Residential Green Build Report

Residential Green Building Report
A MARKET ENGAGEMENT FRAMEWORK

FOR DEVELOPERS AND BUILDERS
ERB I NSTITUTE
FOR G LOBAL S USTAINABLE E NTERPRISE
UNIVERSITY OF MICHIGAN
Jeff Martin
Brian Swett
Doug Wein

A MARKET ENGAGEMENT FRAMEWORK
FOR DEVELOPERS AND BUILDERS
May 2007
Jeff Martin
Brian Swett
Doug Wein
With support from:

Cherokee
Erb Institute for
Global Sustainable Enterprise
Unversity of Michigan
Copyright 2007
Acknowledgements
The authors would like to thank a number of organizations and individuals for their
critical support of this masters project. First and foremost, we would like to thank
Cherokee for their financial, logistical, and content support that was vital to the
success of this project. Our lead contact and project advisor at Cherokee, Chris
Wedding, was particularly helpful in providing thoughtful guidance, advice, and
encouragement throughout the last year. Katherine Henderson and Holly Fling
of Cherokee also deserve thanks for reviewing various documents and drafts
throughout this projects development.
The authors would like to thank the Erb Institute for Global Sustainable Enterprise
at the University of Michigan for its financial support in publishing the results of this
project. In addition, Professor Tom Gladwin of the Erb Institute, the projects academic
advisor, provided helpful guidance and content suggestions in framing this project at its
outset. We also would like to recognize Tish Holbrook and Caroline Eisner for their help
in graphic design and editing, respectively. Special thanks to Corey Seeman for assisting
our research process. We also thank Allen Associates and Barley & Pfeiffer Architects
for providing photographs of their green building projects for our report.
This project would not have been possible without the generous time and valuable
insights of the green residential industry players and experts interviewed by the authors.
The appendix includes a full list of interviewees, and the authors are profoundly grateful
for their willingness to share their expertise with the project.
Lastly, the authors would like to thank friends and family for their ongoing support,
understanding, and flexibility throughout this project.
Executive Summary
The residential green building movement is at an exciting moment in
its development from a niche market to a more mainstream market
segment. According to some predictions, in 2007, more than half of
small and large home builders will be building at least 15% of their homes
to a local, regional, or national green standard. With a variety of major
firm- and market-level drivers of the green residential market, home builders
and developers must thoroughly understand the characteristics and relative
strengths of the green homes market within their operating locales.
The purpose of this report is to investigate and advance the foremost
thinking in the residential green building industry. The reports objective
is to present a strategic Market Engagement Framework (MEF) for
examining a real estate market, so that a developer considering a local
project can gauge consumer demand, understand the existing landscape,
form partnerships for green building, and devise a marketing and sales
strategy appropriate to the locale. The MEF contains two fundamental
components: Analysis and Strategy.
A building market is most ripe for increases in green building market
penetration when numerous stakeholders push for those increases
together. The three primary elements critical for growing a green homes
market are (1) consumers, (2) industry (both for profit and non-profit
organizations), and (3) government. A developer intending to compete
in the residential green building space must have a comprehensive
strategy designed to analyze and exploit the elements specific to the
potential developments location.
To gain a comprehensive understanding of the marketplace and devise
appropriate entry and marketing strategies, builders and developers must
investigate all three of the aforementioned elementsconsumers, industry,
and governmentin conjunction with the resource and economic
pressures influencing the overall landscape. This report develops and
presents the Market Metrics Lens (MML) as an evaluative tool to help
confront the complexity that this investigation necessarily entails. By
following a relatively simple prescriptive process, salient characteristics
for each market element are identified and included as metrics in the
MML. Once completed, this MML is able to identify strengths and
weaknesses in a given market and in comparing one location to another.
Furthermore, it helps identify specific partnership and marketing strategies
to raise overall awareness and advance the industry.
The MML was piloted in four different geographic locations: Los Angeles/
southern California; Houston/Texas; Miami/South Florida; and Newark/
northern New Jersey. In addition, four other markets were reviewed to
add robustness to the comparison pool: Denver, Atlanta, Indianapolis,
and Boston. Of the four focus municipalities, Los Angeles stands out as
the strongest overall in its relative strength in all three key elements of
a residential green building market. While the consumer and industry
elements of Miamis green residential market is relatively weak, the
government element is relatively strong and growing. The industry
element outside of the city, including a strong residential green building
program and the support of a leading builder, is relatively strong. The
consumer element of the Newark green residential market is relatively
strong, while the government support element is moderate and the
industry element is relatively weak. Other towns in northern New
Jersey and the state government are making strong progress in green
residential support. While Houston has a relatively strong industry
element, it ranked weakest of the four focus municipalities in
government and consumer elements.
The strategy portion of the Market Engagement Framework includes two
important aspects: (1) forging partnerships and alliances to help advance
the overall industry and raise consumer awareness and (2) targeting
purchasers of residential green homes through a focused sales and
marketing effort. With the results of the MML, this project proposes
specific strategies for partnership, marketing, and sales in each of the
four focus geographies, as well as develops a number of green homes
strategy best practices, including twelve techniques for selling green
homes.
While the residential green building market is rapidly growing and
maturing, much remains to be understood about the dynamics of key
market elements, the most likely buyer characteristics and preferences,
and the most effective marketing and sales strategies. The MEF and MML
presented in this report can help builders, developers, researchers, and
other green residential stakeholders better understand and strategize for
engagement in particular geographic markets.
Table of Contents
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
OV E RV I E W A N D BAC KG RO U N D
The Green Homes Challenge for the Industry
The Market Engagement Framework Solution
C U R R E N T S TAT E O F T H E G R E E N B U I L D I N G MA R K E T
National Trends
Expert Testimonials on The Benefits of Building Green
E L E M E N TS O F A RO B U S T G R E E N H O M E S MA R K E T
10
Consumers
11
Industry
17
Government
21
Acute Resource Pressures
23
Macroeconomic Trends
24
A N A LY Z I N G MA R K E TS F O R G R E E N H O M E S
25
Market Metric Lens
25
B U I L D I N G PA R T N E R S H I P S
27
Best Practices and Strategic Recommendations
27
The Importance of Champions
28
MA R K E T I N G A N D S A L E S S T R AT E G I E S
29
Growing Concept Awareness in Nascent Markets
29
Selling Green Homes
31
A P P LYI N G T H E MA R K E T M E T R I C S L E N S
38
Pilot and Comparison Cities
38
A N A LYS I S A N D S T R AT E G I E S F O R F O U R P I LOT G E O G R A P H I E S
44
Los Angeles/Southern California
45
Houston/Texas
46
Miami/South Florida
47
Newark/Northern New Jersey
48
Relative Analysis of Four Pilot Geographies
49
CO N C LU D I N G R E MA R K S
50
Use of the Market Engagement Framework
50
LIST OF FIGURES
Figure 1: The Green Homes Market Landscape
Figure 2: Green Homes Adoption Concept: LOHAS Driving the Market
Figure 3: The Market Engagement Framework
Figure 4: Small Builders and Larger Builders
Figure 5: Demand Projection
Figure 6: Green Building Consumer Groups
12
Figure 7: Green Residential Industry Stakeholders
18
Figure 8: Trifecta Umbrella
34
Figure 9: Market Engagement Framework Analysis
49
L I S T O F TA B L E S
Table 1: Relevant Behavioral Differences in Green Homebuyers and Remodelers
13
Table 2: The Market Metric Lens
38
Table 3: Residential Green Building Market Strengths and Weaknesses
49
APPENDIX
List of Interviewees
51
Chapter 1

Overview & Background
THE GREEN HOMES CHALLENGE

FOR THE INDUSTRY
esidential green building developers and home
builders have traditionally

entered markets with little
concrete information and
understanding of the true
nature of consumer demand
for green homes.
his is attributable largely to the

difficulty in quantifying demand for
a relatively new product that is foreign

to or misunderstood by most traditional
homebuyers. Nonetheless, the proactive
efforts of industry leaders to deliver
products to market that they believe are
inherently desirable often tap into latent
demand for green homes. Therefore,
a more rigorous understanding of the
characteristics of demand and other
critical elements of the residential green
building market will assist industry
players interested in expanding their
green building portfolios. Analysis such
as presented in this report will augment
profitability of existing pipe-line projects
and can identify opportunities in areas
where competitors and the rest of the
industry may be lagging.
THE MARKET ENGAGEMENT FRAMEWORK SOLUTION
THE MARKET ENGAGEMENT

FRAMEWORK SOLUTION
o address industry- and
A Robust Green Homes Market: Conceptual Overview
firm-specific challenges,
A building market is most ripe for
be high, whereas industry capability
increases in green building market
and/or government support are
penetration when numerous stakeholders
underdeveloped in relation to this latent
are all pushing for those increases
demand. Alternatively, industry and
together. The three primary elements
government could be actively promoting
and strategy development.
critical for growing a green homes market
the residential green building, but a
We call this tool the Market
are (1) consumers, (2) industry (both
strong consumer preference has simply
for profit and nonprofit organizations),
not yet materialized. Even with these
and (3) government. See Figure 1 for
characteristics, the potential exists for
a representation of the green homes
a market to evolve into one wherein all
market.
three elements are strong. While advances
this report provides an

evaluative tool for both analysis
Engagement Framework (MEF).

The MEF enables an industry
in the green homes market can be made
player who seeks to extend its
In a perfectly robust green homes
with only two of these elements or with
market, there would be a large number of
only minimal interest from each, green
presence in the green home
homebuyers who are well versed in the
homes penetration will never be as rapid
market to quickly and relatively
attributes of green homes, receptive to
or as complete as when all three work
the green homes value-proposition, and
together in a driven fashion. Furthermore,
discerning of the many possible green
the consumer element is critical to the
home products available. Similarly, there
success of any developing market.
easily evaluate the landscape,

identify gaps and leverage points
would be a strong local industry presence

that would consist of developers, builders,
Also affecting market dynamics in
that can be filled and exploited,
sub-contractors, and other professionals
any given location are a variety of
and develop sales and marketing
familiar with the methods for building,
significant external pressures. These
marketing, and selling green homes.
we have organized into two distinct
A local green homes organization and
categories: acute resource pressures
certification program would be active.
and macroeconomic trends. Acute
Lastly, a powerful government entity
resource pressures can include water-
would be present with offices, resources,
scarcity, traffic congestion, land-density
and policies focused on supporting green
constraints, air-pollution, and energy
building and sustainable development.
capacity and price. These pressures will
These three elements working in concert
affect consumer preferences, industry
comprise a robust and active green homes
innovation, media attention, and the
market.
regulatory environment. Macroeconomic
strategies appropriate to
specific locales.
trends are factors such as fluctuating costs

Conversely, in a nascent market, green
of home ownership, job growth rates,
homes have yet to make serious inroads.
interest rates, and migration patterns
In such a market, several factors could
into or out of the area. These factors are
have tempered green home penetration.
known to impact the overall housing
For instance, consumer demand may
market, of which the green homes market
A Market Engagement Framework for Developers and Builders
Chapter 1: Overview & Background
is a part. Together with the three key
Fi g u re 1 . Th e G reen Homes M arket L andsc ape
elements (consumers, industry, and

government), these pressures comprise
the overall green homes market landscape
depicted in Figure 1.
Often, one or two of these elements tends
to move faster than the others; it is not
Consumers
Government
uncommon for one to take the lead before
Industry
The Green Homes Market
the others catch up. Usually, within one

element a specific organization or group
of individuals is at the forefront of the
green residential movement. As Gordon
Cooke, a green building marketing
consultant with 25 years of experience,
notes, in any one area you can identify
Acute
Resource
Pressures
Macroeconomic
Trends
the person or the organization that made

the difference.1
Market Adoption Characteristics

Three concepts are integral to a
early adopters tend to drive the adoption
fundamental understanding of the
of a new technology or product in the
adoption characteristics of green homes.
early stages.2 For green homes, these
First, green homes can be sold to any
two categories are composed largely of a
consumer via benefits-based selling
market segment the Natural Marketing
(e.g. all homebuyers want a healthy living
Institute (NMI) calls Lifestyles of
environment), but some buyers are willing
Health and Sustainability (LOHAS)
to pay more or have a faster absorption
consumers. If the LOHAS consumers
rate for these benefits. Second, potential
were to remain the primary purchaser
green homebuyers are motivated by
of green homes, then the adoption
personal interests when deciding on
curve would largely follow the blue
which home to buy. These include health
line in Figure 2, representing a plateau
effects on inhabitants, durability and
of adoption at a very modest market
ease of maintenance, environmental
penetration. If the green homes market
friendliness, and energy efficiency, in
penetration continues to grow rapidly,
addition to those perceived to be standard
as real estate experts such as McGraw-
for conventional homes (such as location,
Hill Construction predict, then green
price, and size). Third, each segmented
homes will become a product of choice
geographically-based real estate market
for the early majority buyer, and market
has a different mix of homebuyers with a
penetration would follow the green curve.
variety of interests and demands. Based

on this, each market has moved to a
different point along the green homes
adoption curve.
The adoption curve for green homes is
Key Market Adoption

Principles:
1. Green homes can be
sold to anyone.
2. Homebuyers are motivated
by personal interests.
3. Each real estate market
has a different mix of
homebuyers.
Virtually all indications show that green homes are at a

tipping point where most major markets will have significant
availability of product over the next several years.
very similar in nature to the adoption
This transition is occurring in markets
curves of other major new products or
such as Denver, where green home
technologies. As described in Everett
penetration has now surpassed 20%.
Rogers seminal book, Diffusion of
Lastly, if green homes were perceived to
Innovations, innovators and then
be a temporary fad, then the adoption

THE MARKET ENGAGEMENT FRAMEWORK SOLUTION
Fi g u re 2 . G re e n Homes Adoption Concept: LOHAS D riving the M arket
curve would follow the red line, with

market penetration deteriorating
Complete market adoption
as LOHAS consumers move their

purchasing to other products. Virtually
all indications show that green homes
LOHAS
are at a tipping point where most major
Percentage of Sales
markets will have significant availability

of product over the next several years,
and some leading markets will be moving
further along the adoption curve to
capture early majority buyers, thus
following the green line in Figure 2. The
Adoption by LOHAS only
challenge for the developer and builder is

to identify the drivers of growth in green
Eventual loss of interest by LOHAS
homes in particular markets, and then
Time
construct partnership, marketing, and

sales strategies to most effectively tap into
this growing market segment.
Capitalizing on Market Adoption Characteristics

A developer intending to compete in the
This process (and thereby, the MEF) is
homes that are appropriate to the local
residential green building space must
divided into two sections: Analysis and
markets demands. The marketing and
have a comprehensive strategy designed
Strategy. (See Figure 3 below.)
selling strategies that developers form
to analyze and exploit the elements
must be directly linked to the results
specific to the potential developments
Analysis: To properly analyze the three
of their analysis. Effectively gaining a
location. In keeping with that goal, this
elements of the green homes market,
widespread understanding of the benefits
report provides the Market Engagement
developers must know where to look and
of green homes is critical to successful
Framework (MEF) to guide developers in
how to read the potential proxies of the
market penetration, and partnering
gauging the relative strengths of localized
existing elements. This process is covered
with relevant government and industry
elements and to guide those same
more fully in Chapter 4 of this report.
programs is often a critical step in green
developers in forming marketing and
residential market engagement. This
sales strategies tailored to immediate and
Strategy: Beyond analyzing the existing
process is covered more fully in Chapters
long-term needs of their developments.
elements, developers must be able to sell
5 and 6 of this report.
Figure 3 : Th e M a r ke t E n g a g e m e n t Fr a m ewo r k
Analysis
Strategy
3.
Designing marketing
& sales strategies
1.
Evaluating the landscape
2.
Seeking local partnerships
Consumers
Growing skills and

competencies
New strategies for a new

product
Raising awareness
through outreach
Addressing the concept

(awareness) and/or the
product (brand)
Government
Industry
Acute
Resource
Pressures
Macroeconomic
Trends
Chapter 2

Current State Of The

Green Building Market
N AT I O N A L T R E N D S
he green building indus-
The green building movement in the U.S.
Hill Construction survey found that 40%
try is growing rapidly
is nearing what many experts are calling
of the builders, architects, engineers,
a tipping point, where the majority of
and designers surveyed report more
residential and commercial builders will
than moderate involvement with green
be participating in green building projects
building. More than 85% of the architect,
attention in both mainstream
to a significant degree (in which more
engineers, and contractors report partici-
than 15% of their projects will be green).
pation in green building activities. More
media and throughout the entire
The growth and maturation of this market
than 31% of all builders surveyed report
building design and construc-
is due to a variety of factors, including
more than moderate involvement in green
external drivers. The list below reviews
building.5
and has gained a great deal of
tion field. Indeed, as far back

as 2003, Building Design &
Construction magazine was
calling green building the most
vibrant and powerful force to
impact the building design and
construction field in more than
a decade. Three years later,
3
the same publication states:
some of the most significant of these

drivers. For an in-depth exploration of
Residential Green Building Market:
these drivers, see the full report Residen-
A 2006 McGraw-Hill Construction
tial Green Building: Identifying Latent
study projects that by the end of 2007,
Demand and Key Drivers for Sector
60% and 59% of all small and large
Growth, available at www.erb.umich.edu.
homebuilders, respectively, will undertake

green construction projects, accounting
Emergence and Growth of

Residential Green Buildings:
External Drivers
moderate involvement with green

building.6 As shown in Figure 5, the
Urbanization Trends
a green standard eclipsed those with
matic environmental crusade
Government Involvement
industry.4
builders currently report more than
percentage of homebuilders currently
What started out as a charis-
sector of the U.S. construction
shown in Figure 4). Over 30% of home
Energy and Global Warming
Emergence and Popularity of Green

Building Programs
has matured into an established
for at least 15% of their production (as
Socially Responsible Investing

Consumer Demand
doing at least 15% of their product to

little to no engagement in the sector in
2006. McGraw-Hill projects that in 2007
the percentage of homebuilders heavily
involved in green design and construction
will surpass those with little or no involvement, representing a second significant
tipping point. McGraw-Hill also suggests
that the residential green building market
is expected to grow to between $19 billion
and $38 billion by the year 2010, up from
$7.2 billion in 2005. McGraw-Hill defines
Non-Residential Green Building Market:
green homes as ones that meet the
In 2004, non-residential green building
bronze threshold of the NAHB Model
accounted for roughly 2% of the U.S.
Green Building Guidelines, and that the
market, resulting in a $3.3 billion
predictions are based on self-reported
component of the overall industry. By
survey data.7 While other nationwide
2010, this market share is predicted to
green home standards, including LEED
grow to between 5 and 10% of the new
for Homes and NAHBs Model Green
non-residential market, representing a
Home Building Guidelines, have recently
$10-20 billion industry. A 2005 McGraw-
entered the pilot and distribution phases,

