Most people have a vague idea that “going green” is good for the environment and that it should be good for their property values, but now the Appraisal Institute is going to make just how good very clear. Through its Valuation of Sustainable Buildings Professional Development Program (VSBPD), the Appraisal Institute hopes to educate appraisers in how to determine exactly what the worth of green improvements are to a building and that building’s owner or developer[1]. “There is a tremendous need for this type of education…High-performance buildings represent a rapidly growing area of the real estate market, and reliable valuations are critical both to banks’ risk management and to developers’ sound development practices,” said AI president Joseph Magdziarz.

The program presents a new option for developers seeking to have their buildings evaluated for green performance and energy efficiency other than the much-maligned LEED certification program, which has faced much criticism for relying too much on modeling and projections rather than on actual building performance[2]. In fact, according to many reports, “some LEED certified buildings are turning out to be energy hogs” and there may be a class action suit in the works if one developer gets his way. The VSBPD program is designed to expand and advance appraisers’ knowledge base when it comes to green features that could save building owners money – and decrease operating expenses, thereby increasing profits – in the long run. The program developers hope to eradicate misconceptions about green valuation among appraisers and non-appraisers, emphasizing that some pricey green improvements do not necessarily yield value equal to their costs.

Green improvements that show tangible, fiscal benefits have been identified as one of the few ways the new construction can distinguish itself in today’s sea of foreclosures and REO properties. Are you investing in new, green construction or sticking to “older models?”

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[1] http://nationalmortgageprofessional.com/news23249/appraisal-institute-launches-green-valuation-program

[2] http://www.forbes.com/fdc/welcome_mjx.shtml