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Journal of Cleaner Production 19 (2011) 157e167

Contents lists available at ScienceDirect

Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Green strategy for gaining competitive advantage in housing development:

a China study
Xiaoling Zhang a, Liyin Shen a, Yuzhe Wu b, *
a
Department of Building and Real Estate, Faculty of Construction and Land Use, The Hong Kong Polytechnic University, Hong Kong
b
Department of Land Management, Zhejiang University, Hangzhou 310029, China

a r t i c l e i n f o a b s t r a c t

Article history: The promotion of green strategy in housing development has significant contribution to the imple-
Received 19 December 2009 mentation of sustainable development principles. Why do the housing developers go for green? This
Received in revised form paper examines the benefits and barriers in applying green strategies in the process of housing devel-
10 July 2010
opment and facilities management. The examination is conducted from the whole process of developing
Accepted 6 August 2010
Available online 21 September 2010
a housing project, including project plan and design, construction, and operation and management
stages. It is considered by the housing developers that the application of certain types of green strategies
can help contribute to building up developers’ competitive advantages, such as solar system and opti-
Keywords:
Green strategy
mizing building envelope thermal performance technology. The four case studies suggest that housing
Competitive advantage developers believe that the application of these green technologies can contribute to reputation gaining,
Housing development reduction in construction and operation cost, receiving favorable land prices, and more channels avail-
able for financing. On the other hand, the major barriers affecting the application of the green strategies
in housing development process have also been identified, such as higher cost for green appliance and
higher cost in relation to customers’ demand. Data used for analysis are collected from a comprehensive
questionnaire survey and four constructive case studies within the Chinese housing development
market.
Ó 2010 Elsevier Ltd. All rights reserved.

1. Introduction
State intervention, green development policies and their

The promotion of sustainable development mission has been
shaping the practice of all business sectors including housing
development towards sustainable practice, which works for the
balance between economical, social and environmental perfor-
mance. The promotion of sustainable practice in housing devel-
opment has resulted in the development of various green strategies
especially for improving environmental performance in the process
of housing development. In order to promote the sustainable
development mission, there are several regulatory strategies which
need to be considered (Li and Yao, 2009; Zhu and Lin, 2004; Jiang
and Tovey, 2009; Waters et al., 2007), shown as follows.
implications.

Strategies to create awareness with regards to green buildings
and use of green systems and technologies in the housing
sector.

Strategies to reduce municipal service fees and costs for
green housing development.

Community engagement and stakeholder involvement during
and before the design stage.

Proactive strategy to conduct education and training programs
for green housing development.

Exploring use of green measures to compensate any loss of bio-
diversity, environmental deterioration and degradation due to
rapid urbanization in China.

Nevertheless, these regulatory strategies will only be effective if

* Corresponding author. Present address: Department of Land Administration,
Zhejiang University, 258 Kaixuan Road, Hangzhou 310029, PR China. Tel.: þ86 571
8697 1987; fax: þ86 571 8697 1277.
E-mail addresses: zhangxiaoling1982@gmail.com (X.L. Zhang), bsshen@inet.
polyu.edu.hk (L.Y. Shen), wuyuzhe@zju.edu.cn (Y.Z. Wu).
developers participate by conducting green development together
with them. On the other hand, developers will only actively
participate in promoting these green practices if they find that
these practices can help them gain competitiveness in the market.
It is therefore important to help developers understand whether or

