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Explore how sustainability affects all areas of real estate.
Take a minute to engage with this interactive exploration of A Common Thread, a video forum by Texas REALTORS® aired during the 2021 Winter Meeting conference.
2021 Texas REALTORS® Diversity Committee Chair
A COMMON THREAD:
PART 1: TEXAS IS CHANGING
Explore how Texas has changed over the last 30 years, the demographics of the state's residents, and how that has affected the homebuyer population across the state.
Texas Homebuyer Demographics
Thirty years ago, this state looked pretty different. In 1990, there were only 17 million residents and the population was fairly homogenous - white residents almost doubled that of other race and ethnicities.
But over the last three decades, the Texas population has increased exponentially, growing at a faster rate than the country , because of the state’s economic opportunities and affordable cost of living.
TEXAS GROWS FASTER THAN THE U.S.
Texas population percent change from 1984 to 2020, compared to that of the U.S.
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In 2019, Texas was growing at a rate of 1,000 people per day.
That growth has brought with it a change in the makeup of the state - residents are more diverse than ever. If you ask REALTORS®, they’ve witnessed this first-hand.
CAMERON WILLMANN 2020 Texas YPN Committee Member
SARA BRISEÑO GERRISH 2020 Diversity Committee Chair
Texas has been attracting considerable international attention.
2019 data showed that roughly half of the new residents in Texas were migrants. And in 2018, the majority of immigrants to Texas came from other countries. It marked the second straight year that international migration to the state exceeded domestic migration, with Hispanic and Asian immigrants taking the lead.
2020: TOP COUNTRIES FOR INTERNATIONAL HOMEBUYERS IN TEXAS
Mexico - 28%
Brazil - 12%
India - 12%
China - 5%
Canada - 3%
There’s another influence playing into the diversity of the state:
The Millennial generation.
This generation, those born between the early 1980s and late 1990s, is classified by many unique characteristics. Click the images to learn more.
Click the images to enlarge and to see the source of the data.
And this generation currently makes up the largest share of homebuyers today.
Their passions for social responsibility and climate change, coupled with their almost innate knowledge of technology, has a strong impact on not just their volunteerism but also their buying habits, affecting all industries, including real estate.
A COMMON THREAD:
PART 2: TRENDING GREEN & THE ECONOMICS
Homebuyers are focusing more attention on green features and real estate is rising to meet the demand - check out why Texas is trending green and the economics impacting the change.
The rising homebuyer is focused on environmental sustainability.
Millennials and Generation Zers are the first generations to have grown up in a world where climate change is part of a regular and global dialogue. They have been forced to face the realities of extreme weather patterns, rising sea levels and species extinction.
It’s not surprising, then, that this generation is
made up of homebuyers who take environmentally friendly features into consideration when buying a home. They know about climate change, they have the desire to make a difference, and they seek to align spending habits with those values. And so technology was developed to meet the demand, with smart home tech, solar panels, and other sustainability features flooding the market.
NICK KLINE
2019 Texas YPN Committee Chair
CAMERON WILLMANN
2020 Texas YPN Committee Member
Brad D. Smith, American businessman and former Intuit CEO
Prioritizing economics out of necessity.
While Millennials are interested in having a positive environmental impact, they have to prioritize economic tradeoffs. That’s not because they don’t want to invest in green, it’s often because they can’t afford to.
While Millennials are interested in having a positive environmental impact, they have to prioritize economic tradeoffs. That’s not because they don’t want to invest in green, it’s often because they can’t afford to.
A 2018 study from the Federal Reserve found that “Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets and less wealth.” They have to prioritize their financial situation before their goals and aspirations. But when both align in a home, they’re eager to invest in sustainability.
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What I see into the future is that sustainability will become more attractive when time comes and the cost will continue to drop with the help of technology.
Brenda Taylor, 2021 Texas REALTORS Global Chair
Some international homebuyers follow a similar pattern as their Millennial counterparts - their interest is in environmentally friendly investments, but their financial responsibility comes first.
"You have to consider the investment in the long-run. How much it's going to take to maintain that house, the repairs, the replacements, so with all those things sustainability comes in a big big part for them because it is the plan that they have to put into the future.
"And also one of the things that is important for investors is that having all those green items also reduces their vacancy levels and the vacancy rates."
