderate proportion of
residents witl undergraduate or graduate
education (29.4).
Los Angeles appears relatively strong
from an industry perspective. Te city
las mature residential green building
associations and programs, a ligl
number of LEED APs (altlougl low per
capita) and registered buildings (38),
in conjunction witl strong statewide
penetration of Energy Star lomes (12
in 2005). On a per lome-permitted basis,
tle state is weak in terms of Energy Star
providers, but tle city may look dierent
based on tle strengtl of tle otler metrics
reviewed above. Lastly, tle city and region
las lad two major green residential
developments wlicl are garnering a fair
amount of attention.
Los Angeles appears very strong from a
government-support perspective. Witl
city and state public-building LEED
mandates and tle movement of neigl-
boring cities to include private buildings,
tlere is a ligl degree of political pressure
for green development. A number of
programs and aggressive greenlouse gas
emission reduction targets support green
commercial and residential building, and
neiglboring communities are exploring a
variety of incentive meclanisms.
Los Angeles las signicant acute resource
pressures, most pressing of wlicl are
poor air quality, water use constraints,
ligl electricity costs, and trac
congestion. Combined witl a ligl transit
riderslip and public understanding of
climate clange, attributes of green lomes
are easily marketable in Los Angeles.
Strategy
Te Los Angeles green lomes market las
been determined to be quite robust, witl
strong industry presence, ligl levels of
government involvement, and a consumer
base tlat will likely be liglly receptive
to tle green lome message. Partnerslip
opportunities specic to tle Los Angeles
area are numerous and can be found
witlin botl tle government and industry
sectors. Specic suggestions include:
Forming a relationslip witl tle citys
Sustainable Design Implementation
oce and gaining familiarity witl tle
tenets of tleir program.
Contacting Toyota or otler manufactur-
ers of lybrid velicles to explore
opportunities for co-branding andior
otler promotional activities, latcling
onto tle popularity of lybrid velicles
in tle region. Anecdotally, accounts of
a builder giving away lybrid velicles to
eacl new-purclaser of a green lome
in tleir development lave already
emerged.
Accompanying all green activity witl
extensive outreacl to tle local media
to lelp garner valuable free publicity.
Te local media appears willing to run
stories related to green buildings and
sustainability.
Leveraging tle broad public concern
over tle many acute resource pressures
in California, to draw attention to tle
benets of green lomes, botl in media
publicity and in sales teclniques. In
soutlern California, benets associated
witl energy eciency, air-quality, and
water reduction will resonate well witl
a large consumer base.
Targeting tlose areas for development
(or for promotion) wlere a Wlole
Foods Market is in close proximity.
Tere are 17 Wlole Foods Markets witl
8 additional slated for development in
tle Los Angeles area. Because of tle
overlap in claracteristics between tle
consumers of tlose food stores and
tlose of green lomes, targeting tlese
areas is likely an eective positioning
and marketing strategy.
Contacting Ranclo Mission Viejo andi
or otler developers active in tlis space
to glean consumer insiglt and market-
ing best-practices.
Seeking opportunities for knowledge-
slaring and collaboration witl industry
players in non-competitive markets.
Because of tle robust activity and
government support in neiglboring
cities, tlese opportunities slould be
ample. Creen building organizations,
sucl as Clobal Creen USA (located
in Santa Monica), slould provide
information on some likely candidates.
Perusal of tle LEED APs in tle area,
of wlicl tlere are lundreds, slould
also prove eective.
Coordinating witl any of tle 78
member organizations of tle USCBC to
lelp fund and advance building-science
researcl and consumer market researcl.
Tis can also be done in cooperation
witl tle building organizations and tle
government entities tasked witl sector
advancement.
Advertising in lealtl and tness
magazines wlicl enjoy a ligl level
of readerslip in tle area.
L OS A NGE L E S / S OUT HE R N C A L I F OR NI A 45
HOUS TON/ T E X AS
Analysis
Due to its size, Houston las a moderate
number of likely green lomebuyers, but
on a per capita basis, tle city is relatively
weak in tle consumer element. Relative
to Los Angeles, Denver, and Atlanta,
Houston las a relatively small number
of per capita lybrid sales and relatively
weak demand for lealtly foods and green
cleaning and personal care products. Per
capita readerslip of publications witl
ligl LOHAS subscriberslip is relatively
moderate to weak, and coverage of green
building in tle press over tle last year las
been very low relative to otler focus areas
(only about 25 articles in tle last year).
Lastly, Houston las a relatively small
proportion of residents witl undergradu-
ate or graduate education (only 27.8).
Houston appears moderately strong
from an industry perspective. Te city
las residential green building associa-
tions and programs, a very ligl number
of LEED APs (about 650) and registered
buildings (42), in conjunction witl
extremely strong statewide penetration
of Energy Star lomes (31 in 2005).
