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Strategies for potential owners in Singapore to own environmentally sustainable homes

Florence Yean Yng Ling and Asanga Gunawansa
Department of Building, National University of Singapore, Singapore
Purpose With global climate change, it is increasingly necessary to develop the built environment in an environmentally sustainable way. The aim of this study is to investigate the strategies that are needed to enable potential owners to own environmentally sustainable homes. The specic objectives are to: determine the extent to which potential homeowners are willing to pay for homes that are environmentally sustainable; uncover the green features that potential homeowners are willing to pay for; and provide recommendations on how more green features can be incorporated in homes. Design/methodology/approach The survey research method was adopted and data were collected using a specially designed structured questionnaire. Self-administered questionnaires were distributed to randomly selected potential homeowners in Singapore. Findings Based on the data received, the ndings show that the majority of the respondents are willing to pay more to own an environmentally green building. However, they are very price sensitive and only willing to pay 1 percent more in upfront costs. Practical implications The study found that the green features that potential homeowners are willing to pay relates to siting for natural ventilation, provision of greenery, and water conservation. It is concluded that the extent to which homeowners are willing to pay higher upfront costs is limited. Originality/value The research provides several recommendations on how to enable more green features to be incorporated to homes owned by price sensitive individuals. Keywords Green, Environmental sustainability, Capital cost, Life cycle costs, Malaysia, Housing, Sustainable development, Construction operations Paper type Research paper

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Introduction In an era in which mitigating climate change and adapting to global warming have become the greatest environmental challenges faced by the human kind, there is a growing interest in developing environmentally sustainable buildings. This is because the construction industry is regarded as one of the major contributors to climate change. According to the American Institute of Architects (AIA, 2000), the biggest source of emissions and energy consumption both in the US and around the globe is the construction industry. According to a brieng note prepared for the International Investors Group on Climate Change (Kruse, 2004), the cement sector alone accounts for 5 percent of global man-made CO2 emissions. In heavily urbanized Singapore, where half the total land area is built up, the building sector is said to account for approximately 16 percent of national CO2 emissions (MEWR, 2008). This gure includes emissions resulting from primary and secondary energy consumption by buildings but excludes the emissions from the industrial process involved in the construction industry. Hence the total of direct and indirect emissions resulting from the construction industry itself could be much higher.

Engineering, Construction and Architectural Management Vol. 18 No. 6, 2011 pp. 579-594 q Emerald Group Publishing Limited 0969-9988 DOI 10.1108/09699981111180890

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In response to the above challenge, the Singapore Building and Construction Authoritys (BCA) Green Mark Scheme was launched in January 2005. It is a green building rating system that assesses buildings and rates their performance in the following areas: energy efciency (maximum 70 points); water efciency (14 points); environmental protection (32 points); indoor environmental quality (eight points); and other green initiatives (seven points) (BCA, 2010). Depending on the score, the building is categorized in four levels: (1) Platinum ($ 90 points); (2) Gold Plus (85-89 points); (3) Gold (7584 points); and (4) Certied (50-74 points). Details of the assessment criteria are found in BCA (2010). The scheme hopes to promote the adoption of green building design and technologies that improve energy efciency and reduce the impact of buildings on the environment (BCA, 2009a). It enables the benchmarking of the buildings environmental performance and allows comparison between buildings. Singapore has set a lofty target of having at least 80 percent of its buildings attain the BCA Green Mark Certied rating by 2030. Details of Green Mark certication are available at BCA (2009b). The incorporation of green features to achieve Green Mark certication generally leads to higher construction costs (BCA, 2007). Hitherto, it is not known to what extent potential homebuyers are willing to buy green homes that cost more than traditional non-green homes. The aim of this study is to investigate the strategies that are needed to get potential owners to own environmentally sustainable homes. The specic objectives are to: (1) determine the extent to which potential homeowners are willing to pay for homes that are environmentally sustainable; (2) uncover the green features that potential homeowners are willing to pay for; and (3) provide recommendations on how more green features can be incorporated in homes. It is important to develop environmentally sustainable homes as they have lower carbon footprints and contribute less to global environmental degradation. As these homes have higher upfront costs, it is therefore important to know how tolerant potential homeowners are to pay more for these homes. If they are not willing to pay more, this study provides suggestions on how to overcome this problem and yet ensure that environmentally sustainable homes are built. Literature review Importance of environmentally sustainable development Buildings use resources such as energy, water and raw materials, generate waste (occupant, construction and demolition) and produce potentially harmful atmospheric emissions. For example, the buildings in the US alone are responsible for more CO2 emissions than those of any other entire country in the world except China (Kinzey et al., 2002). The drivers of building energy demands would include oor space growth, service demand evolution, and the efciency of the technologies in use (Kyle et al., 2010).

