How To Beat The Cost Of Green Construction

Eco-friendly construction is now being hailed as the future of the construction industry, but many developers are wary of it because they perceive it as a high-cost investment. This, however, is a misconception: green construction can be built cheaply, and most importantly, the profit it brings will widely outnumber the profits of a traditional construction.


Less energy spending

The Green Building Council has produced a good report on the subject, named "The Business Case for Green Building: A Review of the Costs and Benefits for Developers, Investors and Occupants". This report looks through various studies which quantify the economic advantages of green construction. There are various arguments which find support in the scientific literature. The clearest one is the advantage in energy spending: green energy costs less, so there are less bills to pay. This alone can justify higher building costs and brings the investment to a reasonable number, in a reasonable timeframe. According to the European Commission (2015), global energy efficiency measures could save between 280 and 410 billion euros in energy spending. 

Building costs are getting lower

Regarding building costs, they are now sliding closer and closer to those of traditional construction. As construction regulations around the world become tighter on the subject of energy-efficiency and sustainability, and companies producing innovative materials grow and flourish, sustainable construction becomes less expensive. 

Much easier to sell your construction

Once the construction is on the market, it is much easier to sell if it is eco-friendly. This is especially true for housing projects. So you might spend a bit more to build the construction, but you will find yourself with capital that's much easier to valorise, at a much more interesting price. The report presented by the Italian company Scenari Immobiliari, at the 25th Forum of Santa Margherita Ligure, discusses this: "Investing in green construction is always more convenient." 

According to the report, an eco-friendly housing project does have a rise in construction costs, but it also allows one to have a rise in value (between 2 and 10%), higher canons (between 2 and 8%) and a shortening of the time you have to wait before it sells (from 8 to 4 months). State incentives have also encouraged renovations.

But how much more, exactly, is a green building worth? Here is a handy table: (source: Scenari Immobiliari)

Houses | Offices

  • Rise of value | +2/+10% | +5/+12%
  • Rise of canons | +2/+8% | +7/+23%
  • Reduction of selling time | from 8 to 4 months | from 12 to 3 months
  • Extra renovation costs | +10/+18%
  • Extra new construction costs | +3/+8%

Francesca Zirnstein, general director of the Italian company Scenari Immobiliari, has said: "In the case of a renovation, the cost of an intervention is around 40 euros per square meter. In Italian cities, this will mean around 40 billion euros of extra investment, and a rise in value of at least 100 billion." If you need more sources, we can look at the data from Dodge Data and Analytics (2016), which shows that green buildings (both new and renovated) hold a 7% increase in asset value over traditional buildings. 

Francesco Giaccio, general director of Johnson Controls Building Technologies and Solution, highlights that "buildings are fundamental drivers of energy demand, and represent an incredible opportunity."

Some inspiration from around the world: working with governments

So how have different companies reduced costs in this exciting new construction field? In the Netherlands, we can admire the IbbN project (which stands for "I build at accessible prices in Nijmegen"), a catalogue of luxurious green houses for people with not much money, who are buying their first house. In order to make this accessible, of course, the construction costs themselves have to be brought down considerably. So let us look more closely at this case.

The residents of Nijemegen with an income lower than 47,000 euros can choose between 30 greek construction projects, pre-fabricated family houses, at reduced prices. In order to achieve this, the city administration has collaborated with 30 architecture studios, in order to offer the future home-owners the possibility of choosing between a range of elegantly designed green projects. Using pre-fabricated elements that can be assembled on the spot makes the houses much quicker to build and lowers pollution levels.

How can this help you in your projects? This initiative shows that a collaboration between local government bodies and private construction companies can be successful in lowering costs, as the price will not be entirely with your company. 

Boost your company's public image

Another element to consider is that of PR. Investing in green and eco-friendly construction will give a real boost to your company's public image, and will showcase it as being modern, progressive and fresh. This is incredibly useful when recruiting a young client base, and can be an incredible help to your marketing department: green sells.

Links to studies:

Author Biography: Anil Shemar is the Marketing Manager for BUILT/, an online construction and building company based in Birmingham.


Moderated by : Sylvain Bosquet

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