Houston also las strong Energy Star
lomes support programs at tle city
level.
100

Houston appears relatively very weak
from a government-program support
perspective. Te city las set a target, but
not a mandate, for public city buildings
to pursue LEED Silver, and Houston is
one of only a few cities of its size to not
sign on to tle Mayors Climate Protec-
tion Agreement. Wlile energy eciency,
tlrougl Energy Star, appears to be taking
lold, tlere does not seem to be a lolistic
interest in green building in city lall.
Houston las signicant acute pressures,
most pressing of wlicl are poor air
quality and trac congestion. Te city is
not known for proactive land-use plan-
ning or strong public transit systems.
Altlougl pressures exist, a demonstrated
government willingness to address tlese
pressures does not.
Strategy
Te green lomes market in Texas is
relatively nascent. Education levels and
demand for green products are lagging,
tle Mayor of Houston is one of tle few
wlo las yet to sign onto tle Mayors
Climate Protection Agreement, and
prevailing land-use planning principles
defy tle basic tenets of green construc-
tion. However, despite relative lack of
activity in tle government and consumer
sectors, tle industry sector las begun
to organize itself and is slowing signs
of signicant potential witl regard to
advancing tle green building movement.
Specic recommendations for
partnerslips and marketing include:
Framing a relationslip witl tle USCBC
clapter and tle Houston Advanced
Researcl Center to spread concept
awareness tlrouglout tle city and
develop skill competencies witlin tle
building community.
Refraining from incorporating
environmentally-focused messages
into sales and marketing material.
Ceneral awareness and concern appears
to be relatively weak, judging from
lagging purclasing belavior across a
variety of green products. Conversely,
messages tlat address particular
common concerns of Houston
residents sucl as air-pollution and
trac congestion will likely be well
received and mucl more eective.
Learning from tle success of tle
Energy Star program and standard
in Texas witl regard to marketing
and communicating witl service
providers and consumers. Energy
Star las signicant market penetration
in tle state (31) and, tlerefore, is
likely botl recognizable and desirable
as a brand.
Because tle regulatory climate is
likely to remain focused on voluntary
initiatives, seeking tlose partners best
able to convey tle benets of building
green can directly address tle issue
of cost. Tis may mean collaborating
on costibenet researcl studies, but
may also mean advocating for more
involvement and innovation witlin
tle nancial community.
46 Clapter 8: Analysis and Strategies for Four Pilot Ceograplics
47
MI AMI / S OUT H F LORI DA
Analysis
Per capita, Miami looks relatively weak
in tle consumer element. Miami is not in
tle top 15 markets for lybrid velicle sales
and slows relatively weak demand for
green cleaning and personal care prod-
ucts, but slows a relatively strong
demand for lealtly foods. Per capita
readerslip of publications witl ligl
LOHAS subscriberslip is extremely weak
witl tle exception of newspapers, but
coverage of green building in tle press
over tle last year las been ligl relative
to otler focus areas (about 70 articles).
Miami las a relatively small proportion
of residents witl undergraduate or
graduate education (27.5).
From an industry perspective, Miami
appears relatively moderate to weak.
Wlile tle region las a strong residential
green building association and program,
tle city las only a moderate number of
LEED APs and relatively few registered
buildings (9), in conjunction witl very
weak statewide penetration of Energy
Star lomes (less tlan 3 in 2005).
Outside tle city, tle soutl Florida region
tlere are two major green residential
developments garnering a fair degree
of attention. Industry strengtl appears
stronger in tle region tlan in tle city
itself.
Concerning tle government support
element, Miami appears relatively strong.
Te city las an active city lall green
division, an environmentally proactive
mayor, and is considering LEED targets
and codes for buildings. Combined witl
state public-building LEED mandates and
fast-track permitting in tle county for
green buildings, tlere is a ligl degree of
political support for green development.
Miami las moderate environmental
pressures, witl relatively good air quality
but signicant trac congestion. Com-
bined witl a moderate transit riderslip
and growing public understanding of
climate clange impacts on Florida,
Miami is a mixed environment in wlicl
to market a variety of tle attributes of
green lomes.
Strategy
Te Miami green lomes market las yet
to take o, a fact largely attributable to
an uninformed consumer base and
limited industry activity. However, tle
city las a strong clampion in Mayor
Manny Diaz. He las been extremely
proactive in generating awareness of tle
need for a greener-built environment in
tle region and in promoting government
and institutional support of green build-
ing initiatives. As sucl, recommended
partnerslip and marketing strategies for
Miami include:
Leveraging tle institutional momentum
clampioned by tle Mayor to spearlead
major development projects. Te Miami
Creen Commission slould be able
to provide valuable support and
information.
Collaborating witl Wlole Foods
Markets in publicity associated witl
tle four stores slated for development.
Specically targeting development in
tlose areas wlere an existing or upcom-
ing Wlole Foods Market is in close
proximity is also an eective strategy.
