This past year, I have traveled tens of thousands of miles across the United States and internationally to speak to contractors and designers about green building, and here’s what I’ve learned. First, I know it’s hard to keep your eye on future opportunity when you’re worried about laying off employees or even family. But if you look at any historical study, companies that tough it out and focus on preparing for better times — even when they are at the bottom of the business cycle — are far better positioned when an uptick begins.
Whether you look at the breakfast cereal battles during the Great Depression — when Post cereal was forever buried for pulling back on its marketing while Kellogg’s expanded — or what Apple and Disney are doing today putting $1 million per store into creating innovative retail environments that will come online in 2010 (just in time, no?), it’s the companies that find time to focus on opportunity that emerge and thrive.
What part of the bright future should you focus on? I believe it’s green building. Indeed, it is the only sector of the building economy that has grown or held its own in this Great Recession. And according to McGraw Hill Construction, green building will grow during the next five years despite negative market conditions to become a $96- to $140 billion market. By 2013, McGraw Hill projects the residential green building market to be 12 to 20 percent of new construction starts by value. This would equate to $40- to $70 billion.
What’s driving green?
The driving force behind green is twofold. Part one is consumer demand; 90 percent of Americans agree there are “important green issues and problems,” according to the NAHB. How do consumers express those concerns when shopping? They buy green products that make them part of the green solution. And who should they buy from? Well, the same NAHB study showed that 82 percent of Americans believe it is “important for companies to implement environmentally friendly practices.” If you have done that and trained yourself to be knowledgeable about green, you’ve put yourself in the path of money, money that has been flowing in markets both good and bad.
Part two is comprised of codes and regulations. There has been a proliferation of green building codes and energy efficiency requirements nationwide, and this has been expressed at the national, state and local levels. The American Institute of Architects recently reported that 92 cities with populations greater than 50,000 have established green building programs, up from 22 just four years earlier, which is a 318 percent increase. Whether or not you agree with this trend is not important. What matters is how well-educated and trained you are to sell in the markets where green building products are being required by code.
Does green cost more?
Another matter has emerged in the press recently in the form of a study showing consumers don’t want to pay much more to go green. Surveys are skewed by how a question is asked, so let me take an extreme approach here. Let’s say consumers want to pay nothing more to go green. Can they still be your customers? Yes. With the growth of green products on the market, there are now green, third-party labeled adhesives, caulks, sealants, finishes, carpets and lumber products that are environmental indeed, yet they are selling at or very near commodity prices. The availability of these products is consistent with a point I make in all my presentations: Green products are not necessarily exotic species. Indeed, they are less-toxic versions of traditional building products. Moreover, green building is as much about practices, product life-cycle and quality as it is about fumes and recyclability. So don’t let studies that proclaim “we won’t pay more” discourage you from taking advantage of this green market. It will only grow, and designers and builders without a green strategy will be left behind.