Despite some encouraging environmental and energy-efficiency developments in recent years, none of America’s 13 largest publicly traded homebuilders has "fully embraced the emerging market of sustainable building design and construction," according to a new study.
However, the study, which was conducted by investment management group Calvert with support from the Boston College Institute for Responsible Investment, ranked KB Home of Los Angeles as the leader of the group in terms of environmental sustainability.
Four other homebuilders–K. Hovnanian, Red Bank, NJ; MDC Holdings, Denver, CO; Standard Pacific, Irvine CA; and last-place finisher NVR Inc., Reston, VA–are on what the report calls the "sustainability bottom rung."
"The biggest challenge facing this group is that, for the most part, they have not acknowledged that there is a market for green homes or that they have a role in serving or promoting it," the report said.
For best-to-worst rated, the balance of the top 13 U.S. homebuilders are: tied for #2 D.R. Horton, Fort Worth, TX and Pulte, Bloomfield Hills, MI; #4 Centex, Dallas, TX; #5 Lennar, Miami, FL; #6 Ryland, Calabasas, CA; #7 Beazer, Atlanta, GA; #8 Meritage, Scottsdale, AZ; and #9 Toll Brothers, Horsham, PA.
Titled "Greener Pastures for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry," the report concludes: "The industry has a long way to go before any of the companies can truly claim to be addressing the risks and opportunities inherent in the environmental and climate change dilemmas."
Commenting on the report, Stu Dalheim, Director, Shareholder Advocacy, Calvert Group, said, "This is a real and growing issue for homebuyers and for investors. In the green building market there is a first-mover advantage: Companies that make a concerted national effort to integrate sustainability into project sites, construction materials, and construction processes, as well as to provide energy, water, and habitat conservation options in finished products, will be able to build a brand image as the environmental choice for home construction."
As an investor, Calvert said it seeks to discern how major U.S. homebuilders compare on policies, programs, and performance relating to the environment and resource efficiency. The survey of homebuilders used four major "green" indicators: energy use; building-material use; water use; and land use.
Despite the slump in the overall housing market, the green building industry is seeing annual growth of as much as 30%. Green building features for new homes present a clear opportunity for the homebuilding industry–homeowners are willing to pay a premium for greener and cleaner homes of $18,500 on average, according to a McGraw Hill Constructions 2006 report, Home Preferences of Green HomeBuyers.
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