SMARTER makes a case for greener buildings
Making green homes is not so much a technical challenge as it is a financial burden for owners across Europe. But what if we all got it wrong? What if choosing the lowest bidder was just a short-term bias, and the right way to look at work investments was to consider the monthly cost of ownership? One thing is certain: without getting financial institutions on board, energy-efficient buildings will never reach their full potential. “It’s time to borrow responsibly and build wisely,” says Steven Borncamp, project director at the Romania Green Building Council and coordinator of the SMARTER project (SMARTER Finance for Families – Improving Citizens’ Health, Comfort and Financial Well-Being by Supporting Banks, Residential Investors and Solution Providers with Green Homes and Green Mortgage programs). “As they start appreciating the financial risk reduction of loaning money for green homes, banks can lower the cost of their mortgage. Besides, buying green homes is often thought to have financial benefits in the long term. But the truth is, it provides immediate benefits from the first month of ownership.” SMARTER wants us to favour greener homes when making investment decisions. To reach this goal, it helps families re-evaluate the way they view the cost of buying a home; switching from looking at the sales price alone to the ‘total monthly costs of ownership’ of the home which includes the immediate and long-term financial benefits of energy-efficient measures. It also helps investors and developers understand energy performance criteria and demonstrate this performance to homebuyers. “We help banks define whether a project is truly green. We provide them with research justifying the reduction in mortgage interest as well as data from existing homes for them to verify our predictions,” Borncamp explains.
Two platforms, one purpose
The project built two main platforms: the Green Homes Investment Platform, and the Green Homes Solution Providers ecosystem. On the former, stakeholders can follow developments in residential green finance. “The platform includes timely research on how ‘green’ affects financial risk and performance, key developments of interest to the banking and investment communities, and even information on ongoing residential projects,” Borncamp notes. “We are currently completing a ‘soft launch’ to gather feedback from partners and the community.” Green Homes Solution Providers, on the other hand, is an ecosystem of companies providing services, materials, technologies and other products necessary to bring a green residential project to life. It’s great for homeowners, but also for the companies themselves who can instantly increase the number of project opportunities ahead. SMARTER considers all stakeholders with comprehensive documentation or ‘toolkits’ for each group. “We analysed the large and growing body of research materials on green finance and green home performance. We considered the link between greener homes and reduced mortgage default risk, as well as many other related topics. Finally, we ascertained how we can best partner with local and national governments to apply the same green finance principles to low-income housing,” Borncamp adds. Over 10 000 housing units have already been certified or will soon be, representing over EUR 1.5 billion of project value across the 12 participating countries. According to Borncamp, this demonstrates a wide market acceptance and shows this is not a niche market as it is often misconstrued to be. By the time the project comes to an end, the project team will focus its efforts on involving new countries, notably by recruiting other organisations. Borncamp hopes the banking sector will increasingly reward sustainable projects as a result of SMARTER, while citizens will better understand the added value in terms of quality, comfort, wellness and financial security.
Keywords
SMARTER, energy-efficient, buildings, financing, green mortgage, green building, green homes
