The Green Housing Boom

EnlargeThe Cellophane house | Photograph by Kieran Timberlake Associates

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"How do you inspire a revolution?" It's a question that obsesses Matthew Berman. A 36-year-old New York architect with short hair and a starched blue shirt, he doesn't, frankly, look like much of a rebel. "There's this grumbling," he continues. "It grows, it brings things to the center, and then you get this explosion."

Berman and his partner, Andrew Kotchen, 35, boast high-profile clients such as CNN's Anderson Cooper, but they think of themselves as guerrilla fighters in a global cause: reducing the impact of housing on the environment. When it comes to trashing the planet, gas-guzzling automobiles and belching factories get most of the blame. Yet the primary offenders are actually closer to home. Here are the shocking numbers: The construction and operation of buildings generate half of all greenhouse-gas emissions in the country, according to estimates based on data from the U.S. Energy Information Administration. Residential buildings alone account for 21% of national energy consumption -- nearly as much as transportation (27%).

Read the morning papers, and it's hard not to feel that the American housing industry is on the brink of the apocalypse. Home prices are plummeting, in some areas as much as 40%. However, it's exactly the gravity of the situation that some housing analysts see as the opportunity of a lifetime -- the chance to jolt us into embracing green housing.

The eco-revolutionary grumbling that Berman hears is spreading from communities such as California's Marin County, which now insists that all large houses meet the energy budget of a 3,500-square-foot home, to Aspen, Colorado, and surrounding Pitkin County, where any new home larger than 5,000 square feet faces special renewable-energy requirements. The latest report from McGraw-Hill Construction, cosponsored by the National Association of Home Builders, predicts that the market for green housing will grow to from as little as $12 billion this year to between $40 billion and $70 billion by 2012.

Even some large commercial home builders -- forced into hibernation by the real-estate bust -- have begun sketching plans for a decidedly different generation of American houses. "Until recently, the publicly traded home builders saw green building as a niche market best taken up by smaller players," says David Wood, director of the Boston College Institute for Responsible Investing. "But with the down market, this could be a good time for them to differentiate themselves from competitors."

Jeffrey Mezger, president and CEO of Los Angeles -- based KB Home, which built 23,743 houses last year, is among those considering the green implications -- largely for economic reasons. Two years ago, he says, the average KB Home in Southern California for a couple with two kids was 3,000 to 3,200 square feet. Today, it's 2,200 to 2,500 square feet. "Heating and cooling bills in a 3,000-square-foot home are more painful in tougher economic times," Mezger explains. In May, when Wood's BC group and Calvert Investments ranked the 13 major home builders on their environmental practices, KB ended up in the top spot.

Not everyone has gotten with the program. "When people walk into Toll Brothers, they want the luxury that Toll Brothers offers," says Matt Wilkinson, senior project manager for the high-end builder in Bucks County, near the company's Horsham, Pennsylvania, headquarters. "If people want a smaller house, they can purchase in a different community." (Toll Brothers ranked ninth on the BC/Calvert list.)