It is important to construct in an environmentally sustainable manner because the construction sector emits signicant greenhouse gases (GHGs), making it one of the main human induced causes of climate change. Further, mining and manufacturing of raw materials used in construction and the transportation of heavy building materials are contributing signicantly to climate change (Kruse, 2004). The total of direct and indirect emissions resulting from the construction industry itself is high. When the primary and secondary usage (primary users are those which combust fuel directly while secondary users are those that use the electricity generated from fuel) is put together, the construction sector is one of the main contributors to GHG emissions in Singapore (Gunawansa and Kua, 2009). In the circumstances, developing environmentally sustainable buildings is extremely important in the efforts to mitigate climate change and adapt to changing climate conditions. In addition, living in environmentally sustainable buildings have other benets such as improved health of occupants. According to Fisk and Rosenfeld (1998) buildings with good overall environmental quality can reduce the rate of respiratory disease, allergy, asthma, sick building symptoms, and enhance worker performance. Unfortunately, not enough project feasibility studies consider environmental sustainability, as most of them are still more concerned about economic performance (Shen et al., 2010). What is a green building? Environmentally sustainable buildings are generally called green buildings. According to the US Green Building Council, green building is:
[. . .] practice of increasing the efciency of new buildings, and reducing their impact on human health and the environment through better site location, design, construction, operation, maintenance, and removal (Green Building Council, 2009).

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According to the US Environmental Protection Agency (EPA, 2009a):

[. . .] green building is the practice of creating structures and using processes that are environmentally responsible and resource-efcient throughout a buildings life-cycle from siting to design, construction, operation, maintenance, renovation and deconstruction. This practice expands and complements the classical building design concerns of economy, utility, durability, and comfort. Green building is also known as a sustainable or high performance building.

According to the Urban Ecology Australia (2007), green buildings must make best use of the sun, wind and rainfall to help supply the energy and water needs of occupants. Further, the buildings should be multi-storey to maximize the land available for green space. Thus, green or sustainable buildings should use key resources like energy, water, materials, and land more efciently than traditional buildings. With more natural light and better air quality, green buildings typically contribute to improved health, comfort, and productivity of end users. According to Kibert (2004), green buildings are facilities designed, built, operated, renovated, and disposed of... for the purpose of promoting occupant health and resource efciency plus minimizing the impacts of the built environment on the natural environment. The many denitions reviewed above suggest that there is no universally accepted standard denition to dene a green building. However, it should be pointed out that

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green buildings is a relative concept and not an absolute one. This is because even the best green buildings built today are not 100 percent sustainable as the construction of such buildings is likely to have consumed more resources from the earth than the buildings will ever return to the nature (Kats and Capital, 2003). Whilst it is difcult to nd a universal denition for green buildings, six fundamental principles concerning sustainable construction should persist in a green building (NIBS, 2009): (1) the need to optimize site/existing structural potential; (2) optimizing energy use; (3) protection and conservation of water; (4) use of environmentally friendly building materials; (5) enhancing indoor environmental quality; and (6) optimizing operational and maintenance practices. Kyle et al. (2010) postulated that improvement in energy efciency is important to counter-balance population-driven growth in building service demands. In addition, the evolution of building service demands will be important for future energy consumption and CO2 emissions of the buildings sector, even when advanced, energy-saving technologies are in use. Advanced building technologies are important not only for reducing nal energy demand, but for allowing the buildings sector to switch to low-emissions fuels as they become available (Kyle et al., 2010). Besides the environmental reasons for developing green buildings, they also have business relevance. Heerwagen (2000) found that green buildings are relevant to business interests across the full spectrum of concerns, from portfolio issues (e.g. resale value of property) to enhanced quality of individual workspaces (through improved ambient conditions). Cost of green buildings Environmental friendly buildings will cost about 5 percent to 10 percent more upfront (BCA, 2009b). For example, initiatives to search for, and the use of, new and more environmentally friendly technologies and construction processes to build green homes could lead to cost increases. However, it is also said that green buildings could yield up to 30 percent savings in energy consumption through green features such as building envelope designs which reduce heat absorption, provide more day light, maximize natural ventilation, and use more energy efcient air-conditioning systems and light ttings (BCA, 2009b). Other studies have also stated that while green buildings have higher rst/upfront costs, they invariably have lower lifecycle costs (e.g. CalRecycle, 2009; Green Building Council, 2009). Shendler and Udall (2005) argued that a signicant portion of the additional costs of a green building derives not from the hard costs of purchasing green systems and materials but rather from the soft costs of design, certication, modeling and consulting. This is because paying engineers and architects to create radically new designs is not only expensive, but also unpredictable, and unpredictability itself is a signicant cost for risk-averse actors such as real estate developers (Kingsley, 2008). Another point that needs to be made is that many of the benets of the green approach cannot be easily expressed in dollar and cents (Kats and Capital, 2003). For