N AT I O N A L T R E N D S
Figure 4 : S m a l l B u i l d e r s a n d L a rg e B u i l d e r s
Recent Growth in Energy Star

New Homes:
Green building involvement expected at 15% or more
Energy Star is the most widely recognized

environmental certification program
100
100
SMALL BUILDERS
80
80
66%
60
2005
59%
40
35%
27%
20
2006
2007
and product label in the country. This

U.S. Environmental Protection Agency
certification program for products that
60
50%
40
20
LARGE BUILDERS
2005
Year
meet strict energy efficiency guidelines

has separate certification standard for
new homes that complements its well-
39%
known appliance-rating standard.13 In

2006
2007
Year
2005, Energy Star achieved an average

national market presence of nearly 10%
in the new homes sector, with 149,568
Source: MrGraw-Hill 2006 Residental Green Building Smart Market Report
new Energy Star site-built, single-family

homes built. Through 2006, more than
525,000 Energy Star qualified new homes
Figure 5 : D e m a n d P ro j e c t i o n
Upper
Tipping
Point
have been built nationwide.14 From a sales
Lower
Tipping
Point
value perspective, residential Energy Star

building is an impressive market segment.
PROJECTION
Depth of Green Building

Involvement
69%
Population
65%
56%
63%
45%
37%
40%
35%
31%
15%
25%
20%
2005
2006
2007
Exploring Involvement to Moderate

Share of Projects (15% or less projects
are green)
Significant Share or More of Projects
(16% or more projects are green)
Largely to Fully Dedicated to Green
Building (60% or more projects are
green)
Source: MrGraw-Hill Construction 2006
local and regional green home programs
roughly $792 million in new projects
have been around for years. Since 1991,
in 2000, to roughly $10 billion in new
when Austins green home program was
projects in 2006. The growth in square
launched, over 62,000 homes have been
footage of LEED registered projects is
built according to a green building
also impressive. In 2002, there was
standard nationwide.8 The NAHB
roughly 80 million square feet of LEED
Research Center reports that at least
registered space.10 As of February 2007,
14,589 homes were built to a local or
USGBC estimates that over 829 million
According to the Natural Marketing

Institute, the value of Energy Star-certified
homes sold in 2005 was $26 billion.15
The green homes of today will become
the standard homes of tomorrow, states
Harvey M. Bernstein, Vice President,
Industry Analytics and Alliances,
McGraw-Hill Construction.16 David Ellis,
President of the Greater Atlanta Home
Builders Association, agrees: Ten years
from now, were just going to call it how
we build houses.17
David W. Milner, Vice President of
Haven Properties (an Energy Star award
winning builder that constructs 100 to
130 homes per year)18 in Alpharetta,
regional green building standard in 2004.9
Recent Growth in LEED
Ten years from now, were just going to call it how we build houses.
David Elllis, President of the Greater Atlanta Home Builders Association
One strong measure of the recent and

rapid growth in the green building market
square feet is certified or registered.11
is the growth in Leadership in Energy and
Growth in USBGC involvement has
Environmental Design (LEED) registered
also been profound. From 2000-2007,
and certified buildings. LEED is a green
member companies and organizations
building certification program developed
grew from under 500 to over 7,675;
and run by the United States Green
workshop attendees grew from under
Building Council (USGBC). The value
600 to over 43,800; and LEED-accredited
of new LEED-New Construction
professionals grew from 500 to
(LEED-NC) registered projects has
over 35,500.12
grown dramatically each year, from

Georgia, recognizes that, In the

Southeast, green building is certainly an
emerging market that is coming into its
own. I feel like those who embrace it
earliest are the ones that are going to
establish themselves in the marketplace
as builders that are leading edge. Dont
wait until its forced upon you. Begin
to investigate how you can get into a
program.19
Chapter 2: Current State of the Green Building Market
EXPERT TESTIMONIALS ON THE

BENEFITS OF BUILDING GREEN
Willingness to Pay and Absorption Rates
Protection During Market-Downturns
Dennis Creech, Executive Director of
The Solaire green condominium building
Despite the lackluster local economy,
Southface Institute, which developed
in Battery Park, New York City, is
the 15-story Henry condominium
the EarthCraft green homes certification,
attaining 10-15% rent premiums based
building, designed by Portland GBD
says: If we can reduce the number of
on green demand. Solaire Leasing
Architects, sold out nine months ahead
call-backs . . . thats money in [builders]
Manager Lydia Haran says the marketing
of construction, and the developers raised
pockets.25
strategy changed over time: When we
the price five times. Dennis Wilde, Senior
started, we were marketing a stunning
Project Manager with developer Gerding
Attracting New Consumers
residential building with five-star services,
Edlen, cautions that while the buying
Green communities bring in homebuyers
unsurpassed views, and condo quality
public may favor an environmentally
who typically buy only in the resale
finishes. The green features were an
sensitive productespecially in the Pacific
market, says Brooke Warrick, President
added incentive. Haran continues, But
Northwestthey are not necessarily
of American LIVES, a consumer-focused
we learned from the leasing process that
willing to pay more for it. Still, in a
market research firm, so developers and
the green features actually were primary
competitive market, lower utility bills
builders are creating a new market for
and the other factors secondary, and that
and the promise of a healthier indoor
themselves.26
there was a pent-up demand for green
environment give the developer a
luxury high-rises. We leased 293 units
way to differentiate the product in
Entitlement Process
within five months. According to Haran,
the marketplace, Wilde says.
Steve Kellenberg notes, Applying
22
Green measures can definitely win over
those units achieved a 10% premium in

rents, which has risen to 15% since the
Green homes are a little more isolated
communities and speed the entitlement
building opened last year.20
from a downturn, says Chris Bartle,
process. Voluntarily restoring wetlands
President of The Evergreen Group, a
and other ecological areas, encouraging
Overall interest for Terramor Village
San Francisco green brokerage company.
alternatives to automobile use, and
(green homes in southern California)
Our market has softened too, but not
creating open space for community use
homes was 32% higher; and absorption
enough to really make a difference.23
go a long way towards building support

and reducing legal delays.27
was 5% greater than homes in

Terramors green elements. Terramor
Reduced Warranty Costs and Reduced

Call-backs
According to Landon Christopherson, a
Village homebuilders also enjoyed a
According to David W. Milner, Vice
project manager with the small developer
5-10% price premium over homes in
President of Haven Properties in
Landwell Company in Nevada, municipal
Ladera Ranch.
Alpharetta, Georgia: Between 2003
support is critical. [City officials]
and 2004, our warranty costs went
are eager to bring forth a true green
down by about 11%. . . . And we directly
development--one that embraces best
attribute that to . . . the green building
development practices that will stand
program.
the test of time.28
neighboring Ladera villages that lacked
21
24
EXPERT TESTIMONIALS ON THE BENEFITS OF BUILDING GREEN
Resale Value
Amy Bolten, of Christopherson Homes in
According to the National Resource
Increased Publicity and Improved

Reputation
Energy Laboratory (NREL), SheaHomes
By its own contractors estimate,
green reputation was a significant factor
high performance homes in San Diego,
SheaHomes received, without cost, print
in attracting a land seller in Marin County
experienced a mean dollar gain of 55.4%
and broadcast media coverage on the
to approach the company to arrange a sale
for a mean ownership length of 22.5
San Angelo and Tiempo developments
of highly valuable land for development,
months. Comparison [non-green] homes
that approximated one million dollars
rather than putting it up on the open
experienced a mean dollar gain of 44.7%
in publicity value between January and
market. Going green has created goodwill
for a mean ownership length of 28.1
August 2001 alone. The coverage included
with municipalities and environmental
months. The mean dollar gain per month
San Diego television evening news, local
groups in addition to opening doors such
owned was $14,500 for SheaHomes and
newspapers, and trade journals.30
as better access to properties.31
California, reported that the companys
$9,300 for comparison homes.
29
Alleviating the Cost Burden Perception

The perception of increased costs is one
in building green are regularly less than
of many of the green elements early in
of the most significant impediments to
originally perceived. According to the
the development process.34 Conversely,
builders who are considering adopting
Urban Land Institute, Practitioners
piece-meal attempts at green construction
green building. After a thorough
estimate that using green materials
can result in costs exceeding the typical
review of the current research and
tends to cost between 3-4% more
2-5%. Although the cost/benefit issue
studies, McGraw-Hill finds that most
than using conventional construction
is central to any discussion about green
literature suggests green building can
materials.33 Most articles and industry
construction, it falls largely outside the
be achieved for comparable costs to
professionals agree that green building
scope of this report.
standard construction, with better
cost premiums are in accordance with
up-front planning and/or energy or
the Urban Land Institutes estimates.
other cost savings as a result of green
Green construction can be successfully
construction.32 Green home builders
completed at zero extra cost with careful
have also found that actual cost premiums
design and a systematic incorporation
Green construction can be successfully completed at zero extra

cost with careful design and a systematic incorporation of many
of the green elements early in the development process.
Chapter 3
10
Elements of a Robust
Green Homes Market
evelopers and builders
consumer-demand analysis in any given
Consumers, the end users of the product,
seeking to add a green
locale can be burdensome and add to the
are at the root of all activity in this arena,
complexity of the product-to-market par-
as the industry hinges on their ability
adigm. However, by analyzing the system
to value the fundamental nature of the
as a whole, new opportunities and drivers
product being delivered. This complete
liosor adopt green standards as
can be revealed that will help any entrant
landscape behaves as a complex system.
maximize returns while helping to reduce
To simplify analysis of the green homes
a fundamental element of their
costs and avoid frustrating obstacles. The
marketplace, the various stakeholders
businessmust possess effective
Market Engagement Framework (MEF)
have been aggregated into three primary
helps builders and developers gauge the
elements: (1) consumers, (2) industry,
relative strength of the marketplace and
and (3) government. A proxy method of
identify leverage points from which to
analysis has been developed that enables
devise a comprehensive strategy for
the builder or developer to gauge and
market entry and growth
evaluate the relative strength of each
component to their portfo-
and comprehensive strategies

to achieve success in the green
homes marketplace. The existing
paradigm of delivering a known
product to a known consumer
becomes clouded when confronted with both a product
of the different elements by examining

The MEF contains two fundamental
discrete features and characteristics with-
components: analysis and strategy. The
in each respective element. Furthermore,
Market Analysis component is described
two other external factors influencing the
in detail here and the Market Strategy
residential green building marketplace
component is further explained in
have been identified: (1) acute resource
Chapters 5 and 6.
pressures and (2) macroeconomic trends.

These pressures are more subjective in
Market Analysis. The stakeholders in the
nature than the other elements, but are
with less-familiar attributes and
residential green building marketplace
no less significant in contributing to the
benefits and a consumer base
are numerous and are found across most
development of a comprehensive strategy
of the major sectors of civil society, as
to achieve the market engagement goals
shown below:
of the company.
with a diverse set of preferences

and priorities. Many of the risks
Market Stakeholders
associated with jumping directly
Government departments
Material suppliers
into the green homes market
Nonprofits and advocacy groups
Media companies
can be alleviated by a better
Industry associations
Community groups
understanding of the fundamen-
Architecture firms
Insurance agents
tal elements of the marketplace.
Construction companies
Appraisers
The process of industry- and
Real estate brokers
Home financing community
Homebuyers
Research institutions
C O N S U M E R S 11
CONSUMERS
ardee Homes Marketing
How does one identify the likely
Lastly, certain project-level studies have
Vice President Joyce
green homebuyer? The answer to
been undertaken by developers to help
this fundamental question is not as
understand the key factors affecting
straightforward as one would hope.
peoples decisions to buy and/or move
Unlike the straw-bale or UFO-shaped
into a green residence. These pre- and
2007 article that potential
ecological and natural homes of decades
post-occupancy studies, reviewed later in
past, green homes today look and feel
this chapter, reveal additional prevailing
homebuyers have recently
like any other conventional home with
characteristics of the green home
started to specifically ask for
regard to their basic attributes. However,
consumer.
various national segmentation studies
Mason indicated in a March
green features in their homes.

She states: We saw [the trend]
reveal a few statistically significant

differences in attitudinal and behavioral
characteristics that demonstrate an
identifiable high-value buyer. Experts
first happen in hybrid cars. I
interviewed during the development
think its probably going to shift
found within the green home buying
over to houses.35
of this report agree on various patterns

population. These similarities include
higher levels of education, greater overall
awareness of environmental issues such
as global warming, and concern over the
health and performance attributes of a
home. Experts also express differences
in consumer priorities based on
geographical specificity. For instance,
California residents are more concerned
about energy efficiency and air pollution,
whereas those in the southeast part of
the country are more concerned with
issues such as mold and indoor air quality.
Consumers
Government
Industry
Common Behaviors and Characteristics of Green Homebuyers

Seek out healthy food options
Purchase green products
Participate actively in environmental
and cultural organizations
Desire holistic experiences and
authenticity
Look for multiple and extensive
sources of information
Pursue higher education
12
Chapter 3: Elements of a Robust Green Homes Market
The most notable national studies
Fi g u re 6 : G re e n Building Consumer Groups
conducted to help identify the likely

green homebuyer are those by the Natural
Marketing Institute, American LIVES,
16%
and Ropers ASW. This report focuses

on the first of the three. Together, these
24%
25%
studies reveal that the common characterbased on consumer attitudes, behaviors,
25%
graphic characteristics) rather than
14%
10%
on easily-identifiable demographic
General
Population
Green Building
Users
characteristics. These studies rigorously
Drifters
14%
23%
mindsets, and preferences (i.e. psycho-
Naturalites
27%
23%
istics of green homebuyers are generally
LOHAS
Conventionals
Unconcerned
Source: Natural Marketing Institute 2006
support the notion that certain segments

of the population are more likely to be
survey indicates that together the LOHAS
population. The Green Homebuyer/
and Naturalites comprise 90 million con-
Remodeler include those respondents
sumers and represent 41% of the general
who indicated that they plan to buy a
population (16% and 25%, respectively).
home, renovate, or make an addition to
However, this group accounted for 51% of
their current home within the next year
the Green Building Users segment (24%
and indicated one or more of the traits
and 27% respectively).37 The LOHAS and
important for their building products,
a higher willingness to pay.
Naturalite consumer is therefore more
as shown below.
Natural Marketing Institute
products than is the non-LOHAS/non-
The Natural Marketing Institute (NMI)
Naturalite consumer. Data from 2003 and
receptive to the green building message

and are, therefore, more likely to buy
green than the general population. Thus,
as touched upon earlier in this report,
these high value potential green homebuyers are characterized by a faster
absorption rate of green homes and
is a leading business consulting and

market research firm whose comprehensive consumer segmentation analysis
focuses on tracking consumer habits
likely to purchase green buildings and
2005 also substantiate the disproportionate propensity of the LOHAS consumer

to buy green building products. As identified by NMI, the following are a few key
related to the LOHAS (Lifestyles of
characteristics of the LOHAS consumer:
Health and Sustainability) marketplace.
79% of LOHAS consumers consider
In its 2006 survey, five consumer segments were identified: (1) the LOHAS
consumer, (2) the Naturalites, (3) the
Drifters, (4) the Conventionals, and (5)
the Unconcerned. The first of these segments, the LOHAS group, shows leadership in their attitudes toward the environment, society, and socially-responsible
business.36 They tend to be passionate
and knowledgeable about the products
they buy, to be less price sensitive, and to
be more brand loyal. They also generally
consider themselves to be early adopters of new products and services. The
second segment, the Naturalites, while
less committed to environmental issues,
are characterized by a general concern
for personal health, an attitude reflected
in their purchasing habits. The NMI 2006
themselves either the first person to

start using new environmentally friendly
products or ahead of most people,
compared to just 36% of the general
population.38
16% of LOHAS consumers possess
post-college degrees, compared to
only 10% of the general population.39
The LOHAS customer is three times
more likely to use/own renewable power
or plan on purchasing renewable power
in the next year as is the general
population (6% vs. 2% in each case).40
Furthermore, NMIs 2003 research
study identified the Green Homebuyer/
Remodeler and compared specific
Building Product Traits Desired

by Green Homebuyers
Biodegradable
Chemical-free
Contains recycled content
Energy efficient
Energy-Star certified
Environmentally friendly
Formaldehyde-free
Low fumes
Natural
No chemical residues
No synthetics
Non-toxic
Sustainably harvested 41
Source: Natural Marketing Institute 2003
behaviors of that segment of the

population to those of the general
Table 1. Relevant Behavioral Differences in Green Homebuyers and Remodelers
Behavioral Attribute
General Population Green Homebuyer/ Remodeler
Purchases of Green Products
* denotes statistically significant difference
Hybrid Vehicle
0.3%
0.4%*
Renewable Power
6.3%
8.8%*
Alternative Healthcare
31.8%
44.4%*
Socially Responsible Investing (SRI)
10.6%
18.3%*
Healthy Foods and Beverages
53.7%
64.0%
- Celestial Seasonings
24.6%
33.7%*
- Stonyfield Farms
6.4%
8.2%
Natural/Organic Personal Care
61.5%
76.0%
- Aveda
9%
15%*
Cleaning Supplies and Household Products
77.0%
92.2%
- Seventh Generation
2.7%
4.2%*
Energy-Efficient Appliances
74.1%
85.5%
Energy-Efficient Electronics
52.3%
64%
Dietary Supplements
75.3%
86.3%
Memberships to Clubs/ Organizations
- Library
44.6%
50.7%
- The Nature Conservancy
4.6%
6.7%*
- Sierra Club
2.7%
3.4%
- Zoo
8.8%
12.0%*
- Museum
8.2%
11.2%*
- Performing Arts Center
5.4%
6.3%
- Horticultural Center/Garden Club
2.7%
4.4%*
- Science Center
2.6%
4.4%*
Readership and Viewership
Magazines
- Better Homes and Gardens
28.3%
39.4%*
- Consumer Reports
23.6%
34.9%*
- National Geographic
18.8%
28.8%*
- Good Housekeeping
20.9%
25.1%
- Newsweek
16.1%
21.3%*
- Prevention
10.0%
12.8%
- Cooking Light
8.7%
12.4%*
- Discover
7.3%
10.7%*
- Martha Stewart
7.3%
12.0%*
- Parents
6.3%
8.8%*
- Mens Health
5.6%
6.1%
- Money
5.5%
9.5%*
- Fitness
4.8%
5.5%
- Self
4.5%
6.5%*
- Health
4.4%
6.1%*
- Sierra Club
2.1%
2.5%
Newspapers
- The New York Times
7.7%
10.1%*
- The Wall Street Journal
5.7%
9.5%*
Television/Radio
- PBS
28.7%
37.7*
- Home and Garden Channel
26.4%
36.8%*
- NPR
19.9%
25.9%*
- This Old House
19.2%
28.4%*
Source: Natural Marketing Institute, 2003
Table 1 lists examples of the differences in

