Real estate has long been the go-to investment for those looking to build long-term wealth for generations. Let us help you navigate this asset class by signing up for our comprehensive real estate investing guide.
As climate-change-driven events occur around the world, sustainability is more and more of a concern. Construction and demolition materials are one of the largest waste streams on the planet. The Environmental Protection Agency reported that in 2017, the United States generated 569 million tons of construction and demolition debris, which is more than is generated by municipal waste.
While 90% of that is from demolition, the 10% that comes from construction can be reduced. One of the ways to incentivize developers to make their commercial real estate and residential projects more sustainable is the LEED program.
What is LEED?
LEED stands for Leadership In Energy and Environmental Design. It began in 1993, and starting in 1998, it evolved into a third-party certification program for sustainable design that has verified the sustainability of thousands of buildings.
LEED certification looks at a variety of factors in each project, encompassing both the design and construction process as well as the ongoing performance of the building. LEED focuses on waste, energy savings, water conservation, and the use of sustainable materials.
What is LEED certification?
LEED certification is handled through the United States Green Building Council (USGBC). It is available for everything from single-family homes to entire cities. There are LEED programs for new construction as well as for existing buildings whose owners want them certified for their operations and management. Buildings are rated on a 100-point scale and earn Platinum status if they receive over 80 points. Gold status is for buildings that score between 60 and 79 points, and Silver is for buildings that receive 50 to 59 points.
LEED v4 was created to update the LEED system in 2013. A second iteration, LEED v4.1, was released in 2018, partly because very few projects were certified through LEED v4. The program was updated to address new sustainability concerns. LEED v4.1 puts a great emphasis on the materials used. The new system is for both new and existing buildings and expands the elements a project can get credits for including not just energy efficiency and water conservation but site selection, materials, use of natural light, and waste reduction.
Becoming LEED certified does cost money. A flat fee is required for registration, and then a certification fee is assessed based on the project's size. New projects are given a coach through the USGBC to help guide the process.
Why get LEED certified?
Getting LEED certified is good for public relations and for branding a building. People are very interested in sustainability, and LEED is well known as a standard for green building. This is attractive both on the residential front as well as for commercial leasing.
In some locations, LEED buildings can be eligible for tax credits. Local governments may also be more likely to approve a project if they know it will be going for LEED certification, and it can also be good for community relations. Over time, LEED certification can also result in maintenance and operations savings for the building.
For construction businesses as well as architecture firms, it can be a value-add to become conversant in LEED practices and in the process of getting a building certified.
Because of LEED's popularity, some critics have accused the program of "greenwashing," or being used to certify buildings that may not be sustainable over the long haul. One of the reasons that LEED has been updated multiple times is to continue to evolve with the ways that buildings are being designed to better benefit residents and the planet.
LEED is not the only program around for certifying the sustainability of a building. Other programs include Passive House, Energy Star, Zero Energy Certification and Well Building. Each of these programs focuses on specific elements of sustainability such as energy usage or the overall health of building residents.
The Millionacres bottom line
LEED provides a framework for developers, architects, and construction companies to evaluate the many components of what makes a building sustainable and healthy for its residents. With climate change remaining a top-of-mind concern for most people, LEED certification provides an extra level of reassurance that they are making a sustainable choice for where they live and work.
Unfair Advantages: How Real Estate Became a Billionaire Factory
You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why.
But those barriers have come crashing down - and now it’s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.
To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.