GPPF Friday

The Georgia Public Policy Foundation puts out a weel;y email blast, that we will be republishing every Friday. Today's piece takes on "green" buildings.


The Meaningless Mandates of ‘Green’ Building
By Danielle Hudson

Green building standards have been around for more than 15 years. Atlanta businesses have been voluntarily “going green” at higher rates than businesses in other cities, because it makes good business sense to do so in most cases. Where it doesn’t, however, companies should have the right to choose not to participate.

Proponents maintain that ordinances that mandate “green” buildings are financially beneficial in the long run, but if that were truly the case – and where it is the case – businesses would embrace such standards voluntarily.

Investors, corporations and small business owners apply for certification in what is called Leadership in Energy and Environmental Design (LEED) in an effort to attract environmentally conscious buyers, reduce energy costs and show corporate responsibility. As many owners have indicated, the most notable benefit for companies of LEED certification is not lower energy costs or a reduced carbon footprint; it is the community recognition of being “earth-friendly.”
“Green” building usually costs more upfront and is not as cost-effective for small construction projects, but for large projects over the long term, it can be a penny saver. Often, however, such mandates are unfunded or must be subsidized. They also become an excuse for excessive government spending at taxpayer expense, diverting funds from worthier measures.
The Washington Policy Center examined Washington state’s 2005 law requiring schools to meet “green” building standards and concluded the regulations are “more costly than promised and that ‘high-performance’ schools do no better at energy savings than traditionally built schools.” The center noted that flyers urging passage of the law cited Giaudrone Middle School in Tacoma as an example of green building and claimed the school had “realized energy savings of 35%.”
“In fact Giaudrone, compared with a similar school built at the same time, spent 45 percent more [on energy] during the most recent school year, 24 percent more in 2005-06, and in 2004-05 it spent 34 percent more,” the Washington Policy Center reported.

Seattle’s City Hall was designed using "green" building standards in an effort to reduce energy use. When the building opened, the city conducted its own research and found it actually used more energy than the old building, which was less modern and larger than the current structure.
Just last April, when asked about San Francisco’s decision to mandate LEED- and GreenPoint-certified building (and renovation) standards, Mayor Gavin Newsom told reporters, “It requires a mandate in order to get people to do what’s in their best interests sometimes.” What Newsom failed to indicate, however, was just what price San Francisco’s taxpayers would have to pay for their “best” interest - the city’s Office of Economic Analysis estimated a whopping $700 million per year in expenses and lost economic output.

If efforts to mandate “green” building succeed, Atlanta, too, can expect higher construction costs, which will increase the cost of housing and doing business in the city. Further, it will harm the specialty niche of “green label” strategies that serve those willing and able to afford the higher prices. Despite the regulators' claim that “green” building saves money and attracts businesses in the long run, these types of mandates actually create market barriers for local business.
Amid local budget problems and the throes of a recession closing businesses daily, Atlanta’s leaders should be wary of attempts to pile on costly mandates. Let businesses keep their pennies and their freedom to choose more effective, beneficial strategies to achieve efficiency.

Danielle Hudson, a student at the Georgia State University College of Law, is a summer intern at the Georgia Public Policy Foundation. The Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (August 28, 2009). Permission to reprint in whole or in part is hereby granted, provided the author and her affiliations are cited.