The sustainability of green construction
Tuesday, July 31st, 2007Anchor Modular Buildings is a member of the U.S. Green Building Council (USGBC). A recent article in a construction trade publication indicates that the additional investment for “green” construction amounts to $4/SF while the return on that investment is $58/SF. Of course, you need to read the fine print. The $58/SF return is over a 20 year period. So you pay an extra $4/SF now and recoup $58 over 20 years? For those of you that were not finance majors - - we need to figure in the “time value of money”, which we assume the USGBC did not take into account. If you use an 8% interest rate, the net present value works out to be about $23/SF positive cash flow. That is still a terrific return on your investment. Though the USGBC study showed that $42 of the $58/SF savings were from “health and productivity” savings. So 72% of those projected savings are from factors which will be very difficult to measure? If you back out the $42/SF from our net present value calculations - - your investment will make about $3.50/SF over the twenty years.
So, overall we believe that investments in sustainable construction will pay off, though they may not be easily quantifiable and will certainly not be recouped quickly. Of course it is hard to quantify the effects of doing the right thing for our environment and it is hard to put a dollar value on that. Anchor Modular Buildings supports green/sustainable construction, however realistic expectations need to be set at the onset of the project.