example, living in a green building could make our personal environment safer and cleaner and our health better. However, it may not be possible to quantify such benets in economic terms. Gap in knowledge The review above suggests that green buildings are likely to have higher upfront/rst costs. Hitherto, it is not known the extent to which potential homeowners in Singapore, are willing to pay more for green homes. In the eldwork, potential homeowners level of sensitivity towards green home prices and their tolerance level to pay more for green homes are investigated. Homeowners play an important role in requiring green homes as they are the real driving force for buildings to achieve better sustainability (Shen et al., 2010). Many features could be added to homes to make them environmentally sustainable, thus converting them to green buildings. Green building features are those features that lead primarily to energy efciency, water efciency, environmental protection and better indoor environmental quality and other green features (BCA, 2009a, b; IMCSD, 2009). Thus far, it is not known which of these features are welcomed by potential homeowners, and whether they are willing to pay for them. In the eldwork, investigation was carried out to investigate these matters. Research method From the literature review, features of environmentally sustainable homes were identied (see Table I). The research method had the aim of nding out the green features that potential homeowners would like to have and the extent to which they would pay for them. The general research approach was based on questionnaire survey. This was chosen because it allowed a large number of subjects to be studied. The data collection technique was hand-delivered, self-administered survey. This method was chosen because it could efciently reach a large sample, and allowed ease of response. The questionnaire was a more effective alternative to interviews because it enabled a greater proportion of the population to be reached within a limited time frame. Respondents were requested to base their responses on the new home that they would purchase in the near future. A summary of the survey ndings was available to respondents who were interested in the research to encourage participation. The data collection instrument was a structured questionnaire specially designed for this study. Section A of the questionnaire contained questions to gauge respondents awareness of environmental sustainable issues. In Section B, respondents were asked to rate the extent to which they would pay extra for homes with different levels of green mark certications. These were based on BCAs (2010) four certication levels (certied, gold, gold plus and platinum) and the additional costs associated with each level. In Section C, respondents were presented with 16 green features, which were derived from BCAs (2010) green mark rating criteria and literature review in the previous section. They were asked to rate the extent of wanting a green feature if they need to pay more. The questions in Sections B and C were based on a seven-point Likert scale, where 1 not willing or not wanted; 4 neutral; and7 extremely willing or certainly wanted. The last section gathered demographic characteristics of respondents.

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No Green features (1) (2) 5.91

Energy efciency 1 Unit has good natural ventilation inside the unit Coefcient Two-tail signicance 2 Unit is tted with energy saving appliances and light ttings Coefcient 3 Walls and roof in the unit is tted with materials that reduce solar heat gain Coefcient 4 Unit is tted with renewable energy such as solar panels to generate electricity Coefcient 5 Unit has north-south orientation to reduce solar heat gain Coefcient Greenery 6 Plants and greenery planted on the fac ade and roof of high-rise buildings Coefcient Two-tail signicance 7 Extensive landscaping with plants on the premises and grounds around the home Coefcient Two-tail signicance Water efciency 8 Unit is tted with water saving appliances and water efcient ttings, and low water usage Coefcient Two-tail signicance 9 Building has irrigation system for landscaping and plants watered using non-potable or recycled water Coefcient Two-tail signicance 5.91 5.95 5.40 5.63 4.67 4.83 0.355 0.002 0.316 0.006 5.48 4.97