purchasing behaviors of these consumers
versus those of the general population, as
revealed by the NMI research.
The results of the NMI study suggest
that the green homebuyer generally
demonstrates a multitude of significant
differences in certain purchasing behaviors that combine to make identification
through a proxy method of analysis
possible. The results also reveal
possible ways to target these consumers
and develop appropriate marketing and
advertising materials. The American
LIVES and Roper ASW studies, whose
LOHAS-like consumer segments are
referred to as Cultural Creatives and
True Blue Greens respectively, further
support these concepts and findings.
We saw [the trend]

first happen in
hybrid cars. I think
its probably going to
shift over to houses.
Joyce Mason,
Marketing Vice President
of Pardee Homes
14
Expert Opinions Regarding Characteristics and Motivations of the Likely Green Home Buyer
Primary interviews were conducted to
M
ike OBrien, Green Building Specialist
Amy Bolten, of Christopherson Homes,
validate the national segmentation studies
for the Portland Office of Sustainability,
states: Its not the [highest-income
and provide additional insight as to who
reflects on there being only one farmers
earners] who dont really care about
is the most likely green home purchaser.
market a decade ago, whereas now there
operating costs and still want all of the
Assessing the opinions of those at the
are approximately 25 throughout the city
bells and whistles and square-footage
forefront of the green home industry
on different days of the week. He further
of luxury homes. Its the informed
allowed for the creation of a more
postulates that restaurants with menus
upper-class consumer with some
robust consumer element of the Market
offering organic and natural foods have
discretion and conservatism in how
Engagement Framework.
proliferated in the last decade, giving
they spend money.51
rise to a niche specialty-farming indus-
Market Segmentation:
try around the city.47
Barr Hall, Director of Sales and Marketing at McStain Neighborhoods, one of

the premiere green home builders in
the U.S., views his target audience as a
subset of the Cultural Creatives (similar to LOHAS). They do not need to be
rabid-green, but its good [for them]
to have an increased level of awareness
about environmental issues.
42
T
om Paladino, President of Paladino &
B
oth Allen and OBrien highlight the
concentration of hybrid car owners
in their regions as also indicative of
consumer demand and awareness for
green products in general. Indeed,
Portland ranks first in the country in the
number of hybrids sold per thousand
households, with Santa Barbara ranking
fourth. Monterey and San Francisco fill
in the second and third slots.
Motivations Underlying
Purchasing Decisions:
Gordon Cooke of Building Knowledge speaks about quality: Consumer
expectations are constantly on the rise,
whether its a car or a house or a piece
of fruit. Zero-defect houses are now in
demand. Customer service and comfort
will soon be demanded as well. [The
green building movement] follows
trends seen in other industries (cars
and appliances) where the consumer
Company-Green Building Strategies,
expects more.52
indicated that the Cultural Creatives
Education and Income Level:
were a likely consumer due to their
McStain Neighborhoods conducted
Abbey Ehman, a green building profes-
propensity to ask a lot of questions.
a focus group study of 1,800 customers
sional who is helping pilot the LEED
He also posits that Traditionalists/
and found that education attainment
for Homes program in Texas, states:
Modernists would follow.
was key; prevalence of masters
Some [purchase green homes] to show
degrees or higher among clientele
off to their friends. Some do it for the
was significantfour times that of the
greater good. But most do it really only
general population. The study also
if it makes sense for themselves first.
reveals that McStain clientele
Most want it for durability, comfort,
demonstrate a propensity to attend
and energy savings. They want to be
live theater, visit art museums and
comfortable, not pay too much for it,
botanical gardens, and be active in
and be able to resell it. Homebuyers will
other cultural clubs and events.
pay a 5% premium for green features,
43
M
ike OBrien, Green Building Specialist
for the Portland Office of Sustainability,
agrees: People with strong personal
values are most interested in green
building. Theyre creative. Its about
making informed choices.44
Mary Westcott, Administrative Director
for LEED for Homes with the Davis
Energy Group, views many of her
clients as innovators, early adopters,
and holistic-thinkers.45
Green Product Purchasing Behavior:

Dennis Allen, President of Dennis Allen
Associates, a building company in Santa
48
A study, performed by Thomas Taber

& Drazen for Built Green in Colorado,
reveals that those more likely to be
but they also demand a 5-year payback.

Twenty- or 30-year paybacks simply
dont resonate.53
aware of Built Green are married and

college educated, have a household
income between $100-$150K, and live
in houses costing $300k-$500k.49
Barbara and Ventura County, California,
Dennis Allen, President of Dennis Allen
indicates that he is constantly bumping
Associates, notices that his clientele are
into clients and interested green home-
typically upper-middle class rather than
buyers at local farmers markets in the
upper-class. He feels the highest income
Santa Barbara area.46
buyers generally do not show a lot of

interest in green features and states that
higher education is a distinguishable
attribute.50
Industry experts strongly believe that the

LOHAS consumer, the Cultural Creatives,
and the True Blue Greens are motivated
and educated consumers and, therefore,
highly receptive to the green home
message. Although all three of these
segmentation groups generally desire a
home that meets their more traditional
needs of location, space, and affordability, they often either seek out green
home providers specifically or are
already attuned to the benefits of green
homes. However, it is often pointed out
that these groups are not the only ones
buying green homes and, therefore, not
the only viable and attractive segments.
Successful engagement of the marketplace hinges upon the ability of a builder
or developer to communicate product
benefits to the larger, more mainstream,
population. Indeed, Marc Richmond, the
former manager of Austins green building
program and one of the principals behind
the launch of Build It Green in California,
sees green homes as appealing to anyone
who wants something better.54
Homebuyer
Homebuyer Willingness
Willingness to
to Pay:
Pay:
Strong indications exist that homebuyers in markets across the country are increasingly
willing to pay premiums for green homes. Cahners Residential Group, American LIVES,
Christopherson Homes, and others have all contributed to this body of research.
The 2001 Cahners survey reveals that 96% of homebuyers claim they are willing to
pay extra for green features, and 68% would be willing to pay $2,500 to $5,000 extra.
Twenty percent would pay up to $10,000 for green upgrades. A 2005 Christopherson
Homes study finds that roughly half of its survey respondents are willing to pay over
$100 a month in additional mortgage payment for a green home, equating to an
additional $15,821 in purchase price, assuming a 30-year loan and a 6.5% APR.
An October 2005 survey by American LIVES of homebuyers in the Terramor section
of the Ladera Ranch development in Orange County, California, finds that 23% of
respondents are willing to pay over $100 a month in additional mortgage payment
for green home features they think are important. Interestingly, this finding is identical
to a larger 2004 survey of recent homebuyers in the northern California, Denver,
Salt Lake City, and San Diego.
Project-Level Surveys
Several project-level surveys have been
energy, if I could recover it in lower
to save energy even if [they] knew [they]
conducted to help determine the principle
utility bills. Only 10% of the respondents
might not be repaid in savings on utility
drivers and attitudes related to the green
indicate they are not concerned about
bills. An additional 72% say that they
home purchasing decision within specific
energy-saving features. More specifically,
would spend extra money when
communities that have been built to a
new technologies that improved indoor
purchasing a home to save energy, if I
green standard and marketed as such.
air quality are indicated as being very
could recover it in lower utility bills.
For instance, the results of surveys
important or essential to have in the
To the respondents, the term green
green home buyers in the Ladera Ranch
home by a majority of the respondents.55
building typically means good for the
development in California indicate that
environment, with a small majority
most homebuyers want to see builders
A consumer survey conducted by Polaris
(51%) equating it to reduced energy
do more in the area of green building and
Inc. in 2005, on behalf of Christopherson
bills. Furthermore, only 42% link
that a majority of homebuyers is generally
Homes in Northern California, which
green building to a healthier indoor
willing to pay an additional $50 or more
is responsible for over 3,500 homes in
environment, and only 22% link it to
on their monthly mortgage payments for
30 communities, shows similar results
better built homes. Lastly, 74% of
green features. Eighty-three percent
among the 192 respondents: 22% of
respondents are either somewhat
respond in the affirmative to the state-
respondents indicate they would spend
aware or very aware of green
ment: I would spend money to save
extra money when purchasing a home
building techniques and features.57
56
16
Use of the Market Engagement Framework for the Consumer Element

Green homes, when viewed as a
The research suggests that the green
SustainLane comprehensively assesses
consumer product, possess features
homebuyer is more likely to own a hybrid
a citys greenness. Founded in 2004,
that allow them to be absorbed into the
vehicle or shop at natural food stores
SustainLane publishes rankings on U.S.
marketplace. However, the green building
than is the general population. Obviously,
city sustainability covering such topics as
consumer often demonstrates a variety
buying a hybrid vehicle or shopping at
population mobility, traffic congestion,
of demographic, psychographic, and
Whole Foods does not guarantee that
air quality, government innovation,
behavioral characteristics that cannot
the consumer will then purchase a green
and climate change initiatives. For the
be easily placed into any one segmenta-
home. However, the proxy analysis does
consumer proxies, the city ranking
tion profile. Although many purchasers
provide a relative basis for gauging
on local food and agriculture use is
of green homes understand and value
potential consumer demand. Most
particularly informative because it
the associated attributes and benefits,
importantly, a large number and
considers the number of farmers markets
many others may just enjoy the look
percentage of people in a given area
and community gardens per capita.58
and feel of the house regardless of the
buying hybrid vehicles and shopping at
features that make it green. Because there
Whole Foods can be seen as a positive
is no single profile of the green home
sign that there is a viable consumer base
consumer, sizing the market becomes
in the area highly receptive to messaging
difficult. However, the proxy method of
about the benefits of green homes.
consumer-demand analysis is still relevant

and provides a multi-faceted approach
that identifies: (1) which geographies to
specifically target, (2) the level of maturity
of consumer awareness, and (3) how to
best leverage prevailing attitudes in a
marketing and sales strategy.
Many experts interviewed agree in
principle that green homes can be sold
to just about anyone as long as the green
homes message is delivered correctly.
However, the ability to identify likely
green home buyers provides a two-fold
benefit: lowering transaction costs associated with making sales and identifying
appropriate marketing messages that will
resonate most effectively within a chosen
geography. Therefore, a proxy analysis,
although not without limitations, is still
a worthwhile endeavor for those looking
to understand the nature of consumer
demand within particular locations.
The behaviors that can be relatively
easily gauged for different locales have
been winnowed down from the list of all
associated and relevant behaviors in order
to quickly and easily measure the relative
strength of the consumer market for
green homes.
Consumer Proxies and Indicators

Purchase of Green Products

Sales of hybrid vehicles
Number of existing Whole Food Markets
Number of Whole Foods Markets slated for development
Number of natural food stores carrying Celestial Seasonings products
Number of natural food stores carrying Stonyfield Farms products
Wholesale clubs and specialty shops carrying Stonyfield Farms products
SustainLane: Local Food & Agriculture
Number of Aveda stores
Number of Aveda salons/spas
Number of stores selling Seventh Generation products
Readership

Readership of certain magazines
Readership of certain newspapers
Conceptual Exposure

Green construction conceptual exposure
Education

Educational Attainment: Bachelors Degrees
Educational Attainment: Graduate or Professional Degrees

I N D U S T R Y 17
INDUSTRY
he industry element
Dennis Creech, Executive Director of
of the green homes
the EarthCraft green homes standard in
market carries tremendous
the Southface Institute and champion of

Atlanta, Georgia, states that there are two
primary methods for builders to make
importance because it provides
money from green building. The first is to
the expertise, labor, and capital
reduce waste, increase energy efficiency,
required to deliver homes to the
the ultimate goal of reducing costs. The
end-user. In addition, industry

often provides the vision and
improve construction science in order to

right-size mechanical systems, etc., with
second is to improve building quality in
order to differentiate the product and
to gain a market advantage by growing
a price premium or increasing market
initiative necessary for market
share.59 Fortunately, these methods are
transformation and growth.
support each other if done properly.
In this case, industry refers

not only to businesses, but
not mutually exclusive and tend to

Industry professionals will always have
the need to increase (or at least maintain)
profits while building green.
also to non-governmental
organizations, nonprofits and
industry or trade associations,
including green home certification programs run by nonprofits
or industry groups.
Consumers
Government
Industry
Primary Methods to Make

Money from Building Green:
1. Improve construction science
in order to reduce waste,
increase energy efficiency,
right-size mechanical systems,
etc., with the ultimate goal
of reducing costs.
2. Improve building quality
in order to differentiate
the product and to gain
a market advantage by
acheiving a price premium
or increasing market share.
18
Industry Stakeholders
Industry is complicated and multi-
brokers and realtors, councils and
faceted, but also resilient, ingenious,
associations, and other organizations.
and fast-moving. As with conventional
Further information regarding specific
real-estate development, residential
industry players and their activities in the
green building is the result of the
four geographies piloted within the scope
combined efforts of developers,
of this report can be found in Chapter 8.
builders, specialists (including architects,
See Figure 7 for a visual diagram of the
engineers, landscape architects, urban
key green residential stakeholder
planners, and others), home financiers,
categories with examples.
Figure 7. Green Residental Industr y Stakeholders

Leadership examples from the field:
Rancho Mission Viejo
4,000-acre master-planned community
in Southern California
Incorporates sustainability in all of its decisions
for housing, site planning, and transportation
WCI Communities
Florida developer
Incorporates green building into mainstream
housing productions
Cherokee
National brownfield developer
Incorporates substantial design (water conservation, on-site agriculture, green building materials
and techniques, and geothermal energy) in its
Kanawha development in South Carolina
Developers
Advancements in the field:

Eco-broker International
Based in Colorado
Trains and certifies brokers
Educates builders and homebuyers
Energy efficiency in Multiple Listing Services (MLS)
Began in Pacific Northwest
Logs data on purchasing rates and premiums
paid for energy efficient homes
Leadership examples from the field:

Allen Associates
H as built passive solar-designed houses
in Santa Barbara, CA since the early 1970s
G oal to produce homes that generate energy, purify
waste water, produce zero waste, and purify the air.
McStain Neighborhoods
P remium green builder in Boulder, CA crafting
400 homes each year
S ets records for consistent customer satisfaction
of over 90%
Brokers & Realtors
Builders
I N D U S T R Y S TA K E H O L D E R S
Specialists

Green professionals are appearing
at an exponential rate, including:
Architects
Engineers
Urban planners
Ecologists
Landscape architects
Other professionals
Varying levels of expertise and ability
Sources to find experts:
USGBC website
Energy Star website
Whos Green? publication
Home Financiers

Many financiers provide Energy Efficient Mortgages
(EEM)
Loan money for energy improvements
Validated according to Home Energy Rating System
(HERS) Accreditation Standard
Banks and other providers vary by region
Councils & Organizations

Many green building leaders exist throughout the
country:
U S Green Building Council
N ational Association of Home Builders /
Green Building Initiative
U rban Land Institute
Over 40 regional programs, including:
B uilt Green Colorado
A ustin Energy Green Building Program (Texas)
S outhface Institute (Georgia)
B uild It Green (California)
I N D U S T R Y 19
Reasons for Success

Companies have successfully transitioned
Whatever the motivation, the transition
prototype home in 2001 because the
from conventional building and real estate
and internal drive have a better chance of
then-current Chief Executive Officer
to incorporating green building practices
success if there is a champion (or team of
Al Hoffman decided those efforts
into their standard operating procedures.
champions) pushing the process forward.
would be worthwhile for the company.
These firms are driven by an interest to
The likelihood of success increases even
After his departure as the head of the
differentiate their products, a dedication
more if the champion is encouraged,
company, the green projects would not
to high quality, a commitment to helping
supported, and rewarded in these efforts.
have continued without a dedicated group
the natural world, and even a curiosity
Very often within organizations that have
of leaders pushing progress forward.60
for exploring an exciting new avenue of
embraced the green building market, the
The champions themselves can frequently
business opportunity.
initiative can be traced back to a strong,
be classified as LOHAS or Cultural
internal champion for the cause. In
Creatives in the same way that the green
Florida, the large-scale developer/builder
homes buyers can.
WCI Communities began its first green
Challenges for the Green Building Industry

Within the industry element, one
the end-users. Even if the developer is
This learning curve relates to yet
considerable challenge that the green
interested in and dedicated to building
another challenge for the residential
homes market faces is successfully
green, the builder may demand or expect
green building industry skill and
meshing national certification or guideline
that the buyer is willing to pay a premium
capacity building. It is not uncommon
programs (e.g. LEED or the NAHBs
to cover not only any potential increase
for a large portion of home building to
guidelines) with its local counterparts
in building costs, but also the learning
be completed by sub-contractors. Often,
(e.g. Built Green Colorado or EarthCraft).
curve necessary to incorporate new green
these sub-contractors employ workers
As it stands, there are estimated to be in
building practices. As Bob Taber, Manag-
ill-prepared to institute green build-
excess of 40 local green building standards
ing Partner of Thomas, Taber, & Drazen,
ing techniques on job sites. Additional
in the United States.61 This obviously
and marketing consultant for Built Green
training is frequently necessary to enable
causes confusion for the homebuyer, as it
Colorado, describes:
workers to complete the tasks because
is difficult to discern which standard has
they tend to be different than conven-
higher requirements and which weighs
For a high-volume production builder
tional practices and developers may not
energy use, water use, recycled content,
in the $150-$200 thousand cost range,
have direct control over sub-contrac-
and other aspects of green buildings
there can be significant costs in switch-
tors. This results in a re-structuring of
heavier than others.
ing over. From specing and purchasing,
the standard operating procedures of
all the way over to inspection, theres
sub-contractors, builders, and developers
Another common difficulty is the myriad
so much associated with the transition
driving the process. Overcoming learning
of actors affecting the value chain in the
that there will be significant start-up
curve challenges is often most effective
residential market. Usually a developer
costs (since all of their systems must be
through partnerships with industry and
purchases or gains rights to a piece of
re-worked). This is a big challenge for
government players who have greater
land, then contracts building rights to a
production homebuilders. They dont
green building experience. This is further
builder (or series of builders), and then
want to go through that transition
discussed in Chapter 5.
the builders sales staff (or even a fourth
without consumer demand for it.62
entity: a selling agent) is responsible

for selling the constructed homes to
Overcoming learning curve challenges is often most effective through

partnerships with industry and government players who have greater
green building experience.
20
Use of the Market Engagement Framework for the Industry Element
he Market Engagement Frameworks

analysis component (encapsulated
Industry Proxies and Indicators
in the Market Metrics Lens or MML)

is designed to provide the information
that developers need when building in
a specific geography. The information
is both quantitative and qualitative for
the industry element. It is necessary to
consider these developments and the
quantitative data provided in the MML
to gain a comprehensive view of the
geography in question.
Green Building Associations/Coalitions

