Study Shows Residents Willing To Pay More To Live In Sustainable Communities
October 03, 2017
A new study suggests that renters are willing to pay more to live in sustainable spaces, confirming a trend that has seen developers – commercial as well as residential – adding more green components to their projects.
It its first Sustainable Living Index, AMLI – a leading developer and manager of luxury apartment communities – surveyed 2,800 residents in nine areas: Atlanta, Austin, Chicago, Dallas, Denver, Houston, Seattle, Southern California, and Southeast Florida. The results showed clearly that respondents place significant value on features designed to support environmental stewardship:
- 64 percent said they were willing to pay more for sustainable housing
- 84 percent said living in sustainable housing is important to them
- 85 percent said living in sustainable homes is beneficial to their health
Asked about the individual amenities they desire, 94 percent said they preferred a smoke-free community; 93 percent prized energy- and water-efficient appliances and fixtures; and 85 percent said they’d like access to public transit and walking/biking opportunities. More than three-fourths said they believed that AMLI’s specific green features had saved them money on their utility bills.
The AMLI study confirms previous research that underscores the importance residents place on living in sustainable communities – and that demonstrates they would be amenable to paying higher rents for the associated environmental benefits.
For example, a survey by the National Multifamily Housing Council (NMHC) found that apartment residents would be willing to pay more to live in sustainable rental communities. Respondents said they would pay an additional $32.64 per month in rent to live in an apartment building that had earned a “green building” designation such as the Leadership in Energy and Environmental Design certification. Three quarters of all respondents said they were “interested” or “very interested” in these certifications, which for some potential renters could be the determining factor in choosing a living space.
The NMHC survey also showed that renters would pay an extra $31 monthly to live in a building that included “sustainability/green initiatives.”
By way of comparison, they said they would pay $41 more per month for a fitness center and $32 more for parking.
Similarly, the data firm Axiometrics found that renters would pay extra to live in sustainable neighborhoods where they did not have to drive in order to access amenities like shopping and services. And Strata Research determined that 77 percent of renters believed green apartments were important and that tenants identified Energy Star appliances as their most preferred green feature.
But it’s not just residential communities and their developers that benefit from sustainable building practices.
The global green energy market has grown significantly since the turn of the century – approaching $300 billion by some estimates, and including about a fifth of all new U.S. commercial real estate construction. Beyond that, commercial building owners and managers are forecast to invest $960 billion globally through 2023 to make their existing infrastructure greener.
Further underscoring the benefits of sustainable commercial building, a study of the North American portfolio of Bentall Kennedy, a leading commercial real estate advisor, concluded that environmentally friendly office properties generated rents that were 3.7 percent higher than those for non-green properties. Among the firm’s Canadian holdings, occupancy rates in environmentally certified buildings were 18.7 percent greater than the levels in non-certified buildings.