The Ground Floor

Room to Grow in Hong Kong

This post was written for the Ground Floor by C.Y. Leung, chairman Asia Pacific of the Urban Land Institute.

Editor's Note: This article was adapted from an opinion piece originally written by Leung in his role as Patron Chair of Hong Kong’s Climate Change Business Forum for the South China Morning Post, which published on April 2, 2010.

It has become clear that the climate is changing faster than humans are changing to adapt or prevent it. That must change. For Hong Kong to retain its place as an economic and cultural leader, we need to think strategically and act practically. We can start with buildings. Hong Kong buildings consume almost all the electricity generated for the special administrative region--a full 89 percent. Thus our opportunity for reductions in the real estate sector is enormous.

With oil prices fluctuating broadly, and coal bearing costly environmental and climate concerns, our best bet is to increase energy efficiency.

Unfortunately, it's easier to design an energy-efficient building from scratch than to retrofit an old one. Our existing stock of millions of square feet of real estate thus defines our challenge.

The barriers to investing in energy-efficient buildings are well rehearsed:

• Regulations made in times when smart-building designs were unheard of;
• Poorly planned buildings are not conducive to easy upgrades;
• Inadequate information--without smart meters, it's hard to know where and when excess energy is being consumed;
• A lack of urgency among building owners, users and professionals;
• Fragmented incentives or even disincentives for designers, developers and managers to invest in sustainable features;
• Absence of financing or incentives to make a positive return on investments over the medium and long term;
• Lack of a price signal to motivate energy efficiency; and
• A mindset of waiting for others to act instead of embracing opportunity--slowing both adoption of existing technologies and the development of new ones.

But the solutions are equally well known. After all, property development is one of Hong Kong's key competencies. In fact, while other cities struggle to reduce emissions in their transportation sector, Hong Kong can focus on what we do best and become a world leader in retrofitting buildings. But to achieve our targets, we need better collaboration between the business sector and government.

The Urban Land Institute has been engaged in sustainable development issues for many years. ULI’s recent Retrofitting Office Buildings to be Energy Efficient book is a great tool to jump-start our efforts.  ULI’s Energy Exchange website is a new tool to share individual case study examples which represent industry best practices for owners and public officials alike. Across ULI, members are exploring ways to work with the public sector to innovate professional practices and find new ways of structuring finance tools to significantly scale-up the building retrofit marketplace. Working together with government will bring better results to this effort in two ways.

First, Hong Kong needs a regulatory regime that both requires and motivates better energy efficiency. The government's proposed new building energy-efficiency standards could play an even more important role, if they were upgraded to current best international practice.

Second, government procurement can lead market evolution. Carbon should be weighted as a positive design element that commands payment--from embodied carbon in building materials and greenhouse-gas emission during construction to energy efficiency in building operations. These energy efficiency factors must be quantified in a way that can be integrated into ongoing business activities so that the private marketplace can give them a monetary value.

Markets, like people, need to be informed, motivated, and occasionally inspired. A trusted building-rating scheme would provide important information on buildings' actual energy efficiency.

Smart meters, displaying energy use by function and time of day, could demonstrate how energy is being used--or wasted--thus motivate owners and tenants to achieve potential savings. Incentive schemes that help identify and cofinance upgrades would pair nicely with a regulatory regime that imposed credible, transparent, and increasingly stringent standards.

Government and market players together should work to reverse the "circle of blame" that has designers, contractors, developers, financiers, owners, and tenants all unwilling to make investments in energy efficiency because they cannot reap the rewards.

This leads us to the last necessary ingredient: inspiration. Other great world cities have been inspired by a carbon "stretch goal," and have united as business and civil society groups to achieve it. We have proven to the world many times over that Hong Kong can compete on the vast global stage; let’s do it in energy efficiency as well!

In December, I called for Hong Kong to establish a carbon target as part of an overall vision for a green, low-carbon future of our own making. This call is now being echoed by business and nonprofit groups throughout the city. That echo deserves an answer.

