Real Estate Law

Study Ranks Top 10 in Green Homebuilding; Reveals Need for Improvement

Recently, Calvert Investments, a Bethesda, M.D.-based investment group, released a study entitled “A Green Recovery for America’s Homebuilders? A Survey of Sustainable Practices by the Homebuilding Industry,” which examined America’s 10 largest publicly traded homebuilders and their policies/practices related to green building.

The study examined the builders using five major areas, each one presenting significant challenges to the industry--land, building materials, energy, water, and climate change. The study, which ranked Los Angeles-based KB Home, No. 1, and Pulte Homes of Bloomfield Hills, No. 2, showed that out of a possible 42 points, the nation's top 10 builders averaged 6 points or around 15%. However, without KB Home and Pulte Homes, the average dropped significantly--an average of less than 6%.

The top 10 homebuilders, with their 2008 rankings in parenthesis:

  1. KB Homes, Los Angeles (#1);
  2. Pulte Homes, Bloomfield Hills, MI (tied for #2);
  3. Meritage Homes, Scottsdale, AZ (#8);
  4. Toll Brothers, Horsham, PA (#9);
  5. Lennar, Miami, FL (#5);
  6. DR Horton, Fort Worth, TX (tied for #2);
  7. Standard Pacific, Irvine, CA (tied for #11);
  8. NVR, Reston, VA. (last at #13);
  9. Ryland Group, Calabasas, CA (#6); and
  10. MDC Holdings Denver, CO (tied for #11).

Other key points:

  • Homebuilders are not maintaining relevant data regarding their impact on the environment.
  • Homebuilders, with their earlier preference towards regional policies and programs, are now making company-wide, national sustainability commitments.
  • Most green homebuilding initiatives center on energy efficiency and conservation.
  • The green building focus is on nearer-term financial benefits to operating costs and customers--building material recycling and energy and water efficiency–as opposed to longer-term benefits, such as climate change.
  • Homebuilders appear more cost-concerned when it comes to carbon regulation, as opposed to climate change’s physical impacts.