International Real Estate and Planning - Property Sustainability - Essay Example

International Real E and Planning: Property Sustainability College: Introduction The shortage in natural resources, landscape and biodiversity depletion as well as the global climate change faces the society today. A larger percentage of resources and consumption of energy is majorly affected by the property development hence the need for sustainable development. The property sustainable is determined by a number of factors including; building materials and energy, flexibility in expenses and return, the green space design, and landscape and natural ecology (Ling and Archer 2005). The total percentage of energy used in space heating and supplying warm water and curbing carbon dioxide emissions is high accounting for almost 40% in the Western European countries. This calls for efficiency in technology supply and change in lifestyles in managing the type and resources present in a country. The usage of resources further depends on the environmental awareness, learning experiences, the value and availability of the resource, type of household and normative pressure. Property sustainability is affected by product manufacturing and assembly, building structure, maintenance system, waste disposition, material extraction, and replacement (Bulg, Leimgruber, Huni and Scholz 2009). The 2008 financial crisis that hit the world led to weakening of the housing markets and vulnerable populations, and this called for planners to redesign programs that promote sustainable home ownership. The move helped to lower risks, protect the environment while assuring robust returns to investors as they are less prone to shortfalls in returns. The major concern is usually technology, ecology and green performance. This implies that social infrastructure should be able to satisfy the present generation while posing no threat to the future generation. Thus, sustainable property should enable human systems in realizing their capabilities without posing any social inequality (Lorenz and Lutzkendorf 2005). The increase in carbon dioxide emissions is propelled by the energy used by people in heating, lighting and running the daily activities. Given that these emissions pose a serious and adverse effect on the climate change, an effective remedy to this menace needs to be developed. In this effect, initiatives that ensure that homes minimize the use of energy through building of sustainable property help to combat the emissions. Facilitated by the Sustainable Home Code, planners have introduced the buildings are constructed upon codes that enhance a greener way of living thus benefiting the society at large. There has been increase in demand for the sustainable property as it fosters content and comfort. Sustainability focuses on the space between buildings, beautiful landscape around the buildings, since emphasis is laid on architecture and landscape that will aid in combating carbon dioxide. To increase the percentage of sustainable property, land acquisition should be done where the quality of land is high, desired and with efficient connection to locations with high demand (Ling and Archer 2005). Today people are interested in places where they will feel safe, healthy, valued and comfortable and it is the work of property developers to ensure that developments supply with them new amenities, commercial and retail opportunities, new jobs, public spaces and leisure opportunities. The government intends to ensure that buildings are developed to a certain standard that will help in cutting on the energy used in homes. It is possible to construct a building that makes use of renewable resources throughout the process of design, construction and operation. Canada, for instance, is the leader in development of sustainable property given that residential buildings in Canada are designed and developed with super-insulated low energy drive. This helps in reducing pollution and emissions of green gas (Kimmet 2009). Furthermore, to enhance sustainability, the Leadership in Energy and Environmental Design (LEED) is concerned with six key elements, including sustainable site planning, safeguarding of water to enhance water efficiency, efficiency in energy use and employing of renewable energy, conservation of materials and resources, fostering indoor environmental quality as well as engaging in innovation and designing processes. Development of green building has been on the rise in recent years as the world aims at combating greenhouse gas emissions. This has led planners to renovate and construct new commercial buildings that cut on energy consumption as well as being socially acceptable (Ellison and Sayce 2007). The demand from clients in the market for housing that will have lower operating costs motivates construction firms to venture into the new business. Property sustainability incorporates the technical innovations that enable users of a property to operate more efficiently as it produces less waste and greater energy efficiency which protects the environment. Various codified schemes have been introduced to aid in enhancing property sustainability and they include: Green Star, Leadership in Energy and Environmental Design, and Building Research establishment Environmental Assessment Method (Voinov 2008). As the need for going keeps on rising, the commercial property sector has been in the