Residential Green Building Programs
- Year founded
Green Building Organizations
- Year founded
US Green Building Council (USGBC) Chapters
USGBC organizational memberships
Market Penetration
LEED-existing buildings
LEED-registered projects
Energy Star Homes (market penetration percentage of new homes built in 2005)
SustainLane: Green (LEED) Buildings
SustainLane: Green Economy
Green Building Service Providers

USGBC LEED-Accredited Professionals (APs)
- LEED APs per Capita
Energy Star Site-Built Home Builders and Developers
- Energy Star Site-Built Home Builders and Developers per 1,000 housing units
authorized in 2006
Energy Star Home Energy Raters
- Energy Star Home Energy Raters per 1,000 housing units authorized in 2006
Energy Star Lenders (mortgages)
- Energy Star Lenders (mortgages) per 1,000 housing units authorized in 2006
Energy Star Utilities/Sponsors
- Energy Star Utilities/Sponsors per 1,000 housing units authorized in 2006
G O V E R N M E N T 21
GOVERNMENT
he support of govern-
government involvement in promoting
grant policies, density and tax incentives,
ment institutions and
green building is on the rise. Expanding
affordable housing bonuses, and public
on lessons learned from earlier incentives
recognition. In addition to the tangible
in commercial green buildings, govern-
benefits to both builders and buyers that
ments are now exploring and implement-
incentive programs afford, government
utilities, is critical to the market
ing mechanisms for promoting residential
programs and initiatives indicate an effort
green building. These mechanisms in-
by elected officials to serve an interested
growth and support for green
clude expedited permitting, mandate and
public.64
public agencies, including
homes. Several residential green

building experts, including
Institutional/Policy Dynamics
Michele Russo, Directory of
In some cases, government programs are
building, the existence of departments
Industry Communications
being enacted in municipalities that have
and offices devoted to promoting green
not yet had significant green building
building is an important indicator of
activities. Bostons recent private-sector
government support.
at McGraw-Hill Construction,
green building mandate is one such case.
view municipal polices, pro-
Other times government programs can
SustainLanes government measurements
grams, and mandates as critical
be viewed as lagging indicators of
provide annual rankings of the top 50
significant green building activities in
cities along a number of sustainability
a city, such as increasing building-code
metrics, including land-use policy, city
standards to recognize increasing building
innovation, and knowledge base.66 The
performance. Regardless, a significant
land-use policy component ranks cities
attribute of government programs at the
based on park space and sprawl. Green
local and regional level is their staying
building expert Greg Kats of Capital
power. Unlike federal tax credits for en-
E sees smart growth and planning
ergy efficiency, which usually expire after
policies as strong indicators of likely
only a few years, most local and regional
support for green residential building.67
government programs last for many years.
The city innovation ranking incorporates
to the growth of green building.63 As mentioned earlier,
green building incentive programs and
Consumers
Government
The USGBC does a good job of catalog-
support for car sharing and carpooling.
ing such programs and policies at the
The knowledge-base component
state and local levels, and provides these
includes the existence of a sustainability
resources publicly.65 In addition to
department in city government and the
mechanisms for supporting green
establishment of sustainability goals.
Industry
22
Mayors Agreement on Climate Change

Climate-change efforts at the city level
the buildings are a large contributor to
Mayors Climate Protection Agreement.
have played a major role in focusing
greenhouse-gas emissions, will likely be
As of March 1, 2007, 431 mayors across
attention on the built environment.68
followed by policies to increase energy
the country signed the agreement, which
The setting of global-warming emissions-
efficiency in the built environment.
includes setting reduction targets and
reductions targets by cities represents
On June 13, 2005, the U.S. Conference
implementing action programs.69
a significant step and, recognizing that
of Mayors unanimously passed the
Use of the Market Engagement Framework for the Government Element

For the government element, the Market
attention to the environmental impacts of
policy mechanisms of city and state gov-
Engagement Frameworks analysis
development in general, such as policies
ernment that developers need to be aware
component is composed of largely
and programs on climate change and land
of in assessing the government element of
qualitative indicators to assess the
use planning, as well as specific initiatives
the green residential market. Overall, the
strength of government attention to and
around promoting green building.
indicators listed below provide a robust
support for residential green building.
Both carrots (incentives) and sticks
lens into the current or likely government
The indicators cover a governments
(mandates) for green building are critical
support for residential green building.
Government Proxies and Indicators

Government and Planning Authorities
Discrete city-level sustainability committees and/or departments
SustainLane: Knowledge-Base
Kyoto buy-in from leadership (Mayor, City Council)
SustainLane: City Innovation
Incentives, Targets, and Mandates
Municipal support for green building
- Fast-tracking for green or LEED
- Density bonuses (Floor-to-Area Ratios)
- Taxes credits and grants
Municipal Mandates
- Target for public buildings
- Requirement for public buildings
- Target for private buildings
- Requirement for private buildings
State Level Support/Requirements
SustainLane: Planning/Land Use
A C U T E R E S O U R C E P R E S S U R E S 23
ACUTE RESOURCE PRESSURES
n planning potential projects,
For example, in the southwest United
developers must consider
reduction are particularly charged
topics of immediate interest
States, water-use rights and water-use

issues. As a result, native landscaping
Acute resource pressures occasionally spur the
(as opposed to English-style lawns) has
creation of new green building programs. In the
and those that may have become
become the standard expectation in
consumer hot-buttons. Often,
ers working there should be particularly
these topics can become acute

pressures on decision makers
Emergence of the Countrys

First Green Building Program
many cities in the southwest. Develop-
1970s, forward-thinking leaders from Austin,

Texas within the local utility, the city govern-
interested in other water-conserving or
ment, the professional builder community, and
stormwater-runoff techniques, such as
the active citizenship realized that an alternative
greywater systems, permeable pavements,

or natural rain catchments. Consum-
to building additional power plants would be to

set an aggressive energy-use reduction program.
in the area, whether those
ers and builders may both value and be

particularly receptive to these inclusions,
These efforts spawned the Austin Energy Green
decision makers are consumers
even to the degree that absorption rates
Building Program, which has since grown to
or potential building partners
and/or consumer willingness to pay may

be enhanced.
become one of the most successful programs
for the developer. These
of its kind in the country.72 This turn of events
SustainLane is useful in gauging the
is mirrored in recent years in Californias energy
pressures frequently stem from
characteristics of certain resource pres-
crisis and the resulting energy-reduction
sures; it ranks the 50 largest cities in the
real or perceived threats in
U.S. on street and freeway congestion,
initiatives in the state.73
resource scarcity of one or
Furthermore, the Energy Information
more types, and will affect

consumer awareness, industry
public transit ridership, and air-quality.70

Administration of the Department of
Energy provides state averages for the
price of electricity and natural gas by
end-user.71 A more qualitative approach
innovation, and government
to understanding pressures in an area
environmental, building, and
municipal publications. Websites such
urban limit policies.
includes reading local newspapers and

as Factiva.com are useful in locating
articles pertaining to green building,
sustainability, and environmental issues
through key-word searches.
Consumers
Government
Industry
Acute
Resource
Pressures
Macroeconomic
Trends
24
MACROECONOMIC TRENDS
evelopments should not
These macroeconomic issues include,
It is important to note that real estate
be planned without
but are not limited to:
developers must focus on these trends in
Job growth rates.
any business decision and should always
Home ownership cost
include them in the due diligence
paying close attention to

macroeconomic trends of
fluctuations.
Population growth or loss.
process. As a result, this report does

not investigate them in depth.
Current housing supply

and vacancy rates.
the surrounding area.
Interest rate changes.

Income and wage growth.
Construction and material expenses.
These trends should be considered
seriously while designing marketing
and sales strategies. For instance, in a
down-turned housing market in which
buyers have significant bargaining power,
developers and builders should look to
green building techniques even more
than in other circumstances in order
to differentiate their products. This is
particularly true for green homes that use
components to provide more financial
value by reducing operating costs.
Consumers
Government
Industry
Acute
Resource
Pressures
Macroeconomic
Trends
Chapter 4
Analyzing Markets For

Green Homes
25
MARKET METRICS LENS
o gain comprehensive
simple prescriptive process, salient
understanding of the
are identified and included as metrics in
marketplace and devise
characteristics for each market element

the MML. Once completed, this MML
identifies strengths and weaknesses in
appropriate entry and market-
a given market and can compare one
ing strategies, builders and
identifies specific partnership and
developers must investigate all

three of the aforementioned
elementsconsumers, industry,
and governmentin conjunction
with the resource and economic
pressures influencing the overall
location to another. Furthermore, it

marketing strategies used to raise overall
awareness and advance the industry,
topics discussed in detail in Chapters
5 and 6 of this report, respectively. The
Market Metrics Lens can be viewed as
a method of weighting metrics with

respect to one another. For instance,
The New York Times readership can not
be weighted equally to access to Whole
Foods markets or to the existence of a
strong green building program in the
local government. Rather, the intent of
the MML is to provide a snapshot of the
landscape and to highlight strengths and
weaknesses that are most prevalent. No
mathematical algorithm can be effective
at evaluating the intricate nature of the
The complete analysis of the four pilot
is a tool used for an informed evaluation
geographies can be reviewed in the full

report Residential Green Building:
Identifying Latent Demand and Key
Drivers for Sector Growth, available on
oped the Market Metrics Lens
Enterprise website: www.erb.umich.edu.
(MML) as an evaluative tool to
Metrics for the consumer element are
help with the complexity this
under the government element are more
By following a relatively
to be used as a scorecard that proposes
Table 2 on pages 38-43.
landscape. We have devel-
investigation necessarily entails.
the fact that the MML is not provided
the Erb Institute for Global Sustainable
easily quantifiable, whereas the metrics

qualitative in nature. The industry
element possesses a mix of qualitative
and quantitative metrics. The dual
quantitative/qualitative characteristic
of the MML is intentional and highlights
green building marketplace. The MML

using quantitative data and qualitative
information; it is a guide for developers
interested in gauging residential green
building activity and growth potential in
a variety of locales.
The Market Metric Lens has been piloted
in four different geographic locations:
(1) Los Angeles/southern California;
(2) Houston/Texas; (3) Miami/South
Florida; and (4) Newark/northern New
Jersey. Many of these locations consist
of a conglomerate of multiple cities,
townships, and other municipalities,
a characteristic that further complicates
The Market Metric Lens is a tool used for an informed

evaluation using quantitative data and qualitative
information; it is a guide for developers interested in
gauging residential green building activity and growth
potential in a variety of locales.
26
Chapter 4: Analyzing Markets for Green Homes: Market Metrics Lens
a strictly quantitative evaluation. As such,
In addition to the qualitative and
viewership was discovered to be a strong
a few metrics, particularly those under the
quantitative nature of the MML, only a
potential proxy for the most likely green
industry and government sections, men-
limited number of potential proxies were
home buyer, acquiring consumer data
tion attributes of adjacent, but equally
used to assess each of the elements of a
at a metropolitan level is fairly costly.
relevant, locations. The results of the pilot
green homes market. Particularly in the
Conversely, readership is relatively
study for each of the four locations are
consumer element, numerous potential
easy and inexpensive to obtain at many
discussed in detail below, with the excep-
proxies address the attributes of each of
libraries and effectively captures similar
tion of the consumer proxy analysis re-
the three elements that make a strong
consumer characteristics to TV view-
sults, which are all quantifiably tabulated
residential green building market. Efforts
ership. In other areas, such as socially
in Table 2 on pages 38-43. Evaluation
were made to select proxies and indica-
responsible investing, geographical trend
and interpretation of all metrics, includ-
tors that would most directly characterize
data is highly proprietary. As such, the
ing analysis of the interplay and relative
each attribute while avoiding significant
MML is a robust but not comprehensive
strength of each element (consumers,
duplicability. In addition, the proxies and
compilation of proxies and indicators to
industry, and government), are included
indicators that make up the MML are
assess the strength of the three key
in Chapter 8 of this report. The full MML
largely readily available and easy to
elements of a green homes market.
table for these four pilot geographies, as
obtain at little or no cost through public
well as four comparative geographies, is
websites or common library resources.
shown in Table 2.
For instance, although television
Chapter 5
Building Partnerships
27
he two aspects of the
After analyzing the green homes market
Metrics Lens (MML) to gain an under-
strategy portion of the
in a given area, the developer must
standing as to which of the three elements
create a strategy to properly engage the
(consumers, industry, and government)
market to successfully sell green homes.
are well developed and which are weak.
In forming this strategy, developers must
The developer should then consider the
are to: (1) forge partnerships
consider potential partners throughout
opportunities related to forming partner-
the industry and government sectors. In
ships with those industry and government
to help advance the overall
keeping with the process designed in the
entities showing potential strength in the
industry and raise consumer
Market Engagement Framework (MEF),
green homes market and complementing
developers should analyze the Market
the developers own abilities.
Market Engagement Framework
awareness, and (2) target

purchasers of residential
green homes with a focused
marketing and sales effort.
Best Practices And Strategic Recommendations

The guiding principal to form these
Considering the industry element
partnerships should be to find entities
specifically, companies using the MEF
with aligned interests. Benefits could
must seek partners that contribute to their
be achieved in the form of collaborative
green building goals. This means finding
marketing and outreach (raising
builders that are appropriately sized and
awareness and/or specific-brand
able to build at the requisite scale, at the
strengthening), employee or sub-
needed quality level, and in the necessary
contractor training programs, and
timeframe. In many parts of the country,
even simply leveraging the various skills
this may mean striking a balance between
of the many stakeholders of the home-
large-scale production home builders that
building value chain. The EPAs Energy
may not have green building experience
Star program, for instance, has
and smaller, more skilled green building
demonstrated the effectiveness of
companies.
partnering in marketing and outreach

efforts. It has successfully helped develop
To determine the builders dedication and
a strong consumer preference bias for
experience to green building, questions
the Energy Star label in many markets
a developer should ask include:
through a cooperative advertising model

(described in more detail in Chapter 6).74
Developers forging partnerships should
not limit to focusing on homebuilders.
Partners could include regional
developers and builders, nonprofit
organizations, green building programs
or certification systems, financiers,
Does the builder have an internally

mandated recycling program during
demolition and construction?
Does the builder use low Volatile
Organic Compound (VOC) paints
and sealants as a matter of practice?
Does the builder use a third-party
city and state officials, activist and
commissioning or certification standard
environmental consumer groups,
for its green homes?
realtors and brokers, architects,

engineers, and utility companies.
28
Chapter 5: Building Partnerships
By no means should these positive
standing of the skills, motivations, and
green building efforts. These government
practices be the extent of a potential
goals of the builders in the area. Further,
resources could be a part of a city sustain-
builders green building practices. Rather,
the builders should also be evaluated
ability office, an urban planning office, a
basic questions such as these should begin
based on whether their decision-making
zoning and development board, or any
a conversation on goals and methods to
processes are agile or slow-moving,
number of other local offices or associa-
incorporate green building into a project.
often influenced by whether the firm is
tions. The key is to determine the extent
Further questions should be asked in
privately or publicly owned. Certainly, the
of support available to green building
accordance with the developers project
dedication of the top management plays
projects, especially residential projects.
goals. These do not have a right or
a large role in determining a companys
This support can come in the form of fast
wrong answer:
green building practices. The results of
tracking green-housing permits, increased
internal efforts are affected extensively
density allowances, tax increment financ-
by the origin of those efforts: if they are
ing for green building, or even city and
top-down or bottom-up and if they are
state supported green homes certification
engrained in the corporate culture.
programs. With regard to the latter, it is
Finally, green builders should be judged
important to determine the methods for
by the preconceived standards to which
certification (self-driven or third-party), if
any builder would be held, such as
the program has tiers (and, if so, what the
reputation, cost, experience, size, and
criteria are for achieving them), and who
management practices.
the founding and governing partners are
If the builder uses a commissioning or

certification standard, is the standard
focused on reaching a minimum set of
goals or reaching a high mark? Is it a
nationally or locally based standard?
Is the builders green building practices
focused on purely energy efficiency or
are they focused on a holistic sustainability approach to building?
because many programs are partnerships

These questions should also be applied
in and of themselves. This latter point
funding, or public recognition of its
to other industry partners, including
is exemplified well by programs like the
green building efforts or completed
architects, engineers, and urban planners.
EarthCraft housing standard in Atlanta,
projects?
The developer needs simply to shift the
and its parent organization, the Southface
questions to reflect the particular
Institute. This nonprofit organization
discipline more directly.
has built a partnership among the local
Has the builder received any grants,
How do the builders green building

practices differ from other builders in
the same geographic area?
In asking potential building partners both
sets of questions, the developer should
begin to form a comprehensive under-
home-builders association, retailers like

When engaging the government element
Home Depot, local government offices,
of a green homes market, the developer
and dozens of local builders in order to
should look for partners with missions,
advance and promote its green building
resources, staff, and policies that support
program.75
The Importance of Champions

