Several prominent building organizations are trying to encourage green building and design–but is green building already a big focus for today’s builders? Or are the promotional efforts not even close to enough?

The current level of green design chatter is more than we had a year ago, that’s for sure. And it’s what the industry wanted: Just look at the reaction to the U.S. Green Building Council (USGBC) LEED for Homes  guidelines.

In early December, the USGBC released the final version of its green housing design framework, opening up a whole new sustainable world. For years, LEED procedures have served as the benchmark for large commercial projects and city green building initiatives–but housing was left in the dark. It seemed the  residential industry just needed a little push, a little attention paid to its needs–and then green design would be the biggest thing to hit building since the hammer.

Turns out, the USGBC’s efforts were all it took, because housing developments all over the country–which were planned long before the final guidelines came out–have seemed eager to become certified since LEED for Homes’ official debut (in a way, retro-certified).

California builder Olson Homes’ all-solar, multi-family Depot Walk in Orange, Calif. became California’s first attached, new home community to earn LEED Certification (Silver) from the U.S. Green Building Council (USGBC) in late December. Last week, the New York Daily News reported that the Verdesian, a 26-story New York rental building, became the first multi-family, residential high-rise in the U.S. to receive Platinum LEED status. The Albanese Organization, who developed the Verdesian, also created the nation’s first-ever green residential high-rise complex five years ago, The Solaire, which is also in New York.

What does it say about the industry that two large projects, designed with green principles in mind, sought LEED certification once it was available? Are they looking for street cred? Excited about the new system? Throwing support to the new guidelines? Hoping the certification will offer new marketing opportunities to woo renters and buyers?

Sustainable Structure

Developers aren’t the only ones buying in to green building–and they aren’t the only ones who seem unsure about how to encourage it.

True sustainability starts with a building’s design, which many U.S. cities have realized in the past year, prompting 92 with a population of more than 50,000 to put citywide green building programs in place. An additional 36 cities are working on programs.

In 1997, just two cities had green planning initiatives, according to a recent American Institute of Architects (AIA) survey.

Of the current 92 city green building programs, architects were directly involved in creating at least 14 of the plans–which the AIA maybe considers too low because this week it announced a new green building education campaign called "Walk the Walk," designed to promote sustainability to consumers, business owners and architects (basically everybody).

In addition to industry promotion and marketing campaigns, the Walk the Walk campaign includes GreenStep, an informational series detailing the benefits of sustainable design, which will debut on the AIA’s site at the end of January.

Other than that, the Walk the Walk campaign details seem somewhat vague–the press release just seems to imply the AIA still feels there is a strong need to get the word out there about green design. But to who? And how?

Big Changes; Wider Scope

Kudos to the buildings like the Verdesian who planned their design based on LEED for Homes’ pilot program guidelines or using other green principles strong enough to garner LEED certification after it was released.

And much thanks to the AIA for continuing to offer a solid online sustainability resource–with examples, tips, programs and more–on what could just be a standard association Web site.

But we’re not done yet. PR is great; but let’s really focus on getting people building–and not just talking–green.

Where are the federal incentives to build green, which would encourage developers concerned about the extra upfront costs of using specific materials and design? Last year, home builders were eligible for a $2,000 tax credit for each new energy efficient home that achieved 50 percent energy savings for heating and cooling over the 2004 International Energy Conservation Code (IECC).

Homeowners could deduct up to $500 for adding insulation, replacement windows and certain high efficiency heating and cooling equipment.

But the federal consumer tax credit expired at the end of 2007 and wasn’t renewed by Congress, so consumers only can report the credits on their taxes through April. Next year, you’re out of luck.

And where are the special architect and builder certification programs that properly prepare industry professionals to tackle–or suggest–green building projects? Some schools, like UCDavis in California, have added green design certification programs to educate professionals about the architecture, civil engineering, landscape architecture, environmental and land use planning and construction management knowledge sustainable building requires.

UCDavis’ class is in its extension, or part-time, program, which allows working professionals to participate and is designed for planners, architects, developers, contractors, landscape architects and interior designers.

It’s a great start; we need more. How else can the industry promote and encourage green building? Post your thoughts below.

Friday’s blog touched on commercial real estate and the shopping center conundrum: Too many new stores and too little consumer spending.

