New Study Reveals Surprising Trends in Green Building Standards: CALGreen Outperforms LEED in Reducing Emissions

A groundbreaking study by Pepperdine Graziadio faculty members Dr. Michael Cusumano, Dr. Dongshin Kim, and Dr. Abraham Park, along with Dr. Jamie Chung from the University of Nebraska Omaha, has been published in Real Estate Economics, shedding new light on the effectiveness of green building standards in the multifamily housing sector. The study, titled "Road to Net Zero: Greenness of Leadership in Energy and Environmental Design (LEED) and California Green Building Standards Code (CALGreen) in the Multifamily Sector," assesses the impact of LEED and CALGreen programs on reducing greenhouse gas (GHG) emissions.

Key findings reveal that CALGreen, California's mandatory green building code, significantly reduces GHG emissions by 7.2%–11.6% in multifamily buildings. However, LEED-certified properties completed after the implementation of CALGreen in 2015 were found to have 14.1%–20.8% higher emissions compared to non-LEED properties. The researchers attribute this discrepancy to LEED's emphasis on theoretical design elements over actual energy performance.

The study also highlights economic implications, showing that LEED-certified buildings completed before CALGreen's adoption enjoy a rent premium of 4.7%–5.4%. However, this premium fades for LEED-certified buildings constructed during the CALGreen period, indicating a shift in tenant preferences towards state-mandated sustainable features over voluntary certifications.

These findings suggest that state-mandated building codes like CALGreen are more effective in reducing emissions than voluntary programs. The authors recommend enhancing CALGreen standards to include net-zero or near-net-zero requirements for new construction, offering a pathway to more sustainable urban living.

For more details, read the full study here.