It has been said that the best time to plant a tree is 100 years ago. The second best time is now. We need to plant both trees and the seeds of a low-carbon, smart-energy economy. Only then can we ensure prosperity for our children.

Study: Denser development may cut pollution

Would Americans drive less if they stopped living on big lots far from urban centers? If so, would that reduce pollution and dependence on energy? By how much?

Meeting the growing demand for conveniently located homes in neighborhoods designed to encourage walking could significantly reduce the number of miles Americans drive while giving people more housing choices, a national research panel has concluded.

How much it would shrink the nation's carbon footprint is not as clear.

Such questions, which have dominated the debate over "smart growth" for two decades, are getting the attention of lawmakers. The Senate will debate a bill this fall that would cap greenhouse gas emissions, and Congress asked the National Academy of Sciences to quantify the effect of where Americans live on driving habits.

ULI's Senior Resident Fellow Ed McMahon weighs in on findings in USA Today's article.

Is It Smart to Invest in Green During Trying Times?

This post was written for The Ground Floor by Robert Krueger, communications associate at the Urban Land Institute.

It is still wise to make sustainable investments--despite the current economic conditions-- or investors could miss the return on green investments that will inevitably come to fruition. This was the consensus during ULI's “Investing and Developing Green” conference held this week in Washington, D.C. 

Urban designers, property owners, public officials, architects, real estate consultants, and other leaders in land use ascended on the nation’s capital in order to share their knowledge over how to capitalize on the green building movement and discuss particular trends and policies that are making green investment so attractive. 

"The regulatory environment for real estate is increasingly infused with energy efficiency and other environmental priorities,” said Stockton Williams, director of green economy initiatives for Living Cities, a consortium of 21 global philanthropic and private sector institutions that pools investments to connect low-income people and under-invested urban communities to the economic mainstream. 

“Forthcoming federal policy will almost certainly strengthen what cities and states have been doing in this area,” Williams continued. "Savvy owners and developers will find ways to get ahead of what's coming and seize strategic advantage for being greener and smarter than their competitors."

One such bill twas the American Recovery and Reinvestment Act of 2009, which passed in February this year. The bill impacts commercial real estate to make homes and buildings more energy efficient through tax credits and financial incentives.

Another federal bill that was discussed was the Waxman-Markey Cap and Trade bill (H.R. 2454), which the House will vote on June 26.

Danielle Baussan, counsel for the Select Committee on Energy and Global Warming for the U.S. House of Representatives, was one of the speakers who went over the bill’s impact during her afternoon panel.  "The biggest impact for commercial real estate is what the bill does to building codes,"  he said. "Under Waxman-Markey, there will be a national model building code set up under the bill." 

According to Baussan, the new building code has to be 30 percent more efficient than the current codes and this has to be set-up by 2010. The bill also states that the building code must be 50 percent more efficient by 2016. The Environmental Protection Agency (EPA) will determine if this level is possible. If not, the EPA Administrator can adjust this level.

“What this means for states is that all states have to certify that their code meets those efficiency levels,” Baussan explained. “It doesn’t mean that you have to adopt the national model code. It just means that you have to prove that you are X percentage more efficient than what the national code lays out. If a state does not certify or enforce the code, then that is when the federal government can come in and enforce the code.”

The conference also featured panels on maximizing investment values, energy efficiency finance, as well as to green retrofit case examples from Jonathan Rose Companies and CB Richard Ellis.

Learning from Los Angeles

Editor's note: This post was written by Ed McMahon, ULI Senior Resident Fellow for Environmental Policy. He is a panelist at ULI's Developing Green conference underway this week in Los Angeles. This event is focusing on green issues related to the Western and Southwestern regions of the U.S. ULI is hosting a second Developing Green conference June 23 in Washington, D.C., that will focus on green issues related to the Northeast, Mid-Atlantic, and South.  

While driving from the Los Angeles airport to the Beverly Hilton yesterday, it occurred to me that Los Angeles was the perfect city to host ULI's Fifth Annual Developing Green Conference. Los Angeles is of course the world capital of America's car culture, but it is also in the state that has become the national leader in developing innovative solutions to the inter-related problems of sprawl, green house gas emissions and energy consumption.