0959-6526/$ e see front matter Ó 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jclepro.2010.08.005
 Author's personal copy
158 X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167
to what extent the green development strategies can be of helpful
to their competitiveness gaining.
Existing studies have addressed extensively the importance of
green strategy and environmental performance by developers (for
example, Shen et al., 2010; Waters et al., 2007; Eichholtz et al.,
2009). The term “green strategy” in this study is defined as the
approach that developers adopt to improve and gain sustainable
competitive advantage by contributing to environment protection,
ecological responsiveness and social responsibility. Green strategy
is considered as important means to implement sustainable
development principles in the built environment. Previous study
suggests that green features in the building practice provide a cost-
effective choice for developers and policymakers looking to reduce
the negative environmental effects of development (Kingsley,
2008). A wide range of green features, such as green roof tech-
nology (GRHCC, 2003), solar system (Ecotecture, 2006) and HVAC
system (UNEP, 2003) were introduced in previous studies for
application. These strategies aim for various purposes include
better building sustainability performance, lower operational costs,
protecting the health of building residents, and energy saving.
Governments world-wide have also been introducing various
policies and regulations to promote the green development for
infrastructure and building projects. For example, Hong Kong
Buildings Department promulgated a Comprehensive Environ-
mental Performance Assessment Scheme for Buildings. The Scheme
introduces a green building labeling system and gives recognition
to buildings with good environmental performance in planning,
design, construction and management (Hong Kong Development
Bureau, 2007). Such recognition helps the contributing devel-
opers to gain advantages by having better market sales (Polaris,
Inc., 2005).
This paper aims to investigate green elements applicable in the
process of developing housing projects by presenting a green
strategy application profile developed from case studies. This
profile demonstrates procedures for housing developers to select
green technologies and mitigate the barriers encountered across
various stages in the process of housing project development. The
results will lead to examining the competitiveness that housing
developers can gain by employing green elements.
The paper was organized by the following components. First
though, a review of existing studies on green technologies and
various practices for improving competitiveness by adopting green
strategy is provided. This is followed by a brief outline of the
research methodology and data collection. Then, the questionnaire
survey data are analyzed; four case studies are conducted to
deepen and verify the understanding; and research findings are
presented. Finally key conclusions are drawn. This research will
provide new insights into how housing developers can adopt green
strategies to improve their competitiveness in Chinese market.
1.1. Literature review
Previous studies have addressed various green development
technologies in developing housing projects. For example, the
study by Nelms et al. (2005) identifies green roof system as effec-
tive means to reduce energy consumption in operating office
building. The green roof system can help lower the temperature
inside the building, thus reduce the time of using air-conditioning
system. Doherty et al. (2004) suggests that ground source heat
pump technology is installed and tested at the Eco House in UK.
Other researchers, communities, and organizations have been
introducing various lists of indicators for green building charac-
teristics. For example, a number of cities and towns across the
United States have developed green principles tailored to their own
needs (Sparks, 2007). These green guidelines for good performance
buildings include Energy Star, the National Association of Home
Builders’ Green Home Building Guidelines, and Leadership in
Energy and Environmental Design (LEED) (Sparks, 2007). However,
the effectiveness of adopting green strategy in developing housing
project is of limitation. Bradshaw et al. (2005) opined that devel-
opers were reluctant to practice green systems as they consider
that these systems would cause extra costs or include more risks in
using these new systems.
There are experiences of improving developer’s competitiveness
through adopting green strategy. For example, Hong Kong private
sector housing developers such as Swire Properties, Sun Hung Kai,
Hong Kong Land, and Henderson Land have adopted the building
environmental assessment management system (HK-BEAM). In
using HK-BEAM, the green features on building design, construc-
tion and management are assessed. It was reported that, up to
2009, there are about 170 landmark properties in Hong Kong,
which obtained the recognition for improved environmental
performance under BEAM system. These projects comprise of over
7.2 million m2 of office space and 36,000 m2 residential units
(Australia Government Trade net, 2009). For another example, the
study by the Korea Institute of Construction Technology (KICT,
2000) demonstrates that green development is one of the most
important marketing strategies for Korean housing firms. In Korean
housing market, developers implemented green marketing as
a strategy for brand image improvement particularly by focusing on
outdoor landscape design. Outdoor landscape is considered as
a theme garden and an environmental sculpture, and it offers visual
attractiveness (KICT, 2000; Lee et al., 2007). It was reported that in
the United States, developers adopted widely green building
programs in order to promote their environmental friendly image
(USGBC, 2007). The report by Nie (2007) demonstrates that since
2002 China has launched the scheme “Green Eco-housing Sample
Projects” to promote green housing throughout the country. Until
2007, 23 eco-housing sample projects were established in 20 cities
across 14 provinces. These sample projects have embodied various
green features such as solar energy application and prefabrication
concrete technology. Nie’s (2007) report suggests that these
projects achieved an average of 58.1% energy saving target and an
average of 21.6% water saving.
There is a great potential of contributing to sustainable devel-
opment by engaging green strategy in housing development. This is
particularly true in developing countries where huge plans for
housing are to be implemented. For example, China is enjoying the
enormous construction booming. According to National Bureau of
Statistics of China (NBS, 2009a,b), RMB2391.8bn were invested in
housing industry in China in the first 10 months of 2008, increased
by 24.6% from previous year. The completed building area for
housing has been increasing annually by 9.1% during the period of
2000e2008.
Nevertheless, the effectiveness of implementing green strategy
in housing development depends largely on developer’s willing-
ness. Developer’s willingness is contributed by what he can gain.
Therefore, understanding whether developers can gain and what
can be gained through green strategy is essential. It appears that
little study has been conducted on whether adopting various green
strategies can help developer gain advantages, and to what extent if
yes. The lack of this understanding is considered as one of the
critical issues affecting the promotion of green systems in the built
environment. Addressing this issue provides not only a major
opportunity to ‘grow out’ of much of the problem, but also a danger,
if not addressed, of locking in enormous energy waste and ineffi-
ciencies for future generation (World Bank Report, 2001). The paper
intends to fill in this gap through conducting a practical survey to
demonstrate what green technologies are involved in the housing
development practices.
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X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167 159

Table 1 Table 2
Typical green elements/technologies/systems in housing development. Summary of typical barriers for applying green elements in housing projects.