Table I. Signicant correlation between green features and willingness of homeowners to pay for them Mean (3) Pay 1% more (4) Pay 2% more (5) Pay 3% more (6) Pay 4% more (7) 0.249 0.031 0.243 0.035 0.289 0.012 0.277 0.016 0.332 0.004 0.283 0.014 0.262 0.023 0.280 0.015 0.344 0.002 0.336 0.003 0.256 0.027 0.370 0.001 (continued )

No Green features (1) (2)

Mean (3)

Pay 1% more (4)

Pay 2% more (5)

Pay 3% more (6)

Pay 4% more (7)


0.322 0.005 0.252 0.029 0.256 0.027

0.286 0.013

0.323 0.005 0.289 0.012



4.71 5.31

Sustainable construction 10 Certication by developers that the building has been installed with materials that minimize depletion of natural resources Coefcient Two-tail signicance 11 Certication by developers that the building has been installed with materials that adopt reduce, reuse and recycle concepts Coefcient Two-tail signicance 12 Certication by developers that sustainable construction practices have been adopted by contractors during construction stage Coefcient Two-tail signicance Waste management 13 Certication by developers that during construction stage, the contractor had adopted good waste management principles Coefcient 14 Provision of separate bins/chutes that enable waste to be sorted (metal, plastics, paper, thrash) Coefcient Indoor environmental quality 15 Indoor environment: design that leads to low noise level, low indoor air pollutants and high indoor air quality Coefcient Public transport management 16 Public transport accessibility: home is within walking distance of an MRT station Coefcient 5.95 6.27

Notes: Col. 3 Mean average extent of wanting a green feature stated if respondents need to pay more; seven-point scale whereby 1 will certainly not want this feature, 4 neutral and 7 will certainly want this feature; Cols 4-7: One off additional purchase price of 1 percent, 2 percent, 3 percent and 4 percent respectively; For correlation results, rst row is the coefcient, and second row is the two-tail sig. Only correlations that are p , 0.05 are shown

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Table I.

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Before the actual survey, a pilot survey was conducted with three experts to check that the questionnaire is coherent, the data collected would be accurate and meaningful data analysis can be carried out subsequently. After the pilot survey, minor amendments were made to remove ambiguities and discrepancies, and several questions were added. The population of this research was all potential home buyers. The sampling frame was undergraduate students in Singapore. The samples were randomly identied and the questionnaires were hand-delivered to them. Statistical analyses were performed using the PAWS Stats 17 software. The main inferential statistical tests were t-test of the mean and Pearsons correlation analysis. Characteristics of the sample Of the questionnaires, 120 sets were hand-delivered, and 75 responses were received. The response rate of 62.5 percent is good. The characteristics of the respondents are given in Table II. The respondents age ranged from 20 to 27, with an average of 22.15. There is an almost equal mix of male and female respondents, and almost all of them are single. Large portions (45.3 percent) of the respondents major in Arts and Social Sciences and Engineering. The majority (69.3 percent) of them would be completing their studies in 1 to 2 years time, and would purchase their rst homes in 5 to 7 years time. In total, 80 percent of them indicated that their rst homes would be public apartments and most would be buying three-bedroom units. In terms of knowledge and understanding of environmental sustainability, Table II shows that the majority (58.7 percent) of them have high levels of awareness, and the average is 4.63 on a seven-point scale (7 full awareness) which is signicant atp 0:000 and positive t-value. On a seven-point scale 7 extreme importance), they indicated an average of 5.86 for level of importance in developing the built environment in an environmentally sustainable way. It can be concluded that the respondents are at the threshold of buying their rst homes, they represent both males and females who have signicantly high level of environmental awareness and have strong belief in the importance of sustainable development of the built environment p 0:000: Their views and requirements would be more applicable to the public housing authority in Singapore. Results and discussion Willingness to pay more for green homes The rst objective of the study is to determine the extent to which potential homeowners are willing to pay for homes that are environmentally sustainable. The results in Table II show that while the majority (86.7 percent) of respondents have knowledge of environmental sustainability, 28 percent of them are not willing to pay more and would only buy a green home that costs the same as a non-green traditional home. Respondents were also asked the extent to which they would buy a home with different levels of green mark certication which would reap potential savings in electricity bill, but could cost more in terms of one off additional purchase price. The one-sample t-test of the mean (Newbold et al., 2010) was conducted to determine if potential homeowners are willing to pay higher upfront costs for green homes. The null hypothesis (H0) was that they are unwilling to pay higher upfront costs and the

