How to Understand the Costs and Benefits of High-Performance Buildings

July 29, 2020
Modern apartment building
By Robert Herhold

It can be difficult for home builders to assess the true value of a high-performance residential building for its occupants, especially when it includes a hefty premium. But now, people are becoming increasingly aware of their homes, and a healthier building could be attractive. NAHB outlines some of these hidden values and opportunity costs, such as the idea that a building with better indoor air quality could mean less doctor visits for a resident. And high-performance practices could keep a tenant living in that unit, minimizing the costs that occur with high turnover rates. NAHB says that although high-performance construction methods may come at a high price, many of those costs can be recouped. 

The initial cost of a residential building is a primary calculation for builders, but what happens if that is comingled with considerations of the total cost of ownership, opportunity costs or other hidden values? These could include decreased number of doctor visits because of improved indoor air quality or fewer days of work missed from being sick.

Tradeoffs occur when designing various features; opportunity cost is the potential profit loss when one option is chosen over another alternative. What costs and profit losses might occur when you choose to not build green? Evaluating costs and benefits can be multifaceted, so choosing one method over another might depend on a buyer’s priorities.

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