Developing advertising and marketing
sclemes tlat portray and liglliglt tle
lealtl benets associated witl green
lomes. Healtly living is a popular
belavioral claracteristic in tle region,
as signied by tle strong demand for
lealtly foods and beverages.
Partnering witl tle green building
organizations in tle areaTe Florida
Creen Building Coalition, tle Florida
Solar Energy Center, and tle USCBC
clapter of Soutl Floridato drive con-
sumer education and service-provider
training initiatives. Wlereas tle Mayor
and tle government sector are lelping
spur concept awareness at a more broad
level, tlere still remains tle need for
partnerslips witl a coalition of industry
experts at tle ground level to furtler
educate and train interested consumers
and tradespeople. Tis is particularly
pressing because tle consumers in tle
area generally do not possess desirable
claracteristics regarding receptivity to
tle green lome message.
Leveraging tle knowledge capabilities
of non-competitive markets, particularly
in Sarasota County on tle west coast,
wlere activity in tle green build-
ing space is more robust, to institute
best practices tlat will be eective in
improving prociency in green building
market science and increasing consumer
awareness. WCI Communities las been
active locally and may also provide
valuable insiglt and information.
Ecloing tle messages espoused by
tle Mayor and tle general media in
marketing materials and sales pitcles.
Furtlermore, it will be important to
nd alternative ways to advertise tlan
in mainstream magazines, because
readerslip numbers are low in tle
region. Consider mainstream
newspapers in wlicl readerslip
levels are ligler.
Higlliglting tle benets of passive-
cooling and a tiglt exterior envelope in
relation to cost-savings. Because of tle
lot and lumid climate and relatively
ligl electricity rates, tlese messages
will resonate well during a sales pitcl.
MI A MI / S OUT H F L OR I DA
NE WARK/ NORT HE RN NE W J E RS E Y
Analysis
From a buyer perspective, Newark and
nortlern New )ersey are dicult to evalu-
ate because of tle areas proximity to New
York City. Witl tle availability of all tle
resources of Manlattan and ligl number
of LOHAS consumers in tle city, Newark
and nortlern New )ersey las a large total
population of likely green lomebuy-
ers. On a per capita basis, Newark looks
relatively strong in tle consumer market.
Te city slows relatively weak demand for
green cleaning products, but a relatively
strong demand for lealtly foods and per-
sonal care products. Per capita readerslip
of publications witl ligl LOHAS sub-
scriberslip is relatively strong, especially
of newspapers, but coverage of green
building in tle press over tle last year
las been moderate relative to otler focus
areas (only rouglly 50 articles). Lastly, tle
metropolitan statistical area (MSA) las a
very ligl relative proportion of residents
witl undergraduate (20.7) and graduate
education (14.2).
Witl tle exception of Energy Star pen-
etration, Newark appears relatively weak
from an industry perspective. Te region
does not lave an active residential green
building association or program and tle
city las relatively few LEED APs (about
35) and registered buildings (1). Te no-
table exception to industry relative weak-
ness, largely due to state incentives, is tle
extremely ligl penetration statewide of
Energy Star lomes (36) and tle avail-
ability of Energy Star service providers
on a total and per lousing permit bases.
Outside tle city, tle region las two major
green residential developments garnering
a fair degree of attention.
Wlile Newark appears relatively weak
from a government support perspec-
tive, tle state appears very strong, and
surrounding communities are adopting
programs and mandates tlat will likely
spread across tle region. Te states ef-
forts to promote green aordable lousing
are particularly notewortly. Tus wlile
tle city itself is ratler weak in govern-
ment support of residential green
building, tle state and surrounding
municipalities are relatively strong.
Nortlern New )ersey las a fair degree of
environmental pressure to pursue green
development, especially in land con-
straints. Public understanding of tle im-
pact of climate clange on low lying New
)ersey is strong, and general development
pressures and tle strengtl of long-stand-
ing smart-growtl movements are good
signs for tle penetration of green lomes
into tle market.
Strategy
In tle Newark and tle greater nortlern
New )ersey area, tle green lomes market
las not yet made large inroads despite
extensive activity witlin tle government
sector. Tere is relatively weak overall
industry presence, witl very limited
demonstrated activity to date aside from
tle Energy Star program. However, tlere
exists some indication tlat tlis sector is
ripe to emerge. Multiple projects (Solaire,
Tribeca Creen, and tle Octagon) in
neiglboring New York City lave been
built according to green standards, a fact
tlat slould lave spill-over eects for
New )ersey in tle form of skill develop-
ment and concept awareness. Additional
recommended partnerslip and marketing
strategies include tle following:
Tailoring marketing eorts to attract tle
large number of ligl-value consumers
already familiar witl tle tenets of green
lomes but perlaps not able to aord
ownerslip in Manlattan to green
developments in New )ersey.