BRENDA TAYLOR 2021 Global Committee Chair
But the case for sustainability is easier to make at the scale of commercial real estate.
Investors and developers are re-evaluating the traditional cost-benefit model and considering sustainability as a profit generator.
Considering the impact of utility costs on CRE profits, it makes business sense to adopt green efficiencies, which are estimated to consume 29 to 50 percent less energy than non-green buildings.
There’s also clear evidence showing that buildings with green features depreciate less quickly and will be better positioned to meet the growing demand of occupiers and investors that are more discerning.
"All that technology has been kind of pushed upon us for going back years, but the technology now makes sense and people are more willing to put those in.
"We certainly try to do that to extend the life value of our assets and those that we manage and those that we own to extend the life expectancy and just the profit in both the building value and the economic value of the properties."
KENNY GROSS 2019 Commercial Committee Chair
Together with tech advancements, financial incentives are moving green forward.
In 2015, the U.S. Department of Energy estimated that buildings account for 40% of energy use and associated greenhouse gas emissions.
And the U.S. has a history of programs and incentives to combat that: from executive orders calling for federal agencies to cut energy usage; to energy policy promoting environmentally sound production; to net zero commercial initiatives; and program goals to drive down the cost of solar and support solar adoption.
A COMMON THREAD:
PART 3: SCALING UP
Homebuyers are focusing more attention on green features and real estate is rising to meet the demand - check out why Texas is trending green and the economics impacting the change.
Public-private partnerships have also filled a development need for responsible urban planning.
Such as the WHARF D.C. and the High Line in New York City. These public-private partnerships enable local governments to work directly with private developers to create community-driven, sustainable spaces.
In my experience working at Brooks, which is a 1300 acre mixed-use community, we are able to do really creative unique structures because we do not pay property tax and we’re a public entity, our partnerships and the type of deal structures that we are able to work with partners on has been very cutting edge and allows for the opportunity for sustainability.
Amber Gilbert, 2020 Texas REALTORS Commercial Committee Vice Chair
Brooks is a 1,308-acre mixed-use community in San Antonio, Texas, owned and managed by the Brooks Development Authority — an 11-member board of directors that is appointed by the San Antonio City Council.
Brooks is a true public-private partnership and was created in 2001 by the United States Congress, the State of Texas, and the City of San Antonio to redevelop the former Brooks Air Force Base.
Its mission:
To promote and develop a vibrant, sustainable community that serves as a catalyst for progressive economic development and regional prosperity.
And diverse consumers are buying into that sustainable mission.
Millennials are environmentally conscious, and are seeking energy conservation, open spaces, walking trails and sustainability in their home choices, says Anne DeSimone, author of Housing Choice 2020. On top of that, a majority of agents and brokers say that energy efficiency promotion in listings was very or somewhat valuable.
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valuable
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the listing
AMBER GILBERT 2021 Commercial Committee Vice Chair
"I believe that the consumer is driving that demand. Because of the fact that we have our parks and we have some of the components that we do, you would be surprised how many people are coming from other areas that sustainability was a big part of that community and they found it at Brooks.
"They were surprised that they would end up living in the Brooks community on the South-side of San Antonio. But it was the only place that they found that connectivity, that connection, to where they had lived in Europe, or where they had been up North in a different environment."
Those "that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow....”
Grace Farraj, Senior Vice President of Development and Sustainability at Nielsen
And that power-spending includes real estate buying and selling.
AMBER GILBERT 2021 Commercial Committee Vice Chair
Spending that money can be a net positive in the life cycle cost assessment of a building.
From the development side, sustainability is directly linked to increased market value and reduced vacancies. On the occupier side, these investments are directly linked to health, well-being, and increased productivity.
AMBER GILBERT
2021 Commercial Committee Vice Chair
"Another component that has become really popular and we really care about it at Brooks, is LID, so low impact development.
"What we’re seeing is that in partnership with organizations like the San Antonio River Authority and relationships with our tenants and companies, looking at sustainability and the way that they develop their facility, is becoming more and more, a thing. It’s a lot more expensive but it’s much more attractive and it makes for a much better environment for the employees as they’re living and working in that community."
And that attractiveness can lead to resale premiums.
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Retail Premiums of Green
Commercial Buildings in the U.S.
A COMMON THREAD:
PART 4: PROFIT RE-EVALUATED, PEOPLE FORWARD
Homebuyers are focusing more attention on green features and real estate is rising to meet the demand - check out why Texas is trending green and the economics impacting the change.