Characteristics Age (years) # 21 22 23 24 $ 25 Gender Male Female Major Arts & Social Sciences Engineering Science Built Environment Computing Business Level of study Year 1 (freshmen) Year 2 Year 3 Year 4 (senior) Environmental awareness level Low Medium High First home purchase , 5 years time 5-7 years time 8-10 years time . 10 years time Home type Public 2 bedroom 3 bedroom Large units Private Willingness to pay more for a green home No Yes

n 29 14 13 14 5 36 39 34 20 8 7 5 1 2 21 31 21 10 21 44 6 43 20 6 60 9 39 12 15 21 54

% 38.7 18.7 17.3 18.7 6.7 48.0 52.0 45.3 26.7 10.7 9.3 6.7 1.3 2.7 28.0 41.3 28.0 13.3 28.0 58.7 8.0 57.3 26.7 8.0 80.0 12.0 52.0 16.0 20.0 28 72

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Table II. Characteristics of respondents

alternative hypothesis (H1) is that they are willing. The decision rule was to reject H0 when the calculated t-value was positive and the signicance level ( p) was smaller than 0.05. It is then concluded that they are willing to pay signicantly higher upfront costs. Table III shows that of the four options, only the rst one Green Mark Certied costing $3,000 or 1 percent more, has a positive t-value and p , 0.05. The nding indicates that potential home buyers are only willing to purchase green homes that cost

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Certication level Green Green Green Green Mark certied Mark gold Mark gold plus Mark platinum

Saving in electricity bill ($ per year) 161 241 400 500

One off additional purchase price ($) 3,000 6,000 9,000 12,000 1% 2% 3% 4%

% more more more more

Sig. Mean t-value (one-tail) 4.68 4.31 4.21 3.76 4.052 1.742 1.061 2 1.058 0.000 * 0.086 0.292 0.294

Table III. Respondents willingness to pay for green homes

Notes: *Signicant at p , 0.01; Mean willingness to pay, 1 not willing; 4 neutral; and 7 extremely willing

up to 1 percent more than a traditional non-green home. Given the current level of sentiment, the nding indicates that ways must be found to convince potential homeowners or alternative mechanisms must be in place to nance the higher upfront costs. These are discussed in the recommendations section. Green features that home buyers would pay for Respondents were asked to rate on a seven-point scale the extent to which each green feature is important for their new homes. Mean scores were calculated and results shown in Table I. The top three most important green features, based on mean scores, are: (1) public transport accessibility: home is within walking distance of an MRT station; (2) walls and roof in the unit is tted with materials that reduce solar heat gain; and (3) indoor environment: design that leads to low noise level, low indoor air pollutants and high indoor air quality. The next step is to nd the green features that potential homeowners are willing to pay for which is the second objective of this study. By knowing these features, developers may proceed to incorporate them in new homes. In order to check the extent to which potential home buyers are really willing to pay for green features, Pearsons correlation analysis was conducted. Pearsons correlation analysis was used to measure the strength and direction of the linear relationship between a pair of quantitative variables. In this research, each pair comprised one of the additional purchase prices and one of the green features. The null hypothesis (H0) was that there is no signicant correlation between how much more a potential home owner is willing to pay and the green features that he wants. The alternative hypothesis (H1) is that there is signicant correlation. The decision rule was to reject H0 when the correlation coefcient is positive and has a signicance level ( p) that is smaller than 0.05. It is then concluded that home buyers greatly welcome and are willing to pay for the specic green feature. Table I shows that eight of the 16 green features are signicantly correlated with respondents willingness to pay. The signicant correlation between good natural ventilation and willingness to pay 3 percent more upfront costs suggests that respondents may be willing to pay more for units that have design and layout that utilize prevailing wind conditions and have