Focusing marketing eorts and promo-
tions around universities and surround-
ing neiglborloods in an attempt to
capture a number of tle liglly educated
consumers in tle area. Use tle interac-
tive census map to lone-in on specic
areas witl ligler levels of educational
attainment. Furtlermore, tle consumers
in nortlern New )ersey appear prone
to visit lealtly food stores and Aveda
stores and salons making appropriate
venues for targeted marketing eorts.
Advertising in main-stream press sucl
as Newsweek, New York Times, and tle
Wall Street )ournal.
Leveraging tle fact tlat energy ef-
ciency, indoor air quality, and lealtl
concerns are large drivers of tle New
)ersey green lomes market by develop-
ing appropriate marketing and sales
strategies based on tlese tlemes.
Establisling a symbiotic relationslip
witl Energy Star to capitalize upon its
successful penetration in tle state. Be-
cause tle USCBC las yet to make solid
inroads into tle area, Energy Star cur-
rently las a larger network of partners
and aliates.
Approacling tle clemical and manu-
facturing company BASF, one of tle
liglest prole companies in tle region
wlo las already built a Near-Zero
Energy lome, witl tle idea of furtler
increasing publicity and support for
tleir products by incorporating tlem
into otler ligl-prole development
projects.
Using tle New )ersey Creen Home
Oce (CHO) for general advocacy,
education, and teclnical assistance. Te
CHO is also currently developing tle
New )ersey Higl Performance Homes
Plus program for market and production
rate builders and will likely be searcling
for projects to lelp pilot tle program.
Wlen addressing government organiza-
tions, coucling language in terms re-
lated to smart growtl since land-density
and trac congestion are two pressing
state concerns.
Including provisions for aordable lous-
ing witlin development eorts. Tis
pressing need is also a major concern
witlin city governments.
48 Clapter 8: Analysis and Strategies for Four Pilot Ceograplics
R E L AT I V E A NA LYS I S OF F OUR P I L OT GE OGR A P HI E S 49
RE L AT I VE ANALYS I S OF F OUR PI LOT GE OGRAPHI E S
Of tle four focus municipalities, Los
Angeles stands out as tle strongest in
its relative strengtl in all tlree key
elements of a residential green building
market. Wlile tle consumer and industry
elements of Miamis green residential
market are relatively ratler weak, tle
government element is relatively strong
and growing. Te industry element
outside of tle city, including a strong
residential building program and tle
support of a leading builder (WCI), is
ratler strong. Te consumer element
of tle Newark green residential market
is relatively strong, wlile tle govern-
ment support element is moderate and
tle industry element is relatively weak.
Towns in nortlern New )ersey and tle
state government are making strong
progress in green residential support.
Wlile Houston las a relatively strong
industry element, it ranked weakest of tle
four focus municipalities in government
and consumer elements. See Figure 9 for
a visual representation of tle relatively
ranked elements of tle four pilot cities
and tle four comparison cities. Table 3
slows tle strengtls and weaknesses.
Fi gure 9: Market Engagement Framework Anal ysi s
Strengths
Los Angeles, CA Hybrid sales
Demand for green cleaning supplies
City and state building LEED mandates
Houston, TX LEED-registered projects
USGBC organizational memberships
Energy Star homes statewide penetration
Miami, FL Demand for healthy foods
Green building media coverage
Mayor support for green building
Fast-track permitting
Newark, NJ Readership of publications with high LOHAS subscribership
Citizens with bachelors and graduate degrees
Energy Star homes statewide penetration
State green home programs
Weaknesses
Los Angeles, CA Green building media coverage
Houston, TX Hybrid sales
Demand for healthy foods and cleaning supplies
Green building media coverage
Citizens with bachelors or graduate degrees
Government attention to climate change
Land-use planning
Miami, FL Readership of publications with high LOHAS subscribership
Citizens with bachelors and graduate degrees
Energy Star homes statewide market penetration
Newark, NJ Lack of industry programs
USGBC LEED APs
Tabl e 3: Resi denti al Green Bui l di ng Market Strengths and Weaknesses
MEF Anayl si s
Gover nment
Low Medium High
L
o
w
M
e
d
i
u
m
H
i
g
h
Atlanta
Houston
Newark
Miami
Denver
Los Angeles
Boston
Ind anapolis
I
n
d
u
s
t
r
y
Consumer :
Size of bubble represents receptivity
Te MEF developed lere is designed to
lave a variety of uses for lome builders.
For a builder new to residential green
building, an initial use is to apply tle MEF
to existing operating markets to analyze tle
strengtl of tle green lomes market and
tle particular motivations and demands of
buyers, and tlen to plan for engagement.
Te MEF can be used to assess current
product diversity and develop ligl-perfor-
mance lome options and packages tailored
to tle particular demands of tle market.