Code Green elements Key references Code Barriers Key references

GE1 Considering environmental impact United Nation Environment BX1 Higher costs for green appliance design Williams and Dair (2007),
when selecting project site Programme (2005) and energy-saving material Tagaza and Wilson (2004)
GE2 Design for better microclimate and United Nation Environment BX2 Insufficient policy implementation Osmani and Reilly (2009)
environmentally responsible housing Programme (2005) efforts
GE3 Optimizing building orientation and Glicksman et al. (2001) B X3 Technical difficulty during the Tagaza and Wilson (2004)
configuration for better energy construction process
performance in design stage BX4 Risks involved because of different Tagaza and Wilson (2004)
GE4 Application of underground space Parker (2004) contact forms of project delivery and
development technology to save land changed site practices and behaviours
resources BX5 Lengthy planning and approval process Tagaza and Wilson (2004)
GE5 Green landscape design and use of Pei et al. (2009) for new green technologies and recycled
wetland landscape technology materials
GE6 Application of green roof technology GRHCC (2003) BX6 Lack of knowledge and awareness to the The Energy and Resources
GE7 Application of solar system technology Ecotecture (2006) green technologies Institute (2006)
GE8 Application of efficient equipment and U.S Department of Energy BX7 Lack of efficiency for implementing green The Energy and Resources
appliances for natural ventilation (2009) building regulations and byelaws Institute (2006)
GE9 Use of environmental friendly materials UNEP (2003) BX8 Higher cost in relation to customers Osmani and Reilly (2009)
for HVAC systems demand
GE10 Optimizing building envelope thermal U.S Department of Energy BX9 Unfamiliarity with green technologies Eisenberg et al. (2002),
performance (2009) resulting in delays in the design and Tagaza and Wilson (2004)
GE11 Integrative use of natural lighting with HK Green Building Technology construction process
electric lighting system Net (2009) BX10 Interests conflicts between various Williams and Dair (2007)
GE12 Ample ventilation for pollutant and U.S Department of Energy stakeholders in using green measures
thermal control (2009)
GE13 Application of waste management Vanegas et al. (1995)
technology
GE14 Application of minimizing the disruption UNEP (2003) addressed in various previous studies (Tagaza and Wilson, 2004;
to living environment technology Williams and Dair, 2007; The Energy and Resources Institute,
GE15 Application of Low E insulation window Kirby and Williams (1991) 2006), and these typical barriers are compiled in Table 2.
technology
GE16 Application of decentralized rainwater Partzsch (2009)
technology
GE17 Application of ground source heat pump Doherty et al. (2004)
2.2. Data survey
technology
GE18 Application of innovative wastewater Chen et al. (2005) In order to understand the significance of applying green
technology elements to gaining competitive advantages and barriers in prac-
GE19 Application of prefabricated concrete Tam (2009), Noguchi (2003)
tical application, a questionnaire survey has been conducted.
technology
GE20 Application of green technology monitor U.S Department of Energy Questionnaire survey is a common method adopted for collecting
and maintenance system (2009) qualitative information from practice. Dillman (1978) suggested
GE21 System for green facility management Nousiainen and Junnila (2008) that mailed questionnaires survey was an effective method to
obtain the maximum possible responses. The questionnaire survey
in this study was conducted among Chinese housing related
2. Research method professionals who have experience of practicing green development
projects. Initially, a list of 95 real estate firms was identified from
The research data in this study was searched and collected using two databases (China Real Estate Industry Business Directory and
a combination of literature review, existing research reports, the Year Book for Chinese large scale real estate and construction
questionnaires survey, case study and structured face-to-face enterprises). After that, an invitation letter for participating the
interviews with housing project managers. Literature review and survey and e-mail were sent to the directors of these 95 organiza-
questionnaire survey are adopted to examine the green technolo- tions. Fifty-five organizations indicated their willingness to partic-
gies applicable in implementing housing projects. Case study and ipate the survey exercise, therefore, the structured questionnaire
existing research reports are employed to demonstrate whether were distributed by e-mail or post to the directors of those firms
green elements in housing project development process can offer accepting the survey invitation. To increase the sample size,
developers with competitive advantages. Data collected from ‘snowball’ sampling method is used. In other words, the directors
practical survey also help reveal the barriers in adopting green were invited to help distributing the questionnaire between their
elements in the practice of housing development. senior managers and their business partners or senior practitioners
whom they know of having rich experience in the discipline. As
a result, 135 questionnaires were dispatched via both e-mail and
2.1. Identification of green elements and application barriers in post. Finally, 45 effectively completed questionnaires were
housing development returned. Their backgrounds are across a wide range of disciplines in
the Chinese real estate and construction, including governmental
There are various green elements introduced to the housing department, housing developers, contractors, architectural firms,
development industry, which can be identified in the previous property management firms. Table 3 shows the classification of the
studies (Glicksman et al., 2001; Parker, 2004; U.S Department of respondents. The survey was carried out from July to September
Energy, 2009). These elements are summarized into a comprehen- 2009. The questionnaire comprised three parts: (a) questions about
sive list, as shown in Table 1. the respondents’ individual and organizational backgrounds; (b)
Whilst great development has been achieved in developing the opinions on the contribution significance of green elements to
various green elements or technologies in housing development, gaining competitive advantage, and (c) the opinions on the major
various barriers exist in their application. These barriers have been barriers of applying green elements. The sample questionnaire is
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160 X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167

Table 3
Classification of the survey respondents.

