San Francisco Imposes Green Building Codes

Published November 1, 2008

Green building codes signed into law by San Francisco Mayor Gavin Newsom (D) may cost city residents and businesses $700 million each and every year in expenses and lost economic output, the city’s Office of Economic Analysis is reporting.

The green building codes, signed in August, will force residents and businesses to pay significantly higher construction costs and rents and will likely drive many of them out of the city, the agency warns.

Newsom dismissed the report and is predicting the new restrictions will actually attract businesses to the city.

“It requires a mandate in order to get people to do what’s in their best interests sometimes,” Newsom told the San Francisco Chronicle for an August 5 story.

Small Homes Don’t Escape

Proponents of the restrictions hope the mandates will combat global warming and force residents and businesses to conserve more energy and water. The restrictions forbid new construction or building renovations that do not first obtain approval from green building certifiers Leadership in Energy and Environmental Design (LEED) or GreenPoint.

Small and medium residential construction will be evaluated on a point system under the GreenPoint rating system. New construction and renovations of residences of more than 5,000 square feet, and commercial buildings of more than 25,000 square feet or more than 75 feet tall, will have to meet more stringent LEED certification requirements.

The new codes require all buildings to recycle construction materials and include renewable energy, storage space for recyclables, storm water management, and a 50 percent reduction of landscape water use.

Cost Estimates Questioned

Todd Myers, environmental policy director for the Washington Policy Center and author of several green building studies, says proponents of the new restrictions underestimate the costs of the new codes and overestimate the environmental benefits.

“The supporters of green building codes say construction costs will rise only 2 percent, but this is too low” an estimate, Myers said. “Supporters say they looked at green buildings built by private companies and found that, when built, they only cost 2 percent more. But that study ignores all instances where green buildings were considered but rejected due to cost. They are looking only at buildings where the economics were extremely favorable, rather than a cross-section of how these requirements would affect all buildings.

“Estimates that account for all buildings and factors put the costs at about 6 percent, and real-world energy bill savings are surprisingly low,” Myers said.

Savings Estimates Exaggerated

“When proponents argue that new restrictions will actually save money, they are arguing that companies are ignoring large energy savings for no good reason. Why would any company in California ignore energy costs? They wouldn’t, which undercuts the claim that these restrictions will save money,” said Myers.

“In schools of similar size and components, and that deal with the same weather patterns, I found that while advocates claimed that the [green] buildings would save 30-50 percent a year, the schools were nowhere near that good. In fact, I found several schools where the energy costs were 20 to 30 percent higher than recently built non-green schools.

“The new Seattle City Hall was supposed to use much less energy than the older, larger building. When it was opened, however, it used about 30 percent more energy despite the fact that the new building was smaller,” Myers added.

E. Jay Donovan ([email protected]) writes from Tampa, Florida.