The Developing Green conference began with presentations by two California public officals: Mary Nichols, Chairman of the California Air Resources Board and Darrel Steinberg, President protempore of the California Senate. Both speakers focused on California's precedent-setting Global Warming Solutions Act (AB 32).  This act requires a 25 percent reduction in CO2 emissions from 1990 levels by 2020. To achieve this goal California is pursuing three strategies: 1) Better (more fuel efficient) cars; 2) Better (less carbon intensive) fuel; and 3) Better (more walkable and transit friendly) development. The last strategy is of course the one with the greatest relevance to the real estate industry.

For the first time in American history, California is requiring all local goverments to coordinate their transportation and land use stratgies to reduce VMT (vehicle miles travaled). This idea will eventually ripple through the entire country setting the stage for a fundamental shift toward infill development, transit-oriented development and mixed-use development, as well as walkable suburban development. Sometime soon I can see a new book entitled Learning from Los Angeles.

The Seven Silent Crises of Metropolitan America

This post contains content contributed by Bill Hudnut, senior resident fellow at ULI/Joseph C. Canizaro Chair Public Policy

How do we plan for a sustainable future when we are faced with so many challenges? The following seven land use issues greatly affect our quality of life and require concerted action on the part of citizens and elected officials.

The Seven Silent Crises:
• Regional Governance—Our urban areas are becoming increasingly complex.
• Land Use Planning—We need to reduce dependence on the car, increase accessibility to transit, and encourage transit-oriented development.
• The Infrastructure Deficit— Infrastructure spending as percent of federal spending has declined over the past four decades, and today the American Society of Civil Engineers gives infrastructure in the U.S. a grade of “D.” Stressors include a great imbalance between vehicle miles traveled and increase in road capacity, the poor to mediocre condition of nearly a quarter of the country’s roads, structural deficiencies and functional obsolescence among more than a quarter of bridges, more than 100 high risk levees in danger of failure, and billions of dollars in lost productivity due to flight delays. Two possible solutions are public/private partnerships and privatization.
• Global Warming and High Energy Costs—Oil  consumption and net oil imports are increasing while production is decreasing, all while there is an increase in vehicle miles traveled. We need to emphasize infill development and well-designed density to get people to live closer to where they work.
• Workforce Housing—The skyrocketing imbalance between ratio of median house price to median household income means we need to develop more housing that is affordable to working Americans and more mixed-income communities.
• Urban Retail—Retail should be integrated into communities, not separate.
• Sustainability—Green infrastructure is a necessity, not an amenity, and we need to build more green buildings.

For the full discussion of these crises, see the “Changing Metropolitan America” webinar, available on the ULI Web site at www.uli.org/webinars.

EPA Awards for Smarth Growth Honor ULI Members

This post was written for The Ground Floor by Robert Krueger, communications associate at the Urban Land Institute.

Last week, the U.S. Environmental Protection Agency (EPA) announced the winners of the 2008 National Awards for Smart Growth Achievement. The awards, in its seventh year, were honored at a ceremony held at the National Building Museum in Washington, D.C.

Stephen Johnson, administrator for the EPA, was on hand to congratulate this year’s award recipients.  During his address, he highlighted environmental challenges of the 21st Century and that it is not only the responsibility of federal government to implement regulations, but it is also everyone’s civic duty. 

Johnson emphasized that this year’s award winners reflect this philosophy by both improving the resident’s quality of life and the quality of the environment. He went on to discuss the need for the synthesis of transportation planning and green building practices.

“Buildings and transportation account for 61 percent of greenhouse gas emissions in this country,” said Johnson. “That is why both smart growth and green building need to be hand in hand.”

