Save the planet and live in splendor? The idea of a “green” luxury home may seem paradoxical, but the eco-conscious wealthy are increasingly building big houses with tiny carbon footprints.
In 2012, for example, Walmart heir Christy Walton built a 5,600-square-foot home across the street from the beach in Encinitas, Calif., that was “LEED Platinum certified”—the top rating for energy and resource efficiency given by the U.S. Green Building Council.
The residence features solar panels, ultra-high-efficiency gas furnaces and tankless water heaters that heat and disperse water on demand, rather than using energy to store hot water while waiting for users to turn on faucets or showers.
Yet for the affluent, there’s more to living in an eco-friendly home than just supporting sustainability. “Living in a green home provides a greater level of luxury,” says Rich Williams, president of ArtHaus, a San Diego-based residential development company that specializes in high-end, sustainable homes.
“In addition to the altruistic aspects, there are direct benefits to the occupants, like thermal and acoustic comfort, health and safety and well-being,” he says.
In the past five years, Williams has seen noticeable growth in interest in green building among both the affluent and the less affluent, but for different reasons. Resource efficiency is a top priority with mainstream consumers because gas, electric and water bills represent a higher proportion of their incomes.
For those with high incomes, health concerns play a larger role. Indoor air quality is “vitally important” to the wealthy, Williams says. “People just don’t understand how polluted the structures we live in and work in are. It’s 10 to 30 times, sometimes 100 times, more polluted indoors than outdoors. And when you think about how much time we spend indoors, it certainly affects our health.”
Besides wanting to live in a healthier home, the rich see sustainable houses as a way to preserve an important investment. “The longevity of the structure and the lower maintenance costs add to the value of the asset,” Williams says. “Green homes are more durable. Typically, homes in the United States are built to last 50 years. We’re trying to build homes that last 100 years and more, through multiple generations.”
Stunning And Sustainable
One of the largest and best-known green luxury properties in the world is Acqua Liana. The home takes its name from the Tahitian and Fijian word for “water flower,” according to the Web site of luxury real estate developer and best-selling author Frank McKinney, whose company built the property.
The mansion, which recently sold for almost $23 million, stretches over 15,000 square feet, on about 1.6 acres between the Atlantic Ocean and the intracoastal waterway in Palm Beach County, Fla. The opulent seven-bedroom, 11-bath house has transparent, aquarium-like “water walls” and “water floors.” Other features include an oceanfront grand salon, a Hawaiian koa-wood oceanfront kitchen, two glass elevators, a wet bar with a 2,000-gallon aquarium and a courtyard pool with a floating sun terrace.
The property’s eco-features include solar panels that reduce electricity usage by 60%, a rooftop rainwater collection system that supplies the water garden and high-tech indoor air purification systems, according to McKinney’s Web site.
Showcase properties like Acqua Liana should go a long way toward dispelling the myth that green homes are either ugly tree houses or rickety grass huts, according to industry watchers. Williams says style is a critical aspect of eco-conscious luxury building. “Timelessness of design is important for longevity,” he says.
Blending luxury with green features is easier than one might think. “It’s a stupid notion that the two play against each other,” says Robert Fenwick-Smith, founder and senior managing director of Aravaipa Ventures, a Boulder, Colo.-based venture capital fund that invests in early-stage, efficiency technology companies.
Fenwick-Smith and his wife built the second LEED Platinum-certified single-family residence in Colorado. Like many green luxury houses, it’s designed to be visually indistinguishable from conventionally built structures. The home’s clean lines, modern style and native Colorado stone construction are what visitors notice. The solar panels on the flat roof, for example, are visible only from the hiking trails behind the residence. The geothermal pump system is completely buried, heating and cooling through pipes that run deep into the ground, where the temperature is warmer in winter and cooler in summer than the outside air.
There is one eco-feature that visitors notice immediately, says Fenwick-Smith. “The air quality in our house is at a totally different level from normal houses,” he says. The home, in the mountains outside Boulder, was constructed with non-toxic paints, glues and sealants, as well as green flooring and cabinetry. “Our number-one obsession was no VOCs [volatile organic compounds]—no formaldehydes, basically no off-gassing. Plus we constantly circulate filtered fresh air into the house,” he says.
Another invisible attribute common in high-end green homes is quality insulation. Williams describes a LEED Platinum-certified home that he built four doors down from Walton’s house in Encinitas as “super quiet.” “It’s so well insulated, you don’t hear the train going by, or cars on Highway 101,” he says. “You have acoustic comfort, but you may not notice the quiet until somebody points it out.”
