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Market News

 April 19, 2006
Building better cities

 Vancouver, Canada (GLOBE-Net) - Careless urban sprawl has led to a host of environmental problems, yet cities worldwide continue to expand in largely traditional ways. Sustainability experts say that with better motivation, builders and buyers can be encouraged to embrace sustainable urban development, for the betterment of all. GLOBE 2006 speakers agreed that sustainable building and city planning techniques can contribute to positive environmental, social, and economic development. They also are 'good for business.'

From a municipal standpoint the advantages of sustainable urban development are many. For example, in compact sustainable urban communities, residents can live and work in the same general area, thereby lessening their dependence on cars, which in turn not only reduces their personal expenses, but also lessens pollution.

The concept of "infill" is the key to sustainable urban development strategies. Instead of building new roads, sewer lines and water mains to connect new subdivisions, builders can be encouraged to redevelop existing urban sites, build upward instead of outward, and recycle building materials, thereby saving costs and lessening the load at landfills.

In cities such as Vancouver, the benefits of "infill" strategies are readily apparent. Bucking the trend of many North American cities, a 600-hectare strip of land in downtown Vancouver now is home to almost 80,000 people. Further, this density is combined with public amenities such as parks and street level shops. Vancouver's approach to downtown core densification has been so successful that the sustainable development community has coined a new term, "Vancouverism."

Sustainable urban development was a major topic discussed at GLOBE 2006 in March, 2006. International civic leaders, urban designers, environmental industry representatives and corporate CEOs debated ways to transform the world's cities into more eco-friendly urban landscapes.

Sustainable projects can be socially and financially attractive if the right steps are taken, said Jacques Khouri, President and CEO of VanCity Enterprises, during the GLOBE 2006 session 'Innovative Financing for Sustainable Infrastructure'. He noted that smart growth building principles are still widely perceived as risky, costly and complex -- especially if "business as usual" is more lucrative.

"Residential developers are reluctant to try a new design approach because they are not sure there is a green market which is prepared to pay for the added cost of sustainable design," said Kouri. In strong residential markets developers have no incentive to try something new if their existing approach results in strong sales. "Those few developers who do try environmental sustainability usually have a personal commitment and want to reflect that in their work, or else they are responding to municipal incentives for sustainability, he added."

Some developers are pushing the limits of innovation and creating sustainable buildings, however, producing results that contribute to urban livability as well as being financially attractive. Architects like Peter Busby, Managing Director of Busby, Perkins+Will, one of North America's leading sustainable design firms, shared their vision at a GLOBE 2006 session, 'The Future of Green Buildings'.

"We are looking at designing a community -- not just the building," said Busby. In planning sustainable communities, it is important to look at the social and environmental context of the property, as well as employing 'green' construction features such as advanced window glazing, wastewater collection systems, and green roofs.

The LEED (Leadership in Energy and Environmental Design) standards supported by the US and Canada Green Building Councils are important tools in designing such buildings. But they are just one component of an overall building philosophy that integrates all stages of a building's life cycle. Busby's firm is currently undertaking two projects in BC which expect to achieve LEED Platinum rating, which has only been awarded to a handful of buildings worldwide.

Bruce Fowle, Senior Principal of FXFOWLE Architects PC, demonstrated that green buildings are possible on all scales by showcasing several high-rise projects he has designed in New York City. He noted that many green features provide substantial cost-savings to building tenants and operators and the premium required for building to LEED standards can often be recovered within several years.

"To build to LEED standards, developers must commit to an initial price premium, but can generally see a return within several years, and can gain in the long term from many green features," he said. Energy efficiency measures - such as window design that allows for '100% daylight' illumination to reduce or eliminate the need for electric lights during the day - can have a payback period of only 2-3 years, he noted. This is considered an excellent investment horizon in business terms.

GLOBE 2006 delegates also discussed the important role played by municipal support schemes such as providing a 'bonuses' for high density developments. These enable a municipality to reward a developer for creating amenities that meet community or public policy goals. In such schemes, a municipality provides a density bonus as an incentive to a developer to provide a needed local amenity such as affordable housing in exchange for changes in the existing zoning requirements.

As a result, the developer is able to build more floor space, or to increase the total number of units in its development project. This way, developers profit from the increased density usually not allowed under existing zoning while the municipality achieves its community goals.

Typical amenities a developer might provide include the preservation of urban heritage structures, underground parking, child-care facilities, and price-controlled or limited equity market housing units.

Some building industry insiders believe positive change towards sustainability stems not only from increased government incentives, but also through better public information. Industry expert and GLOBE 2006 Speaker Chris Corps, a chartered surveyor and President of Victoria British Columbia's Asset Strategics Ltd asked rhetorically, "Will cities maximize sustainable development by legislating green development, or by encouraging it?"

He asserted that change will only accelerate through motivation. "The market, developers, lenders, appraisers, marketers and agents must be personally motivated to see the benefits of being more sustainable," he says. "This is a communications and focus issue. Work is needed to clearly and succinctly express the benefits of sustainable development beyond the existing green sector, in terms each audience can understand."

He added, "Most importantly of all, the buyer and tenant must understand why they will want to buy or rent a green building. Market demand will then drive change across all sectors and industries involved in development."

Corps predicts that there will be increased demand for green building, once developers and builders can see the competitive advantage available to them.

"Most green building effort has focused on cost savings but the value benefits provide a more persuasive reason to go green," he says. "There is a clear competitive advantage to green buildings and we expect that economies and value will stimulate both demand and industry. Green buildings are good for business."

As was demonstrated by leading edge architects and city planners at GLOBE 2006, sustainable urban strategies are needed to contribute to the overall environmental and social health of our cities. Breaking down traditional barriers and overcoming past thinking can help to accelerate green building projects, which in turn can deliver financial and business benefits apart from their obvious contribution to sustainability.

By continuing to push the envelope in this regard, city dwellers can enjoy improved air and water quality, increased ease of transport, and enhanced overall livability. As well, sustainable cities can deliver solid business benefits. It's another example of doing well by doing good!