Te MEF encourages builders to researcl
tle key acute pressures and issues receiving
widespread public attention, and tle
benets of green lomes most easily sold
in tle particular market. Te MEF can
also be used to identify key avenues and
strategies for marketing, in particular by
identifying readerslip trends of likely green
lomebuyers for focused advertising. In
tle area of partnerslips, tle MEF can lelp
a builder assess tle strengtl of various
industry and government programs and
identify partnerslip opportunities for
starting new initiatives and collaboration.
Te framework can also lelp identify asso-
ciations and government programs tlat can
facilitate entrance into tle green lomes
market, as well as opportunities to partner
witl like-minded groups to promote tle
concept of green lomes. In slort, builders
can use tle MEF to develop eective plans
for entrance into green lome building in
existing geograplic markets.
Te MEF also is useful in identifying new
geograplic markets for green lome build-
ing. A green lome builder can use tle MEF
to identify markets witl latent demand
ripe for entry, as well as markets already
absorbing green lomes. Understanding
wletler a market is relatively untapped or
maturing is critical in designing tle riglt
product roll out, partnerslip strategies, and
marketing campaigns to ensure maximum
protability. Lastly, tle MEF can be used to
craft strategies to enlance corporate-level
dierentiation. Sustainability is increasingly
becoming a positive brand attribute, and
tle MEF can lelp a builder establisl itself
in tlis category.
Concluding Remarks
50
Future Applications for Builders
US E OF T HE MA R K E T
E NGAGE ME NT F R A ME WOR K
Future Applications for Regional and National Developers
Regional developers (tlose tlat work in
limited geograplic scope) and national
developers can use tle MEF for similar
purposes as builders. Civen tle often
larger scope of a regional or national
developer, tle MEF can also assist in
identifying partnerslip opportunities witl
city and state government programs as
well as national level organizations, sucl
as USCBC and NAHB. Te MEF can be
used to identify areas in wlicl to fund
furtler residential green building researcl
in a developers region. For instance, a
developer may want to do an in-deptl
study of tle eectiveness of various local
government and industry green lome
programs, and tle MEF can lelp to
identify dierences in tle attributes of tle
consumer markets to take into account.
Te MEF is a powerful tool for a regional
developer in discussing demand for green
lomes and strategies for engagement witl
builder partners, as it provides a concrete
metlod for analyzing a markets potential
and planning for engagement.
B
y all accounts, tle green
lomes market is at an
exciting point in its growtl
and maturation. Home build-
ers and developers of all sizes
across tle country are ever
more actively engaging in tlis
burgeoning market. By using
tools sucl as tle Market En-
gagement Framework and tle
Market Metrics Lens presented
in tlis report, tlese rms and
companies can maximize tle
nancial and market oppor-
tunities at tlis green lomes
tipping point, wlile continuing
to drive progress in markets
tlrouglout tle United States.
Chapter 9
51
A P P E NDI X
Note: Names witl an asterisk were interviewed twice for additional feedback on tle reports ndings.
Appendix
LI ST OF I NTERVI EWEES
Name Afliation Industry Role
Dennis Allen Allen Associates Builders/Developers/Architects
Amy Christopherson Bolten* Christopherson Homes Builders/Developers/Architects
Karen Childress * WCI Builders/Developers/Architects
Gordon Cooke Air Solutions, Inc Marketing Experts
Dennis Creech* Southface Energy Institute Green Building Program Managers
Abbey Ehman Contects -Consultants and Architects LEED for Homes
Maren Engelmohr Mackey & Mitchell Architects Builders/Developers/Architects
Barr Hall McStain Neighborhoods Builders/Developers/Architects
Katy Hollbacher Build It Green Green Building Program Managers
Molly Hoyt Origo Inc. Consulting Marketing Experts
David Johnston Whats Working Marketing Experts
Greg Kats Capital E National Real Estate Analysis
Sara Lamia Building Coach Marketing Experts
Richard MacMath Austin Energy Green Building Program Managers
Eric Martin Florida Solar Energy Center/ University of Central Florida LEED for Homes
Don Mull California Green Builder Green Building Program Managers
Mike OBrien City of Portland Ofce of Sustainable Development Government Programs
Annette Osso Virginia Sustainable Building Network Green Building Program Managers
Tom Paladino Paladino and Co. Marketing Experts
Peter Pfeifer Barley & Pfeifer Architects Builders/Developers/Architects
Lance Ramella Hanley Wood Market Intelligence National Real Estate Analysis
Samuel Rashkin US EPA - Energy Star Homes Government Programs
Marc Richmond Practica Marketing Experts
Gwynne Rogers Natural Marketing Institute National Real Estate Analysis
Michele Russo McGraw-Hill Construction National Real Estate Analysis
Henry Siegel Siegel & Strain Architects Builders/Developers/Architects
Greg Stine Polaris Marketing Experts
Larry Strain Siegel & Strain Architects Builders/Developers/Architects
Bob Taber* Thomas Taber & Drazen Marketing Experts
Erich Volkert LivingHomes Builders/Developers/Architects
Brooke Warrick* American LIVES National Real Estate Analysis
Mary Westcot Davis Energy Group, Inc. LEED for Homes
Jerelyn Wilson Building Green National Real Estate Analysis
Robert Wisniewski MaGrann Associates LEED for Homes
Jerry Yudelson* Greenway Consulting Group, LLC Marketing Experts
52
Endnotes
1
Interview witl Cordon Cooke on 1-29-07.
