Real World Road Rules--The Realpolitik of Green Building Policymaking

I am involved in getting green building legislation passed in Philadelphia.  Basically, the bill would tie a 10 year tax abatement to LEED certification.  The greater the level of certification, the higher the tax abatement.  The bill is modelled on many other cities' incentive systems, and certainly does not go as far as Boston, Washington DC or several other cities in requiring green building practices.

What has been interesting about the process of shaping this bill and lobbying for its passage is the Realpolitik which comes into play when trying to get legislation done.  This is one of my favorite topics--where the real world intersects with theory.

In theory, everyone should be on board with green building practices.  Save the environment, save money in utilities, get federal, state and local incentives and have a great marketing tool.  In addition, most studies now report that the cost of green is down, in some cases not costing any additional resources beyond standard construction costs. 

But the reality of policymaking is a whole different ballgame.  Turf battles exist even where all the participants are supportive of green building.  Who created the legislation and who will get credit for its passage will effect whether a piece of legislation passes or dies in committee.  Special interest groups, like the affordable housing community, residential developers, mixed-use advocates and others come out  either because of cost considerations or inapplicability to their building typology.  Finally, the best bill may not be the ultimate bill that is passed--compromises made for political reasons will effect the content of the ultimate legislation. 

What is the solution? 

1. Understand the Realpolitik aspects of the process going in.  We do not live in an ivory tower, we live in a democracy with co-equal branches of government.  Engaging the power players in your jurisdiction will matter.

2. Reach out to interest groups early.  These groups should include the affordable housing community, residential developers, large development companies, contractors, the Building Industry Association if your area has one, etc. 

3. Build a coalition of supporters. Political supporters, industry supporters, academic supporters, etc.

4. Recognize that you will not please everybody.  Put in the strongest bill you can, with the best support you can.

5.  Finally, don't let the great be the enemy of the good.  Do not let the holy grail of a perfect bill supported by all constituencies stand in the way of getting something actually passed which  advances the agenda of benefitting the environment through green building practices. 

Where the boys are...and the girls aren't

I went to an EPA conference on greening the building codes.  One of the most fascinating things to me about the conference was the sharp lack of diversity--racial, of course, but also gender.

Although construction related jobs account for as much as 66% of all jobs in the U.S.,  in the building trades, women account for less than 3% of the workforce.  If the conference was any indication, the gender barrier is also reflected in less hands on aspects of the construction industry. Code officials, construction and related law, architecture and so forth all seem to reflect a distinct gender differential. Although there are no good statistics on the number of women in the construction law industry, among the 31 leaders of the ABA Forum Committee on the Construction Industry, only 5 are women, or 16%.  In the Environment, Energy and Resources Section, out of 100 leaders, only 26 are women, or 26%.  

Why do people rob banks? Because that's where the money is.  Today, so much attention and resources are being devoted to the "green economy".  From alternative energy to drafting green regulations, this is where the jobs are and where innovative people are putting their efforts. 

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Barriers to Entry--Analyzing Barriers to Greening Building Codes

Last week was a bit quiet here at Green Building Law Blog as I attended a conference in Atlanta hosted by the EPA on greening building codes.  The invitees to the conference were code officials, EPA personnel, developers, architects, non-governmental organization reps, a couple of attorneys and assorted other municipal and state officials.  It was a great group and a well facilitated conference.

The first day of the conference was devoted to identifying barriers to greening the building codes.  The barriers fell into 7 categories:

1. Procedural--lack of communication among stakeholders, lack of integration among agencies and codes (plumbing codes, etc.), no clear process for obtaining variances to statewide building codes, overextended staff resources, lack of enforcement of current codes

2. Capacity--Lack of experts in green building amongst code staff

3. Education/Perception--Green seen as elitist, expensive, difficult; Lack of certification and training amongst code officials, lack of examples

4. Legal--Standards of proof higher for green buildings than standard buildings for approvals, Federal and state preemption, conflicts with other laws (fire code, historical preservation), LEED not designed to be integrated into codes, risk of liability

