Throughout the Western United States, the building and community development sectors of the real estate industry are looking more seriously at incorporating "green" solutions into their projects. Southern California has not historically practiced sustainable development, particularly when building large-scale new communities.

However, as consumers become more aware of the benefits of green communities, and as developers realize the lower long-term costs associated with green building, a shift is taking place. Terramor is a great example of what the future might hold. Terramor represents one of the most ambitious green building programs in the nation and is utilizing many innovative products and practices that are destined to serve as prototypes for other communities.

With green development, the entire life cycle of a development and its components is considered, as well as the economic and environmental impact and performance. An increasing number of developers, land planners, designers, and real estate owners are becoming interested and involved in green development. National and local programs encouraging green developments are growing and reporting successses, while hundreds of demonstration projects and private developments across the country provide tangible examples of what green development can accomplish in terms of comfort, aesthetics, and energy and resource efficiency.

Terramor is the fifth village to open within the master-planned community of Ladera Ranch, CA. Located in southOrange County on the historic Rancho Mission Viejo, Ladera Ranch boasts striking natural topography, with rolling hills, arroyos, and mountain views. Master developer Rancho Mission Viejo Ladera plans to conserve 1,600 acres of the site's open space, while constructing over 8,000 homes organized into six villages and three districts. The 433-acre Terramor village includes 1,260 residences, including attached town homes and condominiums. Prices range from the high $300,000s to more than $1 million.

As one of California's largest community developers, Rancho Mission Viejo is a strong proponent of building healthy homes as well as communities, and is committed to using natural resources wisely to protect and preserve the environment. To this end, 10 Terramor builders are now participating in the community's green program, which also includes mandatory participation in the ENERGY STAR rebate programs, use of photovoltaic panels for common area electricity use, and coordinated waste management.

Rancho Mission Viejo partnered with EDAW of Irvine, CA and others to implement the green building program. EDAW is one of the world's largest land and environmental-based planning and design firms. The firm has been involved in a number of projects that are implementing green building practices at various levels.

How did the management team convince its 10 constituent builders, some of whom had no experience in green building, to endorse such a strategy? By demonstrating the market potential of all the benefits Terramor was poised to offer.

"No other developers in the area had yet tapped a homebuyer type termed 'Cultural Creative,' characterized by a focus on environmental responsibility and community participation," according to Steve Kellenberg, principal with EDAW.

The builders on the Ladera Ranch team, swayed by Terramor's targeted market appeal, are implementing a five-part green building program addressing elements ranging from energy and water conservation to indoor environmental quality. Developed by a team of consultants who worked collaboratively with the builders, the program centered on a 10-point energy conservation plan:

1. T24 + 20% - Builders must exceed California's tough Title 24 energy efficiency guidelines by 20%, via a combination of elements such as increased insulation, low-E windows, and optional tankless water heaters.

2. Annual Energy Cost Savings of 20% - Builders must demonstrate the annual energy cost savings for each home; this savings becomes a selling point for home buyers unfamiliar with Title 24. Greg Franta, a principal architect with ENSAR Group, Inc., trained the builders to use software based on simulations of hourly energy expenditures for this purpose. "The requirement to demonstrate savings of 20% beyond Title 24 standards may seem modest," says Franta, "but when achieved on 1,260 new homes, it constitutes a significant impact. And, because Ladera's green program is affecting major building teams, it's setting a new standard for mainstream development."

3. ENERGY STAR Certification - San Diego Gas & Electric, a Sempra Energy Utility, will assist all builders with the application process for the California ENERGY STAR New Homes  Program. Incentives are available for both single- and multi-family housing.

4. Building Site Orientation - Several neighborhoods are oriented to reduce solar loading and consequent home cooling needs. "We looked at the homes and the community as a whole. We took certain things such as site planning on the builders' parcels and we went from a standard approach to a nonstandard. As a result, we were able to orient all of the homes from north to south, which reduces heat gain and peak load of the utilities, greatly reducing utility costs," said Will Haynes, principal, community design planning, William Hezmalhalch Architects of Santa Ana, CA.

5. Architectural Shade Elements -West facing elevations are required to shade primary windows or utilize windows with a solar heat gain coefficient (SHGC) of less than 0.4.

6. 100% Fluorescent Lighting - Fluorescent lighting systems are required in all production homes, with the exception of dimmable incandescent chandeliers and bathroom fixtures on a separate switch.

7. Photovoltaic (PV) Systems - Detached model homes are demonstrating a PV option package of at least 1kW in size, and a number of builders are making the PV system standard. In addition, common open space for multi-family neighborhoods is powered by photovoltaic panels. "Here's a product that has evolved a lot. Solar panels are more attractive than they used to be, not to mention, easier to install. New technology such as ëPeel and Stick' makes it much easier," said Haynes.

8. Low-Voltage Outdoor Lighting - All landscape lighting must be low voltage,  installed with an automatic timer or photo cell.

