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Weighing the Economic Benefits vs. Environmental Impacts of New Buildings

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Investment & Markets
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By Megan Wild

New buildings can bring income to the communities in which they’re built by attracting new business and residents to the area. The materials and fuels used to build a new structure also have significant environmental impacts, and new impacts arise once the building is in operation.

Do the many economic benefits of new buildings outweigh the environmental harm they can cause? Could we reduce new buildings’ environmental footprints while still retaining their financial advantages?

Economic Benefits

Building new homes attracts customers for local businesses and additional taxes for the local government. A study from the National Association for Industrial and Office Parks (NAIOP) found that the more than $1 billion spent on construction in 2016 resulted in a $3 trillion increase in gross domestic product.

Both residential and commercial buildings bring economic enhancements. According to a National Association of Home Builders (NAHB) study, the construction 100 single-family houses typically generates $28,670,800 in wages, taxes and income for local businesses. It also supports 394 jobs. After construction is finished, 100 occupied new homes add around $4 million and 69 jobs each year to the local economy.

The effects can be even more pronounced when the new building is a commercial or industrial facility, especially if it’s a large company that creates a lot of new jobs. For instance, even a year before Apple opened its new campus in Cupertino, California, property value in the area increased by $1.7 billion. During peak construction, business activity in the city increased by 33.5 percent. The economic impacts are expected to continue to grow now that Apple has opened the new facility.

Amazon recently announced that it’s looking for a city to host a similarly large-scale expansion — what it’s calling its second headquarters. Amazon’s development of its headquarters in Seattle brought an estimated $38 billion to the local economy between 2010 and 2016, which means the city got $1.40 for every dollar Amazon put into the projects. Understandably, interest in hosting the new headquarters has been high.

Environmental Impacts

New buildings, of course, don’t come without environmental impacts. Building a typical two-bedroom house produces around 80 tons of carbon dioxide emissions, which is equal to the emissions of about five new cars. Building bigger buildings, such as commercial and industrial facilities, naturally creates more emissions. Sourcing the materials used and clearing land for homes has significant impacts as well.

Most of the environmental impact of home occurs while people are living in it. Buildings use about 41 percent of the energy in the United States — even more than the industrial and transportation sectors — and also use 14 percent of all drinkable water. Overall, they’re responsible for around 40 percent of U.S. carbon emissions.

Green Buildings

Although buildings provide substantial economic benefits, they can be a real detriment to the environment. The green building movement seeks to reduce the damage they cause.

Green construction involves sustainably sourcing materials, improving energy efficiency and sometimes using renewable energy. A green building uses about 25 percent less energy and creates 34 percent less carbon dioxide emissions than a standard building. Around 90,800 projects are currently rated by the United States Green Building Council (USGBC) on its Leadership in Energy and Environmental Design (LEED) scale. Those projects have avoided around 80 millions tons of waste, a number that’s expected to grow.

Green buildings have property values that are around 4 percent higher than standard buildings because of their lower energy and maintenance costs. Between 2015 and 2018, the sustainable building industry is expected to contribute more than $3 billion to the U.S. GDP.

Many of the largest new commercial buildings incorporate green construction principles. Apple’s new campus will run purely on solar energy and use recycled water. Many of Amazon’s Seattle buildings have LEED certification, and some recycle heat generated at a nearby data center rather than produce their own heat.

How to Build More Sustainably

Green builders use many different strategies to make their projects more sustainable. Here are a few of them:


  • Sustainable Materials: Materials account for a large portion of the environmental costs of building construction. Using materials that are locally sourced and can regrow quickly can significantly reduce that impact. Local resources require less fuel to transport. Bamboo is a popular green material because it grows so quickly.

  • Using Less: In order to reduce the environmental impact of construction, people working on green building projects often rent equipment rather than purchase it. An added bonus is that environmental compliance is handled by the equipment provider. Those who want to live a greener lifestyle might rent items or use shared ones as well. They might use a car-sharing service or go to the laundromat, for example, rather than buying their own car or washer and dryer. 

  • Energy Efficiency and Renewables: Green buildings are designed to use less energy than a standard building. Green designers take care to insulate any spots where air may escape to make heating and cooling more efficient. They also often use energy-efficient appliances. Green buildings also often use renewable energy, such as solar and wind. Some may have large windows to allow ample amounts of sunlight in for passive heating and lighting.

Today, arguments often revolve around the environment versus the economy. Many investments, such as constructing new buildings, can boost the economy while hurting the environment. Ideas such as the green building movement may provide a way to have the best of both worlds — and save our world, too.

Image credit: Pixabay / Nikguy

Megan Wild is a writer who is interested in sustainable construction and design. When she isn’t brushing up on the latest in green technology, you can find her tweeting about the latest developments in technology @Megan_Wild.

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