Classification of the respondents No.

Officials in planning and zoning department 2
Senior managers of state-owned housing developers 10
Senior managers of private housing developers 11
Contractor 7
Real estate consultants 7
Architects 6
Senior manager in the property management firms 2

shown in Appendix. The Likert scale is used to help respondents

present their opinions, which is commonly used for rating the
relative significance of individual factors through examining
experts’ opinion (e.g., Chan and Kumaraswamy, 1997; Shen and Liu,
2003). The respondents were invited to give their opinion on the
Fig. 1. The distribution of significance value between green elements applicable in the
relative significance of each green element to gaining competitive
housing development.
advantage. Grade ‘1’ denotes for least contribution to competitive-
ness and ‘5’ for most. On the other hand, the respondents were
invited to judge the significance degree of each listed barrier to the green elements are considered effective to bring benefits for
application of green elements, with grade “1” as least significance, housing developers to gain competitive advantages, such as cost
and “5” most. The feedbacks from respondents are analyzed using reduction and image promotion.
relative significance value. Relative significance value is considered On the other hand, the barriers to applying green elements in
as a typical methodology for identifying the key factors among housing development present and some of them are significant.
a number of individual factors (Chau et al., 1999; Moungnos and The relative significance degree of each of the 10 listed barriers was
Charoenngam, 2003). identified on the basis of mean values of individual responses,
as shown in Table 5. And the results can also be shown graphically
3. Survey results in Fig. 2. The major barriers include “higher costs for green appli-
ance design and energy-saving material”, “higher cost in relation
According to the survey data, the relative significance of each of to customers demand” and “insufficient policy implementation
the 21 green elements was derived on the basis of the mean values efforts”.
of responses, as shown in Table 4. The results can also be presented It appears that financial consideration is the biggest barrier in
graphically as in Fig. 1. It can be seen that the most effective green promoting green strategy in housing development process. This is
elements for helping developer gain competitive advantage is echoed with previous studies. The report by Urban Land Institute
considered as solar system with the highest mean value of 4.311, (2002) suggests that using green materials would cost 3e4%
followed by “Optimizing building envelope thermal performance” more than using conventional construction materials. The investi-
(4.044) as the second, and “Low E insulation window technology” gation conducted by the Ministry of Construction (MC, 2005)
(3.978) as the third. The “use of efficient equipment and appliances involves 3000 housing projects and shows that only 58.53% of
for natural ventilation” and “application of prefabricated concrete the projects were designed in line with energy efficient standard,
technology” were ranked as fourth and fifth respectively. These and only 23.25% were built to meet the energy efficient standard.
The report reveals that cost increase is the key factor affecting the
application. The majority of this cost increase is due to the
Table 4 increased architectural and engineering (A&E) design time,
The relative significance of green elements to gain competitive advantages for
modeling costs and time necessary to integrate green building
housing developers.
practices into projects (Kats, 2003). This was echoed in an interview
Code Responses Mean Rank of this study with a housing developer, who opined that his
1 2 3 4 5 company does not seek to use green technologies because the
GE7 0 0 4 23 18 4.311 1 company expects higher cost and the difficulty of finding suppliers
GE10 0 0 10 23 12 4.044 2 for green material and green appliances. Other studies have also
GE15 0 0 11 24 10 3.978 3
GE19 0 3 17 19 6 3.622 4
GE8 0 2 22 21 0 3.422 5
Table 5
GE12 0 2 23 20 0 3.4 6
The relative significance of barriers in adopting green elements for housing
GE3 0 4 21 19 1 3.378 7
development.
GE18 0 10 26 9 0 2.978 8
GE9 0 9 29 7 0 2.956 9 Code Responses Mean Rank
GE6 3 7 24 11 0 2.933 10
GE17 2 14 21 8 0 2.778 11 1 2 3 4 5
GE2 4 11 23 7 0 2.733 12 BX1 0 0 5 20 20 4.311 1
GE5 0 17 24 4 0 2.711 13 BX8 0 0 6 28 11 4.044 2
GE14 1 16 24 4 0 2.689 14 BX2 0 0 13 22 10 3.978 3
GE1 3 15 23 4 0 2.622 15 BX7 0 0 12 26 7 3.622 4
GE11 2 18 21 4 0 2.6 16 BX6 0 0 16 23 6 3.422 5
GE4 3 16 24 2 0 2.556 17 BX3 0 1 19 24 4 3.4 6
GE21 3 19 20 3 0 2.511 18 BX9 0 0 21 19 5 3.378 7
GE20 4 20 19 2 0 2.422 19 BX4 0 0 23 17 5 2.978 8
GE13 4 23 18 0 0 2.311 20 BX5 0 2 20 19 4 2.956 9
GE16 4 24 17 0 0 2.289 21 BX10 0 1 20 23 1 2.933 10
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X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167 161

Fig. 2. The distribution of reluctance degree between the barriers for green elements’ application.

