Building a Green Maryland : Maryland Green Building Lawyer & Attorney : Megan Reuwer : O’Malley, Miles, Nylen & Gilmore Law Firm : MD Green Building, Sustainability

As we draw closer to the end of 2009, I'm beginning to think about statistics relating to green building here in Maryland (and no, I didn't quit my day job as an attorney to become a mathematician...). It's been a tough year in terms of getting new projects up and running, but, amazingly, the green building movement has continued to grow despite the weakened economy.

Here are a couple of interesting statistics for you to mull over:

• In Maryland, 11 out of 24 Counties (counting the City of Baltimore) are working towards implementing some form of green building practices - in various forms including regulations mandating LEED certification (or its equivalent) for both public and private new construction projects; the offer of tax credits to incentivize green building techniques; the offer of added density to projects or for fast-track permitting processing; etc. Obviously, from an industry perspective, the use of incentives is more attractive (and hopefully those remaining 13 counties consider creating incentives if and when they decide to implement green building practices).
• The number of LEED registered projects in Maryland has increased by over 35% this year; increasing from 520 in 2008 to over 800 by the end of 2009.
• Maryland is home to over 60 LEED certified buildings, up from approximately 40 certified projects at the end of 2008
• [Source for all statistics: www.usgbc.org]

It's great to see numbers like these considering the many challenges of 2009. Based on this type of performance, I'm betting that these numbers will continue to increase over the coming new year!

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This week's post is Part II of my interview with Thomas M. Farasy, President of the Maryland-National Capital Building Industry Association and President of Terra Verde Communities, LLC, a real estate development, investment, and advisory firm specializing in transit-oriented development, multifamily projects, and green building serving the Washington, D.C. area and the Mid-Atlantic region.

In this portion of the interview, Tom answers some of the tougher questions relating to the cost of green building, market support, and whether green building is good from the industry perspective.

Are you aware of any difficulties or issues that builders and developers are facing as they begin to seek either LEED or NGBS certification?

Regardless of the standard or certification process used, there’s a need for continuing education at the contractor and subcontractor level. It’s not enough just to put in a contract that a building has to be built a certain way to comply with whatever credit requirements the owner is seeking; there has to be ongoing communication with those responsible in the field to make sure that things are actually being done in accordance with the credit requirements. Complying with LEED or NGBS requires a lot of oversight in the field because they’re relatively new and the market is still developing. People are still learning what these things mean and how to implement them effectively.

Is the market ready to support green building costs? Do you find that more consumers are specifically looking for green features when they’re shopping for new homes?

The market, for the most part, hasn't been ready to support the extra cost of building a home to any of the green standards. Maybe some areas are becoming more receptive, but, to date, it's largely been my experience that consumers aren’t willing to pay $10,000 extra dollars for a home just because it has been certified green. On the other hand, people DO expect you to provide Energy Star appliances; people DO expect you to put in measures to reduce their energy costs - and they will pay for this.

Is green building good for the building industry?

Yes, the green building movement is good for the industry and I think it’s going to continue to grow. If we expand what we mean by “building green” into further incorporating measures to save water resources, to reduce our carbon footprint, to further reduce our use and dependence on energy resources and natural resources, then it’s going to grow. There is no doubt in my mind that technologies are rapidly developing that will enable the green building movement to expand, and there is no doubt in my mind that we’re going to continue to see new standards and certification processes developed as well as revisions and enhancements to existing standards and processes. What these are, I couldn’t say, but I bet we’ll see them in the future.

Thanks again to Tom for sharing his knowledge and experience with us. 

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This week's post is part one of a two-part interview that I conducted with Thomas M. Farasy, President of the Maryland-National Capital Building Industry Association, and President of Terra Verde Communities, LLC, a real estate development, investment, and advisory firm specializing in transit-oriented development, multifamily projects, and green building serving the Washington, D.C. area and the Mid-Atlantic region.

Tom was nice enough to sit down with me and discuss the relative strengths and weaknesses of USGBC's LEED certification program and the National Association of Home Builder's ANSI-approved National Green Building Standard. This was a fun and informative interview, and I hope you enjoy it!

