C sm 305 leed report

LEED Construction Is it Worth the Cost?

Prepared forMrs. Anastasia Britt

CSM 305 Students Fall 2011Ohio State University

Columbus, Ohio

Prepared ByMargaret Ramsey

Josh ClemensNeal Dudash

November 21, 2011

FABE Construction Systems Management 305 StudentsOhio State UniversityColumbus, OH 43210 November 21, 2011 Mrs. Anastasia BrittFABE Construction Systems ManagementOhio State UniversityColumbus, OH 4320 Dear Mrs. Britt:

Here you will find the report you requested in Construction Systems Management 305, our groups chosen topic, “LEED Construction is it Worth the Cost?” and our recommendation.

During the research of the topic, our team considered the additional costs by using materials required to obtain LEED certification for a newly constructed building. Also we included the examples of materials used during the construction of the new Ohio Union, a LEED Silver building, and the features that make it unique. Our findings show that while LEED may add additional cost to a new building that the benefits out way the initial costs. Additionally these costs can possibly be offset by rebates from local, state, and federal governments.

The United States government requires that all new government buildings be built to LEED certified standard, and any major renovation over 2000 square feet also be built to LEED standards.

The information contained within this report came from several helpful resources. The US Green Building Council, RS Means, and numerous smaller sources provided current and past information on LEED construction.

Thank you for allowing us to conduct this research. We have learned that LEED construction while it adds additional cost to a new building; it is the wave of the future in the construction industry. Sincerely,Neal DudashMargaret RamseyJosh Clemens

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Table of Contents

Letter of Transmittal...........................................................................................................i

Executive Summary.........................................................................................................iii

Introduction.......................................................................................................................1What is LEED Construction?.................................................................................1LEED Rating System.............................................................................................1The Five Main Categories of LEED.......................................................................2

The Cost of LEED Construction........................................................................................2Soft Costs..............................................................................................................3Registering Costs...................................................................................................3Documentation Costs and

Effort.................................................................................................................................3Cost of Research and Design................................................................................3Cost of Commissioning and Modeling...................................................................3

Greening Costs.................................................................................................................3

Overall Cost of a LEED Building.......................................................................................4

Current LEED Buildings....................................................................................................4Incentives for LEED Buildings................................................................................4Ohio Union.............................................................................................................5

Difficulties Assessing the True Cost of LEED Buildings...................................................6

Benefits of LEED Construction.........................................................................................6Environmental Benefits..........................................................................................6Economical Benefits..............................................................................................7Reduction of Future Costs.....................................................................................7

Conclusion........................................................................................................................8

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LEED Construction Is it Worth the Cost?

Executive Summary

In order to remain competitive in the construction industry today a construction manager must know how Leadership in Energy and Environmental Design affects how they do business and with who. A LEED building adds additional costs to a project; however with the added tax benefits, and government requirements to build LEED building for new government projects, it is a necessity that a construction manager be LEED certified.

Our research shows that while the current cost of LEED construction is higher than the cost of a more traditional building, it is expected that the cost for a LEED building will eventually fall in the same price range a traditional building.

There are several needs that a construction manager must have prior to beginning the process of constructing a LEED building.

1. Obtain LEED Certification. Obtaining LEED certification requires that a construction manager have prior documented working experience on a LEED project before taking the LEED Accredited Professional Exam. However if the manage does not have prior LEED experience he/she may obtain LEED Associate Certification.

2. Evaluate suppliers and their ability to supply material needed. LEED requires materials that may need to specially made for the project. LEED materials also need to be sourced locally whenever possible or reclaimed materials from building that have been salvaged.

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LEED Construction: Is It Worth the Cost? Page 1

Introduction

Leadership in Energy and Environmental Design (LEED) construction is a relatively new concept in the building industry. Developed with the goal of promoting sustainable or “green” environmentally friendly buildings, LEED has experienced a significant increase in popularity over the last five years. While it is generally a safe long-term investment and its benefits to the environment are well-known, the cost to build a LEED-certified structure is greater than one built in a conventional manner. The question that we plan on exploring; is it worth the cost?

What is LEED Construction?

The United States Green Building Council (USGBC) was established in 1993 with the goal of promoting sustainability in buildings throughout their life cycles, from conception and design through construction and operation. Soon after opening its doors, the USGBC realized that to effectively promote its goals it would need a way to measure just how environmentally friendly a building is in comparison to other buildings and thus began development of a rating system. Version 1.0 of Leadership in Energy and Environmental Design (LEED) was launched in 1998, then tweaked and modified over the next two years to become LEED Version 2.0, launched in March of 2000 (History of LEED, 2011).