Property
developers

Green elements :
GE1,GE2,GE5,
Competitive GE6, GE7,
advantage: GE15, GE17
CI3, CI5,
CI14, CI15,
CI19
Plan & Design
Barriers:
BX1, BX2,
BX6, BX7

Green elements :
GE9, GE13,
GE14, GE19
Competitive
advantage :
Construction CI7, CI8,
CI12, CI14,
Barriers: CI16, CI17
BX3, BX4,
BX5, BX9

Green elements :
GE13, GE20,
Competitive GE21
advantage: Operation &
CI, CI3, Management
CI11, CI19

Barriers:
BX2, BX6,
BX8, BX10

Fig. 3. Application of green strategy in housing development process.

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162 X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167
demonstrated that the compliance with energy efficiency stan-
dards in residential buildings is very low due to a lack of profes-
sional experts and financial resources that cannot address the
complex construction process and complicated techniques induced
by green technologies (Richerzhagen et al., 2008).
Lack of motivation is also a major barrier to applying green
strategy in the process of housing development. The study by
Richerzhagen et al. (2008) suggests that most of the existing
buildings in China do not comply the principle of effective energy
conservation due to the lack of motivation with energy saving.
Furthermore, the commitment of engaging green development is
largely undermined by weak mechanisms and insufficient legal
enforcement. This is also echoed in another interview with
a project manager involved in the survey of this study, who
explained that the project he has been involving adopted little
green elements as there is no compulsory requirements, which will
otherwise cost more.
4. Analysis on the competitive advantage by adopting green
strategy in housing development process
In order to identify what kinds of competitive advantages
housing developers can gain by implementing green strategies,
four case studies were conducted for further understanding the
survey results. The case study can also help verify survey results
Fig. 4. Sample certificate for energy efficient building in China (Cai et al., 2009).
and deepen the understanding. Discussions and findings are pre-
sented as follows.
Housing developers adopt various approaches and strategies to
gain competitive advantages, including green development
strategy. Developers’ competitive advantages can be presented
with various indicators. Zhang et al. (2009) developed a list of
competitiveness indicators for appraising housing developers’
competitiveness (Fig. 3). The indicators are used in this paper as
reference for examining the contribution to developers’ competi-
tive advantages by using the green elements identified in previous
section. The data used for the analysis in this section are collected
from four housing development cases. The four cases are awarded
with green building label in the green building rating system in
China. Fig. 4 shows a sample award certificate for a green building
in China. Case I is Wanke City Project developed by China Vanke.
The project is located in Shenzhen, with 126,000 m2 building area
and completed in 2008. The Case II is called City Xinyu Property
project developed by Jindu Group. The project is located in
Hangzhou, with 234,000 m2 building area and phase-I project was
completed in 2008. Case III is OCT Property project developed by
OCT Properties. The project is located in Shenzhen, with 5130 m2
building area and completed in 2008. Case IV is Merchants Tiger
Apartment developed by China Merchants Property. The project is
located in Shenzhen, with 42,444.13 m2 building area and was
completed in 2004 (Fig. 5).
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X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167
Fig. 5. The four green label building situated in Shenzhen and Hangzhou.
The interview discussions in each case study lasted 2 h,
involving full discussion between this research team and the
project managers who have been working on the concerned
projects. The discussions with professionals led to the formulation
of a set of indicators for studying housing developers’ competitive
advantages, with reference to the indicators introduced by Zhang
et al. (2009), listed in Table 6.
The key questions raised in the interview discussions include:
what competitive advantages (in referring to the indicators listed in
Table 6) the developers can gain by engaging various green
elements listed in Table 1; what are the major barriers encountered
in implementing green elements during housing development
process. The process of developing a residential project is divided
into three stages: project plan and design, construction and oper-
ation and management. The data collected from case study
discussions are summarized in Table 7. The information can be
generalized to a profile for depicting the application of green
strategy in housing development process, as shown in Fig. 3.
For the comparison between the four surveyed practices, the
competitive advantage gained from these green elements for each
case is compared and the barriers encountered are also highlighted.
From the data in Table 7, it can be seen that the four cases adopt
different green elements at different development stages. For
example, the major considerations given by China Vanke at the
Table 6
The indicators for housing developer’s competitive advantage.
Indicators
CI1 e Brand assets CI2 e Distinctive competitive strategy
CI5 e Innovation action CI6 e Information technology
CI9 e Quality control CI10 e Uniqueness of product
CI13 e Cheaper land resource CI14 e Reduction in construction costs
CI17 e Use of industrialized CI18 e More financial channels for
components developing properties
163
design stage include environmental resource conservation, efficient
utilization of resources and energy efficient design, and good
ventilation for living for residents. Vanke has strong financial
resources and can afford to pay more resources to apply green
appliances and equipments to achieve better green building
performance. Referring to the developer OCT Properties, more
emphasis was given on the efficient utilization of land resources at
design stage, for example, application of the underground space
development. By making use of underground space, OCT Properties
provided car parking in responding to the users’ demand, and
mitigating the company’s difficulty of limited land bank. Further-
more, at construction stage, the Case II, City Xinyu project considers
more on using environment-friendly construction materials, such
as fabricated concrete components. But Case I, Case III and Case IV
adopt emphasizing on the minimization of noise, dust and traffic
disruption to the living environment. The investigation on the four
cases shows that at property operation and management stage,
more attention was given to the monitor and maintenance of green
features. For example, the Case IV, Merchants Tiger Apartment,
adopts the green appliance monitor and maintenance system to
identify and solve the environmental problems affecting the living
conditions of the property users. Other three cases, namely, OCT
properties, Vanke City and City Xinyu, have introduced the system
of recyclable materials, appliance and waste management facilities.
CI3 e Customer satisfaction CI4 e Financial assets
CI7 e Production efficiency CI8 e Profitability
CI11 e Value creation CI12 e Commitment on social
responsibility
CI15 e Developing unique CI16 e Reduction in operation and
green housing maintenance costs
CI19 e Green brand reputation
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164 X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167