9. Optional Motion-Activated Indoor Lighting - Model homes feature motionactivated indoor lighting, offered as an option in all residences.

10. Neighborhood Electrical Vehicles (NEVs) - All homes will include a 110- volt electric outlet for charging NEVs. Each builder will display a GEM car at their model home complex, and Rancho Mission Viejo is also purchasing GEM cars to be used by the homeowners association and marketing staff.

Scores of additional technologies and practices are in place to address issues such as indoor air quality and stormwater bio-filtration. A third-party inspection program has been developed to ensure builder compliance.

With 10 large, mainstream building companies endorsing its green building program, Terramor sets a new standard for large-scale new communities in the region. The village illustrates the need for a standardized green program. An implementation process that facilitates information-sharing is also essential. At Ladera Ranch, architects, builders and subcontractors were brought together in workshops to share their experiences and techniques with other builders.

"This was the first time we've seen builders offering to share proprietary information with each other," notes Paul Johnson, senior vice president of community development at Rancho Mission Viejo. "They just realized the more they exchanged lessons learned, the faster we would pull this (green program) together."

Going green can have its costs. A key step in designing a green program is to initiate a cost-benefit analysis.

After the green team has developed an initial array of green elements, the additional revenue, cost savings, or other compensating factors are identified for each element.

Kellenberg explained how the process works: "Using standardized evaluation programs, elements can be categorized by timing of cost recapture, if there is any. The green program can then be modified to better align not only the environmental objectives, but the market, political, and economic goals of the developer," said Kellenberg. "On several projects, this process has helped focus efforts on green elements most likely to succeed, while jettisoning those that sounded good but were extremely expensive relative to either marketing or environmental impact."

Because of the added costs, it's important to identify the degree to which buyers value the benefits and are willing to pay a sales premium, resulting in higher revenue. This "green premium," supplemented by tax incentives and lower operating costs, is crucial to developing a balanced green program. "The challenge is to select the right mix of elements that will result in better financial performance in both the short and long run," said Kellenberg.

Incorporating green products and practices may not even cost additional money.

"After we did extensive research on what would and wouldn't work, we found that many builders are already using some of these products and principles - things such as a 220 outlet in the garage, sealing ducts - We also worked closely with the purchasing agents, who were able to easily make some adjustments in their procedures to incorporate green products," said Haynes.

He cited roof materials as an example many are made from composites, which are lighter in both weight and color - and don't cost more than standard roof materials.

Buyers seem to invest in green measures for one of two reasons: either they believe it is important to lead a more sustainable lifestyle, or they believe they can save money. The long-term savings delivered by some green elements can be partially reflected in increased sales price if carefully communicated to the buyer. Increased insulation, overhangs/shades, ENERGY STAR rated appliances, operable windows, and natural daylighting can reduce energy costs significantly.

Water-saving measures include waterefficient fixtures and appliances, native and drought tolerant landscaping that requires less watering, efficient irrigation systems, and water reclamation programs.

Visible green features are the easiest to sell. Brooke Warrick, the founder of the market research firm American Lives, and a consultant to green developers, "All green features are not equal in the consumer's eye. The cost and the perceived value need to be weighed. For example, in California, photovoltaic panels on a 2,000 squarefoot house could reduce an energy bill by as much as 60 %. With all of the incentives and credits, it may be possible for a green homeowner to break even in a period as short as one year."

At Terramor, the additional costs were also offset by other cost adjustments.

The aesthetic design guidelines were modified slightly to reduce hard costs by about $3 a foot and then a portion of the savings was applied to green elements. Builders are well within the additional $1.50 to $3.50 per square foot for the green components. (According to national surveys by American Lives, 85 % of homebuyers questioned said they are willing to pay $2.25 more per square foot for green and 73 % are willing to pay $4.50 more.) Both buyers and builders do need to be informed about the benefits of using green products and practices.

"We can do a lot more to educate both builders and buyers," says Johnson. "There is a big learning curve for everyone."

Although green is a growing trend across the nation, there are still challenges. One problem with using green materials is that they are not readily available everywhere. For example, there are no suppliers of certified wood products in Southern California.

"It's still too early, so we had to reconstruct the guidelines; green is still very new," Johnson notes. "But this is where the national building trend is going and it's only going to get better." Government agencies are encouraging, sometimes even requiring, developers to use green development principles. Every indication is that this is a growing trend and that in many regions, a green program will soon be expected in tandem with the usual master plan and zoning submission.

Meanwhile, applying green measures can definitely win over communities and speed the entitlement process. Voluntarily restoring wetlands and other ecological areas, encouraging alternatives to automobile use, and creating open space for community use go a long way towards building support and reducing legal delays.

As green communities begin to prove their worth, their residents will have contributed not only to their own futures but to the health of the environment in the long-term-an investment many buyers will find hard to resist. SLDT