Is Building Green Worth the Investment? 

April 30, 2020
Modern home solar panels
By slavun

It's not easy building green, but many builders say that green features add value to the home and create a better overall environment for the homeownera point that is increasingly important as the topic of healthcare takes the national stage. Roughly 86 percent of single-family builders agree that building green costs more than a traditional home, but 70 percent say homebuyers will pay more for a green home, according to the 2020 Green Single Family and Multifamily Homes SmartMarket Brief. Additionally, consumers themselves are becoming more interested in green building and demanding technology that will promote a healthy home. Jerud Martin, co-owner of Urban NW Homes, says that there has been a wave of inquiries about HVAC systems, but now even more requests are pouring in since the pandemic began. 

The 2020 Green Single Family and Multifamily Homes SmartMarket Brief, released before the onset of the COVID-19 crisis, found that most single-family builders (86%), single-family remodelers (72%) and multifamily builders/remodelers (74%) agree that building green costs more than building a traditional home, with the majority reporting a 5%-10% premium. These responses are similar to those reported in the 2017 SmartMarket Brief.

Even the majority of green builders agree there is a cost premium, although the percentage who find that it does not cost more to build green (12%) is three times more than those with low green involvement (4%). These data indicate that — once builders conquer the learning curve, have teams that are comfortable with and experienced in green building practices, and realize economies of scale where possible — green building can be done cost effectively.

Although some green homes may come with a cost premium, single-family builders and remodelers both perceive that owners of green homes experience value from their homes that typically outweighs any additional original cost. About 70% believe that customers will also pay more for these homes and nearly half think they will pay 5% or more, enabling builders to recoup the additional initial costs some encounter when building green.

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