The ANSI approved ICC-700-2008 National Green Building Standard (NGBS) includes single and multifamily homes, residential remodeling projects and site development projects. NAHB has billed the NGBS as being more flexible than USGBC’s LEED in terms of recognizing innovative approaches and techniques. Why do you think NAHB developed its own standard, and do you agree that it is more flexible than LEED?

As a multifamily developer, it’s been my experience that LEED is somewhat rigid and is more commercial building friendly. I think NAHB recognized a need for a standard that encompasses the unique features of residential building. For example, while LEED does offer some site development points, the National Green Building Standard is more comprehensive on site development issues and allows you to capture more points than LEED for that site work. The bottom line is that, as an industry, we want choices. We want flexibility.

In addition to the flexibility factor, there’s the issue of tracking how dollars spent translate into actual green features of the site and the building. For instance, if I spend $100,000 to incorporate green elements into my building, under the National Green Building Standard, 90 cents on the dollar goes into actual hard costs; with LEED, only about 75 cents on the dollar goes into hard costs. The other 25 cents goes into consultants, certification processing fees, and other things that just don’t contribute to the end product of the building featuring green elements.

What are the relative strengths of LEED and the National Green Building Standard?

The USGBC has done a great job of marketing LEED; so that when you ask a consumer “what is green?” they will say “LEED.” On the other hand, the National Green Building Standard has been approved by ANSI (the American National Standards Institute), which implies objectivity and impartiality. An ANSI approved standard means that the standard is the result of a collaborative effort. The development and review process for the National Green Building Standard was inclusive and involved participation from a broad spectrum of people: builders, developers, environmentalists, code enforcement officials, politicians, citizens, and community activists, to name a few. For these reasons, it has much more meaning to me and is representative of a greater stakeholder interest.

Check out next Wednesday's post for more valuable insights from Tom, including his thoughts on the market for green building, emerging issues in the field, and whether green building is good from the building industry's perspective.

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The U.S. Green Building Council Maryland Chapter recently published its 2009-2010 Advocacy Agenda.   Although the message from the Chair asserts that the agenda is modest in light of the tough economic times that we’re facing, it still manages to set forth some lofty statewide and local initiatives.

Select statewide initiatives include the following:

1. State Renewable Energy Credit: Enact legislation to incentivize the development of renewable energy generated in Maryland. By 2022, 20% of Maryland power must be from renewable sources - but, as written, the current policy allows that the credits be derived from a source either in state or within 16 other named states. The USGBC Maryland Chapter advocates that the state should require that 20% of the Renewable Energy Credits and 25% of solar energy should come from in state Maryland sources. This position, if endorsed by the General Assembly, could result in the creation or expansion of the market for alternative energy producers in Maryland. I'm not entirely persuaded that Maryland has the natural resources capable of meeting the requirement as presented by the USGBC Maryland Chapter (Baltimore's nickname is Charm City, not the Windy City...), but if you feel differently, by all means, share your thoughts.
2. Expand the Green Building Program: Expand the existing High Performance Building Act  by requiring that all construction or major renovation (regardless of the source of funds) on State owned or leased land meet LEED Silver or equivalent certification. Presently, the High Performance Building Act mandates that new or renovated State buildings that are at least 7,500 square feet AND built or renovated entirely with State funds meet LEED Silver or equivalent certification. USGBC Maryland Chapter's proposal would effect those buildings constructed with any amount of state funding - local bond bills, community colleges, etc. It seems to me that this proposal, absent the inclusion of a threshold amount of funds to be sourced through the State before triggering the requirement, may apply too broadly and may not, therefore, garner much support among the building industry.

