Sustainability Has Tipped The Scale, Thanks To Risk – Building Green Portfolios
Property developers have long weighed up the pros and cons of converting to sustainable building practices. Finally, according to The New York Times, many developers are seeing sustainability as a key need in new projects in order to offset the risk posed by climate change. With this sea change in place, investors and developers of all sizes must now look to implement sustainability into their development plans – the good news is that there are plenty of ways to do this.
Retrofitting Existing Stock
Existing housing stock has a lot to work on in order to minimize its carbon footprint. According to CNBC, buildings are responsible for 39% of global emissions, yet they could do so much better – without requiring large-scale renovation. For instance, introducing simple sealing around windows and doors will reduce airflow leakage by 25%. This, in turn, will drastically reduce energy bills – keeping properties cool in summer, and hot in winter. These are simple but essential upgrades to a property that is significant for the environment and one’s long-term wealth.
Embarking on Renovation
Global shortages in contractors and materials mean that renovation has been slow coming to American homes. Indeed, as Bloomberg highlights, costs just keep rising, despite the world largely being ‘back to normal’ as it concerns the supply chain. However, that doesn’t mean renovation shouldn’t come. Subsidies and renovation benefits across the country benefit property developers who move towards sustainable designs and property management. Paired with the installation of green energy, this can present further opportunities.
For Building Green Portfolios Installation of Solar
Research by Duke Fuqua School of Business shows that tenants are, by and large, interested in solar – but are unwilling to put money into it, given that that value is then shifted to the landlord, and can represent a large outlay. Furthermore, the cost of solar panel installation can be prohibitive without a property to leverage it against; something renters do not have available to them. Installing solar can be a great way to attract good tenants, and will often garner a higher rental price.
Sustainable development in existing or new housing stock has not been financially viable for many years. This has changed, now, both for risk purposes and for appealing to new tenants. Sustainability is the future of property management and must be achieved to retain a lead over competitors.