"The people element of it really stands out and the main issue is protecting people, obviously the planet, but since we’re kind of responsible for the planet, it really comes down to the people. Profit, you know, when it comes to protecting lives and protecting employees, workers, tenants, then how do you put a value on that?"
KENNY GROSS 2019 Commercial Committee Chair
Hover and click to view more.
Occupant Satisfaction Survey
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However, I think the technologies and advancements have really brought costs down, so in that aspect we’re seeing a lot more investment into that phase of it. I think that long-term, I think that’s going to be carried forth."
-- Kenny Gross
Click the images to enlarge and to see the source of the data.
Real estate, climate change, and social good are inextricably linked. The Global Wellness Institute reports that a hazardous environment and lack of outdoor spaces are leading factors contributing to unsustainable health expenditures. This ranges in outcomes from decreased mobility, rising stress, and segregation.
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Remnants of redlining also shaped the wealth and demographic patterns of American communities today, with 3 out of 4 "redlined" neighborhoods continuing to struggle economically - more than 85 years later.
Jan, Tracy. "Redlining was banned 50 years ago. It’s still hurting minorities today." The Washington Post, July 9, 2018.
A COMMON THREAD:
PART 5: COMMUNITY BUILDING
Homebuyers are focusing more attention on green features and real estate is rising to meet the demand - check out why Texas is trending green and the economics impacting the change.
AMBER GILBERT
2021 Commercial Committee Vice Chair
Using land and building development to serve the community is a growing consideration.
Global investors are also seeing the value of community building to facilitate long-term growth.
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-- Amber Gilbert
"It is important to not only Brooks but the companies that we’re recruiting and their success in the long-term. So they care about looking at it from more of a global view not just dollars and cents."
The business case is that a lot of the companies that we’re talking to are not only looking at building their facility and say, bringing 300 jobs. They’re looking at being a part of a community, that the workforce is there and that they can grow that 300 jobs to 1000 jobs, expand. And so looking at the long-term of their facility and how they’re going to grow and how they’re going to give back."
A COMMON THREAD:
PART 6: THE REALTORS ROLE
Hear from Texas REALTORS® about the ways you can have an impact on the state around you, how you can help to shape inclusive communities, and positively affect the real estate industry.
As REALTORS®, we have a role to play in this common thread.
Hover over images below.
"Maybe you have to do some things that are a little outside the box that build that environment. And I think Brooks was really smart in making those investments that were a little bit risky, they weren’t going to give us a big return, if a return at all. But long-term have really added value to the community."
Amber Gilbert
"And so it’s really exciting to be a part of that sense of pride that, to see it happen. And it’s very common where we see that first homebuyer and then other family members see, like, ‘Hey, it is possible, it can be done.’ And it’s an awesome experience to be able to help more family members out there achieve the American dream."
Sara Briseño Gerrish
"We definitely need to bring more awareness and like you said, in the long run it is a big benefit for people to afford staying in their house. Not only buying it, buying it is only one step, being able to maintain it and to keep it for longer generations."
Brenda Taylor
"I love the diversity, I love inclusion of everybody, because everybody is entitled to a home buy, purchase, lease, as long as you are qualified. That’s what I understand, but I don’t see anything negativity on that and I am for it."
Bahman Davani
"I think it’s a matter of trying to be a good neighbor, trying to be good citizens, trying to be a good industry and the more honest and open we are with how things are developed and why. Why there, why this neighborhood vs. this neighborhood. You have to take into consideration a lot of details. The demographic you’re talking with and you’re speaking with, and trying to see how best to help them."
Kenny Gross
"Some people who’ve really had to go through some persecution, especially racial persecution, is always something that I think that we can be on the forefront of in the real estate community, because we’re so diverse."
Cameron Willmann
"So I just want people that are watching this, myself included, to know that this is a melting pot and the way of the future is sustainability, the way of the future is diversity. And we just need to come together to pull these forces, the intangible things, together. I mean, you’re going to work with young people, I’m going to work with people much older than myself, and I think it’s just realizing that we all live in one world and we need to come forward together."
Nick Kline
You get to be a part of ensuring our future for a much happier place for our kids and our grandkids.
And I think that’s a really, really cool thing.
-- Nick Kline