Builders, developers, and owners are constantly complaining that high-performance buildings rarely get their due from appraisers who, they say, don’t have good measures to compare one building’s energy savings over another’s, or how those savings affect the value of the building.
The Appraisal Foundation, a nonprofit organization authorized by Congress to establish appraisal standards, is working methodically to alter this perceived image of cluelessness. Within the next few weeks, the Foundation is expected to issue the final draft of its guidance related to background and competency for appraisers valuing green buildings.
John Brenan, the Foundation’s director of appraisal issues, tells BD+C that states may elect to start adopting this guidance by early next year. And while the guidance would be voluntary, Brenan believes it may serve as a safe harbor for appraisers performing appraisals on green buildings.
The final guidance relating to the valuation of green buildings may offer methods and techniques to allow compliance with the Uniform Standards of Professional Appraisal Practice (USPAP).
That Board—which utilizes panels of experts, including those with green-building expertise—is one of three independent boards that comprise the Foundation, the other two being the Appraiser Qualifications Board and the Appraisal Standards Board.
The Foundation is also working on more specific guidance for appraisers to use when valuing the “greenness” of one- to four-unit residential buildings; and commercial, multifamily, and institutional properties.
Brenan says these guidances would contain methods and techniques that show appraisers what to look for and how to compare a building’s green features, materials, and construction management with other buildings in a market.
He expects an initial “exposure draft” of these guidances could be available for public comment in the first quarter of 2015. “Our hope is that all three advisories are adopted by late 2015, so the Foundation would have a tool kit for appraisers and regulators to use.”
At press time, Brenan was unable to elaborate on the proposed methodologies. And he is quick to note that appraisers don’t set values; “they just mirror what’s going on in a market.”
He did note, however, that the guidance being developed includes how to compare properties that have sold with like green features, and how to recognize market-to-market differences.
“One of the most interesting potential [guidances] would be to look at anticipated cost savings over an extended period of time,” he says.
Brenan points out that there is never going to be a “plug-in formula” for green valuation that fits all buildings. “It is still completely market-driven, and markets are stratified. Just because you have green features doesn’t mean the appraisal will be apples to apples. It’s kind of a sliding scale.”
That being said, Brenan readily acknowledges that there aren’t enough appraisers out there who are competent enough to assess how high performance should be factored into a home’s valuation. He’s speaking from experience. “I live in California, in a home that has a solar photovoltaic system, and the appraiser didn’t know what to do with it. So that became a little educational experience.”
Brenan says that anyone in the building, design, and construction sectors who wants to get involving in helping to develop these guidances can contact him directly at John@appraisalfoundation.org.
Related Stories
| Dec 29, 2014
HDR and Hill International to turn three floors of a jail into a modern, secure healthcare center [BD+C's 2014 Great Solutions Report]
By bringing healthcare services in house, Dallas County Jail will greatly minimize the security risk and added cost of transferring ill or injured prisoners to a nearby hospital. The project was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
New mobile unit takes the worry out of equipment sterilization during healthcare construction [BD+C's 2014 Great Solutions Report]
Infection control, a constant worry for hospital administrators and clinical staffs, is heightened when the hospital is undergoing a major construction project. Mobile Sterilization Solutions, a mobile sterile-processing department, is designed to simplify the task. The technology was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Startup Solarbox London turns phone booths into quick-charge stations [BD+C's 2014 Great Solutions Report]
About 8,000 of London’s famous red telephone boxes sit unused in warehouses, orphans of the digital age. Two entrepreneurs plan to convert them into charging stations for mobile devices. Their invention was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Spherical reflectors help spread daylight throughout a college library in Portland, Ore. [BD+C's 2014 Great Solutions Report]
The 40,000-sf library is equipped with four “cones of light,” spherical reflectors made from extruded aluminum that distribute daylight from the library’s third floor to illuminate the second. The innovation was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Hard hat equipped with smartglass technology could enhance job site management [BD+C's 2014 Great Solutions Report]
Smart Helmet is equipped with an array of cameras that provides 360-degree vision through its glass visor, even in low light. It was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Clayco lends operational support and financing to construction services startups [BD+C's 2014 Great Solutions Report]
Design-build firm Clayco has launched an investment arm called Treehouse Adventures to provide financing and operational infrastructure to startups, including those serving the AEC industry. The new venture was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Reef Worlds to build world’s largest underwater theme park for luxury resort [BD+C's 2014 Great Solutions Report]
Dubai is known for its gargantuan commercial building projects. The latest to be proposed is the world’s largest underwater theme park, designed and built by Reef Worlds. The project was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
New data-gathering tool for retail designers [BD+C's 2014 Great Solutions Report]
Beacon technology personalizes smartphone messaging, creating a new information resource for store designers. It was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Leo A Daly's minimally invasive approach to remote field site design [BD+C's 2014 Great Solutions Report]
For the past six years, Leo A Daly has been designing sites for remote field stations with near-zero ecological disturbance. The firm's environmentally delicate work was named a 2014 Great Solution by the editors of Building Design+Construction.
| Dec 29, 2014
Wearable job site management system allows contractors to handle deficiencies with subtle hand and finger gestures [BD+C's 2014 Great Solutions Report]
Technology combines a smartglass visual device with a motion-sensing armband to simplify field management work. The innovation was named a 2014 Great Solution by the editors of Building Design+Construction.
