Today we met with Matthew Hyder of Legacy Properties. Matthew is from Texas and graduated from Princeton University. His family was in the real estate business in Texas and Matthew wanted to work in real estate when he graduated. However, he took a decidedly unconvential career path and after meeting and falling in love with an Australian girl, moved to Sydney to work for Macquarie bank in their real estate investment business. He spent several years with them making strategic business connections and learning the local market. Matthew is currently developing a 350 lot master planned housing subdivision North of Sydney. One of Michael Mobb’s projects he worked on as a consultant was working with developers to develop their own power and water infrastructure in new communities in order to achieve sustainable neighborhoods that are independent of coal fired electricity or traditional water treatment. During our conversation with Matthew we shared what Michael was doing and asked whether that would be part of his development. His response was “Who pays for it?” I think that pretty clearly indicates how much of a barrier cost still is. He made the point that if it costs an additional $10k per lot that it’s got to come from out of someone’s pocket. He also stated that the buyers of the lots and homes in this neighborhood will be very price sensitive, so he can’t expect to be able to just increase the sales price by $10k as the buyers are already limited on what they can afford and will simply not buy in his subdivision. It seems that a lot of this sustainability stuff works when “You can afford it” and when you can capture additional value in excess of the monetary value. For example, investors can justify a slight premium on a sustainable building because it can mitigate leasing risk given that having a sustainable building is a differentiator in the market and all things being equal, a sustainably building has that one additional feature. However, I think with individuals often times the analysis and decision making does not go beyond “How much is it going to cost me right now?” I think that’s where education and accurate rating/measurement of cost savings can help change that by giving consumers the ability to quantify savings are or even the fact that they are not paying a premium for a “Sustainable” solution.
NABERS (National Australian Building Energy Rating System) - Toward the end of our meeting Matthew shared with us the Building Energy Efficiency Disclosure Act 2010, a law that became affective November 1, 2010 requiring all buildings in excess of 21,527 sf (2,000 square meters) to be rated and report on a scale of 1 – 6 how efficient they are as it relates to Water and Electricity. It must be reported along with ANY advertising for space to lease or for sale. If you fail to comply it is an immediate $110,000 fine plus $11,000 /day for each day of non-compliance. I generally like this concept of regulation; simply forces the sharing of the information and lets the free market sort out the rest. I would be much more resistant to a government enforced minimum standard.
BASIX (Building Sustainability Index) – New South Whales has implemented a mandatory and minimum standards for energy and water efficiency for all new construction and will not final certificates if the BASIX commitments made at the initial permit application for new construction are not proven done at the end of the construction. Some examples of features include:
• Rainwater tanks plumbed to toilet, garden and /or laundry
• Efficient shower heads
• Indigenous garden species
• Grey water system
• Solar, heat pump or high efficiency gas hot water system.
• Efficient pool heating and pumps
• Good solar orientation
• Cross ventilation
• Insulation
• External shading
• Performance glazing for large glazed areas and/or poorly oriented ares
• Ceiling fans, evap coolers or high efficiency air conditioning
• Energy efficient lighting
• Alternative enegery such as solar panels..
Green Building Council Australia. – Well today I saw my first indoor worm farm, and smelled my first indoor gray water tank. Definitely wasn’t expecting either of this on the 15th floor of an office tower. However, the GBCA definitely practices what it preaches. They took a relatively old and inefficient building and fitted out their space to be the most energy efficient space in the building. On average they say their utilities are 25% of what the other floors are consuming. They exchange the air on their floor with filtered outside 50 – 60 times a day. They had automatic sun tracking shades to prevent the sun from warming their space during hours of direct sunlight. Here we were introduced to Tri-generation as our guide explained that the building across the street generated its own power and the power for four other buildings using a tri-generation system that produced electricity, heated air and heated water. Interestingly enough, their space did not have hot water because they felt there was not an energy efficient way to provide it as they were in an old building with an inefficient boiler. The council views itself as having 3 main goals, 1) rate, 2) educate and 3) advocate.
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