Cody B. Salter
GR Review

 The U.S. building industry has witnessed a recent trend toward increased environmentally friendly building practices, or so-called "green construction."  To encourage green construction and develop standards therefor, the U.S. Green Building Council (USGBC) was formed.  The USGBC has created the Leadership in Energy and Environmental Design (LEED) rating systems, which are points-based checklists designed to grade the environmental friendliness of building projects in several categories of construction. 

Currently, there are nine LEED rating systems.  In each, points are awarded to developers for, among other things, buildings that use sustainable sites, limit the amount of water usage, increase energy efficiency, use recycled and local construction materials, improve the environment of the building interior, and employ innovative construction techniques and design.

As the trend toward green construction continues, the benefits are also increasing.  In addition to protecting biodiversity and ecosystems, improving air and water quality, and reducing waste and conserving natural resources, developers can now enjoy economic benefits.  LEED-certified buildings decrease operating costs and may increase the amount of rent a building owner can charge its tenants.  Moreover, some private environmental organizations provide grants to those developers who reach certain levels in the LEED rating systems.  Also, the government is stepping in to provide economic incentives.  The IRS offers tax deductions, tax credits and favorable depreciation allowances to green developers.  Many states now offer similar tax incentives, and some cities are offering fast-tracking for construction permits and preferred zoning considerations for green projects.

Cody Salter is an Associate in Gould & Ratner's Real Estate Group.  He may be reached via telephone at 312.899.1659 or via email at csalter@gouldratner.com.