forefront in increasingly influencing design and investment patterns by building green. Building green not only saves on the environment by mitigating the greenhouse gas emissions, but it has profound benefits to the property developers, clients and the environment in the long run. Social sustainability plays a big role in the development of property sustainability. Sustainable property fosters social benefits which are in the context of the built environment in enhancing human equity. Even though it reflects the short term benefits derived from sustainable property such as quick returns. The property development should take into consideration the personal values of an individual regarding the environment and society by being accountable. Considerations should be made on the negative and positive consequences of property development on social and environmental factors in analyzing the financial implications (Ellison and Sayce 2007). Given that property are being evaluated in respect to its financial profitability, ecological integrity and social equity; investors in real estate have made sustainability part and parcel of the corporate strategy when making conservation and revitalizing urban areas. In essence, the outcome of sustainability includes safer environment and the best human outcomes in the future as it builds on demand resulting to higher sustained returns. Sustainability is primarily an initiative of mitigating greenhouse gas while enhancing opportunities for growth and prosperity while lowering risks involved in the real estate. The major concern of real estate developers is profits; hence mechanisms that points out the benefits derived from socially responsible behavior in building should be focused. Embracing flexibility, quality, endurance and alternative thinking in development of green real estate promotes financial success on enterprises. The sustainable property offers tenants better packages as they will be able to save over 20 per cent of their energy consumption, granting them better access to expertise and products at lower rates that reflects better economies of scale. In cutting on the amount of energy consumed, greenhouse gas is reduced. The developers can play an upper hand in increasing the percentage of sustainable building stocks through a number of ways. Engaging in social responsible activities instead of focusing majorly on sustainable property is one of the initiatives (Bulg, Leimgruber, Huni and Scholz 2009). This includes negotiating guaranteed targets with tenants and where the target has exceeds the target in energy savings, the property developers should refund the tenants. In situations where the target is not reached due to efficiency, tenants should be allowed to keep their savings. The sustainable property has been effective in employing renewable sources of energy, reduction in consumption of electricity and natural gas, diversion of tenants waste from landfill to recycling and mitigating greenhouse gas emissions of over 50, 000 tons of carbon dioxide through efficiency. This is facilitated by the demand of tenants for green lease that calls for management of properties to be efficient in managing their buildings to enhance safety. Furthermore, existing properties should be redesigned, reconnected, re-used in adaptation on sustainable buildings to human processes and interactions in order to reflect both natural and social environment (Kimmet 2009). The presence of penalties and incentives in the Efficient Building Scheme helps in promoting sustainable development. The scheme recognizes efficiency in energy use and avoidance of emissions, to achieve this, the scheme need to partner with the community in advocating for their rights, wellbeing and environment This makes commercial property managers to enhance sustainability initiatives in operation and management of their property (Boyle 2005). The changes in market demands as reflected by new taste in housing that is geared at protecting the environment while living as a community. Hence, there has been massive growth in development of sustainable property with the intention of capturing the change in demands in the market. This follows the idea that civics predicts the economics and any shift in organizations or society demands, it will result to transformation of the real estate market sector (Voinov 2008). The drive of making money induces investors to invest more in sustainable property as in so doing they will manage to capture a wider market. As a result, many property investors perceive property sustainability as being a means of sustaining surplus in profits since their actions is driven by the idea of making more money. The money motive makes investors to make use of renewable resources as natural resources are scarce. The dependence on high level of technology and policy breakthroughs that are in favor of renewable resources and changes in behaviors leads to progress in fostering environmental and social solutions. The efforts include: improved efficiency in solar panel, implementation of carbon trading and offsetting, increased recycling and the rise in public transport usage as they will facilitate mitigation of natural resources, waste products while enhancing preservation of the scarce resources. The need of ensuring survival in today’s competitive market, cultural shifts that are concerned with the genuine and expansive social