Peer Effects and Voluntary Green Building Certification

Qiu, Yueming; Yin, Shuai; Wang, Yi David

doi:10.3390/su8070632

Cited by 17 publications

(7 citation statements)

References 37 publications

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“…Another barrier to WTP is that public knowledge of green buildings and certification programs tends to be vague and abstract, whereas reliable information about and tangible experience of green buildings are effective at changing perceptions and increasing WTP [54]. This is consistent with spatial correlations in green building diffusion [105,106] and the observation that homebuyers are generally unequipped to calculate trade-offs between future cost savings and increased borrowing [108]. An increasing prevalence of residential CSB and consequent awareness of benefits could increase homebuyer demand as well as support for subsidies and other policies for residential CSB (Figure 3) but this poses a chicken-and-egg problem.…”

Section: Subsidies and Wtpsupporting

confidence: 60%

“…Indeed, Yau found that household income was correlated with both environmental attitudes and willingness to pay for green homes [53]. Spatial correlations in green building diffusion [105,106] indicate that exposure to and awareness of green buildings and their benefits may also be an important driver, potentially increasing WTP and support for subsidies. In contrast, thermal comfort-if it is considered at all-is just one of many competing considerations in home purchases.…”

Section: Subsidies and Wtpmentioning

confidence: 99%

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The Impact of Subsidies on the Prevalence of Climate-Sensitive Residential Buildings in Malaysia

2017

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Dependence on air-conditioning (AC) for residential cooling and ventilation is a health and sustainability challenge. In hot temperatures, climate-sensitive buildings (CSB) can complement and/or substitute for AC usage in achieving thermal comfort. Many countries facing such conditions-particularly in tropical climates-are developing quickly, with rising populations and income creating demand for new housing and AC. This presents a window for adoption of CSB but could also result in long term lock-in of AC-dependent buildings. Here, a simple system dynamics model is used to explore the potential and limitations of subsidies to affect futures of housing stock and night-time AC usage in Malaysia. The effectiveness of subsidies in achieving high uptake of CSB and resulting health benefits is highly dependent on homebuyer willingness to pay (WTP). A detailed understanding of WTP in the Malaysian context and factors that can shift WTP is necessary to determine if CSB subsidies can be a good policy mechanism for achieving CSB uptake.

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Section: Subsidies and Wtpsupporting

confidence: 60%

Section: Subsidies and Wtpmentioning

confidence: 99%

The Impact of Subsidies on the Prevalence of Climate-Sensitive Residential Buildings in Malaysia

2017

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“…The adoption of green certificates has been rapid, at least in the U.S. There are several studies examining the diffusion of green certificates and determinants of green building adoption (e.g., [39,[128][129][130][131], but they were not covered in this review. For instance, Holtermans and Kok [39] observed that by 2014, almost 40% of the assets in the 30 largest U.S. office markets (measured by square feet) had been either LEED or ENERGY STAR certified.…”

Section: Discussionmentioning

confidence: 99%

A Review of the Impact of Green Building Certification on the Cash Flows and Values of Commercial Properties

2020

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This study aims to review empirical research concerning the impact of green certificates on property cash flows and values, particularly from professional property investors’ perspective. The study uses discounted cash flows (DCF), a widely used property valuation method in income-generating properties, as a methodological framework. In this study, over 70 peer-reviewed studies were identified, categorized, and analyzed in the DCF framework. The reviewed studies indicated that certificates might increase the rental income and decrease the operating expenses, vacancy, and risks of a property. Together with the brand value of certificates, these enhancements should lead to an increase in property value. The number of studies has grown rapidly during the 2010s. Lately, studies have developed from asset-level to portfolio-level examinations. Although the reviewed studies found certification to be beneficial, the range of reported benefits was wide, and over half of the studies concentrated on U.S. commercial real estate markets, with a strong focus on LEED and ENERGY STAR certificates. From a property valuation perspective, applying these results to other markets and certificates might be challenging. Property values that fully reflect the environmental performance of properties would be a key to motivate mainstream investors to adopt sustainable property features.

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“…For example, in the green building literature, many researchers, examining the economic value of green building certifications, use this approach (e.g. Qiu et al , 2016, 2014; Fuerst et al , 2012). See Leskinen et al (2020) for a comprehensive review in this field.…”

Section: Methodsmentioning

confidence: 99%

Quantifying the value of high-quality property management

Jayantha

2021

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Purpose“Ill-maintenance of common areas” in multi-owner residential properties is described as the “tragedy of anti-commons problem”. The problem can be addressed by outsourcing the management of the property to a company possessing quality property management (PMGT) certification. The PMGT certification is normally hailed as an effective means of reassuring occupiers and prospective property buyers of the good level of quality of the property management to be expected. This study investigated whether PMGT certification carries with it a price premium for residential properties.Design/methodology/approachA fixed-effects modelling approach was employed in relation to a large residential properties dataset in Hong Kong, in the period 2009–2018.FindingsThe results indicate, on average, that the PMGT certification commands a price premium of between 3.3 and 3.9%. This premium can be called, the “tragedy of anti-commons premium (TAC premium)”. The results further suggest that significant price premium differences relate to the four different types of certifications studied. The price of a residential unit managed by a property management company (PMC) with Q-mark certification is about 3.4% higher than a unit managed by a non-certified PMC, ceteris paribus. Likewise, corresponding price premiums for units certified related to ISO9001 and HKMAQA certifications are 3.5 and 2.4%, respectively.Originality/valueTo the best of author's knowledge, this is the first attempt to investigate if there is any relationship between the property price premium attributed to “tragedy of anti-commons” and PMGT certification.

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Peer Effects and Voluntary Green Building Certification

Cited by 17 publications

References 37 publications

The Impact of Subsidies on the Prevalence of Climate-Sensitive Residential Buildings in Malaysia

The Impact of Subsidies on the Prevalence of Climate-Sensitive Residential Buildings in Malaysia

A Review of the Impact of Green Building Certification on the Cash Flows and Values of Commercial Properties

Quantifying the value of high-quality property management

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