sufcient openings. The advantage of this feature is that the homes need not use air-conditioning, and this would lead to energy savings. The feature relates to siting and orientation, and potentially does not lead to higher costs (CalRecycle, 2009). The next category of green features relates to greenery. The signicant positive correlation shown in Table I suggests that respondents may be willing to pay extra for greenery, whether in the form of sky rise greenery (plants and greenery planted on the fac ade and roof of high rise buildings) or as landscaping at ground level. The advantage of sky rise greenery is that it reduces heat transmitted through the roof thereby reducing ambient temperature and glare, improves sound insulation for buildings and with the right plants, can increase biodiversity (IMCSD, 2009). The third category of green features relates to water conservation. Potential homeowners might be willing to pay additional for homes that are tted with water saving appliances and water efcient ttings so as to reduce water usage. They welcome irrigation system that uses non-potable or recycled water for watering plants. The importance of water to Singaporean respondents may be linked to the scarcity of water in Singapore and its need to buy water from neighboring countries (PUB, 2008). Potential homeowners might also be willing to pay more if developers are able to show them certication that the homes they buy have been installed with materials that minimize depletion of natural resources, or adopted reduce, reuse and recycling practices. Furthermore, potential homeowners are likely to pay more to know that contractors adopted sustainable practices during construction stage. It is consistent with Poon et al.s (2004) nding that contractors do not always adopt sustainable practice, as their sites generate a lot of waste because they do little on-site sorting of inert from non-inert materials, and do not have detailed waste management plan. These requirements indicate a high level of sophistication among the respondents who not only want to own buildings that are environmentally friendly to use, but also were environmentally friendly when they were being built. Recommendations on funding green features Table I shows that there are many other green features that homeowners may not be willing to pay more for. These include features that reduce CO2 emissions like energy saving devices, energy efcient materials and use of renewable energy. There is also a reluctance to pay more for waste disposal, better indoor environment and public transport accessibility. This study also found that one of the main challenges to promoting green homes is end-users unwillingness to pay more than 1 percent upfront costs (see Table III). Objective 3 of this study is to provide recommendations on how to incorporate more green features into homes. Admittedly, some green materials and construction methods are more costly, leading to higher upfront cost and thus discouraging buyers from investing in green homes. The point that has to be made is that, although the up-front costs of a green building may be higher, such costs are often balanced against the long-term low operating costs of the building. According to the available evidence, energy savings from a green home could take care of the cost of green investment over a period of time. Further, the energy savings will also enable the end-user to prot from the green features in the long term after the initial investment cost has been taken care of. Further, once new and energy efcient technologies are developed, due to their low energy consumption, the cost of construction

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is likely to come down. Therefore, it is recommended that a public education be conducted to inform potential homeowners of the lower lifecycle costs of green homes when compared to a traditional building that consumes high volume of energy. Given the potential homeowners reluctance to pay higher than 1 percent in upfront costs (Table III), the second recommendation is to tweak existing project nancing mechanism. If the end-user is short of funds to pay or unwilling to pay the upfront cost of green features, then the project developer or a 3rd party nancier could step in to nance the green features with provision for recovery of the cost plus a reasonable prot over a period of time from energy savings. The third recommendation is to provide affordable low interest loans to end-users so that they can pay for green features by themselves and payoff the loans from the savings achieved from the green features used in the building. The savings would come from a variety of energy-saving features such as increased insulation and air sealing; high-performance windows and doors; high-efciency heating and cooling systems; and energy-saving appliances and lighting. In this regard, it is recommended that Singapore learns from other cities, in which efcient mechanisms have been put in place to nance green homes. For example, in New York, the State Energy Research and Development Authority (NYSERDA, 2009) administers approximately 2,700 projects through its New York Energy Smart Scheme. The homeowners who qualify under the scheme can get low-interest loans to include green features into their homes through the New York Energy Smart Loan Program. Under the several energy nance solutions available in the program, homeowners could get up to US$20,000 as unsecured loans payable during a period of up to ten years (NYSERDA, 2009). The participating lenders offer the loans at up to 4 percent below existing interest rates. The state also offers federal tax incentives to those who install energy efcient equipment and measures into their homes (EPA, 2009b). The fourth recommendation is through legislation, which has been adopted by Singapore. The government has an important role to play in promoting sustainability with policies, laws and regulations, and balance the interests among economic, social and environmental stakeholders through rewards, approvals, taxes and punishment (Shen et al., 2010). In order to encourage greater use of natural light and ventilation, and with proper insulation that ensures less energy is used to cool down buildings, the BCA has established minimum energy efciency standards under the Building Control Regulations. Specically, air-conditioned buildings must be designed with a high-performance building envelope that meets the Envelope Thermal Transfer Value (ETTV) of 50W/m2. The regulations also require air-conditioning equipment and lighting to comply with minimum efciency standards prescribed in the Singapore Standard Code of Practice for Building Services and Equipment. In addition, the Building Control (Environmental Sustainability) Regulations 2008 have mandatory provisions on the minimum environmental sustainability standards that construction projects must adhere to. The current minimum Green Mark certication requirement is not an absolute solution to the problem of mitigating the CO2 emissions from the construction industry and adapting to the changing climate conditions. It is only a minimum criterion that has been introduced by the government by probably taking into consideration the tolerance level and the affordability of end-users. Thus it is recommended that the government, through the public housing authority, lead by developing public housing

