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Key Trends inGreen Development &Investment
B
ASED ON
2008
 
U
RBAN
L
AND
I
NSTITUTE
(ULI)C
ONFERENCE ON
S
USTAINABILITY
 
M
AY
2008
 Jonathan B. Stern
, MBA, M.Arch, LEED AP
 
 jonbstern@gmail.com
 
Key Trends in GreenDevelopment and Investment
Page 2
E
XECUTIVE
S
UMMARY
 
Purpose
The purpose of this paper is to focus attention on important trends that are occurring and willcontinue to influence:
•
 
Increasing real estate development and investment in
 green,
and
•
 
Growing market demand and value of
sustainable
projects.The points highlighted in this paper are culled from presentations and discussions withindustry leaders in real estate, finance, architecture and construction, at the 2008 Urban LandInstitute (ULI) conference on sustainability.“Green” topics are currently a focus of almost every industry and the media. At the same time,it is hoped that the trends presented in this paper will provide a unique perspective of furthervalue, development and investment in sustainable and green projects, over the next 10 to 20years.
Trends
In addition to the impact of the goals and standards set by LEED (Leadership in Energy andEnvironmental Design), Energy Star and other forms of eco-efficiency on the real estateindustry,
there seems to be four important trends that are driving broader approaches todeveloping and investing in sustainable real estate projects, as depicted in the following diagram.
 
•Health
 
&
 
Productivity•Energy
 
Costs
 
&
 
Uncertainty•Functional
 
Obsolescence•The
 
Current
 
Frontier•"Zero"
 
CO
2
Emissions•Systemic
 
Thinking•Market
 
Opportunities•Up
‐
Front
 
Collaboration•Leadership
 
/
 
Support•Higher
 
A/E/C
 
Performance
 
&
 
Innovation•
Where
vs.
 
What 
•Long
‐
Term
 
Vision•Urban
 
Re
‐
Generation•In
‐
Fill
 
Development•Innovative
 
Financing
Higher
 
Urban
 
DensityEvolving
 
Work
 
ParadigmGrowingMarket
 
Demand
 
&
 
Value
 
Going
 
Beyond
 
LEED
 
Key Trends in GreenDevelopment and Investment
Page 3
H
IGHER
U
RBAN
D
ENSITY
 
“Where you choose to develop is more important than what you develop”.
-
 
Peter Calthorpe, Principal, Calthorpe AssociatesKeynote Speaker at 2008 ULI Conference on SustainabilityBuilding green or energy efficient buildings does not seem to completely address the criticalimpact of ever-increasing commuter distances between home and work, and growing numbersof passenger vehicles. This impact is captured by a metric called
Vehicle Miles Traveled
(
VMT 
),which has been identified as one of the key contributors of carbon emissions, as depicted in thebox below.As a result, efforts to construct new or to renovate existing buildings to LEED standards(i.e.
“… what we develop”
) may not be sufficient to achieve broader global goals of reducedcarbon emissions, as long as those buildings or communities continue to encourage longercommutes and increasing VMT.
 
Vehicle Miles Traveled (VMT)
Based on current patterns of suburban development, increased CO
2
emissions fromlonger commutes and more passenger vehicles, are projected to offset any positivereductions in emissions achieved through green building initiatives, bio-fuelefficiencies and lower fuel mileage (mpg) standards, over the next 20 to 25 years.The following chart illustrates the projected increase of VMT in the U.S.
(see blackline)
, with the observation that that
though CO
2
levels in 2030 are projected to belower than today
(see
top 
red line),
increasing VMT may still cause emissions tobe significantly higher than identified target CO
2
levels
(see
bottom 
red line)
.
406080100120140160200520102015202020252030
Vehicle Miles Traveled2030 New 45 mpgFuel Greenhouse Gas: -15%1990 CO2 LevelTarget CO2 LevelProjected CO2 Level
 
Source:
Growing Cooler: The Evidence on Urban Development & Climate Change 
, E. Reid
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