For this week’s Guest Post Friday here at Construction Law Musings, we welcome Michael Matson (@thegreenbuilder ). Michael is the owner of Alternative Building Services, a general contracting firm in Northern California that specilizes in green building design, renovation, and new construction. He has been involved in the construction industry for fifteen years. Thanks to Michael for letting me guest post at his blog.
One of the things I’ve been repeatedly asked is: Why do so few contractors embrace green building? The arguments for green building and energy efficiency that follow the question usually revolve around new streams of income, a growing market, increased public awareness, and so on. As one who has embraced green building I, at first, found the question intriguing. Job site chats with other – how should I put this politely? More main stream contractors, however, quickly answered the question.
Consider: Here in California it wasn’t too long ago that running a construction project was not all that complicated. You had your workers, your subs, the architect and engineer(s), and occasional visits from the building inspector – usually scheduled. Today, things are often much more complicated. It’s not uncommon to have not only the building department involved, but the health department, the department of forestry, fish and game (and project consultants for each), the community (or city) services district, and depending on which third party green building program the project is involved with, add in an inspector for them, and likely an expert consultant on their program as well. Add all those up and the number of overseers on the job site can equal or exceed the work force. Sans the green certification part, I finished a contract that had an even longer list of government agencies and consultants than this just a few months ago.
So who cares, you might say. More supervision is better than less, right?
Well yes… Until something unforeseen happens (and it always does) and the overseers can’t agree (and they never do). And there’s the rub. I’ve seen jobs brought to a halt for days simply because the building inspector and the engineer can’t agree on a solution to a problem. Get the civil engineer, the building inspector, and fish and game arguing over some unforeseen impact and life starts getting complicated. Add in the biological consultant and you might as well go on vacation. They’ll be a month debating how best to resolve this unforeseen problem. There goes the time line, the budget, and workers paychecks.
Unfortunately, my project wasn’t unique. Variations on the above example have become the regulatory reality for many projects. And it is fear of these oceans of regulations, into which programs like LEED get lumped, that drives the reluctance of many builders to embrace green building methods and certification programs.
Too, here in California, green building programs were simply in the wrong place at the wrong time. NGO certification programs started getting a lot of press just as piles of new regulations, including a brand new building code, were filling book shelves. A small contract that could be completed in a month began taking a month of paperwork just to get permitted. New home projects that used to go through plan check in thirty days started taking six months. NGO certification programs became the one point in a regulatory avalanche where builders felt they could regain some control over the escalating mountain of perceived uncertainties. For many contractors, acceptance fell victim to a combination of change fatigue and growing fears of risks they felt were unquantifiable. And unquantifiable risks send up red flags all over the place. Why?
First, like most businesses, contractors don’t like change. Change slows things down and costs money. Crews have to be retrained. Production drops. And until everyone is up to speed on the new way of doing things, workers require a higher degree of supervision, which increases payroll costs. In the highly competitive world of construction, this is all bad. Then there is the problem of liability. In my state, contractors are on the hook for construction defects for as long as ten years. The old way of doing things was tried and true. The building inspectors liked it, the architects liked it, and it didn’t generate call backs, or worse, law suits. The new way? Well, that’s an unquantifiable risk.
Second, like most businesses, contractors don’t like delays – especially delays that are beyond their control. Like all production orientated industries, profit margins in construction are inexorably tied to efficiency. Government agencies and NGOs, on the other hand, have the opposite motivation. The longer they drag things out, the more justification there is for their budget and/or job. For them, nothing good can come of being efficient.
Personally, perhaps because of my background and training, I’m one of those that didn’t find any of the changes all that hard to comprehend or deal with. Time consuming? Yes. Frustrating? Yes. Especially when I look at how much more it costs my customers to get their projects approved and completed. As a steward of their construction budget, I take that somewhat personally and point my meaty finger directly at the homologous blob that is government. My biggest concern where new building technologies are concerned, however, is the risk. New products and constructions methodologies are bound to fail from time to time. And when they do, it’s often a huge legal mess that’s very expensive to clean up. (Remember the Chinese drywall fiasco?)
As for the rest? Time will address many of these issues. As older contractors retire, younger folks more open to new ideas will take their place, and that will certainly include new and greener concepts and methodologies. But I certainly expect more hiccups and resistance down the road. We seem to live in a time where sticks are preferred to carrots for implementing change. And it doesn’t take a psychologist to realize that even the heartiest eater will lose his appetite for carrots after repeated beatings with sticks. Yet that is the road chosen by law makers and regulators.
Perhaps, where green building is concerned, it’s time to consider a road less traveled.