1. The Green Edge: How Commercial Property
Investment in Green Infrastructure Creates Value
Larry Levine, NRDC
March 14, 2014
NJ Future Redevelopment Forum

2. Green Infrastructure
• Water quality management
techniques
o green roofs
o tree plantings
o rain gardens
o permeable pavement
• Proven to help solve major
urban stormwater problems and
improve the health and livability of neighborhoods
• The Green Edge shows the range of benefits that these practices can provide
to commercial property owners and tenants when use on private property

3. Stormwater Runoff & Sewage Overflows
• Each year, urban runoff
generates 10 trillion
gallons of polluted water
that flows into waterways
and oceans, often
combined with untreated
human sewage
Newtown Creek, Brooklyn
Image: Riverkeeper

4. Stormwater Infrastructure Challenges
• Federal “Clean Water Needs
Survey” identified $100
billion of infrastructure
investment needed over the
next 20 years to address
stormwater and sewage
overflows in order to reach
Clean Water Act compliance
• American Society of Civil
Engineers gives U.S. water
infrastructure a “D” grade
• Decline in traditional funding
sources for municipal
stormwater improvements
(municipal budgets and
federal funds)

5. Green versus Gray Infrastructure
• Traditional “gray” stormwater
infrastructure – tunnels and sewage
systems – has proven
environmentally and economically
costly.
• “Green” infrastructure (GI) helps
stop runoff pollution by capturing
rainwater and either storing it for use
or letting it filter back into the
ground, replenishing vegetation and
groundwater supplies.
• GI mimics the way nature collects
and cleanses water, and can be far
more cost-effective than relying
solely on gray infrastructure.
$0
$1
$2
$3
$4
$5
$6
$7
Gray
Infrastructure
Green
Infrastructure
Billions
Estimated Cost of
Philadelphia CWA
Compliance

6. Community benefits of green infrastructure
 Improving urban quality of Life
 Beautifying neighborhoods
 Increased property values
 Cooling and cleansing the air
 Reducing asthma and heat-related illnesses
 Lowering heating and cooling energy costs
 Recharge groundwater supplies/improve conservation
 Spurring economic revitalization
 Creating green jobs

7. Benefits of green infrastructure for private,
commercial property owners
 Increased rents and property values
 Increased retail sales
 Energy savings
 Stormwater fee credits and other financial incentives
 Reduced infrastructure costs
 Reduced costs associated with flooding
 Reduced water bills
 Increased mental health and worker productivity
for office employees
 Reduced crime

8. Higher Rental Rates, Retail Sales, and Property
Values
• Landscaping adds approx. 7%
to the average rental rate for
office buildings
– For a medium-sized office
building rental in Philadelphia
this could mean an additional
$72, 150 in rental income per
year
• Consumers are willing to
spend more (8-10%), visit
more, or travel farther to shop
where there is attractive
landscaping or green streets
– For a mid-sized retail center this
could mean over $1 million in
increased annual sales

9. Higher Rental Rates, Retail Sales, and Property
Values
• Landscaping and trees
increase residential property
values 2-5%
– Green roofs may add 16% to the
average multifamily unit rental
rate
• LEED certification can be
achieved through the use of
green infrastructure
– Increase occupancy rates in
office buildings
– Increase rental rates in
residential buildings

10. Lower Energy Costs
• Green roofs and tree plantings
save on heating and cooling
costs
– Better insulation
– Reduce solar radiation
– Reduce roof surface
temperatures
– Improve operational efficiency
of rooftop air conditioning units
• A green roof can reduce daily
energy demand for cooling in a
one-story building by over 75%
• A single large tree can generate
nearly $45 in energy savings
annually

11. Cash Back
• Tax Credits
– NYC: one-year credit up to
$200,000 for green roof on at
least 50% of a structure
– Philadelphia: credit of 25%
(max $100,000) on green roof
installation costs
• Rebates
– Milwaukee: up to $10 per
square-foot for green roof
projects
– King County, WA: pays builders
50% cost of green infrastructure
retrofits, up to $20,000
• Floor Area Bonus
– Portland, OR: green roof bonus
in its zoning code

12. Cash Back
• Stormwater Fee Credits
– Philadelphia: up to 80% reduction
in stormwater utility fees for
installation of green infrastructure
• Grants
– NYC: $11 million from the Green
Infrastructure Grant Program
committed to 29 green retrofit
projects on private property since
2011
– Onondaga County, NY: $3.8
million in grants for commercial
properties installation of green
infrastructure retrofits
– Philadelphia: $7.9 million in
competitive grants for commercial
properties installation of green
infrastructure retrofits

13. Reduced Infrastructure Costs
• Reduced life-cycle costs
– Green roofs have 40 year life
expectancy (conventional only 20
years)
– Could avoid over $600,000 in
roof-replacement costs (net
present0-value), in a midsize
retail building with a 40,000 sq.
ft. roof
– Allow for use of smaller HVAC
system – reducing capital costs
• Permeable pavement used in
parking lots have significantly
lower maintenance costs
• Integrating green infrastructure
into site design decreases the
amount of required below-
ground drainage infrastructure,
resulting in net cost savings

14. Other Hard-to-Quantify Benefits
• Reduced flood damage
– Reducing the volume of
stormwater runoff
– Flood mitigation can increase
property values (2-8%)
• Reduced Water bills
– Rain barrels and cisterns can save
on water for landscape costs and
other non-potable uses
• Reduced Crime
– Studies found significantly lower
rates of property crime, violent
crime, graffiti, vandalism, and
littering in urban areas with well-
designed green space
• Improved health and job
satisfaction
– Reduced levels of stress
– Direct benefit to employees

16. RETAIL CENTER

18. APARTMENT BUILDING

20. MEDIUM-SIZE OFFICE BUILDING

21. Acknowledgements: Stratus Consulting, lead report author
Larry Levine
Senior Attorney
Natural Resources Defense Council
llevine@nrdc.org
Full report at:
go.nrdc.org/greenedge