Town planning incentives for green building

An edited version of a presentation to the Talking and Walking Sustainability international conference in Auckland last year. Author: Matthew D. Paetz, planning manager, Babbage Consultants Limited. Co-author: Knut Pinto-Delas, urban designer, Babbage Consultants Limited.

This paper provides preliminary analysis on the ways in which planning incentives can make a significant difference in increasing the uptake of green building developments. It defines further research questions that will be addressed by the author in the Resource Management Law Association Fellowship for 2006/ 2007.

Climate change induced by human activity and associated emissions is commonly recognised as one of the most pressing issues of our age. The buildings we construct, and the energy they use, are highly significant in terms of total energy consumption and emissions.

Although debate still rages in the scientific community on the vexed climate change issue, the consensus appears to be weighing in favour of the camp supporting a theory of human-induced climate change.

Regardless of the reality or otherwise of human induced climate change, energy efficiency and renewable energy make sense for a variety of reasons, including increased health and wellbeing of occupants, increased productivity, longer-term cost savings, reduced demand on an increasingly under-pressure energy infrastructure and market image. However, despite these benefits, there is, by international standards a low uptake of energy efficient building practice in New Zealand

But just what role can the planning profession play in addressing climate change and promoting renewable energy? Beyond ‘feel good’ plan statements and policies, can planning really make a difference in a practical sense to one of the biggest issues of our age? Or, to rephrase this question in light of the theme of this conference - can planning ‘walk the talk’ with regard to sustainability?  (Pictured, right: Melbourne's CH2 or Council House 2. Mechanically ventilated, it features phase-change materials to store 'coolth' (opposite of warmth) and timber louvres automatically shade the west facade from hot afternoon sun).

Urban forms
Most, if not all, of the district plans in New Zealand ’s urban areas contain higher-level objectives and policies promoting city development, which seek to reduce the impact of cities on climate change. The most common approach in this area of macro-planning is to encourage the development of urban forms that promote the use of public transport and other alternative modes such as walking and cycling, and reduce dependency on private automobile use. Typically, such approaches involve integrated strategic planning that encourages intensification of development around nodes and along transport corridors.

Such provisions are admirable in addressing the critical issues of land use form and development and its impact on transport systems and infrastructure. However whilst these policies address urban form and transport systems and their relationship to greenhouse gas emissions, they do not address the energy efficiency of buildings and renewable energy forms.

(CH2 is planted on two sides and over the roof garden so that staff are always close to natural plants. The plants also help with cooling and improve air quality).

Cost of green building
There is no doubt that green buildings cost more to build, especially in New Zealand where the market is a lot less developed and sophisticated than in North America, Europe and Japan, and where economies of scale are smaller. In this age of rising material costs and regulatory fees, the margins of developers are often tight. This means that energy efficiency and sustainability is often the last consideration in project design, and is viewed by many developers very much as a luxury.

Many developers with whom the author has worked with have noted that they would seriously consider developing projects with higher levels of energy efficiency and sustainability if assistance was provided by councils.  Because of this, developers need ‘carrots’ to encourage the development of green building in New Zealand , to develop sufficient capacity and maturity in this market. This is where planning incentives could be invaluable.

But are Incentives actually necessary? Alternatives to providing incentives are to:
1. Do nothing; or 2. Impose compulsory energy efficiency and sustainability requirements.
The problem with the first option is that ‘doing nothing’ is the status quo, and other than local and central government projects, there has been very little uptake of green building approaches.

While in theory the second option is a possibility, it ignores the real cost that such a requirement would place on developers already facing increasing layers of regulatory requirements and associated costs. Further cost is likely to exacerbate the significant problem of property affordability, as developers’ costs ultimately get passed on to prospective purchasers or lessees. It is also the authors' opinion that providing incentives for green building is more likely to result in positive and long-lasting shifts in philosophy than compulsory regulation, to which there is often a backlash.

Development bonuses
Overseas case studies have demonstrated that planning incentives have real, practical potential to make a significant difference in encouraging developers to ‘build green’.

The increasingly widespread adoption of such provisions in the USA and Japan , in particular, bears witness to this potential.

What is required from councils in New Zealand is a comprehensive programme providing development bonuses coupled with financial incentives such as development contribution remissions, and even possibly the ‘fast-tracking’ or expedient processing of consent applications, for green developments. Such provisions can also complement tax incentive schemes that could be provided by central government. A common theme appearing in the overseas examples is that a multi-faceted approach is most effective.

The fundamental and most complex issue in devising a development incentive scheme is the inherent tension in seeking to balance the requirement for tangible, profitable development gains, with the need to avoid adverse impacts on residential character and the environment.
Without the former, the ultimate objectives that are sought to be gained from the incentives will not be achieved because the incentives are not attractive or profitable enough to the development industry. Without the latter, the cost of the incentives will be perceived by the community to be greater than the benefits. As such, a community specific cost/benefit analysis is required.

In addition, New Zealand has its own unique legislative, economic, environmental and social context. This context raises unique questions about how such incentive schemes could be applied here. It is likely that this unique context will justify consideration of incentive schemes that, whilst influenced by successful international scheme, respond uniquely to this context.

Planning incentives for energy efficiency have real potential to aid in encouraging developers and their architects to think and build green, significantly increasing the uptake of energy efficient building forms and renewable energy. 

(At right: Council House 2 in Melbourne sets a new standard for building owners, architects and regulators. It is the first ever building to be awarded six green stars under Australia's environmental building rating).

Conclusion
In a profession that is often reactive, development incentives are a positive, proactive tool to encourage the greater uptake of green building and renewable energy solutions. But the implementation of planning incentives for sustainability will require political action. 

So this paper presents a challenge to councils in New Zealand. Are councils willing to draw a line in the sand and make stronger commitments to sustainability - real commitments that allow for action and real gains, through the provision of proven incentive schemes? Only time will tell. 

In the meantime, this paper concludes with a quote from former president Al Gore’s ‘An Inconvenient Truth’: "We have everything we need to begin solving the climate change crisis, save, perhaps, the political will.”

(Note: A copy of the original paper is available by emailing: matthew.paetz@babbage.co.nz).