The future looks green. The demand for more sustainable and innovative real estate construction, technology and materials continues to rise from consumers, industry leaders and legislators alike. Builders, contractors and architects are discovering the benefits of integrating biodegradable, recycled and reclaimed materials into residential and commercial construction and design. Homeowners are increasingly utilizing solar panels, swapping out conventional building materials and seeking technology that offers greener options.
According to a recent analysis by Future Market Insights (FMI), the global green building materials market is booming, surpassing $334 billion in 2023 and expected to reach $962 billion by 2033. What’s driving this demand? It’s a combination of rapidly advancing technology, growing climate risks and social shifts in our post-pandemic world. Read on as we explore four trends driving the construction industry to a green future, and why real estate professionals should take notice.
ADVANCING TECHNOLOGY
Ranging from renewable energy solutions to use of Artificial Intelligence (AI), green technology is growing in popularity among builders, homeowners and investors. According to the 2024 REALTORS® & Sustainability Report from the National Association of REALTORS® (NAR), 39% of respondents reported that their Multiple Listing Service (MLS) had green data fields. Fifty-seven percent reported that energy efficiency promotion in property listings was considered “very or somewhat valuable” to their clients. Buyers and sellers are increasingly considering a property’s eco-friendly features and filtering their searches accordingly. Some examples of green technology in homes and businesses include:
• Solar Energy: With increasing affordability and a federal tax credit incentive, solar panels (or solar photovoltaic systems) have become a particularly attractive feature for buyers and sellers, with 80% of NAR respondents stating that properties with solar panels were available in their market. Thirty-one percent said solar panels increased the perceived value of the property.
• Electric Vehicle (EV) Chargers: The auto industry is taking note of the solar energy trend and electric vehicles (EVs), including plug-in hybrids and fuel cell EVs, are becoming more mainstream. Improvements in battery life and charging infrastructure, as well as tax credit incentives, are inspiring homeowners and businessowners alike to consider installing charging stations on their property.
• Artificial Intelligence (AI): AI is reshaping the energy sector on both a large and small scale. AI algorithms optimize “smart” buildings by learning user preferences and habits, providing automation and personalization to enhance comfort and energy efficiency. AI-powered smart home devices can also do things like predict user behavior and monitor energy consumption, giving homeowners more convenience and adding value to the property.
INDOOR AIR QUALITY CONCERN
The Environmental Protection Agency (EPA) estimates that Americans spend 90% of our time indoors, and concern for indoor air quality and its toll on human health continues to grow. One study found the annual average for indoor air pollution in 2023 was much higher than what the World Health Organization (WHO) considers safe to breathe.
While investing in air filters, air purifiers or air-quality monitors is a cost-effective way to reduce particulate matter (suspended particles of dust, dirt and liquid), more efforts are being made to replace traditional building materials and practices associated with harmful substances like lead, radon, carbon monoxide, mold and volatile organic compounds (VOCs). Better understanding of these contaminants has led to many innovations to combat indoor air pollution and improve human health, including:
• Eco-friendly Materials: Many conventional building materials like vinyl flooring and composite wood products can be major sources of VOCs. Once inhaled, VOCs can cause a wide range of adverse health effects, from eye irritation and headaches to damage to the liver or central nervous system. A growing number of builders are turning to non-toxic, eco-friendly options like bamboo, cork, biocomposite cement, recycled steel and reclaimed wood to reduce the risk of environmental hazards and health concerns.
• Hempcrete: A mixture of hemp stalk and a lime-based binder, hempcrete is used as a green alternative to insulation. It is known for its absorption of carbon and resistance to mold, fire and pests. Hempcrete insulation received certification in U.S. Residential Building Codes earlier this year, allowing hempcrete to now be used as a standard material in residential construction. The International Code Council is working to establish hempcrete as a standard infill insulation in large commercial projects in 2025.
• Biophilic Design: Pioneered by biologist Edward O. Wilson in the 1980s, biophilic design is a design philosophy that strives to connect a structure’s occupants with the natural environment. Incorporating natural light, natural ventilation, plants and water features not only reduces stress, improves mental health and creates a soothing environment, it can also improve air quality. Plants can filter pollutants and release oxygen, moisture from water features can balance humidity and dryness, and natural ventilation can circulate fresh air and reduce indoor pollutants.