In forming partnerships, it is equally
Ultimately, this practice of asking
important to find strong organizations,
questions and forming partnerships
and champions within them. Such
should become part of a developers
champions often know of other cham-
standard operating procedures and best
pions in other area organizations and
practices. This process provides devel-
companies. Tapping into these networks
opers a deeper understanding into the
helps gain a rapid understanding of
opportunities of green building at a local
leading green building practices in an
level within each building market.
area. In addition, these champions were

often originally drawn to green buildings
from a value-oriented perspective and
would likely be considered members of
the LOHAS segment.
Chapter 6
Marketing and Sales Strategies
29
lthough ample evidence
of industry knowledge and capabilities,
Ultimately, the challenge lies not in
suggests that growth
consumer awareness, and government-
whether viable consumers for green
support programs and incentives. In these
homes exist. The growth in the market
more mature environments, the most
is indicative of sufficient interest in and
effective marketing and sales strategies
awareness of these products and technol-
market is progressing sig-
are inherently different from those in
ogies. The challenge is in how to deliver
more emerging locations, where con-
the value-proposition most effectively to
nificantly at the national level,
sumer demand and preferences, as well as
the most receptive buyer.
in the residential green building
several challenges remain at the
stakeholder awareness, are more nascent.
local level and for individual
Growing Concept Awareness In Nascent Markets
developers and builders who
In any given location, a segment of the
Things have to happen at multiple
have yet to carve out a success-
population will be quick to value the
levels for [green building] to become
benefits and attributes of green homes
mainstream. Youve got to get the word
and will seek out the green home
out there more often so that municipal
specifically when purchasing a new
officials and building owners say, Oh,
home. Similarly, at least a small
yeah, I know what green building is.
handful of dedicated builders and
Then, secondly, to demonstrate that, yes,
builders, the desire and
architects have embraced the tenets
this can mean some substantial cost
of sustainability wholeheartedly and
savings and better environment and air
imperative to increase sales
are pushing this technology ahead of
we breathe, et cetera. Lastly, the users
and profitability and to retain
mainstream adoption. However, creating
need to connect with vendors and say,
awareness among potential consumers
This is what you need to start using.
and industry professionals who are not
[The vendors] have to be trained on how
actively seeking knowledge and expertise
to build with this stuff and how to use
mandates robust and targeted
in this area or are reticent to commit
this technology.76
marketing and sales efforts
improving market penetration. Drawing
McGuinness likens the awareness trends
specific to the nature of their
in the more mainstream consumer and
of green buildings to those of recycling
engaging the more traditionally-focused
or automobile seatbelt use: Wearing
builders and developers is crucial. In
your seatbelt is very mainstream now. I
September 2006, Michael McGuinness,
think we arent quite there with the green
Executive Director of the National
building stuff, but we are getting there.
Association of Office and Industrial
Publicity and marketing across a variety of
geographic markets will possess
Properties, New Jersey Chapter, states
sectors is key to narrowing the knowledge
a more robust infrastructure
in an article published in New Jersey
gap about green building benefits and
Business:
ful niche within this field. Even

for established green home
a share in this industry
particular geography and

consumer. For instance, certain
is vital to progressing the industry and
30
Chapter 6: Marketing and Sales Strategies
driving take-up by multiple sectors within
The 2004 focus-group study also revealed
an architect who has been with the GBP
the industry. Greg Stine, of Polaris Inc.,
that many of the participants equated
as Residential Program Specialist for five
asserts that Publicity through articles,
Built Green with environmentally friendly
years, these Green By Design workshops
events and word-of-mouth marketing
construction, which was perceived to
were initially slow to take off but they
builds credibility, creates a buzz and plays
mean lower quality. Even if lower quality
now sell out.82 One of the main market-
a big role in building a successful brand.
was not the perception, people generally
transformation publicity techniques
By employing this strategy effectively,
felt that a house that was environmen-
employed by the GBP was the placement
Build It Green [in California] . . . has
tally-friendly was not very meaningful,
of full-page advertisements every week
become the go-to organization and a
and therefore not worth any extra costs.
in the Sunday edition of the local daily
thought leader for the local and national
As a result, Built Green changed their
newspaper. As a result, the GBP standard
media on green building. This fact isnt
positioning statement to:
became a label-of-excellence, and con-
unrelated to their success.
sumers began asking potential builders
78
A Built Green home is a better built
if they incorporated these features into
In Colorado, Built Green has achieved
home. For homebuyers looking for
their homes and built them to the GBP
success by incorporating similar market-
quality, Built Green means a better
standard.
ing tactics. It embarked on a three-year
built home because its built to a higher
marketing program that helped increase
level by dedicated builders providing
Another successful robust marketing
their market share from 6% in 2003, to
quality workmanship and materi-
effort is associated with EPA Energy Star
22% in 2005. Its marketing program in-
als, with attention to environmental
Homes. Sam Rashkin, National Director
cluded television ads, consumer print ads,
details.
of the program, describes the basic tenets
80
brochures, website information, certified-
and results of its outreach campaign:
home certificates, tour home placards,
Built Green then tailored its marketing
internet promotion, and additional public
efforts to deliver this message and were
If at least 3 energy star partners,
relations such as by-lined articles in local
successful in increasing the percentage
including at least two builders, agree
newspapers and magazines about Built
of people who believed that Built Green
to place energy star advertisement for
Green home builders and green building
homes are better built than non-Built
8 to 13 weeks, EPA agrees to place an
practices. As a result, it was successful
Green homes from approximately 37%
advertisement for the same 8 to 13
in raising the awareness of Built Green
in 2004, to 45% in 2006.
weeks. The results have been dramatic,
81
among prospective homebuyers from

34% to 46%, between 2004 and 2006.79
both in educating the consumer and in

One of the best success stories in the
attracting more builders to Energy Star.
green home movement comes out of
New builders see the partner builders
Furthermore, Built Green conducted a
Austin, Texas, where the Austin Energy
getting impressive recognition and [are
focus-group study of prospective new
Green Building Program (GBP) has been
moved to] join on to be competitive.83
homebuyers and current owners in
in operation since 1991. Participating
Colorado in 2004, to determine (and
builders, architects, and designers have
Such marketing and outreach is instru-
quantify) the perceptions of the Built
built more than 7,000 GBP-rated homes
mental in developing a strong consumer
Green standard related to green homes.
over the past decade. One of its main
preference that has helped progress the
Of those that were aware of the Built
initiatives was to educate the public about
industry in each respective locale. An
Green program, nearly four-in-ten
the value of green homes to create a
established preference bias among the
indicated that the Built Green standard
preference-bias among all homebuyers.
consumer base will not easily fade away.
was an influence in their recent new-
In addition to providing free marketing
In fact, it will likely grow stronger as the
home purchase decision. Nearly six-
and publicity materials and consulting
effects of viral-marketing and word-of-
in-ten indicated Built Green would
with the industry, it currently offers public
mouth advertising take hold.
influence their next new-home purchase.
green building workshops four times

each year. According to Rich MacMath,
S E L L I N G G R E E N H O M E S 31
Selling Green Homes

Green homes possess a variety of
attributes that appeal to potential homebuyers. Consequently, a focused and
targeted sales effort that addresses one
type of consumer may not resonate as
well with another equally desirable and
viable type of consumer. However, certain
characteristics of the overall market
landscape in a given location will point to
sales strategies that will be most effective.
For instance, where the market has been
Twelve Techniques for Selling Green Homes

1. Sell on benefits, not features.
2. Sell on total cost-of-ownership, not payback period.
3. Be authentic and knowledgeable.
4. Build relationships with consumers.
5. Demand excellence from sales staff.
identified as more nascent, with limited
6. Gain strong familiarity with geography-specific drivers.
penetration of green homes, it is most
7. Identify each homebuyers Hot-Buttons.
advantageous for a first-mover builder

or developer in the green home space to
ensure that they capture those consumersLifestyles of Health and Sustainability (LOHAS), Cultural Creatives,
and True Blue Greenswho are more
inherently drawn to their new product
offering. Conversely, in a more mature
market, where the industry and govern-
8. Sell using a self-selecting Quiver-of-Arrows.

9. Incorporate a label of excellence.
10. Bundle features into a package rather than offering options.
11. Use the environment not to drive the sales pitch, but simply to make it stickier.
12. Empower the buyer.
ment involvement has been more robust,

sales strategies will want to capture any
1. Sell on benefits, not features.
remaining LOHAS-type consumers as
Promotional material and sales pitches
well as the more mainstream consumer.
should highlight the health benefits,
When selling to any consumer, discern-
energy-cost-savings, maintenance-cost-
ing exactly which needs the buyer is most
savings, increased comfort, and other
concerned with and hopes to address with
benefits of a green home. Although the
their purchasing decision is essential. Is
salesperson needs to be knowledgeable
the buyer purchasing to address concerns
about the specific features that deliver
about health, to capture energy savings, or
these benefits and cost-savings, the
to express a lifestyle statement? Perhaps
features themselves are less likely
the home is simply the right place, right
to resonate with the mainstream
size, and right price, and the green at-
consumer than are the overall benefits
tributes areat least initiallyirrelevant
associated with them. In advertising
to the consumer. The combination of
language, this means sell the sizzle,
features and benefits that resonate most
not the steak.84 In more concrete terms,
effectively with the buyer obviously differ
it is not enough to say that a house has
from individual to individual and from
a tight envelope. It must be emphasized
one location to the next, two aspects that
that this results in lower energy bills,
increased comfort in all rooms, and

probably no insects. Dennis McConnell,
President of McConnell Homes, an award
winning custom home builder in Atlanta,
has adopted the Southface Institutes
EarthCraft program into its customhome building operation. However, he
indicates that having a label is not entirely
sufficient to drive sales: I cant say, Im an
EarthCraft builder. Let me charge you an
extra two percent. You have to be able to
take the virtues of what you incorporate
and show it as benefits and features that
are valuable to a customer. I can prove
to you that well heat and cool this 4,000
square foot house for $60 a month. That
has a value.85
are not entirely unrelated. Although

certain hot buttons may be predominant
in certain locations, variations occur at
the individual level. Consequently, it is
impossible to devise a one-size-fits-all
sales strategy. However, trends and
best-practices have emerged, which we
have compiled into the following list.
You have to be able to take the virtues of what you incorporate

and show it as benefits and features that are valuable to a
customer. I can prove to you that well heat and cool this
4,000 square foot house for $60 a month. That has a value.
Dennis McConnell, President of McConnell Homes
32
2. S ell on total cost of ownership,

not payback.
In addition, total cost of ownership
3. Be authentic and knowledgeable.
incorporates many intangible expenses
When addressing consumers potentially
The term payback period, when
and tradeoffs that are highly marketable.
interested in a green home, authenticity
applied to the home, often does not carry
As green building marketing expert
in sales and marketing messages is
weight with the home-buying consumer,
David Johnston of the firm Whats
critical. These consumers are likely
particularly when referring to paybacks
Working, states:
to already possess a favorable bias
in the 15-30 year timeframe. It is simply
towards purchasing a green home and
not a benefit that resonates well with
Some in the public health industry say
will be highly receptive to the green
average consumers because human
there is a direct correlation between
home message. However, because
nature tends to undervalue the idea of
the air that children breathe today
these consumers are well-informed and
future energy cost savings, and lengthy
and the crisis were having in
conscientious about their purchases, they
time horizons may be meaningless when
our schools with attention deficit
demand a great deal from their home-
the average duration of home ownership
disorder. And California has defined
builder and often think more holistically
is significantly less. The total-cost-
formaldehyde as a carcinogen. So
about the total sustainability of the home.
of-ownership argument has a more
what we start getting into is not an
They place a high value on integrity and
immediate and timely implication.
affordability conversation, but a
honesty, will be quick to identify any
Furthermore, data may support the
MasterCard commercial. Whats the
type of green-washing, and will likely
assertion that overall monthly payments
cost of a kitchen cabinet upgrade? $275.
be turned away by any perceived lack
on a home will be less with a quality-
Whats the cost of low VOC paint? $12.
of transparency. Therefore, despite what
built green home and are enough to
Whats the cost of formaldehyde-free
may be initially seen as an easy-sell,
counter-balance any monthly mortgage
fiberglass? Nothing. Whats the cost of
failure to recognize and cater to the
premium. For instance, if the additional
preventing your children from suffering
unique knowledge-seeking and holistic
price paid for a green home adds an
from learning disorders? Priceless.86
attributes of these high-value consumers
incremental monthly mortgage premium
may drive them away. Barr Hall, Director
that is less than the typical reduction
of Sales and Marketing for McStain
in monthly utility bills, then espousing
Neighborhoods, a premiere green home
that argument is certainly recommended
design and build firm in Colorado,
because it appeals directly to the What
indicates that in sales and media
does this do for me? question from
campaigns, it lays out all of the attributes
many mainstream consumers. Durability
and benefits and lets people draw their
and lower-maintenance costs are other
own conclusions. Hall points out,
financial benefits of green homes that
however, that it is important to refrain
have high universal appeal. Conversely,
from being preachy: Do not presume to
Net Present Value (NPV) is likely to
tell the consumer that they should also be
resonate with only a limited segment
passionate these things. Let them come
of the population.
to that conclusion themselves. Let them

devise their own reasons internally.87
This holds true especially for the LOHAS
consumer, one of McStains main target
Whats the cost of a kitchen cabinet upgrade? $275.

Whats the cost of low VOC paint? $12. Whats the cost
segments, but also applies to the more

mainstream consumer.
of formaldehyde-free fiberglass? Nothing. Whats the

cost of preventing your children from suffering from
learning disorders? Priceless.
David Johnston, Whats Working
4. B uild relationships with

the consumers.
5. D emand excellence from

the sales staff.
6. Target geographic-specific drivers.
Being able to develop some degree of
Consumers expect sales staff to be more
already possess a working knowledge
a relationship with the consumer is
knowledgeable than they are regarding
of the general characteristics of their
important to solidifying the sale in ways
the product being sold, a notion that
potential buyers and of what drives sales
similar to those associated with the
holds particular significance when selling
in their area, but they may not connect
authenticity mandate described above.
to the LOHAS consumer. Jerry Yudelson,
these drivers to the benefits of green
Paul Ray, Executive Vice President of
green building marketing expert,
homes. Sara Lamia, a green building
American LIVES indicates that sales
describes one builders hard-line approach
marketing coach in Ft. Collins, Colorado,
staff must be able to take time to talk to
of appropriately mandating that each sales
uses an interesting technique to help her
[LOHAS] customers and know them, to
person deliver a 20-minute sales pitch
clients in the building and development
see them as friends and allies, people to
to potential buyers of green homes (the
community make this connection. She
share their excitement with. . . . Dont stop
industry-average is only 10-minutes), or
provides a list of all of the benefits of
with offering decent value for the money.
else face being fired. The rationale is the
green homes and asks her builder-
Thats just [the] ticket to entry. . . . Get
sale of a green home requires more effort
clientele to indicate those that they think
and attention than that required for the
will resonate most with their consumers.
into stories, whole process and systems.
88
Local and regional builders likely will
She then devises sales materials to speak

to those interests. Similarly, existing
Dont stop with offering decent value for the money.
industry knowledge and sales best

practices can be leveraged in another
Thats just [the] ticket to entry. . . . Get into stories,
way. For instance, if the conventional
whole process and systems.
state-of-the-art features in their sales and
Paul Ray, Executive Vice President of American LIVES
builders advocate lifestyle elements and

promotional material, it is important to
not deviate too far from those messages
in green home specific marketing efforts.
The idea is to link the benefits of green
In Colorado, McStain Neighborhoods
sale of a traditional home. Mainstream
homes to those of conventional homes
has embraced the idea of relationship
consumers may not probe as deeply
prevalent in mainstream material by
building, centering many of their
into such issues as where materials are
taking advantage of the inherent overlaps
outreach activity on a Customer for Life
sourced or how they are made, but will
that exist between the two. These
philosophy. In addition to hosting and
likely demand in-depth knowledge of
kinds of techniques emphasize that the
organizing Halloween parties and trail-
the product in order to understand its
industry is generally aware of what sells
building environmental-service retreats
inherent value. Conveying the message
best in its region but may be unaware
for their homebuyers, it has also built a
of value is paramount for builders to
of how green homes fit into the overall
Discovery Center in an infill community.
maintain healthy margins on their homes.
picture. Lastly, by using a proxy method
By inviting people to just go in, look
of consumer analysis as portrayed in the
around, and learn about the exhibits and
MML, it is possible to characterize the
the home features, it has both increased
consumer landscape and identify specific
awareness of the benefits of green homes
sales strategies. The readership statistics
and fostered an element of good will
from the MML are especially valuable
within the community. Consequently,
in identifying issues of interest to the
38% of its home sales come from repeat
consumers.
customers and direct referrals; the

national average is less than 10%.89
34
7. I dentify each homebuyers

Hot-Buttons.
8. S ell using a self-selecting

Quiver of Arrows.
conventional products are also useful, as
It is nearly impossible to predict a
Jerry Yudelson references a technique
display areas in a conventional home
persons individual needs and preferences
used by the large production builder,
where cold air is leaking inside. This latter
or how the person balances those with
KB Home, in one of its developments.
example, in particular, has a significant
elements of home purchase factors such
KB Home placed a green kiosk in
amount of positive shock-value. By
as price. Thus, it becomes imperative to
a showroom that allowed potential
incorporating different features that speak
develop an array of materials that appeal
homebuyers to peruse the green features
to such benefits as durability, energy
to a variety of needs and preferences. The
and benefits of its homes. The consumer
efficiency, indoor air quality and health,
key is to comprehensively, creatively, and
was able to navigate the kiosk at his or
the showroom method of selling allows
artfully demonstrate the various green
her leisure and could choose to dig
potential homebuyers to self-select those
elements of a home and communicate
deeper for more information on
benefits that matter most to them. An
their benefits while respectfully
attributes most interesting to them or
aware and attentive salesperson can then
obtaining valuable information about
to skip over those that were not. Time
focus the sales pitch on those elements
the consumer and insight into what is
was not wasted and consumer interest
that resonated most with the customer,
likely to drive their purchasing decision.
was not lost.
based on which displays held their
are infrared pictures that dramatically
attention the longest.
Sam Rashkin, National Director of EPAs

Energy Star Homes program, suggests
Figure 8: The Trifecta Umbrella
that each salesperson, upon greeting a

prospective homebuyer, should ask a
few simple questions to get to know the
consumer and what may ultimately drive
home you are coming from? and What
are you looking for most in a new home?
Water
Quality &
Efficiency
These provide valuable insight into which

features and benefits to highlight in the
sales pitch. Marc Richmond, the former
manager of Austins green building
program and one of the principals behind
rella of Gr
een
Bu
ild
ng
as: What did you like least about the
Th
a purchasing decision. Ask questions such
Umb
a
t
c
ir f e
T
Energy
Efficiency
Site &
Landscape
Indoor
Environmental
Quality
Construction
Process
the launch of Build It Green in California,
Passive
Design
Materials
Selection
believes green building will not sell as well

to the highest income bracket based on
Another successful show-and-tell
environmental features, and asserts that
technique similar to the kiosk involves
Jennifer Languell, a Florida Green
any attempt to sell to them must be based
a more comprehensive interactive
Building Coalition consultant and
more on the principles of quality or state-
showroom that demonstrates the features
principal for the firm Trifecta
of-the-art.90
of the green home. According to Rich
Construction Services, has identified
MacMath of Austin Energys Green
seven essential elements that comprise
Building Program, people retain 10%
their Trifecta Umbrella and should be
of what they hear and 90% of what they
included in sales materials and building
experience. Demonstrations are the
exhibit space. See Figure 8, above.92
most effective sales tools, e.g. compact

fluorescent bulbs connected to a meter,
light through low-E glass striking a
radiometer, etc.91 Insulation cutaways and
other displays that allow the consumer
to directly compare green products to
9. Incorporate a label-of-excellence.
Designing and building homes to a
10. Bundle elements into a package

rather than offering discrete options.
national or regional standard such
The building science behind green homes
11. Use the environment not to drive

the sales pitch, but simply to make it
stickier.
as Energy Star, LEED for Homes, or
is governed by the principle that all
Many experts in the industry assert
EarthCraft can be extremely effective
elements of the home must function as an
that leading a sales pitch with a strictly
in driving sales. In a more nascent
integrated system. Incorporating merely a
environmental message will only be
market, partnering with a green building
few features (e.g. bamboo flooring, solar
effective within a relatively small segment
brand (or brands) conveys a message of
panels, etc.) does not equate to delivering
of the population. However, even in
authenticity to the discerning consumer
a comprehensive and holistic green
the case of the mainstream buyer, the
and dispels concerns over green-washing,
home. Incorporating several features that
environmental message can make the
or promoting false green attributes.
work symbiotically is also a fundamental
sales pitch become stickier.96 This is
Furthermore, aligning with a brand
method of keeping costs down. Premiere
particularly true when the mainstream
should provide increased publicity
green home providers, such as McStain
media is filled with stories on global
and marketing because the partner
Neighborhoods, incorporate into their
climate change, energy security, and
organization can share or cover many of
homes as many aspects of sustainability
resource pressures. Business Week, The
the associated costs. In a more mature
as possible and deliver the entire package
Economist, The New York Times, and
market, a preference-bias already may
to their buyers, being sure to convey the
Business 2.0 have all run extensive series
have developed and the brand may
McStain Premium. Other builders,
covering environmental issues. Even
be almost a requisite for entry, as has
such as Pardee Homes, acknowledge that
Sports Illustrated put global warming on
happened in Austin, Texas, and Denver,
different consumers will value different
the front page of its March 2007 issue.
Colorado. In the San Francisco Bay
attributes and have several basic packages:
Therefore, even though the primary
Area, an online survey commissioned
Living Smart, Energy Smart, and Water
message delivered to the consumer
by Christopherson Homes revealed
Smart.94 Similarly, the U.S. EPA has
should appeal to pragmatic Whats in it
that 84% of the respondents felt that the
developed complementary lines to its very
for me? reasoning, the more altruistic
rating of a homes green features by an
robust and successful Energy Star energy-
rationale behind buying green will
independent organization was either very
centric program: an indoor air-quality
resonate at least slightly due to the overall
important or somewhat important.93
package and a Water Sense label.95 Many
growing awareness among the general
of the national certification programs
population. Maureen Moore, a resident
mandate packaging and bundling because
of the coastal town Wall, New Jersey,
certain points in each environmental
said global warming, while worrisome,
category must be attained to achieve
was not enough for her to switch from
certification up to its standards.
a company or product she really liked.