Table 7 contribute to reduction of energy and maintenance costs. The

Adopted green elements, encountered barriers and gained competitive advantages. following discussions show several typical examples where
Green elements Barriers encountered Competitive advantage applying green elements contributed to improving developers’
(refer to Table 1) (refer to Table 2) (refer to Table 6) competitive advantages. Adopting green strategy is considered the
Plan and design Case I: Case I: Case I: commitment on social responsibility, and by assuming this social
responsibility, housing developers can gain good image which is
GE1; GE2; GE5; BX1; BX4; BX5; CI3; CI5; CI6;
intangible asset. For example, the adoption of green roof can reduce
GE6; GE15 BX6; BX7; BX9 CI13; CI15; CI19;
Case II: Case II: Case II: ambient urban temperatures; therefore mitigate the urban heat
island effect, which in turn contribute to improving public living
GE6; GE7; GE8; BX1; BX2; BX6; CI1; CI3; CI4; environment. This social benefit can be well received by the public,
GE10; GE12; GE15; BX7; BX10 CI5; CI10; CI15; therefore housing developers can increase its public reputation and
GE16 Case III: CI18;CI19
Case III: Case III:
image. It was revealed from the discussions with professionals
BX1; BX6; BX7; involved in the case studies that the green image can result in
GE4; GE6; GE9; BX10 CI1; CI12;CI13; higher price when developers sell properties. For example, Jindu
GE12; GE15; GE17 Case IV: CI14;CI16;CI19 Group has obtained the green reputation and green housing image
Case IV: Case IV:
through using various green strategies, such as the prefabrication
BX1; BX2; BX6;
GE1;GE2; GE3; BX7 CI3; CI12; CI14; technology. By adopting this green strategy, the developer has
GE5; GE6; GE7; CI15; CI19 attracted many high-income buyers with higher sales price. This
GE15; GE17; GE18 strategy is also echoed with the interview discussion with the
project manager in China Merchants (Case IV). The manager opined
Construction Case I: Case I: Case I: that a reputation for building green housing will not only help enter
GE13; GE14; GE19; BX3; BX5; BX7; CI7; CI9; CI12;
into new housing market in the future, but can also improve rela-
GE21; BX8; BX10; CI17 tionships with governmental planning department, local commu-
Case II: Case II: Case II: nities and consumers. Providing high-quality green space can also
show the commitment on corporate social responsibility (CSR). CSR
GE9; GE12; GE13; BX3; BX4; BX5; CI5; CI8; CI12;
is widely considered a major factor affecting a business image and
GE19 BX9 CI14; CI16
Case III: Case III: Case III: competitiveness. It was reported that housing developers in UK
have started to grow a CSR culture within the industry (Zitzler et al.,
GE13; GE14 BX4, BX5; BX9 CI7; CI8; CI14; 2000). Increasing number of housing developers has started real-
Case IV: Case IV: CI17 izing the importance of building up green reputation in improving
Case IV:
GE13; GE14; GE19 BX3; BX4; BX5
their competitive advantages. The study by World Wildlife Fund
CI12; CI16; CI19 (WWF, 2007) reported that 14 large housing developers in UK had
built up green reputation in the market. This is echoed in another
Operation and Case I: Case I: Case I: report by WWF (2005) suggesting that ‘investing in green housing’
management can achieve not only high standards of environmental performance
GE13; GE20 BX2; BX4; BX10 CI3; CI9; CI19
but also social performance, which can help build advantage to
Case II: Case II: Case II:
attract customers (Deb et al., 2000). In the context of China, the case
GE13; GE20 BX8; BX6 CI3; CI11; CI19 studies in this research indicate that housing developers have
Case III: Case III: Case III: started to realize the importance of building up green brand
reputation.
GE13; GE21 BX8, BX10, BX2 CI1; CI2; CI19
Case IV: Case IV: Case IV:
The second typical competitive advantage that housing devel-
oper can gain through adopting green strategy is to receive ‘cheaper
GE20; GE21 BX6; BX8; BX10 CI1; CI3; CI8; land prices’ (CI13). In China, all land in urban area is owned by the
CI19 government. The land-use rights and land ownership is separated.
Land ownership cannot be sold but the land-use rights can be sold.
The sale of land-use rights means that a municipal government, as
a representative of the state, sells land-use rights to buyers for
The above analysis has demonstrated that housing developers in a fixed period through auction, tender, or negotiation (Ding, 2003).
China have incorporated green strategy into their business in order When a piece of land is sold, it is actually the right of land use sold
to build up reputation and gain competitive advantages at different for a specified period of time. The Chinese government has estab-
stages. Various green elements have been used for minimizing the lished time-limits for selling different categories of land-use rights:
impacts of their business activities on the environment. Emphasis is 70 years for residential land use, 50 years for industrial land use,
particularly given to improving living environments of the resi- and 40 years for commercial, tourism and recreation land use
dents, which is considered an effective strategy to gain competi- (Wang and Murie, 1999). There are various terms and conditions
tiveness. Nevertheless, different firms may consider different green specified in the contract of land-use rights when developers
strategies in order to gain competitive advantages as each firm has procure from the government, for example, the qualifications of the
