Sep 25, 2019, 12:40 PM
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- Sylvia Varnham O'Regan
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Last week, just after Amazon CEO Jeff Bezos committed his company to a host of major environmental measures, hundreds of Amazon employees took to the streets to protest.
The company’s pledge, which came on the heels of this week’s Climate Week and the United Nations’ Climate Action Summit in New York, included converting to 100 percent renewable energy by 2030. The move was “a big win, but not enough,” activists said.
The e-commerce behemoth’s announcement followed a standoff between Bezos and Amazon Employees for Climate Justice, which has put pressure on other high-emission industries — including real estate — to address their environmental records and strategies.
It also turned the spotlight again on the real estate industry, and whether it has finally gotten serious about climate change.
Over the last 15 years, the industry has seen a gradual shift in its willingness to adopt greener technology and construction, industry pros said. But progress remains slow.
While major developers have made efforts to address environmental concerns, smaller building owners with lower profiles have lagged far behind, according to one industry insider.
A reason to go green
“Unless there’s a compelling reason [to go green], they are not going to want to spend money,” said the insider, who didn’t want to be identified because it could jeopardize his current position.
On the commercial side — particularly office buildings — environmentally conscious features have come to be expected. “If you want to rent to a Fortune 500 company, you’re going to have to have a building that has green credentials,” he said, adding that many companies have environmental targets and commitments of their own.
But, “there’s still a big gap between where we are now and where we need to be.”
In New York, buildings are responsible for 67 percent of emissions, according to a government report from 2017. Earlier this year, the city adopted new greenhouse-gas emissions standards for properties bigger than 25,000 square feet, threatening penalties to those landlords that didn’t comply.
The legislation, which laid out a preliminary deadline of 2024, was met with resistance from some developers who complained that the deadline was too tight.
But the impacts of climate change have already prompted institutional investors to alter their approach. They have begun consulting imaging maps and big data to help make decisions about whether to buy real estate in Miami, New York and other major coastal cities worldwide, according to real estate experts at a recent sea level rise conference in Miami.
Touting their “green cred”
Despite industry pushback to some initiatives, including New York’s own “Green New Deal,” new developments on the market are touting their so-called green credentials, suggesting both an acknowledgement of wider environmental issues and an understanding of changing consumer priorities, industry pros said.
In Manhattan, the 115-unit Renzo Piano condominium at 565 Broome Street bills itself as “the first luxury residential zero waste building in New York City.” Developed by Bizzi & Partners Development, Aronov Development and Halpern Real Estate Ventures, the complex offers recycling rooms on each floor, water bottle–filling stations throughout the building and natural air filtration. The 42 parking spots come equipped with electric charging stations, according to marketing materials. Tennis superstar Novak Djokovic and Uber co-founder Travis Kalanick both bought units at the ultra-luxury residence.
Boston Properties, which last year sought to raise $1 billion to fund its green projects across the country, has also invested in the space. The real estate investment trust said it planned to use the proceeds for recently completed and future green projects. It has also pledged to cut water and energy consumption throughout its extensive portfolio.
Some developers have also considered major changes, including finding environmentally friendly alternatives to steel and mortar, according to The New York Times. Architecture and development firm Flank is constructing two wood-filled commercial buildings at 320 and 360 Wythe Avenue in the Williamsburg section of Brooklyn. Mick Walsdorf, co-founder of Flank, said the projects “will expand the limits of traditional construction and usher in a new era of sustainability-minded building practices.”
Still, climate issues have remained low on the real estate industry’s agenda. In 2017, following President Trump’s decision to pull the U.S. out of the Paris climate accord, The Real Deal surveyed 165 real estate firms about the decision. Only 19 firms agreed to participate.
The real estate industry’s reluctance to fully invest in green technology isn’t unique, experts said. According to a new report from the U.S. Green Building Council, 39 percent of Americans say they have “never considered or don’t know the impact buildings have on the environment and their health.” That’s despite almost half of them reporting direct, personal experience with dirty drinking water, asbestos and “sick buildings,” according to the report.
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