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USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Green Development – The Bottom Line
Peter Morris
Principal
Davis Langdon
SLIDE
DAVIS LANGDON
1
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
SLIDE
DAVIS LANGDON
2
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
What does green cost?
SLIDE
DAVIS LANGDON
3
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
How much more does green cost?
Compared to:
• The project itself, without the green
elements
• The project’s original budget
• Similar projects
SLIDE
DAVIS LANGDON
4
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
The project itself, without the green elements
Just prices the added elements
• Some elements have no cost
• Some elements are embedded in the project design or
program
• Some elements have identifiable cost
Usually results in an added cost of 3 – 8%
Generally correlates well with level of green
SLIDE
DAVIS LANGDON
5
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
The original budget
Is typically self reported/anecdotal
Does not validate original budget
Usually results in an added cost of 0 – 2%
But outcome is highly skewed and
generally does not correlate with level of green
SLIDE
DAVIS LANGDON
6
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Distribution of Cost Premium over Budget
Median
Number of Projects
Average
-4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Percentage Premium
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DAVIS LANGDON
7
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Comparable Buildings
Costing Green:
A Comprehensive Cost Database and Budgeting Methodology
DAVIS LANGDON
Lisa Matthiessen
Peter Morris
SLIDE
DAVIS LANGDON
8
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Libraries
Cost/SF
0.00 100.00 200.00 300.00 400.00 500.00 600.00
All Projects
SLIDE
DAVIS LANGDON
9
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Libraries
Cost/SF
0.00 100.00 200.00 300.00 400.00 500.00 600.00
Certified
Not Certified
SLIDE
DAVIS LANGDON
10
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Libraries
Cost/SF
0.00 100.00 200.00 300.00 400.00 500.00 600.00
Certified
Silver
Gold
Not Certified
SLIDE
DAVIS LANGDON
11
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Comparable Buildings
• No statistically significant difference
between LEED-seeking and non-LEED
average costs for similar program types
• Large variation in costs of buildings
• Cost difference due primarily to program
• There are some low cost and some high cost
green buildings
SLIDE
DAVIS LANGDON
12
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Cost of Green
Analysis Conclusion:
• Some green features cost money, but . . .
• People are building green within the same cost range as
non-green
• People are building green within established budget
parameters
• The stated Cost of Green depends on methodology
Green should not be viewed as an add-on
SLIDE
DAVIS LANGDON
13
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
What does green really cost?
The comfort of doing things the old way
The ‘safe bet’ (nobody got fired for buying IBM)
A quiet life in the community
Somebody else to pass the problem to
The real cost is real change
SLIDE
DAVIS LANGDON
14
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
The Bottom Line on Cost
We have to:
• Internalize
• Integrate
• Innovate
SLIDE
DAVIS LANGDON
15
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
The Bottom Line on Cost
Internalize
• Recognize the need for change
• Understand the cost of green
• Understand the owner/community’s cost of money
• Understand the cost of failure
• Understand the owner/community’s business model
• Become Fluent in Economics/Financial language
No Wishful Thinking
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DAVIS LANGDON
16
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
The Bottom Line on Cost
Integrate
• Integrate the project team (including owners and users)
• Integrate with the community
• Integrate sustainable elements into the design
• Share Data:
– Cost
– Performance
– Failure
Green is not an add-on – nor is the owner – nor is the
community
SLIDE
DAVIS LANGDON
17
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
The Bottom Line on Cost
Innovate
• New forms of contract
• New procurement approaches
• New allocations of risk
• New allocations of liability
• Rethink the basic design paradigms
• Eliminate waste
• Make the old ways obsolete
Insanity is doing the same thing and expecting a different
result
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DAVIS LANGDON
18
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
The Bottom Line
The distance to the summit . . .
. . . all depends . . .
. . . on where you start.
SLIDE
DAVIS LANGDON
19
USGBC
Green Development
Northern
Good for Water
and the
California 2/26/08
Bottom Line
Monterey Branch
Keeping Green
Discussion:
SLIDE
DAVIS LANGDON
20
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