EXTREME WEATHER THREATS
The past few years have seen an alarming upswing in extreme weather events world-wide, from hurricanes and flooding to wildfires and extreme heat. To prepare for a future of continuing extreme weather, the construction industry is strategizing ways to remain resilient. In terms of residential and commercial real estate, strategies include:
• Poured concrete or ICF framing: Far stronger and more stable than a wood frame, a poured concrete or ICF (insulated concrete form) frame can better withstand extreme weather, like earthquakes, heavy wind or flooding. Unlike wood, concrete or ICF frames are far less susceptible to moisture, termites or fire risk. They are resistant to bowing, cracking or splitting upon impact and help reduce waste at construction sites.
• Impact-resistant roofing and windows: To better withstand hail, wind and other storm damage, impact-resistant roofing shingles and even metal roof tiles are worthwhile investments. Most materials are made from recycled or other eco-friendly materials, unlike traditional asphalt shingles, requiring less frequent replacement and reduced waste. Impact-resistant windows are designed with an inner layer that can help keep windows intact upon impact. They also stabilize home temperatures, helping cut costs on energy bills. It’s always best to cover windows with plywood or hurricane shutters in the event of a storm, but impact-resistance provides an extra level of defense.
• Envelope sealants: A building’s “envelope” refers to the separation between the outside and inside of a building, especially where heating and gas are concerned. Expansion joints, control joints and window-to-wall connections are some of the most susceptible locations for “envelope failure,” allowing heat to escape or water to intrude. Applying a sealant to such areas helps “storm-proof” a building, as well as lower its heating and gas costs.
CIRCULAR ECONOMY INNOVATION
As part of the global commitment to mitigate growing climate risks, countries from the U.S. to the EU to Singapore are developing action plans for a circular economy system. Unlike our current linear “take-make-waste” economy that leads to landfills and air pollution, a circular economy strives to create a closed-loop supply chain that extends the lifespan of materials and reduces waste, conserves natural resources, lowers carbon emissions, improves efficiency and creates jobs.
Both the construction and real estate industries are dependent on a system that bears a tremendous environmental cost. Ninety percent of the millions of tons of solid waste in the U.S. stems from demolition debris alone. Options for reducing waste and embracing a circular construction economy include:
• Cargotecture: Patented in 1987 by Phillip C. Clark, cargotecture is the repurposing of shipping containers from their original use as cargo transportation to construct residential and commercial properties. It has gained attention in recent years as people search for more affordable and sustainable housing options. Some of the top reasons people are exploring cargotecture include a faster construction speed, affordability, durability and the reuse of materials that will otherwise be discarded as solid waste.
• Biodegradable materials: Natural materials like bamboo, cork and even mushrooms are being used in construction for their durability, thermal properties and biodegradability. Twice as strong as concrete and slightly stronger than steel, bamboo has a faster growth rate than timber forests. Cork trees regenerate their bark every eight to 12 years, offering a sustainable alternative to flooring, countertops, roof shingles, siding and more. Mycelium, the rootlike structure of fungi, offers a versatile, cost-competitive alternative for insulation, soundproofing and fireproofing, as well as a biodegradable replacement for polystyrene foam packaging.
• Design for Deconstruction: This design strategy invests in a regenerative “cradle-to-cradle” approach in construction, in which a building is designed to be deconstructed or disassembled at the end of its life, rather than demolished. A planning-heavy approach, design for deconstruction involves incorporating non-toxic and recyclable materials from the start, which will be reused and recycled after deconstruction, rather than ending up in a landfill.
CONCLUSION
With increasing concern over human health and the health of our environment, it’s no surprise that the demand for green building products, technologies and practices continues to grow. Green buildings can create healthier spaces and use less energy and resources than traditional housing, and homebuyers and tenants are increasingly taking advantage. By recognizing and understanding green real estate initiatives, real estate professionals can educate their clients and help them make informed choices. Whatever innovations the future brings, Old Republic Title will be there to support your title and closing needs.