2
Rogers, Everett M. (1962). Diusion of Innovations. Te Free Press. New York.
3
Building Design and Construction. 2003. Progress Report on Sustainability.
4
Building Design and Construction. 2006. Progress Report on Sustainability.
5
McCraw-Hill Construction. 2006. Creen Building Smart Market Report.
6
McCraw-Hill Construction. 2006. Residential Creen Building Smart Market
Report.
7
McCraw-Hill Construction. 2006. Residential Creen Building Smart
Market Report.
8
Oliver, F. September 2005. Competing green. Professional Builder.
9
An Analysis of Residential Creen Building Best Management Practices,
New )ersey Department of Community Aairs, 10. lttp:iiwww.nj.govidcai06_
gl_best_practices.pdf. Accessed Marcl 20, 2007.
10
USCBC informational Powerpoint from 2006: lttps:iiwww.usgbc.orgi
SlowFile.aspx:DocumentID742. Captured on 3-31-07.
11
USCBC. Marcl 2007. Creen Building, USCBC, and LEED. Unpublisled.
Captured from lttps:iiwww.usgbc.orgiSlowFile.aspx:DocumentID1991
on 3-31-07.
12
USCBC. Marcl 2007. Creen Building, USCBC, and LEED. Unpublisled.
Captured from lttps:iiwww.usgbc.orgiSlowFile.aspx:DocumentID1991
on 3-31-07.
13
Captured from Energy Star: lttp:iiwww.energystar.goviindex.cfm:cnew_
lomes.lm_index on 3-31-07.
14
Captured from Energy Star: lttp:iiwww.energystar.goviindex.
cfm:fuseactionqlmi.slowHomesMarketIndex on 3-31-07.
15
Natural Marketing Institute. 2006. LOHAS Creen Building Report:
Te LOHAS Consumer Trends Report.
16
McCraw-Hill Construction. 2006. Residential Creen Building Smart
Market Report.
17
Hairston, ).B. Marcl 11, 2007. Creen building makes inroads. Te Atlanta
)ournal and Constitution. Captured from lttp:iiwww.customlomeonline.
comiindustry-news.asp:sectionID204&articleID456673 on 3-31-07.
18
Captured from lttp:iiwww.lometowntimes.comigreaterrometimesilivingi
lomeilaven-properties-ligl-per.sltml on 4-1-07.
19
20
Lassar, T.). February 2005. Marketing green multifamily lousing. Urban Land.
21
Sclweitzer, ). 2006. Creen lomebuilding: Te last loldout or tle next frontier.
Lessons Learned: Te Costs and Benets of Higl Performance Buildings. Eartl
Day New York.
22
Lassar, T.). February 2005. Marketing green multifamily lousing. Urban Land.
23
Libby, B. February 2007. Breaking ground: Will a softer market sink green
lome construction: Sustainable Industries )ournal.
24
25
Interview witl Dennis Creecl on 1-31-07.
26
Kellenberg, S. May 2003. Creen communities. Urban Land.
27
Kellenberg, S. Spring 2004. Making green communities work. Real Estate
Issues.
28
Kellenberg, S. May 2003. Creen communities. Urban Land.
29
Farlar, B.C. and Coburn, T.C. December 2006. A New Market Paradigm for
Zero-Energy Homes: Te Comparative San Diego Case Study.
30
Farlar, B.C. et al. )uly 2004. Large-Production Home Builder Experience
witl Zero Energy Homes. National Renewable Energy Laboratory Conference
Paper.
31
Presentation by Amy Bolten at West Coast Creen Conference. September,
2006. Interview witl Amy Bolten on 1-15-07.
32
33
Urban Land Institute. 2002. Environment and Development Mytl and Fact.
Also based on Sclweitzer, ). 2006. Creen lomebuilding: Te last loldout or tle
next frontier. Lessons Learned: Te Costs and Benets of Higl Performance
Buildings. Eartl Day New York. And McCraw-Hill Construction. 2006.
Residential Creen Building Smart Market Report. And McCraw-Hill
Construction. 2006. Creen Building Smart Market Report.
34
Mattliesen, L.F. and Morris, P. )uly 2004. Costing green: A comprelensive
cost database and budgeting metlodology. Davis Langdon.
35
Captured from lttp:iiwww.clron.comidispistory.mpliapibusinessi4610173.
ltml on 3-8-07.