Nonetheless, if two things are similar
and one is environmentally safe and
one isnt, I would go with the one thats
environmentally safe.97
36
12. Empower the buyer.
In conclusion, customers may agree in
Because the features and benefits of green
principle that homes built to a green
homes differ from those of conventional
standard are inherently good, but that
homes, educating the buyer about these
alone does not always translate into a
differences can be an important sales
sale. However, high quality, durable,
technique. Green homes sales efforts
energy efficient, low maintenance, and
should extend beyond merely informing
healthy are all attributes that appeal to
the customer; they should provide the
mainstream consumers and should be
customer with an arsenal of questions
easy to market and sell. David Johnston,
and other techniques to take to other
a green building marketing expert and
homes they are viewing. For instance,
President of the firm, Whats Working,
it is to the advantage of the green home
a green home solutions-provider and
builder for customers to ask their sales
consultancy in Boulder, Colorado, calls
person, regardless of whether they are
the successful marketing of green homes
viewing a green home or a conventional
applied common sense.98 Greg Stine,
home, if the paint contains VOCs, or if
CEO and President of the marketing
the windows have low-emissivity (low-e)
consultancy Polaris Inc., agrees: The
coatings, or construction materials have
gap has started to close between the early
formaldehyde as an ingredient. This
adopters of green building and those a
technique has further appeal considering
bit more hesitant. No longer is green
the type of consumer typically drawn to

green homes. LOHAS consumers thrive
on information and consider it critical to
the decision-making process. They will
be wary of aggressive sales techniques
and will appreciate the candor and the
confidence that this sales technique
exhibits. By empowering the buyer
to make an informed decision in this
manner, not only will the salesperson
help convey the benefits of green
homes, but will also foster a sense
of trust and respect.
The gap has started to close between the early adopters of

green building and those a bit more hesitant. No longer is
green building reserved for the fringe. Instead, it makes sense
for everyone. In an era where depleting energy, water, and
other resources affect everyone, green building is no longer
about making a statement; its becoming a standard.
Greg Stine, CEO and President of Polaris Inc.
building reserved for the fringe. Instead,

it makes sense for everyone. In an era
where depleting energy, water, and other
resources affect everyone, green building
is no longer about making a statement; its
becoming a standard.99 As green homes
move into the mainstream, the adoption
of these sales techniques will be critical
for home builders to maintain their
competitive advantages.
37
Chapter 7
38
Applying the Market

Metrics Lens
Table 2: The Market Metric Lens

KEY
Strong
Moderate
Weak
PILOT CITIES
No.
COMPARISON CITIES
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
City Population
3,844,829
2,016,582
386,417
280,666
557,917
784,118
470,688
559,034
By city
MSA Population
12,923,547
5,280,077
5,422,200
18,747,320
2,359,994
1,640,591
4,917,717
4,411,835
By MSA
Total Population
Aged 25+
7,989,287
3,208,707
3,587,485
12,305,512
1,515,084
1,038,093
3,104,099
2,928,558
By MSA
Households per County
3,133,774
1,205,516
776,774
283,736
239,235
352,164
321,242
278,722
By county
County Name
Los Angeles
Harris
Dade
Essex
Denver
Marion
Fulton
Suffolk
Number of housing units

authorized in 2006
155,419
216,755
205,711
32,566
39,314
28,315
98,843
19,805
By state
4,954
3,559
7,795
Total number of
cars by MSA (sales,
2006)
PROXY / INDICATOR
Metric used
Normalizing Data
CONSUMER DEMAND PROXIES
C1
Purchases of Green Products
C1.1
Hybrid Vehicles
C1.1-1
Hybrid Vehicles - total

number sold
C1.1-2
Hybrid Vehicles per 1,000

Households
5.6
C1.1-3
Hybrid vehicles per 1,000

Residents (by MSA)
2.40
0.62
2.01
0.72
1.77
C1.2
Healthy Foods & Beverages
C1.2-1
Whole Foods
(Existing Stores)
17
Total number of
existing stores
by city
C1.2-1a
Whole Foods
(Stores in Development)
Number of stores
in development
by city
C1.2-2
Celestial Seasonings
149
21
129
276
86
10
81
155
Total No. of Natural

Food Stores (25
mile radius)
C1.2-2a
Celestial Seasonings:
Natural Food Stores /
10,000 residents (city)
0.39
0.10
3.34
9.83
1.54
0.13
1.72
2.77
C1.2-2b
Celestial Seasonings:
Natural Food Stores /
10,000 residents (MSA)
0.12
0.04
0.24
0.15
0.36
0.06
0.16
0.35
C1.2-3
Stonyfield Farm
19
20+
20+
20+
12
20+
20+
30,989
3,288
3.5
No. of Natural
Food Stores
(25 mile radius)
T H E M A R K E T M E T R I C L E N S 39
PILOT CITIES
COMPARISON CITIES
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Metric used
Stonyfield Farm
19
15
14
No. of Wholesale
Clubs & Specialty
Shops (25 mile
radius)
C1.2-4
SustainLane: Local Food

and Agriculture
36
44
45
N/A
10
31
39
Ranking among
top 50 cities
(lower is better)
C1.3
Natural/Organic Personal Care
C1.3-1
Aveda
(# of Stores)
10
# of Aveda Stores
in 25 mile radius
C1.3-1a
Aveda
(# of Salons/Spas)
20 in 14 mi
20 in 25 mi
17 in 25 mi
20 in 12 mi
20 in 8 mi
20 in 14 mi
20 in 9 mi
17 in 25 mi
C1.4-1
Seventh Generation
108
51
22
18
21
C1.4-1a
Seventh Generation:
Stores / 10,000 residents
(city)
0.28
0.04
0.13
1.82
0.39
0.05
0.38
0.38
C1.4-1b
Seventh Generation:
Stores / 10,000 residents
(MSA)
0.084
0.015
0.009
0.027
0.093
0.024
0.037
0.048
C2
Readership & Viewership
C2.1
Magazines
C2.1-1
Better Homes & Gardens
144,471
66,710
21,865
11,178
9,331
21,061
22,059
7,185
C2.1-1a
(House-Hold %)
4.61%
5.53%
2.81%
3.94%
3.90%
5.98%
6.87%
2.58%
C2.1-2
National Geographic
142,406
50,066
29,280
10,045
15,219
13,775
16,988
11,416
C2.1-2a
(HH %)
4.54%
4.15%
3.77%
3.54%
6.36%
3.91%
5.29%
4.01%
C2.1-3
Good Housekeeping
76,676
35,009
13,798
11,761
5,078
12,996
12,141
6,124
C2.1-3a
(HH %)
2.45%
2.90%
1.78%
4.15%
2.12%
3.69%
3.78%
2.20%
C2.1-4
Newsweek
106,853
31,084
21,682
8,242
9,755
9,941
19,310
11,165
C2.1-4a
(HH %)
3.41%
2.58%
2.79%
2.90%
4.08%
2.82%
6.01%
4.01%
C2.1-5
Prevention
58,523
22,083
11,875
5,880
4,306
7,054
7,583
4,389
C2.1-5a
(HH %)
1.87%
1.83%
1.53%
2.07%
1.80%
2.00%
2.36%
1.57%
C2.1-6
Cooking Light
40,095
17,778
6,374
3,788
9,194
4,526
10,098
5,244
C2.1-6a
(HH %)
1.28%
1.47%
0.82%
1.34%
3.84%
1.29%
3.14%
1.88%
C2.1-7
Martha Stewart
57,569
17,477
7,591
4,273
4,017
4,623
6,798
5,170
C2.1-7a
(HH %)
1.84%
1.45%
0.98%
1.51%
1.68%
1.31%
2.12%
1.85%
No.
PROXY / INDICATOR
C1.2-3a
# of Aveda
Salons/Spas at
given radius
# of stores that
sell products in 20
mile radius
August 2005
Circulation
Sept 2005
Circulation
March 2006
Circulation
February 2005
Circulation
August 2005
Circulation
Jan/Feb 2006
Circulation
October 2005
Circulation
40
Chapter 7: Applying the Market Metric Lens
PILOT CITIES
COMPARISON CITIES
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
Parents
47,057
20,011
9,506
6,038
2,907
6,117
6,420
3,385
C2.1-8a
(HH %)
1.50%
1.66%
1.22%
2.13%
1.22%
1.74%
2.00%
1.21%
C2.1-9
Mens Health
57,210
21,057
11,539
6,703
5,424
6,422
13,177
5,042
C2.1-9a
(HH %)
1.83%
1.75%
1.49%
2.36%
2.27%
1.82%
4.10%
1.81%
C2.1-10
Money
53,628
20,778
10,490
5,618
5,951
5,122
10,683
3,943
C2.1-10a
(HH %)
1.71%
1.72%
1.35%
1.98%
2.49%
1.45%
3.33%
1.41%
C2.1-11
Fitness
45,058
15,450
9,105
4,461
3,345
4,510
7,417
4,212
C2.1-11a
(HH %)
1.44%
1.28%
1.17%
1.57%
1.40%
1.28%
2.31%
1.51%
C2.1-12
Self
45,262
13,270
7,582
4,705
3,942
4,337
7,549
6,772
C2.1-12a
(HH %)
1.44%
1.10%
0.98%
1.66%
1.65%
1.23%
2.35%
2.43%
C2.1-13
Health
35,579
12,172
6,270
3,337
5,275
3,499
4,863
3,457
C2.1-13a
(HH %)
1.14%
1.00%
0.81%
1.18%
2.20%
0.99%
1.51%
1.24%
C2.1-14
Sierra Club Magazine
38,104
4,007
2,697
2,331
3,685
1,327
3,231
2,132
C2.1-14a
(HH %)
1.22%
0.33%
0.35%
0.82%
1.54%
0.38%
1.01%
0.76%
C2.2
Newspapers
C2.2-1
New York Times

(No. Household Subscriptions in Designated
Market Area)
34,585
10,576
18,827
633,330
12,584
3,755
16,669
48,847
Sept 2005 Daily

Circulation to DMA
C2.2-1a
New York Times

(% by Designated Market
Area)
0.52%
0.46%
1.02%
7.03%
0.73%
0.30%
0.67%
1.70%
Sept 2005 Daily

Circulation as %
household in DMA
C2.2-2
Wall Street Journal

(# Household Subscriptions in MSA)
114,341
44,088
50,108
281,325
23,984
11,181
42,293
79,705
February 2005
Daily Circulation
to MSA
C2.2-2a
Wall Street Journal

(% by MSA)
4.36%
February 2005
Daily Circulation
as % household
in MSA
C3
Green Construction Conceptual Exposure
C3.1
Articles In Local Area

Papers
(last calendar year:
Feb-Feb)
80
Articles in
local area papers
about green
construction; in
last calendar year
(Feb-Feb)
No.
PROXY / INDICATOR
C2.1-8
2.51%
40
2.30%
25
2.32%
70
3.86%
50
2.49%
150
1.66%
36
2.31%
36
Metric used
May 2006
Circulation
March 2006
Circulation
March 2006
Circulation
February 2006
Circulation
March 2006
Circulation
July/ Aug 2005

Circulation
July/ Aug 2005

Circulation
PILOT CITIES
COMPARISON CITIES
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
No. of residents with

Bachelors Degrees
(Highest level of attainment)
1,528,813
595,670
633,074
2,541,259
363,286
200,832
706,162
668,268
# in MSA
C4.1-2
No. of residents with

Graduate or Professional
Degree (Highest level of
attainment)
816,308
297,217
354,933
1,747,050
193,892
102,937
359,022
520,433
# in MSA
C4.1-3
% of residents Age 25+

with Bachelors or Above
29.4%
27.8%
27.5%
34.8%
36.8%
29.3%
34.3%
40.6%
% of residents
Age 25+
US urban avg: 29.8%
C4.1-4
% with just Bachelors

Degrees
19.1%
18.6%
17.6%
20.7%
24.0%
19.3%
22.7%
22.8%
% of residents
Age 25+
US urban avg: 19.4%
C4.1-5
% with Graduate or
Professional Degree
10.2%
9.3%
9.9%
14.2%
12.8%
9.9%
11.6%
17.8%
% of residents
Age 25+
US urban avg: 10.4%
INDUSTRY PROXIES / INDICATORS
I1
Green Building Associations / Coalitions
I1.1-1
Residential Green Building Programs

Existence
I1.1-1b
Year founded
No.
PROXY / INDICATOR
C4
Education
C4.1-1
Metric used
California
Green Builder
(HBA)
Houston
Green Building Initiative
(HBA)
Florida Green
Building
Coalition, Inc.
(NP); Build
Smart (FPL)
None found
2001
2001
None found
Global Green
USA (Santa
Monica)
Houston
Advanced Research Center
(HARC)
Florida
Solar Energy
Center (FSEC)
- Univesity
of Central
Florida
1983
None found
None found
None found
1998
Year founded
New Jersey
Colorado
Indiana
Atlanta
None
Existence
Built Green
Colorado
(HBA)
1995
None found
Earth Craft
House
(HBA/NP)
None found
Existence
None found
1999
None found
Year founded
None found
Envirosense
Consortium,
Inc.
-------Southface
The Green
Roundtable
Existence
I1.2-1a
Green Building Organizations

Existence
I1.2-1b
Year founded
1993
I1.3
USGBC Chapter
Los Angeles,
Orange
County
Houston
South Florida,
Florida Gulf
Coast,
Central
Florida
I1.4
USGBC organizational
memberships
78
97
37
89
38
100
76
By city name
I2
Market Penetration
I2.1
LEED existing buildings
13
By city name
I2.2
LEED registered projects
38
42
30
41
23
By city name
I2.3
Energy Star Homes

(market penetration
%age of new homes built
in 2005)
12%
31%
<3%
36%
bet. 3-10%
bet. 3-10%
<3%
16%
None found
None found
By state
42
Chapter 7: Applying the Market Metric Lens
PILOT CITIES
COMPARISON CITIES
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
SustainLane: Green
(LEED) Buildings
(Ranking: lower is better)
30
29
33
N/A
14
42
Ranking among
top 50 cities
(lower is better)
I2.5
SustainLane: Green
Economy
20
24
N/A
N/A
33
N/A
12
Ranking among
top 50 cities
(lower is better)
I3
Green Building Service Providers
I3.1-1a
USGBC LEED APs
~500
~650
~100
~35
~450
~75
~1000
~725
I3.1-1b
LEED APs per 1,000

residents
0.13
0.32
0.26
0.12
0.81
0.01
2.12
1.30
I3.2-1a
Energy Star Site-Built

Home Builders &
Developers
165
492
132
109
104
121
70
105
I3.2-1b
Energy Star Site-Built

Home Builders &
Developers per 1,000
housing units authorized
in 2006
1.06
2.27
0.64
3.35
2.65
4.27
0.71
5.30
I3.2-2a
Energy Star Home Energy

Raters
24
11
I3.2-2b
Energy Star Home Energy

Raters per 1,000 housing
units authorized in 2006
0.03
0.11
0.02
0.18
0.23
0.28
0.11
0.30
I3.2-3a
Energy Star Lenders

(mortgages)
12
10
I3.2-3b
Energy Star Lenders

(mortgages) per 1,000
in 2006
0.08
0.04
0.04
0.18
0.23
0.35
0.08
0.20
I3.2-4a
Energy Star Utilities /

Sponsors
10
I3.2-4b
Energy Star Utilities

/ Sponsors per 1,000
in 2006
0.05
0.02
0.03
0.18
0.10
0.14
0.05
0.50
GOVERNMENT PROXIES / INDICATORS
G1
Government & Planning Authorities
G1.1
Discrete city-level
sustainability committees
and/or departments
Yes - Sustainable Design

Implementation program
G1.2
SustainLane:
Knowledge Base
17
29
N/A
N/A
17
N/A
17
Ranking among
top 50 cities
(lower is better)
G1.3
Kyoto Buy-In from

Leadership (Mayor)
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Signed agreement
with US Council of
Mayors
G1.4
SustainLane:
City Innovation
19
N/A
N/A
26
N/A
19
Ranking among
top 50 cities
(lower is better)
G1.5
SustainLane:
Planning / Land Use
Density / Sprawl /
Green Space
21
44
24
N/A
17
47
50
Ranking among
top 50 cities
(lower is better)
No.
PROXY / INDICATOR
I2.4
None found
Yes- Mayors
Green Commission
None found
Yes - Greenprint Denver
None found
None found
Yes - City
Environment
Department
- runs High
Performance
bldg program
Metric used
By city name
By state
By state
By state
By state
Existence
PILOT CITIES
Los Angeles,
California
(90001)
Houston,
Texas
(77001)
COMPARISON CITIES
Miami,
Florida
(33010)
Newark,
New Jersey
(07101)
Denver,
Colorado
(80265)
Indianapolis,
Indiana
(46204)
Atlanta,
Georgia
(30301)
Boston,
Massachusetts
(02109)
No.
PROXY / INDICATOR
G2
Incentives, Targets, & Mandates
G2.1
Fast-tracking for green

or LEED
Yes (Santa
Monica)
None found
Yes (Dade
County)
None found
None found
None found
None found
None found
Existence
G2.2
Density bonuses
(Floor-to-Area Ratios)
None found
None found
None found
Yes (Cranford)
None found
None found
None found
None found
Existence
G2.3
Taxes credits, grants
Yes (Santa
Monica) &
affordable
(LA)
None found
None found
None found
None found
None found
None found
None found
Existence
G2.4-1
Target for public buildings
LEED Certified
(LA & Long
Beach);
Silver (Santa
Monica)
LEED Silver
In process
- TBD
LEED Silver
(Cranford &
Princeton)
LEED Silver
None found
None found
LEED Silver
Existence
G2.4-2
Requirement for
public buildings
LEED Certified
(LA & Long
Beach);
Silver (Santa
Monica)
None found
In process
- TBD
LEED Silver
(Cranford)
LEED Silver
None found
None found
LEED Silver
Existence
G2.4-3
Target for private

buildings
LEED Silver
(Long Beach)
None found
In process
- TBD
None found
None found
None found
None found
LEED
Certified
Existence
G2.4-4
Requirement for private

buildings
LEED Silver
(Long Beach)
None found
In process
(updating
building
code)
None found
None found
None found
None found
LEED
Certified
Existence
G2.4-5
State Level Support /

Requirements
CA req.
for state
buildings to
be LEED
None found
All new state

buildings
must be
LEED
No requirements, but
numerous
state support
programs
LEED-EB &
NC adopted
None found
None found
Considering LEED
adoption
Existence of
requirements
AP
ACUTE RESOURCE PRESSURES Proxies / Indicators
AP1
Land / Transit / Air
AP1.1
AP1.2
SustainLane: Congestion
SustainLane: Transit
Considerations
(regional ridership)
49
44
12
35
13
N/A
N/A
36
19
21
40
45
10
Metric used
33
Ranking among
top 50 cities
(lower ranking
means less
congestion, higher
ranking means
more congestion)
Ranking among
top 50 cities
(lower ranking
means better
transit, higher
ranking means
poor transit)
49
40
10
N/A
14
41
39
22
Ranking among
top 50 cities
(lower ranking
means less
pollution, higher
ranking means
more pollution)
Electricity (Cents/kWh)
14.48
11.54
11.21
12.46
8.42
7.83
8.31
16.94
State Residential
Avg. (Dec. 2006)
Natural Gas ($/thousand

ft3)
10.94
9.97
19.02
14.51
8.05
10.29
14.13
16.28
Jan 2007 Avg.