But, as it turns out, malls aren’t the only commercial buildings suffering from the economic slowdown. Enter: The waning workplace. Yes, that’s right, the office has become more than just a clever NBC comedy–it’s a commercial real estate crisis, according to some sources.

Retail centers in areas that saw some of the largest housing boom price and property increases–and some of the decline’s biggest drops–have fallen on particularly hard times. Office space isn’t fairing any better.

California Dreamin’ (Of Residesnts)

Take, for example, the Silicon Valley–one of California’s most coveted real estate sectors during the housing boom, the area is now in the midst of an office space bust.

At the end of 2007, residents occupied nearly 1.5 million square feet less space in office, research and development buildings than in September, according to brokerage house CB Richard Ellis.

Vacancy rates in all three sectors were also up, the Silicon Valley/San Jose Business Journal reports.

And, like the retail property decline, the U.K. has mirrored the U.S. commercial space decline.

According to prices of derivatives contracts linked to indexes compiled by London-based research firm Investment Property Databank Ltd., building owners could see losses of 11 percent or more in 2008.

In fact, some experts–like Peter Hobbs, London-based head of research at RREEF Real Estate, a Deutsche Bank AG unit that manages about $100 billion–say Britain’s 700 billion-pound commercial property market will have a worse year this year than the rest of Europe, Asia and the U.S.

Holding On To Commercial Cash

One reason the commercial sector is having such a hard time: Funding isn’t just hard to come by these days in the housing market.

Banks lost $90 billion in the U.S. mortgage mess–and they haven’t forgotten it. Lending standards are stricter and banks are more nervous about giving in general. The world’s second-largest commercial broker, Jones Lang LaSalle Inc., says U.K. transactions fell 60 percent in the last quarter of 2007, according to Bloomberg.

Then there are the big banks: Morgan Stanley, UBS, Wachovia, Credit Suisse. They ponied up most of the capital for real estate before the credit crash; in its wake, that funding is coming from insurance companies, savings banks and commercial banks.

Some say the lender shift is making larger deals–for example, giant new commercial property projects and big commercial purchases–hard to close.

"The opportunity to finance is available for less than $100 million, but there are no funds at all available for larger deals," a prominent real estate investor, who asked to remain anonymous, told the New York Sun.

And while domestic balance sheet lenders may not be as gunshy as some of the banks who got burned by the residential market, they have the law of supply and demand on their side–and they’re using it.

"Loans are at very different terms than from six to nine months ago," Eli Weiss, an associate at Ackman-Ziff Real Estate Group, with offices in New York, Miami, Boston and Los Angeles, told the Sun. "Also, since they have the pick of the litter, domestic balance sheet lenders are being extremely selective as to deals they take on. This boils down to banks and insurance companies ‘saving their powder’ for their best clients and deals that have lower-risk profiles."

Low Commercial, High Cost

So companies who have any exposure to residential projects: Sorry. That’s going to mean less projects, and less building–and a decline.

Considering that commercial real estate has picked up much of the slack for residential as housing cooled, that’s a dangerous prospect. Some states, like Colorado, depend on it: Commercial real estate is 10.5 percent of the state’s economy, a recent National Association of Industrial and Office Properties report revealed.

The Denver Post reported that commercial real estate had a $23.4 billion impact on Colorado in 2006. $23.4 billion. To put that number in perspective, the state budget for this year is only $18 billion total funds.

Anyone who follows commercial building (and should you want to, please do read Commercial Property News, one of our sister sites) knows the industry still sees activity–more projects are being greenlit in commercial building than in residential these days. And yet, it’s a big business industry, and any drop-off should be taken seriously.

Lately, the housing decline may be the hot topic to rehash in the press, but–as the economy slows and spending threatens to send us spiraling into a recession–can we continue to ignore the sad state of commercial building much longer?

Speaking today for the first time since the Fed’s last meeting, Federal Reserve Chairman Ben Bernanke implied a further rate cut might be en route.

U.S. stocks bounced up midday Thursday on anticipation Bernanke’s comments would suggest more rate cuts–but stocks faltered after the actual remarks were made as investors struggled to interpret what they meant, according to MarketWatch.

To be fair, Bernanke’s comments were–as usual–a little vague. In a speech to the Women in Housing and Finance and Exchequer Club in Washington, D.C., he basically said the Fed was concerned about oil prices, housing issues and other threats to the economy–and would be carefully watching and ready to act quickly.

