On July 17, 2008, the State of California Building Standards Commission ("Commission") adopted the California Green Building Standards Code ("Green Building Regulations") to apply to all new construction statewide. Prior to California's adoption of its Green Building Regulations, the standard for green and sustainable buildings in California and across the nation was and is still set by the U.S. Green Building Council ("USGBC") through its Leadership in Energy & Environmental Design ("LEED®") levels of building certification. According to the USGBC, buildings nationwide account for 70% of electricity consumption, 39% of energy usage, 12% of potable water consumption, 40% of raw materials usage, 30% of waste output and produce 39% of associated greenhouse gases ("GHGs") like chlorofluorocarbons ("CFCs"), hydrochlorofluorocarbons ("HCFCs"), and carbon dioxide ("CO2").
The LEED® standards for rating new construction, existing buildings and commercial interiors are, from highest to lowest: platinum, gold, silver and certified. The LEED® rating system is based on the achievement of a certain number of credits, or points, towards LEED® certification: the higher the points, the more prestigious the rating. California's Green Building Regulations are the approximate equivalent of achieving LEED® silver rating for new construction. The LEED® ratings will still remain the most applicable standard for nationwide market transformation in construction of both office buildings and homes, because they encourage and accelerate global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria. However, California's Green Building Regulations are just another example of California leading the charge on green and sustainable construction.
California's Green Building Regulations are an important piece of the state's ambitious goal to reduce the state's CFCs, HCFCs, CO2 and other GHG emissions by 30% by 2020 as required by Assembly Bill ("AB") 32, Chapter 488, Statutes of 2006, authored by then Assembly Speaker Fabian Nuñez (D - Los Angeles). Last October 2007, Governor Arnold Schwarzenegger vetoed AB 1058, authored by Assembly Members John Laird (D - Santa Cruz / Monterey) and Ted Lieu (D - El Segundo), which would have established green building construction best practices and made them an official statutory part of the California Public Resources Code. The Governor's veto message to the Legislature stated that he supports green construction standards and shares the goals of AB 1058, but believes that building standards should not be in the state's statutes, but instead set by the Commission, presumably because the Governor desires a more phased approach to green building regulation and to inject more public participation into the lawmaking process.
California's Green Building Regulations, which are 60 pages long, do not take effect until July 1, 2009. These standards will remain voluntary until the Commission completes its work on mandatory regulations which it hopes to have in place by late 2010 and early 2011. The highlights of the Green Building Regulations are set forth in the following goals:
- 15% reduction in overall energy use for all new construction by employing such strategies as solar energy, Energy Star-certified appliances, highly-reflective roofs, and elevators and escalators that move only when passengers are present;
- 20% reduction in water use for all new construction through low-flow toilets, waterless urinals and dual plumbing for potable and graywater;
- 50% reduction in water use for landscaping by utilizing such approaches as native plants, drip irrigation systems, and bioswales; and
- Use of environmentally sensitive materials like eco-friendly flooring, carpeting, paint, coatings, thermal insulation, acoustical wall and ceiling panels, and other recycled building materials.
The Green Building Regulations also identify various site improvements, i.e., parking for hybrid vehicles and improved and comprehensive storm water plans. Importantly, the Green Building Regulations do not specify how to make the reductions, but instead, suggest a variety of green and sustainable construction practices. In practice, a LEED® Accredited Professional ("AP") may be in the best position to advise construction companies as to green and sustainable construction practices, because a LEED® AP has demonstrated a thorough understanding of green building practices and principles and is a building professional with the knowledge and skills to successfully steward the LEED® certification process.
The Green Building Regulations only set a floor, not a ceiling, and do not prevent municipalities, such as cities and counties, from enacting more stringent standards than the state. For example, San Francisco's recent Green Building Ordinance is the approximate equivalent of achieving LEED® gold certification. Also, in April 2008, the City of Los Angeles became the largest U.S. city to enact mandatory green building standards for private development. The City of Los Angeles' mandatory green building standards program applies generally to new development and remodels of non-residential development over 50,000 square feet, or 50 residential units, and requires compliance with the criteria for a LEED® Certified rating.
The most common argument against green and sustainable building practices are the upfront costs of implementing such measures and using such materials. However, supporters of green building respond that although a building may cost more to build on the front end, the sustainable building will perform better, i.e., consume less energy, be more water-use efficient, etc., thus leading to a greater return on investment ("ROI") and a higher net operating income ("NOI") associated with the building.
Another major issue with green building initiatives is that they inject yet another layer of risk into construction projects, and raise new issues for developers, builders, and design professionals. Perhaps the most obvious and immediate issue is whether California's Green Building Regulations will elevate the standard of care for an architect or an engineer. A corollary of this issue is whether developers, builders and design professionals will expose themselves to more risk when they promise to deliver high-performance green buildings. From a contractual point of view, developers, builders and design professionals are now faced with the issue of whether to include and incorporate language into their contracts to require them to design and construct a sustainable building. Indeed, although green and sustainable building practices are an easy rallying point and have made important strides in recent times, the green building movement has raised the stakes and created new and still developing issues that the construction and real estate industries must now face.
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