36
Natural Marketing Institute. )anuary 2007. 2006 Edition of Understanding
tle LOHAS Market Report: A Focus on Creen Building.
37
38
Presentation by Cwynne Rogers at West Coast Creen Conference.
September 2006.
39
40
Presentation by Cwynne Rogers at West Coast Creen Conference.
September 2006.
41
Natural Marketing Institute. 2003. Understanding tle LOHAS Consumer
Report: Clapter 6: Creen Building.
42
Interview witl Barr Hall on 2-5-07.
43
Interview witl Tom Paladino on 1-22-07.
44
Interview witl Mike OBrien on 2-9-07.
45
Interview witl Mary Westcott, 2-21-07.
46
Interview witl Dennis Allen 1-10-07.
47
Interview witl Mike OBrien on 2-9-07.
48
49
Presentation by Tomas Taber & Drazen for Built Creen Colorado. August 4,
2005. 2005 A&U Survey Results.
50
Interview witl Dennis Allen on 1-10-07.
51
Interview witl Amy Bolten on 1-15-07.
52
Interview witl Cordon Cooke on 1-26-07.
53
Interview witl Abbey Elman on 1-29-07.
54
Interview witl Marc Riclmond on 12-12-06.
55
American LIVES. Ladera Rancl Post-Occupancy Study: Creen Develop-
ment Tables. Unpublisled. Provided by Brooke Warrick. Taken from tlree
America LIVES studies: Terramor, Creen National, and West, in 2005,
2002, and 2004, respectively.
53
56
Captured from lttp:iiwww.clristoplersonlomes.comiaboutus.asp on
4-1-07.
57
Polaris, Inc. 2005. Survey of potential lome buyers registered on Clristopler-
son Homes website. Unpublisled. Provided by Amy Bolten.
58
Captured from www.sustainlane.usilocal_foo_and_agriculture.jsp on 3-29-07.
59
60
Interview witl Karen Clildress on 1-29-07.
61
Senick, ). September 2006. An analysis of residential green building best
management practices. Institute for Meadowland Studies.
62
Interview witl Bob Taber on 11-16-07.
63
Interview witl Miclele Russo on 11-21-06. Otler concurring experts
(tlrougl interviews) include: Peter Pfeier on 10-24-06, Amy Bolten on
1-15-07, Eric Martin on 12-6-06, Dennis Allen on 1-10-07, Tom Paladino
on 1-22-07, Creg Kats on 1-23-07, and Abbey Elman on 1-29-07.
64
Interview witl Tom Paladino on 1-22-07.
65
Captured from lttp:iiwww.usgbc.orgiDisplayPage.aspx:CMSPageID1496
on 4-1-07.
66
Captured from lttp:iiwww.sustainlane.usioverview.jsp on 4-1-07.
67
Interview witl Creg Kats on 1-23-07.
68
Interview witl Creg Kats on 1-23-07.
69
Captured from lttp:iiwww.seattle.govimayoriclimateidefault.ltm#wlo
on 4-1-07.
70
Captured from lttp:iiwww.sustainlane.usiStreet_and_Freeway_Congestion.
jsp and lttp:iiwww.sustainlane.usiRegional_Public_Transportation_Riderslip.
jsp on 3-17-07.
71
Captured from lttp:iiwww.eia.doe.govicneafielectricityiepmitable5_6
_a.ltml on 3-17-07.
72
Interview witl Riclard MacMatl on 2-2-07.
73
Interview witl Amy Bolten on 1-15-07.
74
Interview witl Sam Raslkin on 3-6-07.
75
76
Saliba, C.N. September 1, 2006. Te greening of N) buildings: Coing green
in tle garden state. New )ersey Business. Volume 52, Issue 9.
77
Saliba, C.N. September 1, 2006. Te greening of N) buildings: Coing green
in tle garden state. New )ersey Business. Volume 52, Issue 9.
78
Stine, C. November 15, 2007. Creen building in a soft lousing market.
Polaris, Inc. Unpublisled. Captured from lttp:iiwww.polaris-inc.comiarticlesi
index.cfm:fuseactionarticle&rowid1169 on 3-15-07.
79
Presentation by Bob Taber at Creenbuild Conference. September, 2006.
80
81
82
Interview witl Ricl MacMatl on 2-2-07.
83
84
Canada Mortgage and Housing Corporation (CMHC)iSCHL International.
)anuary 2002. Tips on selling in tle U.S. green lousing market.
85
Oliver, F. )uly 1, 2006. Te case for going green. Custom Builder.
86
87
88
Ray, P. Marcl 2000. Dragony Media. Wlo is tle LOHAS consumer:
LOHAS )ournal.
89
90
Interview witl Marc Riclmond on 12-12-06.
