Green Building Law Blog
Does Green Regulation Really Scare Away Development?
The New York Times reported that Toronto was mulling a mandatory green roof by-law. Developers in Toronto objected to the green roof mandate, arguing:
that it would scare away investment due to the high cost of green roofs. Saying green roof installation should be voluntary, building industry representatives told The Globe and Mail that such add-ons could increase construction costs by $18 to $28 a square foot.
In Philadelphia, City Councilman Curtis Jones proposed tying an already existing ten-year property tax abatement to green building requirements. Building Industry advocates and Mayor Nutter's office made the same argument that the Toronto developers put forward:
"Restricting the abatement program . . . would likely have the effect of inhibiting development when we need it most," Andrew Altman, deputy mayor for planning and economic development, told Council this month.
The trouble with these arguments is that they are exactly that---arguments with no basis in fact. The problem? No facts. There is no study which can be pointed to, no analysis which has been done which attempts to quantify the effect of green building regulation on development. Do green building regulations inhibit development? Do they encourage green development? No one really knows for certain.
In this "money constrained economy" it may be easier for critics of green building regulations to wave the red flag of inhibiting development to prevent further strictures from being put in place. To effectively counteract this argument, a study needs to be undertaken which compares the development rates in comparable cities which have green building mandates (like Boston or Washington DC) with those that do not. Controlling for other factors (population, pre-regulation development rates, etc.), it would provide a solid factual foundation for policymaking in this area.
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I totally agree. One of the driving purposes for B2S is to try and inject a little fact into these theoretical arguments. Real Estate has very high initial cost barriers to entry. If we are to build sustainably, sustainable designers need to build real world ROI arguments to debunk some myths.
I think it seems fairly obvious: if you madate something that is not the norm, you are bound to scare some people away. Logic suggests as much.
I hope Toronto knows about the Vancouver Catch-22 before it mandates green roofs. I fear they do not.
The answer is not as obvious as it might seem:
1) If development in a particular area is desirable, there is a level of regulation which will not impact people's desire to build there. Historically, it has cost a lot of money to build in Manhattan, but people have chosen to do so because the value outweighed the costs.
2) If being a "green" city has value, people who would not otherwise have built in, say, Toronto, might choose to do so, thus counteracting any people who are "scared" away. The question is whether one outweighs the other.
Shari,
As to point (1), I think we would both agree that the additional costs to build in Manhattan have definitely impacted people's desire to build there. Some people can't afford to build in Manhattan because of cost. If you add additional "green" costs, these costs will further impact the number of people that can build in Manhattan.
Point (2) is a good point. This would be difficult to measure.
In the end, the people that are hurt by the green mandates the most are the new and smaller developers that do not have as much capital to build with. These are the developers that can not afford the additional green costs.
I fear that the New York Times' blog and your column are setting up a straw person just to knock them down. Although it is true that green (a.k.a. vegetative) roofs are more expensive (and one can argue about how much exactly) the main objections to the Toronto bylaw are:
1) Toronto did not critically examine the benefits of green roofs, in particular research done by Canadian government agencies that have found that energy savings only occur during the summer. (For readers elsewhere, we have something called "winter" in these climes).
2) Toronto did not look at the short-lived experience of green roofs in Canada. The City's own web site on the topic features projects that the owners firmly state they will never repeat.
3) Toronto created a Technical Advisory Group on the roofing standard(sic) that was not given a charge; had no industry representation on it; refused to make recommendations on fire, wind uplift, durability and maintenance; and didn't cite even the few standards that do exist for water capture and media retention, plant maintenance, or media density for deadload analysis
4) the Toronto bylaw does not meet the requirements of the City of Toronto Act, which permits Toronto to exceed the Ontario Building Code but not skirt it
5) the bylaw probably exposes the Chief Building Official to liability for failure through negligence. (The City solicitor's office has remained conspicuously silent during all of these discussions).
6) the Toronto bylaw creates a "Green Roof Declaration" for the designer that likely conflicts with the mandatory design and field review provisions of our provincially controlled warranty agency for homes and condominiums; and perhaps also the recommendations of Ontario's architectural and engineering licensing bodies
Unfortunately, the bylaw was prepared in haste and without consultation. If one wishes to do good; one has an obligation to also do the right thing.
Marshall, that is an incredible comment! Nice work.
Marshall, thanks for the insight into the toronto situation. There are really three things going on here:
1) Should you implement green building mandates at all? (the subject of my post)
2) Whether the proposed regulation is well crafted (does it conflict with other regulations, expose regulators or regulated community to liability, etc.)?
3) Whether the process used to adopt the regulation was sound (were relevant stakeholders consulted, were best practices from other municipalities examined, etc.)
You rightly highlight issues from categories 2 and 3 which are hampering Toronto's proposed green roof law.
Leaving aside the issue of green roofs specifically (as Marshall and work by @verdantconcepts seem to show are ineffectual for ONT) I think it's a matter of position. If developers or users were being asked to pay the 'true cost' of say, storm water runoff, then a green roof or permeable parking makes more sense. The problem is that benefits accrued beyond the property line, and developers (and homeowners) are not required to pay directly for those costs.
Furthermore, imposing a cost without showing any benefit to the owner will only lead to evasion. I suspect many MEP engineers are drawing rooftops with a surprisingly amount amount of 'mechanical space'.
If, however, you offer the carrot of tax abatements, or a reduction in the size of storm water detention, or mandatory minimum parking, suddenly a green roof (or its sustainable equivalent) isn't quite so onerous.
The Philly example seems a reasonable policy choice: extend a benefit to those who develop more responsibly than others. As Philly's 100k house shows, it's not necessarily a costlier proposition.
The objection is in requiring something that has no financial incentive and (apparently) no alternative method of meeting the requirement. Providing multiple means of responding to the policy goal (less runoff, cleaner air, less energy use, e.g.) makes for better policy.
The City of Toronto is actually moving ahead quite smartly to approve a green standard, see: http://www.toronto.ca/planning/greendevelopment.htm. And I like it!
Toronto has also been an innovator in another regard, but in our own inimicable Canadian fashion has failed to toot its own horn with regard to a wonderful programme called the "Better Buildings Partnerships, see: http://www.toronto.ca/bbp/index.htm. Since 1993, about 700 (don't hold me to an exact number) existing buildings have been retrofitted; and the municipal programme served as a template for a national "Commercial Building Incentive Programme" that did end, but I keep hoping will be brought back.
The developers also complain when one increases insulation standards or fresh air or thermally broken windows or recycling, saying it will cost the consumers more and kill development, that's not news.
But when the City exempts its own non-profit housing and schools from the rule, (as they did) they are showing themselves to be hypocrites.
If it is the right thing for building and the environment then it should be for everyone.