In its early years, LEED certifications were somewhat of a novelty. In general it is more expensive for a project to achieve certification than to complete construction using conventional methods and materials and the benefits were not immediately visible to many builders. In its first four years of existence there were fewer than 100 buildings registered as LEED certified. From 2004 to 2007 the number of LEED certified projects began to steadily increase as “sustainability” and “green building” became industry buzzwords. From 2007 to 2008 the number of LEED certified projects nearly doubled,


going from 543 to 982, and then more than doubling in 2009 with 2,089 projects receiving LEED certification (Green Building Insider, 2010). As the long-term benefits of green building and energy efficiency become more widely visible and publicly known, the demand for LEED certification has greatly increased and is expected to continue its upward trend.

LEED Rating system

The LEED rating system is based on a 100-point scale with divisions for different ranks or certifications for achieving a set number of points. For example, a project that earns 40 or more points on the LEED scale is considered LEED Certified, a project earning 50 or more points is LEED silver, 60 or more points is LEED Gold, and 80 or more points is LEED Platinum. The points themselves are weighted to represent the impact that each individual item can have on the environment, with items representing a greater impact receiving more points on the LEED scale. The “Sustainable Sites” LEED category clearly shows this distinction when looking at the options available for alternative transportation. If a project provides a bicycle storage area it will earn 1 point and if it provides adequate parking capacity it will earn 2 points, but if it provides easy access to public transportation the project can earn 6 points for maximizing its environmental impact. There are also certain items that are not optional, such as prevention of pollution during actual construction and careful storage and collection of recyclables. These items are non-negotiable for LEED certification and do not earn the project any points (Leadership in Energy and Environmental Design, 2011).

The Five Main Categories of LEED

There are five main categories that are assigned points under the LEED system. The first category is sustainable sites: covering items such as construction activity pollution, site selection, brownfield redevelopment, alternative transportation, light pollution, and storm water drain design. The second category is water efficiency: covering water use reduction, water efficient landscaping, and innovative waste water technologies. Third is the energy and atmosphere category: including on-site renewable energy, optimized energy performance, enhanced refrigerant management, and green power. The fourth category includes materials and resources: such as use of recycled products, construction waste management, use of regional materials, and use of rapidly renewable materials. The fifth category is indoor environmental quality: covering low-emitting materials, use of daylight and provided views, controlling building systems, increased ventilation, and the construction indoor air quality management plan for before and during construction. There are also 10 bonus points available that fall into their own categories and include the use of innovative design, employing the services of a LEED-accredited professional, and using design that incorporates regional needs (Leadership in Energy and Environmental Design, 2011).


The Cost of LEED Construction

The cost of LEED construction can vary depending on the amount of “greenness” the building has in it. Since the amount of “green” materials that are put in the building determines the LEED rating of the structure that will also determine the amount of cost that will be incurred during the project. One thing is certain, that obtaining LEED certification adds to the cost of a project. Determining exactly how much becomes the difficult part. There are two basic categories of expenses associated with LEED construction, “soft” costs and “greening” costs. With soft and greening costs combined, it is estimated that LEED certification can add between 4% - 11% to a project’s overall construction cost (Northbridge Environmental Management Consultants, 2003).

Soft Costs

Soft costs can best be described as overhead costs. They include fees to register and certify your project, the cost of documentation and effort, cost of research and design, and the cost of commissioning and modeling for compliance. Many of these costs are able to be quantified. The difficulties in establishing costs are the ones that are not able to be quantified easily. It is estimated that 1% - 5% of the construction costs will be attributed to these soft costs (Northbridge Environmental Consultants, 2003).

Registering Costs

The cost to register and certify a LEED project is approximately 3 to 5 cents per square foot, and the size of the project determines where in the range that the cost will lie. For example, smaller projects tend to be on the high side (Understanding the Cost of LEED Project Certification).

Documentation Costs and Effort

The cost of documentation and effort is a category that can cost a lot or a little depending on the amount of experience of the person in charge of compiling and submitting LEED documentation. If that person is new to running a LEED project, then it can be very time consuming and cost the company a lot of money. The problem that construction companies run into is that there is no “how-to” book that simplifies the process, and navigating it is more of a trial-and-error process. That means that until the construction company has had some experience with LEED, it will cost them more to pay for the time involved in figuring it out (Northbridge Environmental Management Consultants, 2003).

Cost of Research and Design

The cost of research and design is another category that can incur extra costs if it is one of the first times that the design team has worked on a LEED project. One of those


reasons is because design teams may find it difficult to understand the principles behind sustainable materials. Therefore implementing them into the design can cause confusion and even mistakes. When there are mistakes from the design end that can cause a domino effect throughout the project. “Incorporating green design in mid-project can lead to added cost, due to redesign and additional change orders” (City of Bloomington, page 1). Also, it may be difficult to find manufacturers who can produce these materials, which can result in time being paid to these design teams to find them (Leadership in Energy and Environmental Design, 2011). RS Means estimates that designing a green building will cost an additional 5% of the project’s design cost (Northbridge Environmental Management Consultants, 2003).