This year’s award winners are:

• Achievement Award for Overall Excellence:  The Downtown Silver Spring Redevelopment Project in downtown Silver Spring, Maryland.  The Silver Spring Regional Center accepted the award because of its work with rejuvenating the commercial area of this downtown. The work resulted in over 1,500 jobs created and a tax base up by 62 percent. Currently, there is only a 4 percent vacancy rate. Admirably, the project preserved historic aspects in the area, such as the 1937 Silver Theatre and the adjoining 1937 shopping center.

• Achievement Award for Policies and Regulations:  The Livable Centers Initiative in Atlanta, Georgia. This project was created to help the Atlanta region achieve air-quality targets has resulted in less air pollution and showed a reduction in vehicle travel and related emissions. The motive behind the project was to both improve transportation and create sustainable, livable communities. The Livable Cities Initiative wanted to revitalize downtown centers by linking mass transit and mixed-use buildings. The Atlanta Regional Commission accepted the award. 

• Achievement Award for Built Projects: The Egleston Crossing in Roxbury, Massachusetts.  This project involved the redevelopment of two buildings into 64 affordable green housing units for low-income residents. The units use ENERGY STAR® appliances and solar panels which have helped reduce energy use by 30 percent. Egleston Crossing is within walking distance to four bus lines, a subway, retail and restaurants. The Urban Edge Housing Corporation was present to accept the honor for this marvelous project.

• Achievement Award for Equitable Development:  Mission Creek Senior Community in San Francisco, California. This project of Mercy Housing California and San Francisco Housing Authority is a brownfield site that was transformed into a mixed-use, low-income senior community. During Johnson’s speech, he spoke of the value of such a project in helping seniors, who primarily have only a fixed income, afford housing that is environmentally safe and has a variety of transportation choices. In this senior community, residents pay a maximum of 30 percent of their total income. These residents also have access to a public library, ground-floor retail, and a railway stop.

This year’s award competition was open to both private and public sector candidates. The awards were chosen through a process of selection by an expert panel, followed by an internal EPA review panel and finally the elite four were chosen by EPA’s Associate Administrator for Policy, Economics and Innovation.

The EPA National Award for Smart Growth Achievement was created in 2002 with the purpose of recognizing outstanding approaches to development not only the environment, but also the economy, the community, and public health.

Lessons from Samso Island

This post was written for The Ground Floor by Rick Abelson, ULI Member, and director at Online Land Planning in Redondo Beach, California.

Just as every town needs its fire station and library, we also need a new and relevant type of community land use--an Energy Academy and Park. I first saw the manifestation of this idea on Samso Island in Denmark (set in the Kattegat Strait) about two years ago. I was struck by its simplicity and also the unique story behind it. In 1997, Soren Hermansen, now director of the Energy Academy realized that the summer tourist destination where he and his family lived full time was dead most of the frozen year. The local economy didn’t amount to much and the farmlands and powerful winds that wrapped the island had more potential if they somehow could be harnessed in a symbiotic way. His definition of sustainability for Samso’s future was not merely about energy efficiency, but also self sufficiency. So after reading about a contest sponsored by the Danish Ministry of Environment and Energy, he mobilized his neighbors to enter. 

Over the next ten years, Samso Island residents banded together on evenings and weekends learned about renewable energy, especially wind, solar, and biofuel--of which they had plenty. Samso Island now receives international recognition for leading the world in sustainable alternative energy becaming carbon neutral in 2007 by producing 10 percent more than its 6,000 residents use each year. They export wind power to Norway and have created a variety of new jobs for themselves. Some residents even travel the world to help erect wind turbines and large solar installations based on what they have learned. Basically,  they went from nothing to everything.   

The Samso Island Energy Academy is the pinnacle of their efforts.  The roughly 640 square meter building designed by Copenhagen’s Arkitema Architects, functions as the Island’s symbolic hub.  It’s Samso’s unofficial international visitor center, meeting hall and a research office for six dedicated staff.