5. Technical/Research--Lack of performance data on green systems and technologies, lack of definitions of green terminology, lack of clearinghouse of information on best practices, inaccessibility of financial data and cost/benefit analyses

6. Political--Partisanship, status quo interests, unions, property rights advocates, lack of political champion for greening codes

7. Financial--budget shortfalls (especially because of recession), jurisdiction for funding (state vs. local allocation) for code changes

Some of these barriers are more perception than reality, but perception is reality when it comes to making political change.  In addition, most are very real---code changes require policial will and resources, and good communication among stakeholders both within the government and with the regulated community.

Michigan Introduces Bill To Allow Municipalities to Implement Stretch Building Codes

A bill was introduced in Michigan to allow municipalities the flexibility to create stretch building codes, including incorporating LEED into their codes.  The article is available here.


Greening the Codes

I have been discussing the difficulties of greening building codes with municipal officials nationwide this week.  There are really two problems: 1) legacy codes which inhibit green building practices; and 2) state and federal laws which prevent municipalities from upgrading their building codes.

The East Hampton Star had an article about the problems of legacy codes. The town required asphalt paving, where developers wanted to use greener pervious paving materials.  They had to convince the township to allow the alternate material.  This causes delays and added cost to the building process.

Many municipalities and states (including my very own Philadelphia and Pennsylvania) are looking to revise their building codes to allow for greener practices, and in some cases (like California) require them.  However, many municipalities face state-wide mandated building codes which preempt their efforts to enhance their building codes.  In other localities, there is a resistance to implementing a new mandatory greener code. 

This week I heard from two sources about an interesting way to thread this needle.  Local governments are enacting "voluntary" appendices to their building codes outlining approved green practices.  This has many benefits.  First, it educates builders and municipal officials in green building practices.  Second, it builds municipal capacity slowly to understand, evaluate and approve green practices.  Third, it solves the East Hampton problem by having pre-approved green alternatives to the standard building code. 

Credibility in an Age of Skepticism

There has been quite a dust-up over last week's energy efficiency feasibility study by NAIOP, the Commercial Real Estate Development Association.  The study challenged the economic feasibility of developing office buildings with 30% and 50% energy efficiency targets.  Essentially, the study concluded: 

Using energy models, the report found that 30 percent and 50 percent improvements in energy efficiency over code were not financially feasible for most new, Class A office construction. Developers striving for the 30 percent target would not recoup the cost of their initial energy efficiency investments within a 10-year period, while the 50 percent target was far beyond their reach, the study said.

The study set off a storm of controversy, resulting in the USGBC and others to decry the methodology and conclusions of the NAIOP study. 

However, the NAIOP study highlights some very important flaws in the current analysis of green buildings. 

1. We need to stop measuring certification, and start measuring performance.  If we had good, apples-to-apples measurements of energy efficiency, water savings, indoor air quality, vehicle miles travelled by occupants and occupant satisfaction which we could compare across building types, it would be easier to deflect the misinformation being espoused by green building skeptics.

2. We need to start incorporating carbon costs. NAIOP's main argument is that achieving 30-50% energy efficiency is not cost effective.  If building carbon costs and other environmental externalities were measured as a component of the cost-benefit analysis, even a flawed study like the NAIOP would have a hard time showing that the costs outweighed the benefits.

3. We need policies which mandate measurement and verification.  In order to collect solid information about building performance over time.  To do so, public policies should incorporate energy efficiency, water savings, indoor air quality, vehicle miles travelled by occupants and occupant satisfaction reporting as components of their green building regulation. 

By effectively incorporating costs and developing solid performance measurements, we can acheive credible green building arguments (as well as improving the performance of the buildings themselves) which will give the green building movement credibility in an age of skepticism. 