Affordable Housing
Estimates vary on the price of going green, but industry insiders say eco-friendly building materials and mechanical systems typically add 5% to 10% to the construction cost compared to what’s used for a standard home. The application and inspection process to achieve third-party green certification adds another 3% to 5% to the cost. Experts say that for luxury homes, these percentages are much lower, so the cost of going green on larger homes ends up being a smaller portion of the total construction cost.
Green certification can be obtained through a number of programs, including the U.S. Green Building Council’s LEED for Homes program and the National Association of Home Builders’ National Green Building Standard. The LEED (Leadership in Energy and Environmental Design) program is the world’s most widely used green building rating system. To gain certification, homes must be third-party inspected, tested and performance verified. The LEED system favors smaller houses because they tend to use less energy, so larger homes must typically achieve greater sustainability in other areas to attain one of the four levels of certification: certified, silver, gold and platinum.
As of May, the USGBC had certified over 56,000 homes in the U.S. and abroad. The organization says LEED for Homes has grown about 20% year over year. It anticipates a similar increase in 2014 and a slightly higher rate in 2015 and 2016.
The resale value of third-party-certified sustainable homes is higher than comparable standard houses, according to a 2012 study by professors at the University of California, Berkeley, and the University of California, Los Angeles. Single-family homes sold in California between 2007 and 2012 that were labeled LEED-, Energy Star- or Greenpoint-rated commanded an average premium of 9% relative to comparable, non-labeled homes.
Other studies found similar price premiums for homes sold in cities such as Portland, Ore., Seattle and Atlanta that were certified as “green” or “energy efficient.” In some cities, certified homes sold more than 3% closer to the asking price and spent over 20% less time on the market than non-certified homes.
The long-term payback from lower energy and water bills can also be significant. For example, one 15,000-square-foot eco-home near the ski town of Winter Park, Colo., reportedly pays just $450 per month in utility bills.
There are also significant tax breaks for going green. DSIRE, the Database of State Incentives for Renewables & Efficiency (dsireusa.org), provides information on federal, state and local financial incentives for implementing renewable energy systems and improving energy efficiency. Depending on where they reside, homeowners may also be eligible for rebates from their state, city or utility.
Benevolent Building
If there’s an existing structure on-site, the green building process usually begins with deconstruction, rather than demolition, to minimize the amount of usable material sent to landfills. Williams says he coordinates with appraisers who can get $25 to $35 per square foot for everything that’s in a typical home slated for deconstruction. For about $2,500, appraisers can identify salvageable items for donation to charities like Habitat for Humanity. Williams says he knows of a homeowner in the ritzy La Jolla Shores neighborhood of San Diego who generated a non-cash charitable contribution of $94,000—just for donating used cabinets.
To design the new home, Williams says it’s a good idea to hire an architect with green credentials, such as a LEED accredited professional (AP). “It’s helpful to have an architect who can design a green home, because it makes the builder’s job easier. But it’s critical to have a green builder, because it’s the implementation that really counts,” he says.
Part of a green builder’s job is locating cost-effective, local materials that don’t require extra energy to ship from elsewhere. “One of the most precious resources that is too infrequently discussed in green building is money. We strive to value-engineer green building measures to save clients’ money,” says Williams.
For historically significant luxury properties that owners want to preserve, remodeling or retrofitting is always an option. One way to start is with an energy audit. Many local utilities conduct free audits to identify areas in homes where energy is leaking. Private companies typically charge a few hundred dollars to use thermal imaging to map the areas where energy is escaping and suggest remedial measures.
In most homes, a significant amount of energy loss occurs through inefficient windows and doors. Tax credits are available for replacing these with Energy Star-rated products. Swapping older appliances for Energy Star-certified models is another way to reduce energy usage, gain near-term tax breaks and cut utility bills for years to come.
For those who aren’t interested in building or remodeling, green-real-estate-trained agents can help purchasers find a green home on the market. The Association of Energy and Environmental Real Estate Professionals certifies “EcoBrokers” and the National Association of Realtors issues “Green Designations.”
Fenwick-Smith says the affluent can also assume environmental leadership roles in their communities by jump-starting new tends in sustainability. “People with bigger budgets who build high-end green homes help promote technologies that will ultimately be available for normal homes,” he says.
Some might wonder how a home with a large physical footprint can ever be green, but there’s an ironic answer to that. “If you go green on a large home, it will have a bigger impact on the environment than building green on a smaller home,” Williams says.