responsibility initiatives, increased profitability and government pressure in promoting green business requires organization to engage in sustainable property development (Bell and Morse 2008). Investment in sustainable property results to profit sharing among all the stakeholders in the market. The investors, individuals, society at large, environment and governments derived benefits from this development hence the need for efficiency in greener building development. A connection between returns derived and sustenance of the planet over time should be made. Alliances between the community and businesses are on the rise to increase demand for meaningful and sustainable environment for the future sustainability of the commercial property. Furthermore, communicating of the principles of sustainable development to the public helps in creating awareness and increasing demand for sustainable property. Taking programs that ensure social and environment interests is protected through transparency, openness and best business practices (Bulg, Leimgruber, Huni and Scholz 2009). The major focus of sustainability is on ethical principles, environmental and social aspects in creating value to shareholders and society at large. To understand better the concept of sustainable property, the relationship between the value of property, risk exposure and financing, responsibility and the growing interest of the property industry towards the society and environment ought to be analyzed. By being aware that by ignoring the social and environmental concerns when making investment decision poses financial risk to an organization, property investors have become socially conscious by adapting social responsibility in their investment. The global community is committed in achieving sustainable development in the world and in this regard, efforts have been deployed in facilitating this goal, including the Socially Responsible Property Investment. Sustainability is an ongoing process that is focused in attaining durable balance between the environment, economy and society. The commitment by the global community is due to the urgency in addressing the climate change which threatens sustenance of future generations as the ozone layer is being depleted due to increased greenhouse gas emissions (Voinov 2008). Studies conducted by Stern while reviewing the economics of climate change assert that the climate change is the greatest contributor to the decrease in global gross domestic product and this will have negative impact on the investors capital. Measures ought to be employed in harnessing these and foster a sustainable property that will help to save the future generation (Bell and Morse 2008). The potential identified in property developments, buildings and construction sectors in fostering sustainable development is great. Sustainable property is thus the cornerstone of sustainability in respect to Organization for Economic Co-operation and Development (OECD, 2003). Several strategies are being employed in increasing the percentage of sustainable building blocks including: the introduction of new subsidy programs that are specific in promoting renewable resource use, changing the general framework on building taxation and legislation, introducing carbon dioxide certificate trading schemes in the property and construction sector. Furthermore, transforming the values and concerns of the society by strengthening individuals and corporations to take responsibility towards sustainable society and environment, as well as developing and marketing investment products, such as sustainable property investment funds, will increase sustainable property development (Ling and Archer 2005). The investors should be informed of the financial benefits and reduced risk accrued from sustainable property development through campaigns from banks, and government agencies. The government should pave the way by constructing sustainable properties, as this will create more confidence on investors thus leading to real estate developers embracing the idea. The political and governmental forces that overshadows the market forces of demand and supply such as environmental legislation, building codes and regulations and health and safety codes determines the value of property. Lastly, the social forces comprising of the entire spectrum of human activities and changes in population pose much influence on the value of property and with much awareness on sustainability has led to dynamics in the demand for commercial property (Voinov 2008). It is generally accepted that sustainable property is profitable and marketable, has increased functionality, more energy and cost efficient, highly adaptable, easy to service, risk reduction with reduced negative impacts on the environment. Further, it is functionally effective, more comfortable thus making the occupants be more contented. These benefits are in direct and indirect financial gains, all geared at reducing property risks both today and in the future. Poor environmental and social concerns posses a great investment risk to property development and this calls for sustainable and responsibility in the real estate business. Though the potential for sustainable property is lower at present age, the demand is deemed to rise as the global community is in the business of fostering sustainability with the intention of protecting future generation. In