Green Homes Made Up 17% of U.S. Residential Construction Market in 2011, Expected to Grow 5-Fold by 2016

With the construction industry still recovering in the U.S., companies offering “green” services may be able to set themselves apart and grow business faster, according to a survey conducted by McGraw-Hill Construction.

In 2011, green builds in the residential sector made up 17% of construction, totaling $17 billion in economic activity. And the value of the residential green building market is expected to grow five-fold by 2016, taking up to 38% of the market and representing $87 billion – $114 billion.

McGraw Hill defines green building as “one built to LEED standards, an equivalent green building certification program, or one that incorporates numerous green building elements across five category areas: energy efficiency, water efficiency, resource efficiency, responsible site management and improved indoor air quality.”

According to figures released by McGraw Hill, 46% of “conventional” homebuilders say that providing green design services makes it easier to find new work. And 71% of firms working exclusively in the green building space say that these services help set themselves apart in a struggling construction market.

Many factors are driving the green homes market, with “higher quality” and “increases in energy costs” topping the list, indicating that today’s green homebuyer is not just a green consumer. Buyers recognize that green homes have lower bills due to higher building performance. The reported costs of building a green home have also gone down significantly. Builders report that the cost to go green is now 7%, as compared to 10% in 2008 and 11% in 2006.

While green is growing across the U.S., three regions are seeing higher than average growth. The West Coast has seen the highest green growth; the Midwest’s northern region, west of the Mississippi, is second highest; and New England ranks third.

The green remodeling market performed even better than new construction in 2011, with 62% of firms saying green services helped them increase work last year. Just over one third of remodelers say they’ll be doing mostly green work by 2016.

This mirrors trends in the commercial sector, where LEED-certified retrofits surpassed new builds for the first time ever in 2011.

All this green building activity translates into new jobs and new skills for existing workers. McGraw Hill reported in October that one third of architects, engineers and contractors in the U.S. — around 660,000 people — say they have “green” jobs. That number may climb to more than 900,000 jobs by 2015.

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2 Responses to Green Homes Made Up 17% of U.S. Residential Construction Market in 2011, Expected to Grow 5-Fold by 2016

  1. Mike Roddy says:

    The methodology to evaluate green standards is rudimentary, and lacks scientific rigor on all levels. Most green decisions are made via consensus, with input from trade associations and various people who are unqualified. This includes those who took a two week online course and got a LEED certification. Professionals with hard science backgrounds are just another voice, instead of being the ones who govern.

    For example, wood from clearcuts passes LEED certification, as long as it gets a rubber stamp from FSC, an organization that is itself so compromised as to be almost useless. They have certified destruction of primary forests and their replacement by tree farms.

    New homes are still filled with toxic chemicals, including formaldehyde (banned in Europe), copper chromate arsenic for wood bottom plates, and much else. Green standards exist here, but are too weak. Our houses are fragile, and are torn down after two generations, mostly due to OSB and two by four structural systems. This is just not acceptable.

  2. Ken Levenson says:

    I agree with Mike’s concerns, but on the other hand, there is within this trend, an explosion of very meaningful green construction – providing significant energy demand cuts and improvements in building performance and comfort, epitomized by the Passive House/Passivhaus Standard.