different background and resources such as capital resources, buyers, the time period for paying the land-use rights fees, and
technique conditions and corporate visions. commitments to the environmental protection in the development
area, and others. The government in some contexts has been
offering developers with favorable land price where green
5. Discussion elements and strategies are to be implemented. The government
also favors those developers who have a track record of delivering
The four case studies analyzed in previous section suggest that green development projects. For example, in Case I, it was revealed
housing developers can gain certain competitive advantages by that the developer received favorable land price for the project
adopting certain types of green strategies. The green elements development as the developer was convinced the government of
 Author's personal copy
X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167
employing ecological landscape technology and constructing green
buildings, which contribute to good profit-making from this
housing development. However, this is a special case where the
developer did receive favorable land price at land sale stage. In
general, the government in China offers developers with tax
rebates and financial incentives at the property sale stage in which
various green elements can be practically found in order to
encourage development of green properties. This practice has been
adopted in other developed countries or regions. For example, the
Hong Kong government has introduced the concession scheme in
2001 for the gross floor area (GFA) where green and energy-saving
buildings are designed and implemented (Joint Practice Notes
(JPNs) No. 1 and 2, 2001).
Thirdly, developers can gain the advantage of ‘reduction in
construction costs’ (CI14) from applying green technologies. For
example, on-site recycling methods and reducing material
consumption can save construction materials cost. This competitive
advantage has been found in the Case II and III. As echoed by the
project managers in the two concerned cases, the adoption of waste
reduction procedures and methods helped the developers in saving
considerable construction materials in comparing to those projects
where waste management is not properly adopted. Less materials
consumption not only means reducing construction cost, but also
results in less environmental impact. Consequently, lower liability
and remediation costs will be achieved. The discussions over case
studies further suggest that green technology will be more attrac-
tive in the future when traditional construction materials price will
continue increasing.
The fourth competitive advantage comes from ‘developing
unique green housing product’ (CI15). The unique green product has
good potential market opportunities when buyers start to have
demands for higher quality living environment. For China
Merchants Property, in Case IV, it is suggested that the competitive
advantage is gained by satisfying the customers’ expectation on
green living environment. The developer applied various green
appliance and materials, and all the individual flats in this project
were well received by users. For example, the case China Merchants
gave emphasis on design for comfort and improved indoor air
quality. This strategy helps the developer offer unique green
products to lead the market and gain competitive advantage. This is
echoed in the discussions with the project managers in the Cases I,
II and IV, opining that developing unique green housing product is
the future direction for business growth, and those developers
leading the mission will certainly have advantages in the market
competition.
‘Reduction in operation and maintenance costs’ (CI16) is identi-
fied as another competitive advantage that housing developer can
gain by delivering green products. This is particularly addressed in
the case III, the OCT Property. By employing the green technologies,
such as water-saving appliances, envelope optimization tech-
nology, and air pressure automatic passive ventilation technology,
the OCT expects the operation cost to decrease in the long run.
Although the initial cost is higher to the developer, the property
was well received in the market as the buyers are convinced of cost
saving in operation. This advantage was also reported from Case I,
where the gray water reuse rate is increased to 30%, and the use of
renewable energy can bring energy saving by 5% (Feasibility report
of sample energy efficient building for China Vanke Property,
2005). The developer generated good profits from this project as
buyers were willing to pay higher price.
‘Use of industrialized components’ (CI17) is considered as
another competitive advantage to housing developer. The indus-
trialized components are increasingly used in housing develop-
ment, including the integrated elements of construction and
decoration, and prefabricated concrete elements. This competitive
165
advantage was reported in the cases I and IV. Prefabricated
elements were extensively applied in these two cases, and
construction time was saved significantly. This helped the devel-
opers deliver house products earlier to the market, thus to generate
incomes as soon as possible by selling properties. This is considered
very important advantage as developers can have sufficient funds
by receiving payments in time. Using these funds can help devel-
opers reserve more land and develop more projects.
Furthermore, adopting green strategy can help developers
secure ‘more financial channels for developing green properties’
