The natural environment and real estate investment
When it comes to housing, for many years, concerns about the natural environment were low on the list of priorities for developers. Community-builders saw the natural environment as a backdrop for their projects rather than a critical element in their design and function. Think gated developments set within lush valleys or mountainside retreats that sit apart from their surroundings, rather than being integrated into the natural environment.
Despite the mistakes of the past, societal and consumer demands have led to a sea change in how many developers view the environment, and how they can integrate and protect the environment while still generating solid returns on their capital investments.
Among the most important contributions a developer can make to the local environment is to build walkable communities. The ability to walk to local shops, work, and recreational activities decreases the addition of carbon monoxide and other noxious gases into the air. There are many other benefits offered by walkability, including healthier populations, increased local commerce, and the ability to save space by not building wide roads and parking lots.
Leaving the tree canopy intact
A 2018 US Forest Service study found that communities lost 36 million trees in just five years between 2009 and 2014, almost 1% of total tree coverage in the United States. Trees provide shade for nearby buildings and lower surface temperatures in the area. They also actively take in and release moisture, which helps cool the air. By embracing non-traditional development models, and protecting tree canopy and other natural features, developers can create communities that benefit the environment, while also attracting residents who have an appreciation for green living.
Embracing water saving technologies
The planet is getting hotter. Many areas of the country, particularly in Sun Belt states like Arizona, Nevada and New Mexico, are experiencing increasingly more severe and longer heatwaves. Many Sun Belt states rely heavily on aquifers, in particular, the Ogallala Aquifer, which acts as a significant source of water for eight states in and around the Sun Belt. Water-saving technologies like low drip faucets, water-efficient dishwashers and laundry machines, and xeriscaping can help save residents and investors money, while also preserving our precious water resources.
Utilizing alternative, pro-environment funding sources
One hundred of the largest companies on the planet are responsible for 71% of greenhouse gas emissions, according to The Guardian. These companies enjoy a symbiotic relationship with traditional banks, mortgage lenders, and other big financial players who are the primary source of funding for most real estate projects. If green building and green tech projects become the standard, these companies may lose billions or even trillions of dollars in value over the long term. So it should comes as no surprise that these same companies are not particularly gung-ho about investing in green real estate projects.
Instead of soliciting funds from financial institutions that are diametrically opposed to progressive environmental and social ideals, developers can go straight to the people by raising capital with crowdfunding platforms. Millions of investors across the United States are ready to invest with their conscience, not just their pocket book, and a not-insignificant amount of those investors are interested in green building solutions.
Partnering with local governments and nonprofit organizations
Environmentally-friendly developers hold a unique advantage over large firms- they are well-positioned to work with the community and with government entities to get projects shovel ready and completed as soon as possible. This is especially true in dense urban areas. Cities are leading the way in green legislation, from building codes to transportation, and this allows developers in this space to have projects greenlit with far less resistance than a traditional development.
Every industry-not just real estate development- will have to adapt to a greener future. We’re already seeing the growth in this trend in the automotive, restaurant, logistics, and energy sectors, among others. This makes the choice to get in on the ground floor with environmentally sustainable development an easy one. The combination of community and government support, along with return on investment and cash flow boosting green measures make developing sustainably a formidable strategy for developers and investors.
Image by Eve Picker