Greening the Standard of Care

This post was co-authored by Shari Shapiro and Christopher Hill

Contractors and design professionals have long been held to a standard of care to provide services in a “workman like” or “professional” manner. The general test, subject to some detail below and absent contractual language to the contrary, is “Will the building built by the contractor and contracted for by the owner stand up and work to the purpose intended?’ In short, will the building fall down and do the lights turn on? If the answer is “Yes” and the building meets minimal guidelines, a contractor meets this standard.

What are the components of this standard? A contractor or design professional is required to have an understanding of the historical standards of workmanship in its segment of the industry—in other words, to design or build as a reasonable professional in his/her area of expertise would do. These include knowledge of building codes, some expertise in its field, and the methods by which work is performed.

Most insurance contracts and standard building contracts assume this type of standard of care. A project owner can assume, for legal purposes, that the contractor it hires (and any other workmen on the project) meets this standard. While this can be of comfort to owners and contractors, unfortunately, without a contractual provision setting the standard of care, the state court system gets to decide what the standard is and whether that standard is met. In other words, everyone at the site may believe that they know the standard and what is necessary, but a court or insurance company could look at it differently.

Determination of all of these factors is difficult enough when the parties to the building contract are the only ones setting the standard of care. Enter LEED and green building where a standard is set by a third party, incorporated into some municipal and state building codes and interpreted by yet another third party. The question which is on the lips of lawyers, insurers and design professionals is whether and how green changes the standard of care.

Many insurers say that while they are keeping a close eye on whether green projects present risks above and beyond the traditional claims made by construction projects, they have not yet recognized green buildings as a unique category of risk. This is good, because it means that a design professional’s liability insurance probably covers their green building endeavors.

However, the answer is not as clear for professionals who hold themselves out as a LEED Accredited Professional, or who provide additional green services, like commissioning and energy modeling. There is a credible argument to be made that a LEED AP should be compared with what a reasonable LEED AP would have done with respect to building a green building, not just what a reasonable architect or other design professional would have done under the circumstances. Further, it is not clear that a professional liability policy which covers specific design or contracting services covers negligence in providing additional green services like commissioning and energy modeling.

So what is the beleaguered design professional to do? First, don’t overpromise. Ensure that you are able to provide the services you are asked to do in a reasonable and workmanlike manner. Second, communicate with your insurance provider. Ensure that your green services are included in the list of covered services for liability. Finally, to the extent that you employ subcontractors to provide green services, ensure that they are properly qualified and obtain adequate liability coverage, as well.

The Importance of Aligning Intent With Outcome

In today's News-Tribune of Tacoma, Washington (admittedly not on my usual roundup of morning papers) there was anop-ed piece by a conservative columnist calling for Washington (state) to roll back "green" requirements for schools because they are not creating the energy savings promised when enacted. 

The 2005 law calls for schools to be designed, constructed and certified to LEED Silver standard.  At the time, the Governor Gregoire's press release stated:

According to the State Board of Education and Superintendent of Public Instruction’s office, use of sustainable building designs result in:

  • 20% annual savings in energy costs

  • 20% reduction in water costs

  • 38% in waste water production

  • 22% reduction in construction waste

  • A potential reduction in student absenteeism

  • A potential 5% decrease in teacher turnover rates

  • A potential 5% to 26% improvements in standardized test scores

In an ideal world, meeting LEED Silver standards would result in the predicted energy, water and other efficiencies.  But that is not always the case.  Many factors contribute to efficiency, including construction, operations and maintenance. Further, measurement and verification of energy usage is more art than science--which schools are being compared? by what methodology? Finally, what are the overall environmental implications of the building--were fewer new resources used, for example?

 Many municpalities and companies are using LEED as a shorthand for high performance building to circumvent the difficulties of determining individual targets for resource efficiency and creating long term verification plans. This is shortsighted.  By creating laws which use LEED as a substitute for rigorous environmental standards, well-intentioned municpalities and companies open themselves up to the criticism of the News-Tribune critic--that we shouldn't implement (or we should rescind) green building laws because they don't create environmental efficiency.