Architects Feel the Hit

A recent article in Architectural Record describes the economic downturn's effect on design firms, and the gloomy forecast for the forseeable future. According to the article, retail and hotel building will fall 10 per cent in 2009, with office construction constricting by 12 percent. While some regional banks for still making loans for projects that are not speculative, even this activity is undercut by fundamental problems in the construction industry, one of the most important being the steep rise in prices of construction materials.

Institutional projects are being impacted as well. Public projects are typically financed by bonds, and voter support this year is extremely uncertain. As for private schools, endowments are typically invested in the stock market, the volatility of which is front page news every day.

The article finds one potential bright spot --- for firms that are able to diversity with international projects. Since this article was published (October 15, 2008), however, it has become painfully clear that the economic downturn is global. To read the entire article, click here. (This entry published by Karen Carey, a member of Womble Carlyle's Real Estate Development and Construction Law practice groups.)

Housing Construction Decline Hits Long-time Construction Supply Company

Stock Building Supply, established 86 years ago in Raleigh, North Carolina as Carolina Builders, "is slashing 3,000 jobs and closing 86 facilities in six states as it struggles with the biggest housing slump in more than six decades" reports the News & Observer. Parent company Wolseley Plc (UK), made the announcement on October 23. The story notes that other building suppliers are also cutting back as a result of the economic slowdown, although the Triangle and Charlotte may fare better than other areas such as Florida, California and Louisiana. (This entry posted by Liz Riley, a member of Womble Carlyle's Real Estate Development and Construction Practice Group.)

Zero Trans fat Homes?

Michelle Kaufmann, an architect known for her line of prefab homes, recently proposed a standardized "nutrition" label to communicate the benefits of a green building to potential buyers. She notes that we traditionally buy a home based on qualities like location, curb appeal, size, and upfront costs, but exclude important factors like sustainability, healthfulness of the indoor environment, and the cost of operating a home.

The purpose of the sustainability label is to quantify the advantages of a green home in easy to understand terms. Her proposed label, similar to the nutritional label found on packaged food products, lists key figures such as energy consumption, carbon dioxide emissions, and insulation values. The label would allow consumers to compare the long-term cost benefits of homes on the market and a home's contribution to improving the environment. In the same way that nutritional labels have changed the way people buy food (for example, the recent push for zero trans fats), Michelle Kaufmann hopes that a standardized sustainability label will change the way people buy homes.

The label could also be married to existing green building standard, such as LEED. The LEED distinction on the label would promote USGBC's brand, and listing key figures on the label will help distinguish a LEED building from one built using traditional building standards.

For more information and an example of a "sustainability label" see Michelle's blog entry and her whitepaper.