Cost of Commissioning and Modeling

The cost of commissioning and modeling for compliance can be a significant cost. It is estimated anywhere between 0.5% - 3% of the construction costs, which are also determined based off of the size or complexity of the project. This is unavoidable, as it is a prerequisite for the LEED process. It involves a person or a team who is not associated with the construction company or design team whose responsibility is to ensure that the project is being built in accordance to LEED standards and specifications. They are required to document compliance and to submit it to the GBCI (Green Building Certification Institute) for review. The GBCI then determines whether certification is awarded or not (Northbridge Environmental Management Consultants, 2003).

Greening Costs

Greening costs are best described as the added construction costs incurred to construct a building with green materials. They include systems that use resources more efficiently compared to those that are traditionally used in construction. Some examples are more efficient heating, cooling and ventilation systems. Some may incorporate lighting systems that use solar panels or maybe just a compact fluorescent bulb. Some buildings will include products that will conserve water usage and even recycle the left over grey water to feed their plants. All of the products require an added cost because they are based off of new technology. It is difficult to determine exactly how much these add to a project’s cost because it depends on what products are used in the building (Northbridge Environmental Management Consultants, 2003).

Another greening cost is the cost of the labor needed to build these structures according to LEED specifications. Much of the construction workforce is unaware of how to install these new products and require extensive training to be able to do so. As the demand for green buildings rises, so does the demand for people who know how to correctly install these unique products. This means that those who know how to properly work with green materials can charge more for their expertise, and those that do not know how will take longer to complete the installation because of the time needed to teach them. This will end up costing more because of the added training time.


Overall Cost of a LEED Building

According to RS Means, the entire cost for a Basic LEED Certified building is on average 41 to 46 cents per square foot. However, additional levels of LEED certification cost more to construct. To register a Silver LEED building will cost on average 41 to 55 cents per square foot. Gold LEED buildings will cost 61 to 81 cents per square foot if an outside consultant is hired to conduct the inspection and certification (R.S Means, 2011). However, if the design team conducts the inspection and certification process the cost is significantly reduced. A Basic LEED certified building could cost 35 cents per square foot, while Silver and Gold Certified buildings would cost 36 to 44, and 58 to 59 cents per square foot respectively (R.S Means, 2011).

Current LEED Buildings

Incentives for LEED Buildings

It is important to be aware of the impact that buildings have on the environment. Because of that, “more and more legislation is being passed that impacts not only the zoning, but the environmental impact for new construction,”(Promoting New LEED Construction, page 2). Many federal, state and local governments offer some type of incentive programs for LEED buildings. Some of those incentives include tax breaks, grants, and low-interest loans (Leadership in Energy and Environmental Design, 2011). Currently, LEED certification is a voluntary program. However, many localities are making it a requirement for public projects. It may be for that reason that the public sector of construction has a higher percentage of projects that applied for LEED certification than the private sector. It has been reported that 16.5% - 18.5% of the public sector applied for LEED certification, while only 1% of the private sector applied (Northbridge Environmental Management Consultants, 2003).

Ohio Union

One example of a public building that uses LEED construction is the new Ohio Union at the Ohio State University. It is a LEED Silver certified building that uses many aspects of LEED. It sets an example for future building by reducing waste, utilizing mass transit and by reusable materials.

One of the main aspects of LEED construction is to create a pedestrian culture by utilizing area transit and places for bicyclist to park. The Ohio Union has access to COTA and to the OSU’s Campus Area Bus Service network. Also for those that commute via bicycle, there is a place to store their bikes as well as a place to shower (Ohio State University).


LEED buildings need to reduce waste and utilize materials that have minimal impact on the environment; such as recycled portions of the previous Ohio Union. These materials used at the current Ohio Union include limestone panels on the south elevations and the marble and granite stones that make up the fireplaces in the Union building. Also the building contains 50 percent certified wood, which is wood sourced from managed tree farms, and not from mass deforestation logging camps. In total, the new Ohio Union building is made up of 25 percent recycled materials (Ohio State University).

Other ways in which the Ohio Union reduces its impact on the environment is that the building envelope and HVAC system were designed to meet ASHRAE 55-2004 Thermal Comfort Conditions for Human Occupancy. This standard sets the usage of heating and cooling to defined ranges for the utilization of the least amount of energy while maintaining levels of comfort as a standard building. The lighting systems were also designed to use as little energy as possible while maintaining levels concurrent with a standard building. The Ohio Union utilizes Compact Florescent Bulbs, and LED lighting in the ballrooms and in display cases (Ohio State University).

