Green Home Building Industry

SWOT Analysis of the state of green building

Green industries have become a renewed focus of the housing industry. But today’s proposed innovations are even more radical than the solar-heated houses that were briefly popular during the oil-conscious ‘stagflation’ era of the 1970s. Replacement windows, highly efficient light bulbs, improved circulatory systems, and mold and dust-free homes may all be the face of the cleaner, greener, healthier future of the housing industry — provided there are solvent consumers to buy such innovative houses and products, and provided banks are willing and able to provide the credit to the industry. This paper will attempt to give an overview of the strengths, weaknesses, opportunities, and threats offered by entering the green building industry.

Strengths

Consumers today are more cost-conscious than ever before. Greening a home, by replacing energy-inefficient windows, caulking drafts, and replacing light bulbs will all result in tremendous cost savings on current buildings. Given the glut in the housing market, consumers may wish to make their current homes more affordable than move to new homes. Greening a home, with a future-oriented focus on energy costs is the obvious solution, and can provide a boon to the industry in terms of refurbishing current houses to make them greener.

Other consumers, unable to sell their homes, may wish to make their current residences cheaper to maintain, even if they eventually desire to move from their homes.

Going green is also hipper than ever before, and has an added social cache, just like adding a new deck might have had only five years ago. Consumers may opt for green technology rather than more typical home improvements to ‘impress the neighbors’ and ‘keep up with the Joneses.’

Weaknesses

Because of the credit crisis, few banks are lending money to homeowners for any purposes, even for relatively modest changes in their living structures. Consumers who are wary of losing their jobs may fear any outlay of expenses. Because the economic future is so uncertain, consumers are focusing on surviving in the short-term, not the long-term, and greening a building requires a long-term focus. Many homeowners are defaulting on their mortgages and are being forced from their homes. They lack the funds and resources simply to pay for basic home necessities, much less ‘green’ their current structures.

In terms of new home structures, there is already a glut in most markets of currently-existing homes, and even consumers with good credit may have trouble getting a mortgage to buy existing green homes, or obtain credit to build a new, green home to their desired energy-saving specifications.

Finally, the deflation of energy prices and prices in general may make people less worried about the escalating price of gasoline. Consumers’ concerns are fickle, and although interest in green cars and green homes rose when gas prices were going ‘through the roof,’ this may become less of an issue, as there is a serious possibility of further price deflation in terms of maintenance costs, including utility bills.

Opportunities

The Obama Administration has made the ‘greening’ of America a fundamental part of its economic stimulus package, and will continue to make green energy, both in terms of sustainable vehicles and general energy generation, a cornerstone of future policies. Unlike the Bush Administration, President Obama does not deny the reality of global warming. His “proposed $825 billion stimulus package includes billions of dollars in tax incentives and direct government spending on clean-energy programs…the stimulus plan calls for laying 3,000 miles of new transmission lines — considered crucial for moving wind and solar power to different corners of the country” (LaMonica 2008). This sets a shining example for the nation for the need to make current and future structures environmentally sustainable.

Even if prices of fossil fuels decline, there are also other pressures that increase public awareness about the need for green housing — finite timber resources, increasing overpopulation, and also the expansion of the densely populated developing world in China and India will make green building a continued priority on an international level.

The sad rise of asthma due to mold and other allergies contained in sick buildings may make a green building that can reduce mold, mildew and other build-up a necessity rather than a debatable luxury for many home owners in the future.

The current administration is working to bring down mortgage rates. The Obama Administration’s Homeowner Affordability and Stability Plan is designed to lower mortgage rates by helping mortgage-payers renegotiate their rates. Although not specific to green building, this can be helpful for the housing industry as a whole, and raise interest in green building in the long-term.

Threats focus on short-term costs, rather than long-term environmental growth, combined with an increasingly tight credit market may threaten the future of green industry. So may too much of a focus on reducing the earth’s carbon footprint by focusing on hybridization of cars, rather than a more holistic approach to green technology.

A number of very public green buildings have been threatened or had their production stalled by the credit crisis. Manhattan was thought to be one of the most ‘recession-proof’ real estate markets in previous decades. But New York City has seen many of its highest profile green projects reduced in scale or forestalled indefinitely. A sad revelation is that many of the projects for sustainable building were not simply financed by the financial industry, but also were intended to house the industry itself. “As the credit crisis continues to unfold, it’s clear that there will be implications locally and, eventually, nationally for sustainable building. Indeed, with 1.5 million square feet of office space about to come back on the New York City market…from financial services firms looking to shed space, the impact on a number of local green projects that are targeting such tenants could be significant… specifically aiming for high-end financial services tenants capable of occupying an entire floor of the building’s column-free plates (Del Percio 2008).

Industries across the nation will continue to let workers go, and take up less space. Often, the first green structures are built by major corporations or lucrative industries, such as the finance or the auto industry, because these companies have the resources to take risks with new, green technology. The threats to these industries could also pose a threat to future green building.

Works Cited

Del Percio, Stephen. (2008, March 28). Green building in crisis. Green buildings NYC.

Retrieved March 9, 2009 at http://www.greenbuildingsnyc.com/2008/03/18/green-building-in-crisis-bear-stearns-meltdown-may-drown-beer-belly-building/

Homeowner affordability and stability plan. (2009, February 9). Department of the Treasury.

Retrieved March 9, 2009 at http://www.treas.gov/press/releases/tg33.htm

LaMonica, Martin. (2008, January 29). Obama lays first piece in energy policy puzzle. CNET.