91
Captured from Ricl MacCratls Notes from presentations by Sam Raslkin
(February 2006) and article by Roy Clitwood (September 2000). Creen
Building Program: Marketing for Members: 10 Laws of Selling for tle Energy
Star Provider.
92
Presentation by )ennifer Languell. 2005. Creen development: Building
green is good for business. Unpublisled. Trifecta Construction Solutions.
Captured from lttp:iiwww.greentrends.orgiPresentationsi2005_Presentationsi
4c-Languell-greentrends202005.pdf on 4-1-07.
93
Polaris, Inc. 2005. Survey of potential lome buyers registered on
Clristoplerson Homes website. Unpublisled. Provided by Amy Bolten.
94
95
96
Interview witl Miclele Russo on 11-21-06, interview witl Cordon Cooke
on 1-29-07, and interview witl Sam Raslkin on 3-6-07.
97
Diamon, M.L. )anuary 21, 2007. Some slore-area companies are doing
more to protect tle environment. McClatcly-Tribune Business News.
98
99
Stine, C. November 15, 2007. Creen building in a soft lousing market.
Polaris, Inc. Unpublisled. Captured from lttp:iiwww.polaris-inc.comi
articlesiindex.cfm:fuseactionarticle&rowid1169 on 3-8-07.
100
E NDNOT E S
54
55
Jeff Martin
jedmar@umich.edu
)e graduated from tle University of Micligan in tle spring of 2007 witl botl an MBA from
tle Ross Sclool of Business and an MS from tle Sclool of Natural Resources and Environment.
As a student of tle Erb Institute for Clobal Sustainable Enterprise, )e focused lis education and
professional development on alternative energy, green building, entrepreneurslip, and corporate
strategy. He was awarded a Distinguisled Leader merit-based sclolarslip, was elected to tle
executive board of lis business sclool colort, served as vice-president of tle Clobal Citizenslip
Club, and acted as tle president of tle Soccer Club. A graduate of Duke University witl an
undergraduate degree in environmental engineering, )e spent tle rst two years of lis professional
life as a consulting environmental engineer before moving to Colorado to become Director of
Operations for an adventure travel company. Recently, )e was awarded a fellowslip by tle
William David Institute to develop a comprelensive business plan in support of a community-based
ecotourism and rural electrication project in Sagarmatla National Park in Nepal. He will return to
tle states in tle summer of 2007 and will begin a job searcl in tle elds of renewable energy
and green development.
Brian Swett
bswett@umich.edu

Brian Swett will graduate in 2008 witl an MBA from tle Ross Sclool of Business and an MS
in Sustainable Enterprise from tle Sclool of Natural Resources and Environment tlrougl tle
dual-degree program at tle Erb Institute for Clobal Sustainable Enterprise at tle University
of Micligan. Brians career interests include green buildings, smart growtl, corporate social
responsibility, environmental stewardslip, and socially responsible investing. In tle summer of
2007, Brian will be working for Boston Properties, a national REIT, on green real estate development.
At Micligan, le las played a leaderslip role in advancing and advising two major green building
eorts: tle $150 million Ross Sclool building and tle $500 million Mott Clildrens Hospital
building. Prior to sclool, Brian worked for an environmental justice nonprot, two socially
responsible investment rms, U.S. Senator Barbara Boxer, and several oces in tle U.S.
Environmental Protection Agency. During lis time at EPAs National Center for Environmental
Innovation, Brian created and led a program on learning from international best practices in
environmental policy for domestic adaptation and application. Areas of focus included water
infrastructure, integrated permitting, and smart growtl and urban planning. Brian lolds a BA
witl lonors from Brown University in Public Policy and International Relations.

Doug Wein
dougwein@umich.edu

Doug Wein las just completed lis MBA at tle Ross Sclool of Business and lis MS at tle Sclool
of Natural Resources and Environment as a student of tle Erb Institute for Clobal Sustainable
Enterprise at tle University of Micligan. His career focuses on green building and sustainable
community optimization, real estate nance and marketing, and management consulting. Doug las
been instrumental in many of tle University of Micligans recent green building eorts, including
tle design and launcl of tle new Creen Development graduate course and tle greening of tle new
$150 million Ross Sclool building. He acted as Co-President of Ross Net Impact in 2005-2006, wlen
it was named National Clapter of tle Year for its exemplary eorts in socially and environmentally
responsible business. Upon graduation from tle University of Micligan, Doug was presented witl
tle Ross Innovation Award and tle Ross Clobal Citizenslip Award for outstanding service to tle
community. He now works as a sustainability consultant in real estate, community planning, and
green building witl CTC Energetics, a leading national green design rm. Doug now lives in
Providence, RI, witl lis wife Raclael.
Autlors
56
WI TH SUPPORT BY
For tle complete report please visit www.erb.umicl.edu
Printed on 100% post-consumer recycled paper. Please recycle.
A summary report of a masters project of the
School of Natural Resources and Environment
at the University of Michigan.

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