But the most interesting thing Hermansen said came at the end our day together. As the sun began to set on a frosty day in February, he told us that of the many countries that have sent research teams from around the world to visit and learn from Samso’s sustainable success stor --that my colleague and I were the only Americans to have actually visited (except for one reporter from the New Yorker a few months earlier). I felt a bit embarrassed. Luckily though, others have discovered what’s happening and Soren is getting the recognition he deserves by being named a TIME magazine 2008 Hero of the Environment.

Green Training for Construction Workers

Green-collar programs around the country are beginning to take off. Mayor Adrian M. Fenty of Washington, D.C., and Councilmember At-Large Kwame Brown unveiled the nation's first green collar job training curriculum for the metro area construction industry.

The focus of training will be on current construction workers and Catter and Technical Education for student who will be entering construction trade programs in the District.

"The demand for District residents who can fill green collar jobs is only expected to grow. Now DC workers and Career and Technical Education students will be able to gain a valuable skill set that will benefit their careers and our city's green future," Mayor Fenty said.

"Now, when people ask me what a green collar job is, I can point to specifics. This training will lead to important results: A greener, more sustainable city and the jobs that go with it," said Councilmember Brown. "The District is looking ahead to the future, and we're fortunate to have partners who want to bring hope to our young people."

Other organizations have already begun implementing similar programs, such as the Florida-based  National Center for Construction Education and Research (NCCER), which on July 16 unveiled "Your Role in the Green Environment," a national green jobs training curriculum for the construction industry craft professional.

According to NCCER, the 15-hour course introduces craft workers to USGBC LEED Green Building Rating System. D.C.’s curriculum is the product of a partnership between the Green Builders Council of D.C. and the NCCER.

The Green Builders Council of D.C. and NCCER commissioned the Sustainable Facilities and Infrastructure Research Team of the Myers-Lawson School of Construction at Virginia Tech University to develop the curriculum. An updated version will be prepared in the coming months to train workers in the U.S. Green Building Council's revised LEED standards for 2009.

California Passes Green Building Code

The state of California is poised to be the first state to adopt a statewide green building code requiring new construction take measures to cut energy and water use significantly from current standards. Although the California Building Standards Commission unanimously approved the new code at a meeting this month, they won't take effect until July 1, 2009, and will be voluntary until sometime in 2010.

Governor Arnold Schwarzenegger praised the measure in a press release, connecting it to the state's broader efforts to curb climate change: "This is literally a groundbreaking move to ensure that when we break ground on all new buildings in the Golden State we are promoting green building and energy efficient new technologies. Cars and buildings are two of the leading users of energy –- we're already addressing cars, and these new building standards will ensure that California remains at the forefront of reducing our carbon footprint ..."

The Architecture 2030 group has announced the goal to make all buildings carbon-neutral by 2030, and they recently released a summary of how efficient buildings must be according to a number of codes in order to meet their ambitious targets. The group estimates buildings are responsible for roughly 48 percent of U.S. greenhouse gas emissions annually.

Green Building Across America

Government officials and private industry are working to build more energy-efficient buildings in America's cities and towns. Although high-profile greening efforts in America's big cities often grabs news headlines, the greening trend is truly nationwide.

A report by the American Institute of Architects found the number of populous U.S. counties with green building programs has jumped from eight in 2003 to 39 this year. Found in every region of the country, these programs encourage green building in municipal buildings and in private construction through combinations of incentives and regulation.

Meanwhile, Centex Homes has announced every new home they construct nationwide will contain a suite of energy-saving features by January 2009. They include an energy monitor, special windows, energy-efficient appliances, fluorescent lighting, and insulation. Centex claims the energy monitor, which provides real-time information about energy use and expenses, can allow homeowners to cut their electricity use by 4 to 15 percent.

Perhaps no American city has done more than the town of Greensburg, Kansas. After a tornado destroyed 95 percent of the town's buildings, the 1,389 residents overwhelmingly voted to take it as an opportunity to reinvent their community as a model for sustainability.

Their bold vision won the town a 2008 FT/ULI Sustainable Cities Award. The city requires all new construction meet LEED Platinum Standards, and recently approved a comprehensive plan that seeks to create a "a socially, economically, and environmentally sustainable city."