Select local initiatives include the following:

1. Amend Master Plans to be consistent with LEED-ND: As a result of SB 280/ HB 297, development within a local jurisdiction must be "consistent" with the local government land use master plan. The USGBC Maryland Chapter advocates that each local government master plan should specifically incorporate the principles of the USGBC's LEED for Neighborhood Development (LEED-ND) rating system. LEED-ND is purported to be the first national standard for neighborhood subdivision design, and the USGBC envisions that LEED-ND will become a nationalized standard in the future. Most legislation that we've seen mandating compliance with green building practices contains the string "LEED X-level, or its equivalent certification."  What is the equivalent to LEED-ND? I'd argue that an equivalent doesn't yet exist.  This isn't necessarily problematic, but it is interesting.

It's good to have goals and it's clear that the USGBC Maryland Chapter wants Maryland to remain a leader in instituting green building practices and laws, but I think some of these may stretch a bit far considering the current economic conditions.

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The U.S. Green Building Council (USGBC) released LEED v3, effective April 27, 2009, which replaces former versions of LEED. The new LEED v3 implements some major changes from previous versions, including:

• Creation of Regional Priority Points: the USGBC has recognized that location plays a fundamental role in credit applicability, and has created six regional credit opportunities (based on a project's zipcode). Of the 6 potential points, only 4 can be earned per project.
• 100 Point Scale: the new LEED v3 implements a 100 point scale (and actually, more than 100 points are available with the new Regional Priority points and Innovation in Design points). To become LEED certified, a building now needs to achieve at least 40 points; 50 points are needed for Silver; 60 points for Gold; and 80 points for Platinum certification.
• To learn more about LEED v.3, check out this webinar featuring the U.S. Green Building Council's Brendan Owens.

How do the new changes impact Maryland builders and developers?

Although Regional Priority credits vary by zipcode, there are emergent themes for the Maryland region that include an emphasis on:

• Sustainable Sites (particularly SS Credit 5 -Site Development, SS Credit 6 -Stormwater Design, SS Credit 7.1 - Heat Island Effect, Non-roof, and SS Credit 8 - Light Pollution Reduction)
• Water Efficiency (particularly WE Credit 2 - Innovative Wastewater Technologies, and WE Credit 3 - Water Use Reduction)

The selection of these credits as Regional Priorities reveals the important role that water plays as an environmental resource in the Maryland region, and incentivizes the protection of our major water resources via stormwater management techniques to limit both the quantity and quality of runoff from development sites, and encourages overall water use reduction. USGBC's choice of Regional Priority points seems to be well-tailored for our region to address the most current concerns.

What do you think? Are the new Regional Priority points a good idea?

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Starting July 1, 2009, all new construction and major renovation projects in Baltimore City must adhere to the LEED-Silver standard.

As Robbie Whelan explains in his article, Legislating LEED: Developers worry about new city law , the new law basically incorporates LEED standards into the city's building code. What does this mean for Baltimore City builders? In a nut shell: 

If you don't commit to building green, you will no longer be approved for a building permit in the city. If your building or renovation does not comply with LEED, you will not be issued an occupancy permit.

There are both benefits and burdens associated with "going green."  On the one hand, employees working in new commercial or renovated interiors may enjoy greater health benefits associated with cleaner air and lower emissions from furniture and materials.  Building owners could enjoy potential energy savings and attract environmentally-conscious tenants. Baltimore itself could become a model "green" city, drawing tourists and national media attention.

On the other hand, one of the difficulties in holding a building to attain LEED- Silver certification is that it necessitates the involvement of the U.S. Green Building Council, the nonprofit that administers the LEED program, and its sister program, the Green Building Certification Institute, which operates LEED Online. Any transaction can be complicated by the involvement of third parties, but the real issue here is that the points needed to meet the certification requirements aren't formally "achieved" until after the building has undergone construction.

So what's the big deal?

Well, as one builder recently remarked during an event I attended, "once the building is built, it's built." While this might be a bit of an overstatement, what this really means is that Baltimore City builders are going to have to pay extra care and attention during the design and planning stages to ensure that they will be able to implement the credit requirements that they need to reach certification. They will likely have to involve key members of the project team at earlier stages and may have to educate contractors and subcontractors on the credit requirements that they intend to meet.

Going green definitely has it benefits, but as the first Baltimore City builders after July 1, 2009 are likely going to discover, it also has its burdens.

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