Residential Natural
Gas prices by State
AP1.3
SustainLane: Air Quality
AP2
Energy Costs
AP2.1
AP2.2
Chapter 8
44
Analysis and Strategies

for Four Pilot Geographies
he four focus areas were
population but relatively week green
green homes market. Performing this
residential market. Indianapolis was
analysis through the use of the Market
chosen due to a presumed relative
Metric Lens (as described in Chapter
weakness in all three elements of a
4) reveals both gaps in the marketplace
robust green residential market. Data
as well as leverage points that can be
homes market potential. As
was collected for these four cities for the
harnessed to augment activity and profit-
MML for comparison to the four pilot
ability in the sector. Identifying ideal
such, four additional control
cities. This comparison is presented
industry and government partnership
municipalities which were
below, based on the quantitative data
opportunities and pinpointing salient
collected and contained in Table 2, the
consumer characteristics upon which to
MML. Further information (quantita-
base a marketing and sales strategy are
tive and qualitative) can be found in the
key components of the strategic portions
full report Residential Green Building:
of the MEF. The strategy components
Identifying Latent Demand and Key
of building partnerships and forming
Drivers for Sector Growth, available
marketing and sales strategies influence
at www.erb.umich.edu.
one another directly. For this reason,
chosen partially due to
their relatively unknown green
believed to have varying degrees

of residential green building
market strength were chosen
from across the country to add
to the comparison pool. Denver
and Atlanta were chosen as cit-
these steps have been undertaken and

The Market Engagement Framework
combined below for each of the four pilot
(MEF) begins with an analysis component
geographies addressed in this study.
that delves deeply into the characteristics

of the three principal elements in the
ies with very strong green home

building markets. Boston was
chosen due to its strong LOHAS
(Lifestyles of Health and
Sustainability) and educated
L O S A N G E L E S / S O U T H E R N C A L I F O R N I A 45
LO S A N G E L E S / S O U T H E R N C A L I F O R N I A
Analysis
Los Angeles has a large number of
likely green homebuyers and, on a per
capita basis, looks relatively strong. Los
Angeles is fifth in the nation in per capita
hybrid sales (5.6 per 1,000 households)
and shows strong demand for healthy
foods and green cleaning and personal
care products. Per capita readership of
publications with high LOHAS subscribership is relatively moderate, and coverage
of green building in the press over the
last year has been fairly weak (about 40
articles in the last year). Los Angeles
has a relatively moderate proportion of
residents with undergraduate or graduate
Los Angeles has significant acute resource
with energy efficiency, air-quality, and
pressures, most pressing of which are
water reduction will resonate well with
poor air quality, water use constraints,
a large consumer base.
high electricity costs, and traffic

congestion. Combined with a high transit
ridership and public understanding of
climate change, attributes of green homes
are easily marketable in Los Angeles.
Strategy
The Los Angeles green homes market has
been determined to be quite robust, with
strong industry presence, high levels of
government involvement, and a consumer
base that will likely be highly receptive
to the green home message. Partnership
education (29.4%).
opportunities specific to the Los Angeles
Los Angeles appears relatively strong
within both the government and industry
area are numerous and can be found
from an industry perspective. The city
sectors. Specific suggestions include:
has mature residential green building
Forming a relationship with the citys
associations and programs, a high

number of LEED APs (although low per
capita) and registered buildings (38),
in conjunction with strong statewide
penetration of Energy Star homes (12%
in 2005). On a per home-permitted basis,
the state is weak in terms of Energy Star
providers, but the city may look different
based on the strength of the other metrics
reviewed above. Lastly, the city and region
has had two major green residential
developments which are garnering a fair
amount of attention.
Los Angeles appears very strong from a
government-support perspective. With
city and state public-building LEED
mandates and the movement of neighboring cities to include private buildings,
there is a high degree of political pressure
for green development. A number of
programs and aggressive greenhouse gas
emission reduction targets support green
commercial and residential building, and
neighboring communities are exploring a
variety of incentive mechanisms.
Sustainable Design Implementation

office and gaining familiarity with the
tenets of their program.
Contacting Toyota or other manufacturers of hybrid vehicles to explore
opportunities for co-branding and/or
other promotional activities, latching
onto the popularity of hybrid vehicles
in the region. Anecdotally, accounts of
a builder giving away hybrid vehicles to
each new-purchaser of a green home
in their development have already
emerged.
Accompanying all green activity with
extensive outreach to the local media
to help garner valuable free publicity.
The local media appears willing to run
stories related to green buildings and
sustainability.
Leveraging the broad public concern
over the many acute resource pressures
in California, to draw attention to the
benefits of green homes, both in media
publicity and in sales techniques. In
southern California, benefits associated
Targeting those areas for development

(or for promotion) where a Whole
Foods Market is in close proximity.
There are 17 Whole Foods Markets with
8 additional slated for development in
the Los Angeles area. Because of the
overlap in characteristics between the
consumers of those food stores and
those of green homes, targeting these
areas is likely an effective positioning
and marketing strategy.
Contacting Rancho Mission Viejo and/
or other developers active in this space
to glean consumer insight and marketing best-practices.
Seeking opportunities for knowledgesharing and collaboration with industry
players in non-competitive markets.
Because of the robust activity and
government support in neighboring
cities, these opportunities should be
ample. Green building organizations,
such as Global Green USA (located
in Santa Monica), should provide
information on some likely candidates.
Perusal of the LEED APs in the area,
of which there are hundreds, should
also prove effective.
Coordinating with any of the 78
member organizations of the USGBC to
help fund and advance building-science
research and consumer market research.
This can also be done in cooperation
with the building organizations and the
government entities tasked with sector
advancement.
Advertising in health and fitness
magazines which enjoy a high level
of readership in the area.
46
Chapter 8: Analysis and Strategies for Four Pilot Geographics
HOUSTON/TEXAS
Analysis
Due to its size, Houston has a moderate
number of likely green homebuyers, but
on a per capita basis, the city is relatively
weak in the consumer element. Relative
to Los Angeles, Denver, and Atlanta,
Houston has a relatively small number
of per capita hybrid sales and relatively
weak demand for healthy foods and green
cleaning and personal care products. Per
capita readership of publications with
high LOHAS subscribership is relatively
moderate to weak, and coverage of green
building in the press over the last year has
been very low relative to other focus areas
(only about 25 articles in the last year).
Lastly, Houston has a relatively small
proportion of residents with undergradu-
Houston has significant acute pressures,
Energy Star program and standard
quality and traffic congestion. The city is
in Texas with regard to marketing
not known for proactive land-use plan-
and communicating with service
ning or strong public transit systems.
providers and consumers. Energy
Although pressures exist, a demonstrated
Star has significant market penetration
government willingness to address these
in the state (31%) and, therefore, is
pressures does not.
likely both recognizable and desirable
Strategy
The green homes market in Texas is
relatively nascent. Education levels and
demand for green products are lagging,
the Mayor of Houston is one of the few
who has yet to sign onto the Mayors
Climate Protection Agreement, and
prevailing land-use planning principles
defy the basic tenets of green construc-
ate or graduate education (only 27.8%).
tion. However, despite relative lack of
Houston appears moderately strong
sectors, the industry sector has begun
from an industry perspective. The city

has residential green building associations and programs, a very high number
of LEED APs (about 650) and registered
activity in the government and consumer
Houston appears relatively very weak

from a government-program support
perspective. The city has set a target, but
not a mandate, for public city buildings
to pursue LEED Silver, and Houston is
one of only a few cities of its size to not
sign on to the Mayors Climate Protection Agreement. While energy efficiency,
through Energy Star, appears to be taking
hold, there does not seem to be a holistic
interest in green building in city hall.
initiatives, seeking those partners best

able to convey the benefits of building
green can directly address the issue
of cost. This may mean collaborating
on cost/benefit research studies, but
may also mean advocating for more
involvement and innovation within
the financial community.
Specific recommendations for

Framing a relationship with the USGBC
level.100
likely to remain focused on voluntary
advancing the green building movement.
extremely strong statewide penetration
homes support programs at the city
Because the regulatory climate is
of significant potential with regard to
partnerships and marketing include:
Houston also has strong Energy Star
as a brand.
to organize itself and is showing signs
buildings (42), in conjunction with

of Energy Star homes (31% in 2005).
Learning from the success of the
most pressing of which are poor air
chapter and the Houston Advanced

Research Center to spread concept
awareness throughout the city and
develop skill competencies within the
building community.
Refraining from incorporating
environmentally-focused messages
into sales and marketing material.
General awareness and concern appears
to be relatively weak, judging from
lagging purchasing behavior across a
variety of green products. Conversely,
messages that address particular
common concerns of Houston
residents such as air-pollution and
traffic congestion will likely be well
received and much more effective.
M I A M I / S O U T H F L O R I D A 47
M I A M I / S O U T H F LO R I D A
Analysis
Per capita, Miami looks relatively weak
in the consumer element. Miami is not in
the top 15 markets for hybrid vehicle sales
and shows relatively weak demand for
green cleaning and personal care products, but shows a relatively strong
demand for healthy foods. Per capita
readership of publications with high
but significant traffic congestion. Com-
Partnering with the green building
bined with a moderate transit ridership
organizations in the areaThe Florida
and growing public understanding of
Green Building Coalition, the Florida
climate change impacts on Florida,
Solar Energy Center, and the USGBC
Miami is a mixed environment in which
chapter of South Floridato drive con-
to market a variety of the attributes of
sumer education and service-provider
green homes.
training initiatives. Whereas the Mayor
Strategy
and the government sector are helping

spur concept awareness at a more broad
The Miami green homes market has yet
level, there still remains the need for
to take off, a fact largely attributable to
partnerships with a coalition of industry
an uninformed consumer base and
experts at the ground level to further
limited industry activity. However, the
educate and train interested consumers
city has a strong champion in Mayor
and tradespeople. This is particularly
Manny Diaz. He has been extremely
pressing because the consumers in the
proactive in generating awareness of the
area generally do not possess desirable
graduate education (27.5%).
need for a greener-built environment in
characteristics regarding receptivity to
the region and in promoting government
the green home message.
From an industry perspective, Miami
and institutional support of green build-
LOHAS subscribership is extremely weak

with the exception of newspapers, but
coverage of green building in the press
over the last year has been high relative
to other focus areas (about 70 articles).
Miami has a relatively small proportion
of residents with undergraduate or
appears relatively moderate to weak.

While the region has a strong residential
ing initiatives. As such, recommended

partnership and marketing strategies for
Leveraging the knowledge capabilities

of non-competitive markets, particularly
in Sarasota County on the west coast,
green building association and program,
Miami include:
the city has only a moderate number of
Leveraging the institutional momentum
ing space is more robust, to institute
championed by the Mayor to spearhead
best practices that will be effective in
major development projects. The Miami
improving proficiency in green building
Green Commission should be able
market science and increasing consumer
to provide valuable support and
awareness. WCI Communities has been
information.
active locally and may also provide
LEED APs and relatively few registered

buildings (9), in conjunction with very
weak statewide penetration of Energy
Star homes (less than 3% in 2005).
Outside the city, the south Florida region
there are two major green residential
developments garnering a fair degree
of attention. Industry strength appears
stronger in the region than in the city
itself.
Concerning the government support
element, Miami appears relatively strong.
The city has an active city hall green
division, an environmentally proactive
mayor, and is considering LEED targets
and codes for buildings. Combined with
state public-building LEED mandates and
fast-track permitting in the county for
green buildings, there is a high degree of
Collaborating with Whole Foods

Markets in publicity associated with
where activity in the green build-
valuable insight and information.

Echoing the messages espoused by
the four stores slated for development.
the Mayor and the general media in
Specifically targeting development in
marketing materials and sales pitches.
those areas where an existing or upcom-
Furthermore, it will be important to
ing Whole Foods Market is in close
find alternative ways to advertise than
proximity is also an effective strategy.
in mainstream magazines, because
Developing advertising and marketing

schemes that portray and highlight the
health benefits associated with green
homes. Healthy living is a popular
behavioral characteristic in the region,
readership numbers are low in the

region. Consider mainstream
newspapers in which readership
levels are higher.
Highlighting the benefits of passive-
as signified by the strong demand for
cooling and a tight exterior envelope in
healthy foods and beverages.
relation to cost-savings. Because of the
political support for green development.

Miami has moderate environmental
pressures, with relatively good air quality
hot and humid climate and relatively

high electricity rates, these messages
will resonate well during a sales pitch.
48
Chapter 8: Analysis and Strategies for Four Pilot Geographics
NEWARK/NORTHERN NEW JERSEY

Analysis
From a buyer perspective, Newark and
northern New Jersey are difficult to evaluate because of the areas proximity to New
York City. With the availability of all the
resources of Manhattan and high number
of LOHAS consumers in the city, Newark
and northern New Jersey has a large total
population of likely green homebuyers. On a per capita basis, Newark looks
relatively strong in the consumer market.
The city shows relatively weak demand for
green cleaning products, but a relatively
strong demand for healthy foods and personal care products. Per capita readership
of publications with high LOHAS subscribership is relatively strong, especially
of newspapers, but coverage of green
building in the press over the last year
has been moderate relative to other focus
areas (only roughly 50 articles). Lastly, the
metropolitan statistical area (MSA) has a
very high relative proportion of residents
with undergraduate (20.7%) and graduate
forts to promote green affordable housing
areas with higher levels of educational
are particularly noteworthy. Thus while
attainment. Furthermore, the consumers
the city itself is rather weak in govern-
in northern New Jersey appear prone
ment support of residential green
to visit healthy food stores and Aveda
building, the state and surrounding
stores and salons making appropriate
municipalities are relatively strong.
venues for targeted marketing efforts.
Northern New Jersey has a fair degree of

environmental pressure to pursue green
development, especially in land constraints. Public understanding of the impact of climate change on low lying New
Jersey is strong, and general development
pressures and the strength of long-standing smart-growth movements are good
signs for the penetration of green homes
into the market.
Strategy
In the Newark and the greater northern
New Jersey area, the green homes market
has not yet made large inroads despite
extensive activity within the government
sector. There is relatively weak overall
industry presence, with very limited
education (14.2%).
demonstrated activity to date aside from
With the exception of Energy Star pen-
exists some indication that this sector is
etration, Newark appears relatively weak

from an industry perspective. The region
does not have an active residential green
building association or program and the
city has relatively few LEED APs (about
35) and registered buildings (1). The notable exception to industry relative weakness, largely due to state incentives, is the
extremely high penetration statewide of
Energy Star homes (36%) and the availability of Energy Star service providers
on a total and per housing permit bases.
Outside the city, the region has two major
green residential developments garnering
a fair degree of attention.
While Newark appears relatively weak
from a government support perspective, the state appears very strong, and
surrounding communities are adopting
programs and mandates that will likely
spread across the region. The states ef-
the Energy Star program. However, there

ripe to emerge. Multiple projects (Solaire,
Tribeca Green, and the Octagon) in
neighboring New York City have been
built according to green standards, a fact
that should have spill-over effects for
New Jersey in the form of skill development and concept awareness. Additional
recommended partnership and marketing
strategies include the following:
Tailoring marketing efforts to attract the
large number of high-value consumers
already familiar with the tenets of green
homes but perhaps not able to afford
ownership in Manhattan to green
developments in New Jersey.
Focusing marketing efforts and promotions around universities and surrounding neighborhoods in an attempt to
capture a number of the highly educated
consumers in the area. Use the interactive census map to hone-in on specific
Advertising in main-stream press such

as Newsweek, New York Times, and the
Wall Street Journal.
Leveraging the fact that energy efficiency, indoor air quality, and health
concerns are large drivers of the New
Jersey green homes market by developing appropriate marketing and sales
strategies based on these themes.
Establishing a symbiotic relationship
with Energy Star to capitalize upon its
successful penetration in the state. Because the USGBC has yet to make solid
inroads into the area, Energy Star currently has a larger network of partners
and affiliates.
Approaching the chemical and manufacturing company BASF, one of the
highest profile companies in the region
who has already built a Near-Zero
Energy home, with the idea of further
increasing publicity and support for
their products by incorporating them
into other high-profile development
projects.
Using the New Jersey Green Home
Office (GHO) for general advocacy,
education, and technical assistance. The
GHO is also currently developing the
New Jersey High Performance Homes
Plus program for market and production
rate builders and will likely be searching
for projects to help pilot the program.
When addressing government organizations, couching language in terms related to smart growth since land-density
and traffic congestion are two pressing
state concerns.
Including provisions for affordable housing within development efforts. This
pressing need is also a major concern
within city governments.
R E L A T I V E A N A L Y S I S O F F O U R P I L O T G E O G R A P H I E S 49
R E L AT I V E A N A LY S I S O F F O U R P I LO T G E O G R A P H I E S
Of the four focus municipalities, Los
Angeles stands out as the strongest in
its relative strength in all three key
Figure 9: Market Engagement Framework Analysis
MEF Anaylsis
Consumer:
elements of a residential green building
Size of bubble represents receptivity
market. While the consumer and industry

