Sustainable real estate: Supply gap, awareness vacuum persist
There has been a significant increase in ‘green’ growth in the residential segment.
In the past decade, Indian as well as global corporates have shifted a lot of their focus on green commercial buildings. This increasing interest has led to an accelerated availability of such products, services and also enthusiasm from builders catering to this segment.
There has also been a significant increase in ‘green’ growth in the residential segment. There are now investors such as International Finance Corporation, UK government’s Department of International Development (DFID) and the National Housing Bank, which is significantly boosting this relatively new segment.
Today, many more Indian developers have understood that green certification can attract more customers and investors, and are aligning themselves with green concepts. However, the supply gap is still quite significant, and there is still a definite need to create a broader spectrum of awareness among end-users.
Another lacuna is on the banking front. Bank loans are an integral factor driving the residential property market, and unless bankers and lending agencies are trained on the benefits and importance of green real estate and insist on such features, we will not see awareness and traction of sustainable properties increase much.
In commercial properties, there needs to be more clarity on who reaps the benefits: The owner or the tenant. In view of this, codes have to be made mandatory. The Energy Conservation Building Code has to be simplified, and the state governments have to ensure that it is made mandatory for all concerned local bodies. The way things are now, local urban bodies do not have the wherewithal for implementation.
Green building concepts, when implemented to the required extent and intent, will help save water through rainwater harvesting and recycling of waste water, and in reaping benefits from the water energy nexus. The compounded annual growth rate of electricity in the residential segment is over 8 per cent. One-third of electricity used in the country is for residential and commercial buildings. Whether it is water or energy, one can easily achieve benefits to the tune of 25 per cent or more.
Green buildings also address the major concern area of waste disposal in most Indian cities. We already face decreasing availability of landfill sites in these cities, and green buildings with their integrated waste disposal and recycling systems can contribute significantly towards decreasing dependence on them.
Incentives & concessions
At present, Indian cities which offer incentives and concessions for green building development include Kolkata, Noida, Hyderabad and Pune. Examples of such incentives include higher (floor area ratio) FAR and property tax incentives by Greater Hyderabad Municipal Corporation, the Pune Eco-housing programme, etc. Linking property tax to actual performance and mandating a simplified region-specific list will help achieve attain green goals faster and in more cities. A holistic approach is preferable to a piece-meal approach. The positive impacts will accrue faster when green construction parameters are made mandatory and implemented by all concerned stakeholders like urban local bodies (municipalities and development authorities), builders, owners, tenants, electricity distribution companies, pollution control bodies, water supply and sewerage departments, and state and central governments.
Rating & Certification
Today, there are a number of rating and certifying agencies for green construction existing in India. These include Indian Green Building Council, US Green Building Council (EDGE Program), Green Globes, Eco Housing program and MNRE’s GRIHA. Almost all of the certification programmes have common elements of focus, and the benefits of savings in energy and water, and using local materials are invariably achieved.
The time is now
There is no question that population growth in most parts of the urbanised and urbanising world is exceeding these areas’ ability to accommodate it. Unsustainable growth inevitably leads to environmental changes which, if they cannot actually be reversed, at least must be slowed down. The onus of reducing environmental degradation obviously does not fall solely on the shoulders of sustainable real estate.
However, green buildings are definitely an obvious available solution, since designing and buildings real estate which results in lower emissions is in every developer’s reach today. It is only a question of awareness and willingness. In a massively populated and increasingly populating country like India, the government is already severely challenged in making basic resources like water and electricity available and managing waste. The situation will not improve without proactive intervention, and in fact only worsen. Sustainable real estate can make a significant dent in this resource deficit if it is deployed in the required magnitude, so we as a country need to ‘go green’ sooner rather than later.