The economic downturn, coupled with sustainable design’s growing station, make the task of whittling down project costs without slacking on environmental stewardship a challenge—and it’s causing some among the design community to question whether green-building certifications such as LEED are worth the expense. The issue is of particular concern for healthcare projects, whose extensive energy consumption places heavy loads on the grid while often-tight budgets make it difficult to spring for sustainable design.
Perkins+Will explores LEED certification for hospitals in a report released Sept. 16, titled “LEED Certified Hospitals: Perspectives on Capital Cost Premiums and Operational Benefits ." The study’s authors—Robin Guenther, FAIA, a sustainable healthcare design principal at the firm’s New York office; Breeze Glazer, a designer and sustainable healthcare research expert also at the firm’s New York office; and Gail Vittori, a LEED fellow who is co-director of the Center for Maximum Potential Building Systems in Austin, Texas—contend that the cost premium for incorporating sustainable design principles in healthcare projects is declining. However, they note the lack of a common industry definition for the LEED-driven premiums.
The authors interviewed architects and sustainability consultants on project design teams representing 15 LEED-certified hospitals across 12 U.S. cities (see chart, below) between 2010 and 2012, not including ambulatory care and mixed-use projects. For most of these projects, the goal of LEED certification was established during the schematic design phase or the design- and construction-development phases, the study reports, resulting in harder-to-control capital cost premiums for the added sustainable features than if they had been incorporated earlier in the process. More than half of the 15 hospitals studied achieved a higher level of LEED certification than initially targeted.
The average premium on a hospital’s capital cost for sustainable design was 1.24 percent for all projects surveyed, with a lower premium, 0.67 percent, for projects larger than 100,000 square feet. The 2012 numbers represent a decline from the 2.4 percent average premium reported in a 2008 survey by Guenther and Vittori, which used a 13-hospital sample that combined all sizes of facilities.
Respondents to the most recent survey were asked to define capital cost premiums for sustainable design by choosing from four commonly used definitions, choosing one or more of them. All respondents agreed that the premiums include “strategies to achieve a LEED credit, or certification level that increased the original budget.” Nine in 10 respondents also said it entails “sustainable strategies that deliver operational savings but carry first-cost premiums.” Additionally, 44 percent said the term signifies “constant costs associated with strategies included primarily due to environmental performance.” Another 44 percent defined the term as meaning “strategies with added costs offset by incentives.” Half of the respondents selected three or more of these definitions, reflecting the lack of industry consensus on what factors the premiums consider.
In follow-up interviews, the authors found the most common definition of capital cost premiums for sustainable design to be “an increase in the established project budget”—suggesting that projects for which project teams factored in the steps needed to achieve LEED certification during the early design and budgeting phases would report zero or minimal capital-cost increases.
Among the most commonly reported factors contributing to the premiums (see chart, below) were an optimized energy system, low-flow bathroom fixtures, and bicycle storage. Overall, 40 percent of survey respondents said that while their healthcare clients may be less likely to pursue LEED certification on future projects, they’d continue to build to the program’s standards for energy efficiency. The survey found that LEED certification costs accounted for 0.05 percent to 0.10 percent of the project’s cost, depending on its size, with most survey respondents identifying cost as a deterrent to seeking certification.
Of the projects surveyed, the 50,000-square-foot Kiowa County Memorial Hospital, in Greensburg, Kan., falls on the higher end of the cost-premium spectrum, achieving LEED Platinum certification at a 5-percent cost premium. The installation of on-site renewable wind-energy systems contributed significantly to the premium but is anticipated to offset about 40 percent of the building’s energy use, the study reports. The project was completed in 2010, following the destruction of the original hospital when an EF5 tornado hit the town of Greensburg on May 4, 2007. Roughly a third of the new structure is made from recycled materials, while the entire building is nearly one-third more energy efficient than ASHRAE-compliant peer buildings.
Further exploration remains into the payback of LEED-certification for hospitals. The authors note that future reports could look into the operational performance of LEED-certified hospitals versus those that incorporate sustainable design but haven’t obtained certification. Similarly, they write, post-occupancy evaluations would help design professionals gauge the effectiveness of incorporating LEED-centric design strategies.
Editor's Note: This article as been updated to correct the office locations of Robin Guenther and Breeze Glazer. Both are located at Perkins+Will's New York office. We regret the error.