But at what point would a Fed "action" happen? And what exactly would that action be?

Concrete statements aren’t really Bernanke’s strong suit, as The New York Times pointed out today in an article debating Bernanke’s assertiveness.

Bernanke is known for making somewhat vague statements, such as "incoming information on the performance of mortgage-related assets has intensified investors’ concerns" (Nov. 8, speaking to Congress’ Joint Economic Committee) and "a full recovery of market functioning is likely to take time and we may well see some setbacks" (giving remarks to the New York Economic Club on Oct 15).

The Times article questioned whether Bernanke needed to be more like former chairmen Alan Greenspan and Paul A. Volcker, who heavily influenced their colleagues, or whether he was just too nice for the job.

He certainly has the know-how–Bernanke is a former presidential chief economic adviser, Princeton University economics professor and policy failures expert. It’s possible he just needs a bit more time. He has, after all, only been the Fed Chairman for two years; and–at least considering the national housing situation–what a two years that has been.

The main criticism of Bernanke involves his–and the Fed’s–hesitation to cut rates. They waited out the summer, finally chopping the benchmark interest rate by a half point to correct for the housing and credit crunches in September. The reduction was the Fed’s first cut in four years–way past when many had expected one would come.

But if that’s the main beef about Bernanke, critics might want to consider the fact the Fed has since made up for lost rate cut time, trimming the federal funds rate in October and December–and it’s had little effect.

The economy has been on edge for months, fearing an impending recession. Well, sadly, the worrying may be over: Several sources say we may already be in one. Merrill Lynch & Co. economist David Rosenberg said Monday that "Friday’s employment report confirmed our suspicions that the economy was transitioning into an official recession towards the end of last year."

Goldman Sachs said Wednesday that it expects gross domestic product to drop, indicating a recession, in the second and third quarters of 2007, The Financial Times reported today.

Some experts, the Times reports, are suggesting other methods of economic help–low-income family tax rebates, longer unemployment insurance or other ways to boost consumer spending, which was down this holiday season.

Previously owned home sales fell more than forecast in November, according to the National Association of Realtors, indicating that cutting rates also has failed to consistently ignite home purchases.

So should we really be all that upset Bernanke waited to do it?

And what should the Fed do next to offset the factors dragging the economy down? Tell us what you think.

For the past year, Canada’s housing market has been steadily rising.

Prices for condos, two-story properties and detached bungalows all rose more than 11 percent last quarter from 2006, according to a Royal LePage Real Estate Services report released this week. The Canadian real estate company, which has more than 600 locations in the country, said the fourth quarter saw large housing gains, The National Post reports.

"The fourth quarter 2007 was surprisingly strong with unseasonably high price increases and unwavering demand," Royal LePage CEO Phil Soper said.

In addition, the Toronto Real Estate Board said 2007 was its best year ever, with the average sale price increasing by 7 percent to $394,931 last month from a year ago, The Financial Post reported Tuesday.

Basically, pretty much the opposite of what’s going on in the U.S. And yet, our housing slump has undoubtedly affected Canada; the U.S. and Canada have the world’s largest trading relationship, according to the BBC.

Canada’s housing situation eerily echoes the U.S. market of years past. Could Canada suffer the same fate?

Things were rosy for the U.S., too–until the residential industry began to collapse under the pressure of mortgage defaults, property value decreases and a national home sales slowdown.

Which has left us with an awful lot of property: Although the NAR said in December that the housing supply had dwindled slightly, we still have enough to last for more than 10 months at the current rate.

For now, Canada’s residential rise continues. However, the nation would be well advised to consider the U.S. housing decline a valid learning experience–and to carefully monitor and control its own housing expansion. Some thoughts for our neighbor to the north:

• Watch regional growth. Areas like Orange County, Calif. and Las Vegas saw some of the largest home value increases during the boom and some of the biggest drops after. They’re now seeing high office vacancy rates, indicating the slump is continuing to spread, according to The Wall Street Journal. Keeping an eye on areas with rapidly rising home prices and values may help identify an oncoming bust once those prices begin to waver.

• Lend carefully. It’s hard to say if home prices could have continued rising if risky lending practices going on at the same time hadn’t prompted so many defaults and foreclosures; the lending frenzy was undoubtedly influenced by the rush to buy housing as residents across the country began to view it as a sure-fire investment.