order to achieve better investment returns thus making the company to increase its competitiveness in the market and improving its long term profits (Bell and Morse 2008). The increased percentage in sustainable building blocks is attributed to the huge untapped potential existing in the market today for investments in sustainable property. The view that sustainable property outperforms the conventional properties in terms of social, environmental and financial benefits; the venture has been the center of attention. The need to reach a symbiotic relationship between human economic activities and nature so as to enhance sustenance of the earth’s ecosystem is propelled by the changes in sustainable behavior patterns. The challenge to sustainable property development is presented by lack of experience and relevant data that will aid evaluator’s and investors in investing in the project. The risk involved makes many investors to shy-off as they fail to understand that risk is part of business. Elements of sustainability should be incorporated in education and training programs as this will serve a large population with the concept of sustainable issues that calls for their attention. As the business environment is rapidly changing to pave way for sustainable products, services and behavioral patterns, clients will require sustainable property and the evaluators, real estate developers should be ready to offer these to the large population in case they intent to be competitive in the long run. The sustainable property is concerned with climate control, pollutants, energy efficiency, water and waste management, adaptability, contextual fit, occupier fit and accessibility. These factors when taken into closer consideration they will make property sustainable (Kimmet 2009). The end results will be efficiency on operational energy thus saving tenants a huge sum of money as well as reducing the amount of carbon emitted. The increase in standardization for energy efficiency mechanisms makes it a prerequisite to enhancing sustainability. Air conditioning increases energy consumption leading to increased carbon emissions. Understanding the ways in which building ownership and occupation affect the sustainability perception in terms of worth and physical characteristics, the issues of sustainability will be addressed effectively (Boyle 2005). The tenant and investor have a role to play in preserving the environment since social responsibility is the center of attention for property investors hence the need for efficiency. Proper valuation gives room for innovation and technological growth as investors will be looking for effective way in delivering sustainable property to the market. Property sustainability is thus concerned with generation of value and avoidance of risk majorly by investors as these factors outweigh the social and ecological demands. In conclusion, the energy efficiency benefits, as reflected in property price estimates, encourage the need to embrace sustainable property development as people are willing to save more money even as they protect the environment. Property valuation points out the monetary measures of utility that is derived from accessibility and control of property and this should be in line with the interests of the public for it to prosper (Lorenz and Lutzkendorf 2005). The economic factors, such as the ability of the economy to satisfy the demand and supply needs through its purchasing power, and the physical factors including man-made and environmental externalities impact greatly on the value of a property. The advantages of the sustainable property development should be communicated effectively through analysis of risks, transaction and valuation of the property sector. Proper valuation and communication enhance the penetration of the sustainable development as the environmental, social and economic benefits derived from sustainability will boost the demand for these properties in the market. Reference list Bell S and Morse S, 2008. Sustainability Indicators: Measuring the Immeasurable? 2nd Edn. Routledge, London. Boyle A, 2005. Sustainable Buildings. Proceedings of the Institution of Civil Engineers, Engineering Sustainability, 158 (1), pp. 41-48. Bulg R, C Leimgruber, G Huni and R Scholz, 2009. Sustainable Property Funds: Financial Stakeholders’ Views on Sustainability Criteria and Market Acceptance. Building Research and Information, 37 (3), pp. 246-263. Ellison L and S Sayce, 2007. Assessing Sustainability in the Existing Commercial Property Stock: Establishing Sustainability Criteria Relevant for the Commercial Property Investment Sector. Property Management, 25 (3), pp. 287-304. Kimmet P, 2009. Comparing “Socially Responsible” and “Sustainable” Commercial Property Investment. Journal of Property Investment & Finance, 27 (5), pp. 470-480 Ling C and R Archer, 2005. Real Estate Principles – A Value Approach. McGraw-Hill, New York, NY. Lorenz D and Lutzkendorf T, 2008. Sustainability in Property Valuation: Theory and Practice. Journal of Property Investment and Finance, 26 (6), pp.482-521 Organization for Economic Co-operation and Development, 2003. Environmentally Sustainable Buildings – Challenges and Policies. OECD Publications, Paris. Voinov A, 2008. Understanding and Communicating Sustainability: Global Versus Regional Perspectives. Environment Development and Sustainability, 10 (4), pp. 487–501. Read More