Part 1.3 - Benefits of Promoting Municipal Regulations on Green Buildings
Benefits of promoting municipal regulations on green buildings
Sustainable buildings carry benefits for all actors involved in the construction sector and environmental care, in particular for the following areas:
1.3.1. Citizens and society
The main beneficiaries of the construction of sustainable buildings are the citizens and society in general, for the following reasons:
a. Savings in energy and water costs
Occupants of sustainable buildings save on utility costs by saving energy and water. For companies that own or lease this type of space, this also means lower operating expenses.
b. Increased comfort and healthy spaces
Comfort and a healthy environment hold value for residents and workers, as they have a positive impact on health and productivity.
c. Medium and long term investment benefits
Studies in more mature green building markets have shown that investing in a sustainable asset offers higher resale values, more attractive leasing terms and higher occupancy rates in the case of commercial assets.
In addition, it attracts international investors and tenants seeking higher levels of efficiency, creating more attractive cities.
d. Aligning consumers with climate change priorities
Rising awareness of the need to care for the environment drives demand for products that have a lower environmental impact, including properties.
1.3.2. Developers or builders
The private sector benefits from both financial and non-financial (technical) incentives provided by public entities through:
a. Increased profitabilty
The different incentives are intended to increase the profitability of green buildings. This occurs either by increasing the area available for sale or rent, in the case of building incentives, or by reducing taxation on sustainable construction inputs, thereby lowering costs for the builder.12
b. Enhanced building value
Buildings carrying an international certification such as EDGE or LEED, hold a value that is on average 7.5% higher than comparable noncertified buildings.
c. Unique branding opportunities
Companies can position themselves as leaders in sustainable construction and align their Corporate Social Responsibility strategies with the Savings associated with building green.
1.3.3. Public entities implementing the initiative
a. Compliance with COP2113 commitments and opportunity to position public entity
Green building incentives allow any government or public entity to play an active role in the fight againstclimate change and showcase good environmental practices in public administration.
b. Indicators on resource savings
Data provided by green building certifications allows local governments to generate verifiable and measurable figures on savings in energy, water and CO2 emissions, as well as estimated amounts of green investment. These verified figures will inform and provide accountability on the results of municipal management to stakeholders and society in general and will also align the local government with climate goals established in the Paris Agreement.
c. Green economic growth
The construction sector is an effective driver of a country’s economic activity. Incentivizing this sector to be more sustainable can help attract investment to the municipality, and in turn generate greater local employment14.
d. Positioning of the town and city
Encouraging green construction emphasizes the priority that the municipality gives to environmental policies, positioning it positively in terms of climate investment. Likewise, sustainable buildings consume fewer resources for drinking water and electricity, contributing to the responsible management of these resources.
Real Estate Potential
12 Housing programs that subsidize the purchase of a home with features that directly benefit the buyer also help the developer, as they incentivize the purchase and thus the development of the market. Public programs that include additional purchase incentives for the purchase of a sustainable property are also important measures to promote the green building market.
13 COP21 is the abbreviation for the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC). The central objective of the Paris Agreement is to strengthen the global response to the threat of climate change by keeping the global temperature increase this century well below two degrees Celsius above pre-industrial levels and to pursue efforts to further limit the temperature increase to 1.5 degrees Celsius. The Agreement requires all Parties to do their utmost, through Nationally Determined Contributions (NDCs), and to redouble their efforts in the coming years. This includes the obligation for all Parties to report regularly on their emissions and implementation efforts.
14 According to the International Energy Agency (IEA), for every US$1 million invested in energy efficiency measures in the building sector, an estimated 9 to 30 jobs are created.