The Ohio Union has one unique feature that reduces the impact on the environment and that is its Pulper System. The system prevents food wastes from entering the waste water treatment facilities by removing the soft portion foods that have been thrown away. This reduces the need for large amounts of chemicals to be introduced at the waste water treatment facilities. Also this system creates compost that introduces nutrients into the soil (Ohio State University).

On the following page is a picture of the Ohio Union during construction (Ohio State University). They are using locally sourced steel which is part of keeping a project green by not having to transport materials into the project from far away.


Difficulties Assessing the True Cost of LEED Buildings

Some of the difficulty in assessing the true cost of building a LEED certified building is that some of the requirements mandated by GBCI are also required by local building codes. So those added costs would be the same whether or not the construction company built a LEED certified building or not. In other words, some of the data collected as part of the cost of LEED construction are actually the costs that would be incurred even if it wasn’t a LEED project.


Benefits of LEED Construction

Environmental Benefits

There are several benefits to LEED construction that include both environmental and economic advantages. Some of the environmental benefits include the “decrease in carbon emission by using energy efficient appliances and bio-degradable or recyclable materials” (Promoting New LEED Construction, page 2). They are being credited for having better lighting, ventilation, temperature control and better indoor pollution (Leadership in Energy and Environmental Design, 2011).

Economical Benefits

Buildings that are LEED certified are selling at higher prices and are producing higher rental income. There are also higher occupancy rates associated with them. Employees of LEED certified buildings seem to be producing at a higher rate and calling off of work less. They cost less to operate because of the attention to energy efficiency. Overall they seem to be a better investment than traditional construction buildings.(Leadership in Energy and Environmental Design, 2011).

Reduction of Future Costs

Another factor to consider is that as time goes on, the cost of building a LEED certified structure will decrease. People will become more educated on the processes needed to apply for LEED certification effectively. They will already understand the research involved and know where they will have to allocate their time in finding certain products and where they do not need to spend their time. As energy efficient systems become more popular, the cost to manufacture them will decrease (Northbridge Environmental Management Consultants, 2003).

Conclusion

Overall, LEED construction will cost more initially. It will take time to learn the processes and to implement them effectively. But as our research has shown, it is the way of the future. Many federal, state and localities are making it mandatory and it is only a matter of time before those regulations are required for the private sector too. As with any type of new technology, there are bound to be some growing pains as people become acquainted with integrating the new processes. But those construction companies that are putting forth the effort now to understand and utilize LEED in their projects will be at the forefront of the business when it does become mandatory. Therefore we believe that it makes sense to invest in LEED certification now as a way to invest in one's future.


Works CitedNorthbridge Environmental Management Consultants . (2003). Analyzing the Cost of Obataining LEED Certification. Westford.

City of Bloomington. (n.d.). Green Building Costs. Retrieved November 6, 2011, from The City of Bloomingotn: http://bloomington.in.gov/green-building-costs

Government Service Agency. (2004). LEED® Cost Study. Washington DC: Government Service Agency.

History of LEED. (n.d.). Retrieved from http://www.businessrecovery.ws/leed-certification/history-of-leed: http://www.businessrecovery.ws/leed-certification/history-of-leed

Leadership in energy and environmental design. (2011, November 3). Retrieved Novemember 6, 2011, from Wikipedia: http://en.wikipedia.org/wiki/Leadership_in_Energy_and_Environmental_Design

Ohio State University. (n.d.). LEED Certification. Retrieved November 7, 2011, from The Ohio Union: http://ohiounion.osu.edu/about_the_union/green/leed

Powers, E. (n.d.). I'm a designer: What do I tell my client when he or she asks me what LEED will cost them for their project? Retrieved from Building Capacity: http://buildingcapacity.typepad.com/blog/2011/02/im-a-designer-what-do-i-tell-my-client-when-he-or-she-asks-me-what-leed-will-cost-them-for-their-project-elizabeth-powers.html

Promoting New LEED Construction. (n.d.). Retrieved October 16, 2011, from LEED New Construction: www.newleedconstruction.com

R.S Means. (2011). Green Building: Project Planning and Cost. Hoboken: John Wiley & Sons.

Understanding the cost of leed project certification. (n.d.). Retrieved November 6, 2011, from LEED User: http://www.leeduser.com/strategy/cost-leed-report-and-understanding-cost-leed-project-certification

US Green Building Council. (2009). Summary of Government LEED® Incentives – March, 2009. Washington DC: US Green Building Council.

US Green Builind Coincil. (2011). LEED Professional Credentials . Retrieved November 6, 2011, from US Green Building Council: http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1815


Vamosi, S. J. (2011, January 1). The True Cost of LEED-Certified Green Buildings. Retrieved from HPAC Engineering: http://hpac.com/columns/engineering-green/true-cost-leed-buildings-0111/

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