One of the greatest responsibilities an architect holds is protecting the interests of the clients we serve. The primary interest for most clients is, of course, cost. Therefore, every decision we make as architects needs to factor cost into the equation. Increasingly, that conversation also includes building performance, which is the evolution of the term sustainability. It speaks to a more data-driven approach to measuring performance, which can more easily translate into cost-benefit analysis. Clients should expect their architects to be well-versed in everything that goes into their investment. While evaluating a decision for building design, clients need to understand the correlations between first cost, or the cost of development and building performance.
One compelling reason to focus on building performance is operating energy. Implementing energy-efficient designs and technologies can significantly reduce long-term energy costs for a building. This not only benefits the environment by reducing carbon emissions, but also translates into substantial financial savings over the building's lifespan. Clients who understand the link between initial investments in energy-efficient systems and subsequent reductions in operational costs are more likely to appreciate the value of building performance.
The increasing price of carbon emissions is another critical factor. As city and state regulations such as Building Performance Standards (BPS) tighten and carbon pricing becomes more prevalent, buildings with a disregard for embodied carbon may incur higher regulatory costs. Forward-thinking clients will recognize that investing in lower carbon-emitting building practices today can shield them from potential financial penalties in the future. By incorporating energy-efficient measures and reducing their carbon footprint, buildings can remain compliant with evolving regulations and avoid the financial risks associated with high carbon emissions.
Energy Usage: Predicting energy use during design and monitoring energy usage over time in the built project provides insights for the calculation of energy savings and cost reductions.
Embodied Carbon: Material choices have an impact on users’ wellness. Material choices also have a global warming potential metric which is beginning to have cost associated with it in the form of regulatory carbon pricing.
Water Consumption: Tracking water usage helps to identify water-saving opportunities and their financial impact.
Occupancy and Rental Data: Keeping track of occupancy rates and rental income data helps quantify the financial benefits of sustainable buildings.
Integrating resilience into a project means preparing for climate change and extreme weather events without compromising on design aesthetics. This involves using durable materials that can withstand extreme weather conditions, designing flexible spaces that can adapt to changing environmental conditions, incorporating renewable energy sources like solar panels to reduce dependence on external power grids, and implementing efficient water management systems to prevent flooding and ensure water availability during droughts.
Insurance companies are increasingly factoring in building performance and resilience when assessing risk and determining premiums. Buildings designed with robust sustainable measures are often viewed as lower-risk investments. They are perceived to be more resilient to environmental changes and natural disasters, which can result in lower insurance premiums. Presenting clients with data on how sustainable building practices can lead to reduced insurance costs further strengthens the case for prioritizing building performance.
One challenge faced when promoting sustainability is maintaining the integrity of a building's design while incorporating resilience to climate change and extreme weather events. A resilient project that has great design and pencils out will always be more appealing to developers.
Durable Materials: Using materials that can withstand extreme weather conditions ensures the longevity of the building.
Flexible Design: Designing spaces that can adapt to changing environmental conditions enhances the building's resilience.
Energy Independence: Incorporating renewable energy sources like solar panels with battery back-up reduces dependence on external power grids.
Water Management: Implementing efficient water management systems prevents flooding and ensures water availability during droughts.
It’s to be expected that regulatory measures such as Building Performance Standards and the SEC Climate Disclosure ruling will force developers to comply with the policies and laws aimed at reducing the carbon impact of buildings. While some regulatory measures have been put on hold, it is only a matter of time before they get implemented. Engaging with these sooner rather than later helps prepare a developer for the long term. Helping to push this market transformation is the Inflation Reduction Act (IRA), which offers financial incentives for developers to implement building performance measures.
The IRA is a groundbreaking legislative measure aimed at addressing climate change and promoting energy efficiency. By offering various incentives such as tax credits and rebates, the IRA encourages developers and property owners to invest in sustainable practices and technologies. These financial incentives help offset the initial costs of incorporating building performance measures, making it more appealing for developers to prioritize sustainability. Additionally, the IRA aims to stimulate economic growth by creating jobs and fostering innovation in the renewable energy sector, thus presenting a multifaceted approach to achieving long-term environmental and financial benefits.
The IRA offers substantial financial incentives for implementing sustainable features in development projects. Designers must educate developers about these incentives and how taking advantage of them can prevent future energy usage penalties and financial losses.
Tax Credits: Developers can receive tax credits for implementing energy-efficient features, reducing their overall tax burden.
Grants and Rebates: Government grants and rebates are available for projects that incorporate sustainable elements, offsetting initial investment costs.
Low-Interest Loans: Access to low-interest loans for sustainable projects can make financing more affordable.
In today's data-driven world, sustainability must be presented through a data-focused lens. Developers, as the ultimate decision-makers, need clear and compelling evidence that building performance practices will yield long-term financial benefits. To achieve this, designers must highlight specific data points that demonstrate the long-term savings and value brought by sustainable features. By taking advantage of these incentives now, developers can save money in the long run by avoiding penalties for excessive energy usage. Additionally, the reduced operational costs and increased property values associated with sustainable buildings contribute to long-term financial stability.
Communicating the financial value of sustainability to developers requires a strategic approach that combines data-driven rationale with education about available incentives. By presenting clear data points, tracking vital measurements, leveraging financial incentives, and maintaining design integrity, designers can effectively persuade developers to embrace sustainable measures in their projects. The result is not only a more sustainable built environment, but also a financially sound investment for developers, ensuring long-term success and resilience in the face of future challenges.
Mark Taylor, AIA, LFA, Principal at DAHLIN Architecture | Planning | Interiors, leads multifamily, commercial, and mixed-use projects for DAHLIN throughout the Pacific Northwest. Taylor has 25 years of design and sustainability experience leading complex projects for large-scale retail and mixed-use development and holds a reputation as an exceptional leader in both design and business development. He has been deeply involved in the Seattle community for over 25 years.