to Gold or Platinum certication levels. This however, is going to be a signicant challenge for the government given the popular perception that green buildings are considerably more expensive than traditional buildings. As argued in the previous sections of this paper, this cost perception is a myth if the lifecycle performance of a green building is taken into consideration. Thus, it is important to develop a strategy to defeat the current perception of overly expensive green buildings and educate prospective home buyers of the nancial and other benets of green buildings. Limitations of the study The main limitation of this study is the use of undergraduates as the subject of study. They were selected because this sampling method is an inexpensive way of ensuring sufcient numbers. Moreover, many studies in humanities and social sciences (e.g. Gouveia et al. (2002) and Herrero et al. (2010)), at least initially, were obtained with student subjects. As these student subjects who are purchasing a house in ve to seven years time, the ndings would give developers time to incorporate the green features into the new homes that are built. Furthermore, the general publics understanding of green homes and the related public awareness programs do not have a long history. In many countries in Asia, including Singapore, only recently have initiatives been taken to promote public awareness of the need for sustainability in the built environment. Thus, engaging undergraduates who have beneted from such initiatives was considered an effective way of testing the pulse of the next generation of potential home buyers. Nevertheless, the limitation is that the ndings might not be representative of the general population, and future studies could be conducted on a random sample of population. Another limitation is the degree of reliability of the data gathered due to self-reporting and a possible difference between actual and perceived behavior. Future research on other population groups, e.g. subjects without higher education, and actual behavior could be conducted. The next limitation is the correlation results in Table I. Some statistical anomalies are found in several instances whereby there is signicant correlation between wanting a green feature and willingness to pay a higher price, but no signicant correlation with willingness to pay a lower price. These statistical anomalies could be due to internal inconsistencies. Future studies could ask respondents to rate the maximum extra price they are willing to pay for each green feature. This study provided several recommendations on how potential homeowners can be persuaded to purchase green homes, which have higher upfront costs. In future studies, these recommendations could be tested for their efcacy. Conclusion This study investigated whether potential homeowners are willing to pay for environmentally sustainable homes. Using a structured questionnaire, data were collected from undergraduates who plan to buy their rst homes in several years time. The statistical analysis revealed that the majority (72 percent) of them are willing to pay more for homes that incorporate green features. However, their cost tolerance is low the majority of them are only willing to pay 1 percent more in upfront costs. This is far too low to fund the many green features that could be incorporated to make homes more environmentally sustainable.

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Of the 16 features, this study shows that potential homeowners are willing to pay for half of them. These generally relate to natural ventilation, greenery, water conservation and certication that conrm the homes used environmentally sustainable materials and adopted sustainable construction practices. As for the other eight features, though they lead to more environment sustainability, there is signicant reluctance on the part of potential homeowners to pay for them. It is therefore recommended that potential home buyers be educated about lifecycle costs instead of focusing merely on upfront costs. In addition, third party nancing of green features should be considered. The third party nancier may recover the investment plus expected prots over a reasonable period of time from the end-user who will benet from the green features. The next recommendation is to give out low interest loans to end-users. Government should also lead by developing highly green public housing. In the road ahead, policy makers and regulators may need to take into consideration issues such as the demand for new and cheaper buildings; the cost of nding new and energy efcient technologies; the need to meet national and international emission reduction standards; the need to restructure existing practices and energy usages in the industry to be more environmental friendly; and the need to be alert to adapt to changing climate conditions which is likely to be inevitable, when planning and taking decisions relating to building and construction industry. In other words, the entire lifecycle of buildings could be changed in order to establish a coherent succession of sustainable construction activities.
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Shen, L.Y., Tam, V.W.Y., Tam, L. and Ji, Y.B. (2010), Project feasibility study: the key to successful implementation of sustainable and socially responsible construction management practice, Journal of Cleaner Production, Vol. 18 No. 3, pp. 254-9. Urban Ecology Australia (2007), Ecological Cities, Urban Ecology Australia, available at: www. (accessed 16 December 2009). Corresponding author Asanga Gunawansa can be contacted at:


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