Denver
High
elements of Miamis green residential

market are relatively rather weak, the
residential building program and the

support of a leading builder (WCI), is
Houston
Medium
outside of the city, including a strong
Industr y
government element is relatively strong

and growing. The industry element
Miami
Indianapolis
Low
of the Newark green residential market

is relatively strong, while the government support element is moderate and
Low
the industry element is relatively weak.
Medium
Government
Towns in northern New Jersey and the

progress in green residential support.
Boston
Newark
rather strong. The consumer element
state government are making strong
Los Angeles
Atlanta
Table 3: Residential Green Building Market Strengths and Weaknesses
While Houston has a relatively strong
Strengths
industry element, it ranked weakest of the
Los Angeles, CA

Hybrid sales
Demand for green cleaning supplies
City and state building LEED mandates
Houston, TX

USGBC organizational memberships
Energy Star homes statewide penetration
Miami, FL

Demand for healthy foods

Green building media coverage
Mayor support for green building
Fast-track permitting
Newark, NJ

Readership of publications with high LOHAS subscribership

Citizens with bachelors and graduate degrees
Energy Star homes statewide penetration
State green home programs
four focus municipalities in government

and consumer elements. See Figure 9 for
a visual representation of the relatively
ranked elements of the four pilot cities
and the four comparison cities. Table 3
shows the strengths and weaknesses.
Weaknesses
Los Angeles, CA
Houston, TX

Hybrid sales
Demand for healthy foods and cleaning supplies
Citizens with bachelors or graduate degrees
Government attention to climate change
Land-use planning
Miami, FL

Readership of publications with high LOHAS subscribership

Citizens with bachelors and graduate degrees
Energy Star homes statewide market penetration
Newark, NJ

Lack of industry programs

USGBC LEED APs
High
Chapter 9
Concluding Remarks
50
USE OF THE MARKET

ENGAGEMENT FRAMEWORK
y all accounts, the green
Future Applications for Builders
homes market is at an
The MEF developed here is designed to
The framework can also help identify asso-
have a variety of uses for home builders.
ciations and government programs that can
For a builder new to residential green
facilitate entrance into the green homes
building, an initial use is to apply the MEF
market, as well as opportunities to partner
to existing operating markets to analyze the
with like-minded groups to promote the
strength of the green homes market and
concept of green homes. In short, builders
the particular motivations and demands of
can use the MEF to develop effective plans
across the country are ever
buyers, and then to plan for engagement.
for entrance into green home building in
The MEF can be used to assess current
existing geographic markets.
more actively engaging in this
product diversity and develop high-perfor-
burgeoning market. By using
mance home options and packages tailored
The MEF also is useful in identifying new
to the particular demands of the market.
geographic markets for green home build-
The MEF encourages builders to research
ing. A green home builder can use the MEF
the key acute pressures and issues receiving
to identify markets with latent demand
gagement Framework and the
widespread public attention, and the
ripe for entry, as well as markets already
benefits of green homes most easily sold
absorbing green homes. Understanding
Market Metrics Lens presented
in the particular market. The MEF can
whether a market is relatively untapped or
in this report, these firms and
also be used to identify key avenues and
maturing is critical in designing the right
strategies for marketing, in particular by
product roll out, partnership strategies, and
identifying readership trends of likely green
marketing campaigns to ensure maximum
homebuyers for focused advertising. In
profitability. Lastly, the MEF can be used to
the area of partnerships, the MEF can help
craft strategies to enhance corporate-level
a builder assess the strength of various
differentiation. Sustainability is increasingly
tunities at this green homes
industry and government programs and
becoming a positive brand attribute, and
tipping point, while continuing
identify partnership opportunities for
the MEF can help a builder establish itself
starting new initiatives and collaboration.
in this category.
exciting point in its growth

and maturation. Home builders and developers of all sizes
tools such as the Market En-
companies can maximize the

financial and market oppor-
to drive progress in markets
Future Applications for Regional and National Developers
throughout the United States.
Regional developers (those that work in
developer may want to do an in-depth
limited geographic scope) and national
study of the effectiveness of various local
developers can use the MEF for similar
government and industry green home
purposes as builders. Given the often
programs, and the MEF can help to
larger scope of a regional or national
identify differences in the attributes of the
developer, the MEF can also assist in
consumer markets to take into account.
identifying partnership opportunities with
The MEF is a powerful tool for a regional
city and state government programs as
developer in discussing demand for green
well as national level organizations, such
homes and strategies for engagement with
as USGBC and NAHB. The MEF can be
builder partners, as it provides a concrete
used to identify areas in which to fund
method for analyzing a markets potential
further residential green building research
and planning for engagement.
in a developers region. For instance, a

Appendix
A P P E N D I X 51
LIST OF INTERVIEWEES
Note: Names with an asterisk were interviewed twice for additional feedback on the reports findings.
Name
Affiliation
Industry Role
Dennis Allen
Allen Associates
Builders/Developers/Architects
Amy Christopherson Bolten*
Christopherson Homes
Karen Childress *
WCI
Gordon Cooke
Air Solutions, Inc
Marketing Experts
Dennis Creech*
Southface Energy Institute
Green Building Program Managers
Abbey Ehman
Contects -Consultants and Architects
LEED for Homes
Maren Engelmohr
Mackey & Mitchell Architects
Barr Hall
McStain Neighborhoods
Katy Hollbacher
Build It Green
Molly Hoyt
Origo Inc. Consulting
Marketing Experts
David Johnston
Whats Working
Marketing Experts
Greg Kats
Capital E
National Real Estate Analysis
Sara Lamia
Building Coach
Marketing Experts
Richard MacMath
Austin Energy
Eric Martin
Florida Solar Energy Center/ University of Central Florida
LEED for Homes
Don Mull
California Green Builder
Mike OBrien
City of Portland Office of Sustainable Development
Government Programs
Annette Osso
Virginia Sustainable Building Network
Tom Paladino
Paladino and Co.
Marketing Experts
Peter Pfeiffer
Barley & Pfeiffer Architects
Lance Ramella
Hanley Wood Market Intelligence
Samuel Rashkin
US EPA - Energy Star Homes
Government Programs
Marc Richmond
Practica
Marketing Experts
Gwynne Rogers
Natural Marketing Institute
Michele Russo
McGraw-Hill Construction
Henry Siegel
Siegel & Strain Architects
Greg Stine
Polaris
Marketing Experts
Larry Strain
Siegel & Strain Architects
Bob Taber*
Thomas Taber & Drazen
Marketing Experts
Erich Volkert
LivingHomes
Brooke Warrick*
American LIVES
Mary Westcot
Davis Energy Group, Inc.
LEED for Homes
Jerelyn Wilson
Building Green
Robert Wisniewski
MaGrann Associates
LEED for Homes
Jerry Yudelson*
Greenway Consulting Group, LLC
Marketing Experts
52
Endnotes
Interview with Gordon Cooke on 1-29-07.
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Presentation by Amy Bolten at West Coast Green Conference. September,

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31
32
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34
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ShowFile.aspx?DocumentID=742. Captured on 3-31-07.
35
USGBC. March 2007. Green Building, USGBC, and LEED. Unpublished.

Captured from https://www.usgbc.org/ShowFile.aspx?DocumentID=1991
on 3-31-07.
36
11

USGBC. March 2007. Green Building, USGBC, and LEED. Unpublished.
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12
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html on 3-8-07.
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37
Presentation by Gwynne Rogers at West Coast Green Conference.

September 2006.
38
13
Captured from Energy Star: http://www.energystar.gov/index.cfm?c=new_

homes.hm_index on 3-31-07.
39
14
Captured from Energy Star: http://www.energystar.gov/index.

cfm?fuseaction=qhmi.showHomesMarketIndex on 3-31-07.
40
15
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The LOHAS Consumer Trends Report.
41
McGraw-Hill Construction. 2006. Residential Green Building Smart

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42
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17
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home/haven-properties-high-per.shtml on 4-1-07.
18

Presentation by Gwynne Rogers at West Coast Green Conference.
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Interview with Barr Hall on 2-5-07.
Interview with Tom Paladino on 1-22-07.
43
Interview with Mike OBrien on 2-9-07.
44
Interview with Mary Westcott, 2-21-07.
45
Interview with Dennis Allen 1-10-07.
46
47
20
Lassar, T.J. February 2005. Marketing green multifamily housing. Urban Land.
48
Schweitzer, J. 2006. Green homebuilding: The last holdout or the next frontier.
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49
19
21
Lassar, T.J. February 2005. Marketing green multifamily housing. Urban Land.
22
Libby, B. February 2007. Breaking ground: Will a softer market sink green
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23
Interview with Mike OBrien on 2-9-07.

Presentation by Thomas Taber & Drazen for Built Green Colorado. August 4,
2005. 2005 A&U Survey Results.
Interview with Dennis Allen on 1-10-07.
50
Interview with Amy Bolten on 1-15-07.
51
Interview with Gordon Cooke on 1-26-07.
52
53
Interview with Dennis Creech on 1-31-07.
54
Kellenberg, S. May 2003. Green communities. Urban Land.
55
24
25
26
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Issues.
27
Interview with Abbey Ehman on 1-29-07.

Interview with Marc Richmond on 12-12-06.
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28
E N D N O T E S 53
56
Captured from http://www.christophersonhomes.com/aboutus.asp on

4-1-07.
84
Polaris, Inc. 2005. Survey of potential home buyers registered on Christopherson Homes website. Unpublished. Provided by Amy Bolten.
85
57
Captured from www.sustainlane.us/local_foo_and_agriculture.jsp on 3-29-07.
58
59
Interview with Karen Childress on 1-29-07.
60
Senick, J. September 2006. An analysis of residential green building best

management practices. Institute for Meadowland Studies.
61
Interview with Bob Taber on 11-16-07.
62
Interview with Michele Russo on 11-21-06. Other concurring experts

(through interviews) include: Peter Pfeiffer on 10-24-06, Amy Bolten on
1-15-07, Eric Martin on 12-6-06, Dennis Allen on 1-10-07, Tom Paladino
on 1-22-07, Greg Kats on 1-23-07, and Abbey Ehman on 1-29-07.
63
Interview with Tom Paladino on 1-22-07.
64
Captured from http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1496

on 4-1-07.
65
Captured from http://www.sustainlane.us/overview.jsp on 4-1-07.
66
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86
87
Ray, P. March 2000. Dragonfly Media. Who is the LOHAS consumer?

LOHAS Journal.
88
89
Interview with Marc Richmond on 12-12-06.
90
Captured from Rich MacGraths Notes from presentations by Sam Rashkin

(February 2006) and article by Roy Chitwood (September 2000). Green
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Star Provider.
91
Presentation by Jennifer Languell. 2005. Green development: Building

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92
Polaris, Inc. 2005. Survey of potential home buyers registered on

Christopherson Homes website. Unpublished. Provided by Amy Bolten.
93
Interview with Greg Kats on 1-23-07.
94
68
Interview with Greg Kats on 1-23-07.
95
69
Captured from http://www.seattle.gov/mayor/climate/default.htm#who

on 4-1-07.
96
Captured from http://www.sustainlane.us/Street_and_Freeway_Congestion.

jsp and http://www.sustainlane.us/Regional_Public_Transportation_Ridership.
jsp on 3-17-07.
97
67
70
Captured from http://www.eia.doe.gov/cneaf/electricity/epm/table5_6

_a.html on 3-17-07.
71
Interview with Richard MacMath on 2-2-07.
72
Interview with Amy Bolten on 1-15-07.
73
Interview with Sam Rashkin on 3-6-07.
74
75
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in the garden state. New Jersey Business. Volume 52; Issue 9.
76
Saliba, G.N. September 1, 2006. The greening of NJ buildings: Going green

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77
Stine, G. November 15, 2007. Green building in a soft housing market.

Polaris, Inc. Unpublished. Captured from http://www.polaris-inc.com/articles/
index.cfm?fuseaction=article&rowid=1169 on 3-15-07.
78
Presentation by Bob Taber at Greenbuild Conference. September, 2006.
79
80
81
Interview with Rich MacMath on 2-2-07.
82
83

Interview with Michele Russo on 11-21-06, interview with Gordon Cooke

on 1-29-07, and interview with Sam Rashkin on 3-6-07.
Diamon, M.L. January 21, 2007. Some shore-area companies are doing
more to protect the environment. McClatchy-Tribune Business News.
98
Stine, G. November 15, 2007. Green building in a soft housing market.

Polaris, Inc. Unpublished. Captured from http://www.polaris-inc.com/
articles/index.cfm?fuseaction=article&rowid=1169 on 3-8-07.
99
100
54
Authors
55
Jeff Martin
jeffdmar@umich.edu
Jeff graduated from the University of Michigan in the spring of 2007 with both an MBA from
the Ross School of Business and an MS from the School of Natural Resources and Environment.
As a student of the Erb Institute for Global Sustainable Enterprise, Jeff focused his education and
professional development on alternative energy, green building, entrepreneurship, and corporate
strategy. He was awarded a Distinguished Leader merit-based scholarship, was elected to the
executive board of his business school cohort, served as vice-president of the Global Citizenship
Club, and acted as the president of the Soccer Club. A graduate of Duke University with an
undergraduate degree in environmental engineering, Jeff spent the first two years of his professional
life as a consulting environmental engineer before moving to Colorado to become Director of
Operations for an adventure travel company. Recently, Jeff was awarded a fellowship by the
William David Institute to develop a comprehensive business plan in support of a community-based
ecotourism and rural electrification project in Sagarmatha National Park in Nepal. He will return to
the states in the summer of 2007 and will begin a job search in the fields of renewable energy
and green development.
Brian Swett
bswett@umich.edu
Brian Swett will graduate in 2008 with an MBA from the Ross School of Business and an MS
in Sustainable Enterprise from the School of Natural Resources and Environment through the
dual-degree program at the Erb Institute for Global Sustainable Enterprise at the University
of Michigan. Brians career interests include green buildings, smart growth, corporate social
responsibility, environmental stewardship, and socially responsible investing. In the summer of
2007, Brian will be working for Boston Properties, a national REIT, on green real estate development.
At Michigan, he has played a leadership role in advancing and advising two major green building
efforts: the $150 million Ross School building and the $500 million Mott Childrens Hospital
building. Prior to school, Brian worked for an environmental justice nonprofit, two socially
responsible investment firms, U.S. Senator Barbara Boxer, and several offices in the U.S.
Environmental Protection Agency. During his time at EPAs National Center for Environmental
Innovation, Brian created and led a program on learning from international best practices in
environmental policy for domestic adaptation and application. Areas of focus included water
infrastructure, integrated permitting, and smart growth and urban planning. Brian holds a BA
with honors from Brown University in Public Policy and International Relations.
Doug Wein
dougwein@umich.edu
Doug Wein has just completed his MBA at the Ross School of Business and his MS at the School
of Natural Resources and Environment as a student of the Erb Institute for Global Sustainable
Enterprise at the University of Michigan. His career focuses on green building and sustainable
community optimization, real estate finance and marketing, and management consulting. Doug has
been instrumental in many of the University of Michigans recent green building efforts, including
the design and launch of the new Green Development graduate course and the greening of the new
$150 million Ross School building. He acted as Co-President of Ross Net Impact in 2005-2006, when
it was named National Chapter of the Year for its exemplary efforts in socially and environmentally
responsible business. Upon graduation from the University of Michigan, Doug was presented with
the Ross Innovation Award and the Ross Global Citizenship Award for outstanding service to the
community. He now works as a sustainability consultant in real estate, community planning, and
green building with CTG Energetics, a leading national green design firm. Doug now lives in
Providence, RI, with his wife Rachael.
56
W I T H S U P P O RT B Y
For the complete report please visit www.erb.umich.edu
Printed on 100% post-consumer recycled paper. Please recycle.
A summary report of a masters project of the

School of Natural Resources and Environment
at the University of Michigan.

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Residential Green Building Report

A MARKET ENGAGEMENT FRAMEWORK

Residential Green Building Report

With support from:

The Green Homes Challenge for the Industry

The Market Engagement Framework Solution

Expert Testimonials on The Benefits of Building Green

Acute Resource Pressures

Market Metric Lens

Best Practices and Strategic Recommendations

The Importance of Champions

Growing Concept Awareness in Nascent Markets

Selling Green Homes

Pilot and Comparison Cities

Los Angeles/Southern California

Newark/Northern New Jersey

Relative Analysis of Four Pilot Geographies

Use of the Market Engagement Framework

Figure 1: The Green Homes Market Landscape

Figure 2: Green Homes Adoption Concept: LOHAS Driving the Market

Figure 3: The Market Engagement Framework

Figure 4: Small Builders and Larger Builders

Figure 5: Demand Projection

Figure 6: Green Building Consumer Groups

Figure 7: Green Residential Industry Stakeholders

Figure 8: Trifecta Umbrella

Figure 9: Market Engagement Framework Analysis

Table 1: Relevant Behavioral Differences in Green Homebuyers and Remodelers

Table 2: The Market Metric Lens

Table 3: Residential Green Building Market Strengths and Weaknesses

Overview & Background

THE GREEN HOMES CHALLENGE

esidential green building developers and home

builders have traditionally

his is attributable largely to the

a relatively new product that is foreign

Residential Green Building Report

THE MARKET ENGAGEMENT FRAMEWORK SOLUTION

THE MARKET ENGAGEMENT

o address industry- and

A Robust Green Homes Market: Conceptual Overview

A building market is most ripe for

be high, whereas industry capability

increases in green building market

and/or government support are

penetration when numerous stakeholders

underdeveloped in relation to this latent

are all pushing for those increases

demand. Alternatively, industry and

together. The three primary elements

government could be actively promoting

and strategy development.

critical for growing a green homes market

the residential green building, but a

We call this tool the Market

are (1) consumers, (2) industry (both

strong consumer preference has simply

for profit and nonprofit organizations),

not yet materialized. Even with these

and (3) government. See Figure 1 for

characteristics, the potential exists for

a representation of the green homes

a market to evolve into one wherein all

three elements are strong. While advances