LEED Losing Favor

New Certifications Gain Ground

By Erica Rascón on Nov 3, 2016 in News

United States Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) program may be losing clout as the leader of sustainable building certifications in America. Developers seek alternative certification methods to cut capital costs while keeping buildings green.

When JDS Development Group CEO Michael Stern spoke at a recent real estate summit in New York, he didn’t mince words:

“I think the LEED criteria is totally arbitrary and LEED has basically devolved into a self-sustaining revenue machine for LEED consultants without actually moving the bar that much,” he said. “You can have a LEED project basically anywhere near transportation. You qualify for enough points if you pay enough money.”

Others on the panel shared his sentiments. Dissatisfaction with the cost of certification questions the data LEED shares on the costs of eligible projects. According to the Dodge Data & Analytics and United Technologies Corporation, about 70 percent of respondents quote high perceived cost as the biggest challenge to sustainable building.

A Health Facilities Management report claims that LEED certification capital costs can exceed 10 percent of conventional construction.

Conversely, LEED’s report, “Perspectives on Capital Costs Premiums and Operational Benefits” suggests that the capital costs of hospitals exceeding 100,000 square feet barely reach 1 percent of conventional costs.

A US News editorial asserts that LEED credentials on government buildings do not add value. Moreover, taxpayer returns are lower than promised. The article suggests that, in spite of the costs, regulations are unlikely to change since governments reap millions of dollars in permit fees.

Fortunately, the cost discrepancies have not turned LEED cynics away from sustainable construction. Developers are investing in alternative accreditations or use LEED as a guideline without paying for the certification.

Builders have several green building certifications from which to choose.  The newest arrival is Building Research Establishment Environmental Assessment Methodology (BREEAM), a respected international program that recently opened to US markets.

To date, BREEAM has registered nearly 543,000 certifications and has more than 2,242,262 registered buildings in 77 countries. Comparatively, LEED reports 80,000 certifications and nearly 1 million buildings in its queue.

BREEAM USA will tap into an underserved portion of the US market, existing buildings. BREEM In-Use, as the program is called, offers easier and more cost-efficient certifications.

Barry Giles, CEO of BuildingWise, a partner of BREEAM USA, explained the company’s approach to the new market, “LEED EB has really only focused on the top 10, maybe top 5 percent of the marketplace, and new versions of LEED are making it harder and harder for existing buildings to get into the program,” says Giles.

Another portion of the market that may soon appeal to BREEAM consists of buildings that adhere to sustainable standards but forego LEED certification because of costs

Modern Healthcare recently reported on the growing number of healthcare facilities that are built to LEED-approved standards without gaining certification. A low-cost alternative may appeal to leaders of similar projects.

There is, of course, the possibility that LEED standards are still a valuable and worthy certification.

LEED reports that the program triggers economic growth and job creation. The USGBC also reports that the number of LEED v4- registered projects has increased by 2 percent and v2009 projects increased by 8 percent from 2014-2015.