(CI18). Financial capital is regarded as one of the core competitive
advantages for housing developers (Ambrose and Peek, 2008).
Recent research has shown that green development can attract
more investment funds (Igloo, 2005). Investment funds are one of
the key channels for developers to obtain capital. For example,
Socially Responsible Investment (SRI) is one of the typical invest-
ment channels for developing green properties (Carter, 2006).
Nevertheless, it appears that this advantage has not been well
recognized in the surveyed cases. To take advantage of this
emerging capital channel opportunity, developers are advised to
adopt various tools to carry out the green practice to attract more
SRI in the future.
On the other hand, there are barriers in applying green strate-
gies in housing development process. The four practices investi-
gated in this study show that significant barriers exist in applying
green strategies in the whole housing development processes,
including plan and design, construction and operation & manage-
ment stages. The case studies demonstrate the impacts of these
major barriers derived from the questionnaire survey (presented in
Table 4) on promoting green strategies in practice. These major
ones include ‘high green appliance design and energy-saving
material costs’ (BX1), ‘higher cost in relation to customers’ demand’
(BX8), and ‘insufficient policy implementation efforts’ (BX2). The
discussions on the four cases echo that the implementation of all
the concerned projects did encounter with these barriers, such as
BX1 and BX8, which have been identified as the top two barriers in
the survey. For example, according to the project manager in Vanke
City (Case I), though the developer was keen on using green
elements, it did not use them as the business expected that more
money will be needed to implement these green elements. Very
often, these extra costs would be transferred to the end users who
will not be willing to pay this extra money. In fact, this disagree-
ment on this extra cost between developers and buyers presents
the barrier (BX1) to the application of green elements in the
housing projects in China. Other barriers have also hindered to
different extents the use of various green elements in practice.
Developers shall consider their own resources and capability while
choose suitable green strategy in order to reduce the barriers
encountered, thus effective competitive advantage can be gained.
6. Conclusion
There are various green elements applicable to the development
of housing projects across project life cycle, including design,
construction and operation of buildings. This study identified the
commonly referred green elements and the top 10 green elements
adopted in practice are highlighted, such as ‘solar system’, ‘green
roof technology’ and ‘low-E insulation window’. The study also
found that significant barriers exist in applying green elements;
these major barriers include ‘higher costs for green appliance
design and energy-saving materials’, ‘lack of motivation in relation
to customers’ demand’ and ‘insufficient policy implementation
efforts’. With the presence of the barriers, the question is “why
developers still go for green?” The case studies in this study suggest
that adopting green elements can contribute to improving housing
 Author's personal copy
166 X.L. Zhang et al. / Journal of Cleaner Production 19 (2011) 157e167
developers’ competitive advantages by. Green elements can help
developers differentiate their products thus provide unique
commodities to the marketwith green components. Using green
elements, housing developers can achieve reduction in construc-
tion and operation cost, gain favorable land prices, acquire more
financial channels, and obtain the green brand reputation. It is
encouraging to note that a growing number of developers have
started to adopt green strategies in their business activities, as
evidenced by the four cases examined in this study.
The authors appreciate the limitations in this study. First, the
research findings refer to China context, though green strategies
and technologies are widely used in many other developing
countries. Further comparative study can be conducted to verify
whether the findings are applicable to other countries. Secondly,
the implementation of green strategies should be achieved through
various channels including state policy intervention, community
engagement and stakeholder involvement, education and training,
However, due to limited space, this paper focuses on identifying the
green strategies implemented by housing developers.
Furthermore, the guidance and commitments from government
on promoting green housing development can drive and motivate
housing developers to adopt green strategy, for example, by
adopting favorable tax policy and incentive schemes for those
developers who incorporate green elements in their developments.
This study provides valuable references for housing developers to
consider improving their competitive advantage through green
strategy. It also provides valuable references for studying the
practice of green housing development in other industries.
Acknowledgements
The authors would like to thank all the anonymous reviewers
for their invaluable and constructive comments on an earlier draft
of this paper and hence their contribution to the substantial revi-
sions made since that time.
Appendix A. Supplementary data
Supplementary data associated with this article can be found, in
the online version, at doi:10.1016/j.jclepro.2010.08.005.
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