Last October, Edward Mazria, AIA, the founder and CEO of Architecture 2030, shared a surprising statistic during a talk he gave at the Design Futures Council’s Leadership Summit on Sustainable Design. Mazria said that the U.S. Energy Information Administration “forecasts that American consumers will spend $4.61 trillion less on energy between 2013 and 2030 than was originally projected in 2005.”
This is good news, of course, for everyone who cares about reducing energy consumption. But Mazria’s comment raised a question for me: How do the energy savings architects have generated for clients compare to our fees? With some 100,000 architects nationwide, according to NCARB, and with gross revenue per employee estimated at roughly $200,000, according to Design Intelligence, that means architects earn about $20 billion in fees annually. Compare that to the $4.61 trillion in projected energy savings over the next 17 years, which works out to an average of $271 billion per year.
Granted, while “architects have certainly played a part” in reducing energy consumption, says Mazria, “we can’t attribute the savings to any one group—design, codes, federal and state legislation, and incentives all play a role.” Still, even if architects can claim only one-tenth of those savings—$27 billion per year—the profession more than justifies its annual fees solely with the reductions that architects bring to clients’ energy costs.
Moreover, consider that homeowners, on average, realize a 60 percent return from substantial residential improvements, or that 87 percent of nonresidential clients in a Deloitte Consulting survey said that green retrofits increased the productivity of employees. All of this helps make a case for the return on investment (ROI) of architecture itself, but it also demonstrates the tremendous ROI of architectural fees. Indeed, while most clients view fees as an expense that they need to minimize, they should be putting architecture fees on the savings side of the ledger, as an investment that brings a handsome return.
The fault for clients’ misperception of our value, unfortunately, lies with us. To its detriment, the architectural profession has long had a weak research culture. Most firms do not revisit their projects to document the savings that the clients realized, and most architectural schools have few faculty or students doing post-occupancy research. The profession also has a weak communications culture, with firms not widely sharing available ROI data, and with most claims of the value of our work lacking any hard evidence.
Our design culture, ironically, may present the greatest hurdle to demonstrating our value. Too many in the profession hold on to the out-of-date idea that quantifying the effects of design somehow diminishes it and destroys its mystique, an idea that mystifies most people outside of the profession and that lessens our influence. Add to that the equally antiquated idea of the “gentleman” architect who shouldn’t appear to need or want money—a self-fulfilling prophecy that too many clients have been all too happy to oblige.
So how do we do the research needed and promote it in a way that will get our clients to move our work to the savings side of their ledgers? A group of firms with offices in the Minneapolis–St. Paul region—AECOM, Cuningham Group, DLR Group, HGA, Mortenson Construction, MSR, and Perkins+Will—in partnership with the School of Architecture at the University of Minnesota, where I am the dean, have started a promising effort in this direction. They have established a “consortium for research practices,” in which the firms pay an annual membership fee to join. Each firm supports at least one student per year who does research of relevance to the firm and of interest to the larger consortium. Other firms, like Gensler, have also invested heavily in research and made it available to the profession through its own publications.
Not all of this research directly demonstrates the savings that architects generate for clients. But it shows that our profession is finally becoming serious about research and about sharing our findings, and it demonstrates that quantifying the value of design does not detract from design quality. Eventually, firms should be able to enter into fee conversations with clients armed with hard data about the savings they have generated, and able to ask clients how much they want to save: Very low fees make it difficult for firms to save clients much money, while higher fees enable clients to increase their savings and improve ROI. It’s their choice.