U.S. apartment market getting greener
The U.S. apartment market is hotter, more competitive and more popular than ever. With increasing interest in sustainable living, the newest and trendiest urban apartment buildings are also green.
An analysis by U.S. apartment search website RENTCafé shows that there are now 13 times more LEED-certified apartments being built per year than eight years ago, when LEED-certification began being widely-used by the multifamily sector, reports the Urban Developer.
Leadership in Energy and Environmental Design (LEED) is an international recognized green building certification system developed by the U.S. Green Building Council (USGBC). As of October, there are 3,187 LEED-certified (or pending certification) residential projects in the United States, according to the organization.
To show how much the U.S. apartment market has evolved in terms of sustainable building, on average 18 percent of the large apartment buildings (of 50-plus units) that hit the market last year in the U.S. were LEED-certified or proposed for certification. In 2008, only 2 percent of large-scale apartment properties were green.
Overall, about 15 percent of the U.S. apartment stock (in the large multi-family segment) built after 2008 is built by sustainable standards.
By year’s end, 59,000 LEED-certified apartments are expected to be completed in 50-plus unit buildings, four times as many as five years ago.
The volume of green apartment construction is concentrated in urban areas, according to property data from Yardi Matrix, which covers rental buildings with 50 units or more. Chicago leads the country with the largest number of green-certified apartments, with approximately 13,800. Thirty-four percent of Chicago’s newer apartment buildings (opened since 2009) are green.
Some cities stand out for being the greenest cities for renters, as they offer the largest numbers of eco-friendly apartments relative to their total population. Cambridge, Mass., tops the list of the best cities for “go green” renters with one green-certified apartment for every 39 people, followed by Seattle (1:61) and Alexandria, Va. (1:70).
Although eco-friendly construction is becoming more common, green-certified apartments overall continue to be more expensive than apartments that don’t follow sustainable standards. Rents in LEED-certified apartments exceed those in regular apartments by $560 per month on average, nationwide.
Looking at the price of rent in apartments built after 2009, the national average rent for a LEED-certified apartment is $2,260, while that for a regular apartment is $1,700. In other words, green living is 33 percent more expensive, and that remains true across all asset classes (high-end, mid-range or affordably-priced apartments).
A recent RENTCafé survey of over 2,600 renters revealed that, while a large portion of renters care about the environment and would like to live in an environmentally-friendly building, when it comes to cost, they are not willing – or able – to pay nearly as much as the market currently asks.
Fifty-two percent of respondents said they would pay no more than $100 per month in extra rent for the benefit of living in a green apartment, while 23.5 percent said they wouldn’t pay anything extra.
At the opposite end, 10 percent of respondents are willing to pay upward of $500 per month to rent a green apartment. The largest share of those willing to spend that much are baby-boomers.
With a growing number of people who want to live and work in buildings that use materials, finishes, and fixtures that have a good impact on the community and the environment, increasing demand for green-certified rentals is expected to continue, the research found.
Topics: Architectural Firms, Building Owners and Managers, Construction Firms, Consulting - Green & Sustainable Strategies and Solutions, Engineering Firms, Environmental Firms, Multifamily / Multiunit Residential, Sustainable Communities, Urban Planning and Design