However, the U.S. now is encouraging lenders to more carefully do their homework. The recent Fed guidelines offered what may seem like simple logic–requiring proof of resources and ability to pay, among other things–but it isn’t always.

Thanks to the current U.S. foreclosure situation, we’ve all learned that getting someone into a house they can’t afford isn’t helping them–or the economy. (What are we going to do with 10 months of homes to sell if we keep adding repossessed properties to the pile? It’s certainly not going to spark residential building.)

• Hold on to equity. Homeowners are more easily able to weather market fluctuations if they haven’t cashed out some of their home’s equity. Consider homes an investment; not a way to fund a lifestyle.

Will Canada see a housing bust after its boom? It’s hard to say.

However, consider the U.K.’s current situation. Average home prices soared by 182 percent over the past decade, according to Halifax, a U.K bank. The country now seems poised to get a severe housing correction along with its daily tea and crumpets. (Or whatever they’re serving with tea these days.)

The situation is so dicey that the Bank of England recently cut interest rates for the first time in two years. Lenders gave out the fewest mortgages in three years in November. Home prices just rose in December for the first time in four months–and by only 1.3 percent, according to Bloomberg.

Home prices could fall up to 10 percent in 2009, according to Morgan Stanley economist David Miles, who advised the Treasury on the British property market.

Commercial property values are even suffering in the U.K., falling at a record rate in November.

As a result, lending options have tightened. Consumer spending has started to drop off.

Phil Soper, chief executive of Canada’s Royal LePage Real Estate Services, recently said prices are expected to rise more modestly in 2008, leading to a strong, stable market. Hopefully, he’s right.

But just in case he isn’t, keep a close eye on your neighbors and friends, Canada: It could save your economy some serious distress.

The nation’s high foreclosure rate–Irvine, Calif-based Realty Trac said in November that foreclosures were up nearly 68 percent from the same month in 2006–has led to an interesting phenomenon: Banks who are anxious to unload many of their foreclosed upon items.

Some likely don’t want to invest in the properties’ upkeep; other banks possibly are acting out of fear the housing market will in fact continue downward next year, further reducing the homes’ value.

That’s good news for investors who are eager to buy foreclosed properties and land and reduced homes.

However, those deals might not be as much of a steal as investors had hoped. "Many markets are still overvalued," David Stiff, chief economist at Fiserv, told BusinessWeek. "The [previous housing price] increases were just so meteoric they need a larger correction."

So many are waiting the slump out–holding off on buying a new home because they are certain the next six months will bring unbelievable bargains.

And yet, an unlikely investor–one not looking to make money off the low market–has emerged: Habitat for Humanity, the nonprofit homebuilder.

• Dallas Habitat President Philip Wise has created the Texas Habitat Land & Development Fund to finance, purchase and develop property because the market is low. The fund will work with Habitat’s 15 metro affiliates in Texas and Oklahoma. It’s already secured 500 lots in Texas, which the fund will close on in the next three months.

"We can now acquire raw land, prepared lots and possibly finished homes from builders, investors and lenders cheaper than any time in the previous seven or eight years," Wise told The Dallas Morning News. "We’d like to double Habitat production in the big cities in the next four years."

• Sarasota County in Florida recently gave $10 million to revamp three of the area’s six public housing sites throughout 2014, according to the Sarasota Herald-Tribune. But those requiring public aid aren’t the area’s only problem anymore. Forget that we have a 10-plus month supply of new homes still to sell in this country. Forget that building has slowed because housing demand has decreased. As prices stay stubbornly higher than many can afford and financing becomes harder to get, there is still a strong need for housing–as long as it’s reasonably priced.

As such, Sarasota’s Habitat for Humanity chapter won preliminary approval in December for a 200-home program in Newtown, Fla., which will contain homes for people making just 30 percent below the county median income–a far cry from public aid, but a growing sector that is being pushed out of homeownership by high costs and flat employment growth.

In 2004, during the real estate boom, the county created a trust to help provide middle-income families with affordable housing; that’s now more needed than ever. The county voted in December to continue funding the trust.

Cheaper options for affordable housing creators: It makes sense. And it’s one piece of positive news to come out of the housing decline–which is something we all can benefit from.