Downscaling but not out: sustainable developers adjust to downturn.

• Author: Lewis, David
• Position: Q1 REAL ESTATE REPORT

Real estate's Big Slump is far from over, despite cheery GDP numbers. Yet real estate developers and experts in sustainability persist in seeing sunrise amid the gloom.

Observers note that sustainable building has taken its knocks like every other part of the economy. But all argue, often passionately, that the recession adds up to not much more than a pause in sustainability's remarkable growth.

[ILLUSTRATION OMITTED]

Assessing the impact of the downturn on the sustainability movement seems to be "one of those things where it depends on your mood that day, whether it is optimistic or pessimistic," says Josh Radoff, principal and co-founder of Boulder-based YRG Sustainability Consultants. "The official line, if there is such a thing, is, yes, of course it has hurt. But the feeling overall is that the percentage of projects and people interested in sustainability one way or the other is increasing non-linearly," that is, growing geometrically or exponentially.

Meantime:

* Thirty-four percent of 200-plus business executives surveyed for an Economist Intelligence Unit study, "Managing for Sustainability," said "their firms' immediate financial goals were the most pressing priority that prevented the incorporation of sustainability into company strategies and goals." About 24 percent said lack of funding was the chief obstacle to putting sustainability into strategies and goals.

* Aberdeen Group tracked more than 200 enterprises' sustainability initiatives. Forty-six percent of respondents said "budget challenges remain an impediment to sustainability initiatives." Forty-two percent "still find it difficult to demonstrate quantified business value and return on investment, ROI, in order to make a business case for sustainability."

The economic recession "obviously is going to have a very significant negative impact on what might be considered the sustainability market, the green building market," says Karl Dakin, CEO of DaVinci Quest, an offshoot of the Louisville-based DaVinci Institute. "We're still moving forward, but at a far, far slower pace than we would have."

(DaVinci Quest, with the city of Longmont, in January announced the Smarter, Safer, Greener House contest, to award a cash prize up to $5 million. "We wanted a competition in which people would figure out how to turn the house into an interface device," says DaVinci Institute executive director and senior futurist Thomas Frey.)

Sounds like a downer, no? And yet sustainability seems...