From the outset, our thesis was that Green Building isn't expensive.  Many people before us have done life cycle analysis and found that over the lifetime of the building,  Green Building often saves money.  We went one step further, and claimed that we could build a house that is very green for less than ten percent additional cost up front.  While we still may be able to reach that goal, we discovered that there are many complicating factors so some context is needed.

Although we thought that stating the cost of green building as a percentage of construction cost would make it a more generally applicable metric, we realized that this is totally false.  The problem is that the cost of construction varies greatly throughout the country, while the cost of many green products is very similar throughout the country.  In Seattle, the cost of houses and construction is one of the highest in the country, so the relative cost of green products is less.  Of course, any aspect of green building that involves mostly labor will scale in price with the cost of construction.  Rather than trying to draw generic conclusions, we present an analysis of our costs an let you draw your own conclusions.

For those not familiar with the local housing market, the entry price for a house is just over $300K, and a typical medium size home goes for $450K or more.  Typical construction prices range from $125/SF to $200/SF of finished space, depending on the complexity of the house and the cost of finish materials.  Our initial thought had been to do an extensive remodel and second story addition with a target price of around $250K, but as the scope changed to be a complete re-build, the price shot up about $425K, which is in the range of construction costs, but when added to land cost, higher than what could get back if we sold the house on the open market (and if you add the cost of the existing house, which we have to pay to have removed, the situation is worse, but we knew that up front). 

The majority of this budget is independent of Green Building, and can be mostly attributed to three factors: 

1. The size of the project (about 2500SF finished space, 300SF attic space, 1000SF basement and garage.)
2. The high cost of construction (see note below)
3. The fact that we also building an ADU.

While this accounts for most of the budget, there are a few other significant issue affecting cost:

• Green building typically involves higher quality, longer lasting products and by nature requires greater attention to detail, and hence more experienced, higher priced labor. This affects such things as energy performance and longevity of the building.
• Although not strictly necessary, Green Building often involves a higher level of finish detail because aesthetics are also important to many people.
• When building a smaller home, the cost per square foot tends to go up, because there are many fixed costs in a house, no matter what size it is.

There are two economic twists that compound the cost issue: first, although the economy has a whole is in the middle of a big downturn, construction has not been affected by this because it has been buoyed up by very low interest rates, making it seem relatively expensive.  The other interesting issue is that the state of Washington charges sales tax on construction, at 8.8%, or about $34K out of the $425 total budget.  While we have no particular political opinion as to whether this is a reasonable method of taxation, it did occur to us that this amount was approximately how much we thought the additional up front cost of the green features of the house would be.

Ignoring all these issues, we believe that our construction costs are very comparable to other custom construction projects.  If we guess at $50K for the cost of the unfinished space, that leaves $375K or about $150/SF.

Rather than look at overall costs, it is useful to attempt to break out the additional costs of green building as line items.  For a discussion on the benefits of the various materials, see the next section.