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People Are Paying a 20% Premium for ‘Green’ LEED-Certified Condos

Plus: 4 things to know before you build a LEED Platinum home

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Inside a LEED-certified condo at 70 Little West 12th Street in Manhattan.

Douglas Elliman Real Estate
Inside a LEED-certified condo at 70 Little West 12th Street in Manhattan.
Douglas Elliman Real Estate

Homebuyers are willing to pay a 21% median price premium for LEED-certified condominiums, according to data compiled by realtor.com. LEED, which stands for Leadership in Energy and Environmental Design, is a third-party certification by the U.S. Green Building Council (USGBC) for high-performance green buildings. It looks at water conservation, energy efficiency, materials, indoor air quality and innovative design. The LEED premium for condos can range from 0 to 80% depending on the building characteristics and the surrounding area, according to data analyzed for Mansion Global by realtor.com. (Both Realtor.com and Mansion Global are owned by News Corp.) MORE: You Can Buy All Five of These $50 Million Homes for the Price of One New York Apartment As an example of a potential 80% premium, a property in New York’s 10026 Zip Code, in the Circa Central Park condominium project, is listed at $4.5 million, while a comparable property at 125 Central Park North is listed for $1.59 million. Realtor.com was unable to analyze the price premium on single-family homes with a LEED certification because the sample size was too small. Only properties with a list or sale price above the national luxury threshold of $750,000 were included in the analysis. The sample size involved 155 condo buildings in 15 states where there was at least one LEED listing on realtor.com. The 21% premium was surprising, said Javier Vivas, economic researcher for realtor.com. “We’ve analyzed eco-friendly features before and they range from a 2% to 10% premium,” he said. MORE: Golden State Warrior Stephen Curry Lists Orinda, Calif. Home A full certification appears to carry more weight.  However, Vivas cautioned that other factors should be taken into account when considering the price premium. LEED certified condo buildings often are newer properties as the LEED residential label has only been around since 2008. They tend to be located in prime locations and may have other amenities that play into the price premium. Other surveys confirm price premium Other studies have also cited a premium for green residential buildings. A regional study from 2012 shows a premium of up to 9% for green homes in California. California has far more LEED-certified residential properties than any other state—nearly 8,600 units have a LEED Platinum designation in California, according to USGBC. The state’s robust building climate, incentives and a strict energy code have encouraged LEED certification there, said Asa Foss, director of LEED Residential Technical Development for USGBC. There are four LEED levels: Platinum, Gold, Silver and Certified. Projects earn points related to sustainability. Based on the number of points earned, a project receives one of the four LEED certifications with Platinum as the pinnacle achievement. MORE: This Is the Most Expensive Home Sold in NYC in 2016 Another regional study shows a 3.5% price premium for green homes in Washington, D.C. Realtor.com calculated the LEED premium as the median price per square foot difference between LEED listings and non-LEED listings in the same ZIP code. The analysis was based on a sample of active and recently sold luxury condo listings as of April 12. Across the country, 3,667 residential projects with 29,711 units have obtained LEED’s highest designation, a Platinum certification, according to the USGBC. The bulk of the designations are with condos. USGBC doesn’t track how many of these projects fall into the luxury category. “We do see a lot of very high-end luxury homes on the custom and small production scale" that obtain LEED Platinum certification, Foss said. “Our numbers on multifamily dwarf that of single-family and a lot of that is downtown, CBD luxury apartments and condos.” First LEED Platinum in Highland Park, Texas Dallas-based Welch Architecture recently completed the first LEED platinum certified home in the exclusive enclave of Highland Park, a small town in central Dallas. “To get to the platinum level it really takes a commitment from everyone involved: the owner, the architect and the contractor,” said Cliff Welch, principal at Welch Architecture, which specializes in modern residential architecture. The Highland Park house includes a geothermal mechanical system and solar panels but it doesn’t collect rainwater because the small site made above-ground collection unsightly and underground storage cost-prohibitive. What you need to know to go LEED Platinum 1. It’s challenging. Standard practices plus a few add-ons won't get you there. “You really need to be committed to building green,” Foss says. 2. Make decisions based on your priorities and then apply the LEED scorecard. You want to make sure your house has a high quality design that meets your needs. 3. Certification comes with a financial cost. You’ll need to hire third-party inspectors and you may pay more for locally sourced and sustainable materials and equipment. 4. It’s time-consuming. There will be a lot of documentation that must be tracked throughout the process. MORE From Mansion Global: