Sustainability in itself is not a way to lose money in a development project; in fact, we would argue that the opposite is true: incorporating sustainable practices in a development project can both increase property value and enhance a development organization’s brand.
This being said, there are several aspects of incorporating sustainable design into a commercial development project that can be harmful to the budget, and it is these aspects that strengthen the concept of sustainability being a money pit.
In this article, we will discuss the ways in which developers can lose money when incorporating sustainable designs and the best methods to circumvent these issues. The issues can be summed up in three separate categories: issues with scheduling and inspections, misunderstandings of code requirements, and hiring a consultant who doesn’t understand the site-specific requirements.
To begin with the simplest to fix: sustainable design requires a larger amount of oversight and planning in implementing systems than its traditional counterparts, and as a result there are more steps involved in the installation process. Since there is more to do, a very common issue is that the process proceeds before a mandatory inspection takes place. In other words, the part of the building that needs to be inspected is covered up before the inspection actually takes place.
This means that everything built after the system in question has to come down, and in some cases, the system in question comes down as well. This is textbook bad timing, and the only way to fix this error is to work alongside the builder, or have a single point of reference, and understand exactly when the inspections must take place.
Misunderstanding California’s energy code requirements is not only easy – it’s painful as well! Losing points means that your development project may no longer be eligible for a Certificate of Occupancy until the points are met once more, so having a clear understanding of what your vision is required to do in order to pass inspections is top on the list of priorities. The best method to do this is to hire a consultant who knows the code and your project.
The wrong consultant
…but this does not always work. Some energy consultants do not understand the building as an ecosystem, and as a result glaze over features that both pass inspection and are perfect for problems like mold growth within the near future.
In short – the number one way that real-estate developers in California lose money is by hiring the wrong type of energy consultant for the project, or none at all, and then timing inspections incorrectly against building phases.