Retrieved March 9, 2009 at http://news.cnet.com/8301-11128_3-10149819-54.htm

Green Home Building Industry

SWOT Analysis of the state of green building

Green industries have become a renewed focus of the housing industry. But today’s proposed innovations are even more radical than the solar-heated houses that were briefly popular during the oil-conscious ‘stagflation’ era of the 1970s. Replacement windows, highly efficient light bulbs, improved circulatory systems, and mold and dust-free homes may all be the face of the cleaner, greener, healthier future of the housing industry — provided there are solvent consumers to buy such innovative houses and products, and provided banks are willing and able to provide the credit to the industry. This paper will attempt to give an overview of the strengths, weaknesses, opportunities, and threats offered by entering the green building industry.

Strengths

Consumers today are more cost-conscious than ever before. Greening a home, by replacing energy-inefficient windows, caulking drafts, and replacing light bulbs will all result in tremendous cost savings on current buildings. Given the glut in the housing market, consumers may wish to make their current homes more affordable than move to new homes. Greening a home, with a future-oriented focus on energy costs is the obvious solution, and can provide a boon to the industry in terms of refurbishing current houses to make them greener.

Other consumers, unable to sell their homes, may wish to make their current residences cheaper to maintain, even if they eventually desire to move from their homes.

Going green is also hipper than ever before, and has an added social cache, just like adding a new deck might have had only five years ago. Consumers may opt for green technology rather than more typical home improvements to ‘impress the neighbors’ and ‘keep up with the Joneses.’

Weaknesses

Because of the credit crisis, few banks are lending money to homeowners for any purposes, even for relatively modest changes in their living structures. Consumers who are wary of losing their jobs may fear any outlay of expenses. Because the economic future is so uncertain, consumers are focusing on surviving in the short-term, not the long-term, and greening a building requires a long-term focus. Many homeowners are defaulting on their mortgages and are being forced from their homes. They lack the funds and resources simply to pay for basic home necessities, much less ‘green’ their current structures.

In terms of new home structures, there is already a glut in most markets of currently-existing homes, and even consumers with good credit may have trouble getting a mortgage to buy existing green homes, or obtain credit to build a new, green home to their desired energy-saving specifications.

Finally, the deflation of energy prices and prices in general may make people less worried about the escalating price of gasoline. Consumers’ concerns are fickle, and although interest in green cars and green homes rose when gas prices were going ‘through the roof,’ this may become less of an issue, as there is a serious possibility of further price deflation in terms of maintenance costs, including utility bills.

Opportunities

The Obama Administration has made the ‘greening’ of America a fundamental part of its economic stimulus package, and will continue to make green energy, both in terms of sustainable vehicles and general energy generation, a cornerstone of future policies. Unlike the Bush Administration, President Obama does not deny the reality of global warming. His “proposed $825 billion stimulus package includes billions of dollars in tax incentives and direct government spending on clean-energy programs…the stimulus plan calls for laying 3,000 miles of new transmission lines — considered crucial for moving wind and solar power to different corners of the country” (LaMonica 2008). This sets a shining example for the nation for the need to make current and future structures environmentally sustainable.

Even if prices of fossil fuels decline, there are also other pressures that increase public awareness about the need for green housing — finite timber resources, increasing overpopulation, and also the expansion of the densely populated developing world in China and India will make green building a continued priority on an international level.

The sad rise of asthma due to mold and other allergies contained in sick buildings may make a green building that can reduce mold, mildew and other build-up a necessity rather than a debatable luxury for many home owners in the future.

The current administration is working to bring down mortgage rates. The Obama Administration’s Homeowner Affordability and Stability Plan is designed to lower mortgage rates by helping mortgage-payers renegotiate their rates. Although not specific to green building, this can be helpful for the housing industry as a whole, and raise interest in green building in the long-term.

Threats focus on short-term costs, rather than long-term environmental growth, combined with an increasingly tight credit market may threaten the future of green industry. So may too much of a focus on reducing the earth’s carbon footprint by focusing on hybridization of cars, rather than a more holistic approach to green technology.

A number of very public green buildings have been threatened or had their production stalled by the credit crisis. Manhattan was thought to be one of the most ‘recession-proof’ real estate markets in previous decades. But New York City has seen many of its highest profile green projects reduced in scale or forestalled indefinitely. A sad revelation is that many of the projects for sustainable building were not simply financed by the financial industry, but also were intended to house the industry itself. “As the credit crisis continues to unfold, it’s clear that there will be implications locally and, eventually, nationally for sustainable building. Indeed, with 1.5 million square feet of office space about to come back on the New York City market…from financial services firms looking to shed space, the impact on a number of local green projects that are targeting such tenants could be significant… specifically aiming for high-end financial services tenants capable of occupying an entire floor of the building’s column-free plates (Del Percio 2008).

Industries across the nation will continue to let workers go, and take up less space. Often, the first green structures are built by major corporations or lucrative industries, such as the finance or the auto industry, because these companies have the resources to take risks with new, green technology. The threats to these industries could also pose a threat to future green building.

Works Cited

Del Percio, Stephen. (2008, March 28). Green building in crisis. Green buildings NYC.

Retrieved March 9, 2009 at http://www.greenbuildingsnyc.com/2008/03/18/green-building-in-crisis-bear-stearns-meltdown-may-drown-beer-belly-building/

Homeowner affordability and stability plan. (2009, February 9). Department of the Treasury.

Retrieved March 9, 2009 at http://www.treas.gov/press/releases/tg33.htm

LaMonica, Martin. (2008, January 29). Obama lays first piece in energy policy puzzle. CNET.

Retrieved March 9, 2009 at http://news.cnet.com/8301-11128_3-10149819-54.htm