Exploring Sustainable Building and a Greener Real Estate Industry – Mark Holland

Mark Holland: This is a good program. This will withstand the common-sense test.

Shaun Majumder: Hey, Mark, do you want to buy a tube TV?

Mark: At this point, it's nearly impossible to ignore climate change and its effects on our lives. We all have a responsibility to minimize our footprint where we can, but it's increasingly important to protect your home for safety, for comfort, and your wallet. For REALTORS®, a big part of that is really and truly understanding sustainable housing and environmentally conscious building practices, and then being able to explain the importance of these things to your client. On today's show, we're being joined by Mark Holland, principal at Westplan Consulting Group. He's a professor at Vancouver Island University and a LEED-accredited professional.

Today, I'm going to be asking him a ton of questions about green building and sustainability, and how it affects all of our communities. As a bonus, we're going to be throwing in a couple of extra questions from REALTORS® just like you. It's a great episode. I can't wait to get started. Why wait? Mark, wow. Mark, it's a real pleasure to meet you. I'm really excited to talk to you today. I noticed you have some beautiful Indigenous arts in the background there on your wall. I decided, in honour of you and where you are right now on the West Coast, what do you think of my shirt? I love your shirt, Shaun. It's a real honour to be here with you and, yes, to be coming from the West Coast. We're really fortunate.

It's an interesting history here on the West Coast. We have some of the highest density of First Nations in the entire country. Almost half of the First Nations of the country are out here because food supplies historically were so dense and so rich. There was a very rich culture that developed. My house is full of art like your T-shirt and mask, et cetera. It's a real privilege to be able to live out here. I'm living in the lands of the Lekwungen-speaking peoples, the Esquimalt, the Songhees, and the W̱SÁNEĆ here as I come to you in this discussion.

Shaun: I think it's totally apropos. Today, we are talking about sustainable design, sustainable real estate. It's so interesting because everybody wants it. They're not quite sure what it is. The technology is always changing. People always want it. Then, sometimes it can be controversial about why. Do we need green spaces? Do we need green tech? Do we need green-- I'm excited to talk to you today about it. Tell me a bit about, first of all, your background, and also give us the broad strokes about what is sustainable design when we're talking about real estate, individual homes, et cetera.

Mark: Yes, thanks, Shaun. It's a very interesting field. I've had the privilege of being part of it for a few decades. My career started in my education at the University of BC, where I had the privilege to study under William Rees, who was one of the authors of the idea of the ecological footprint and the impact that we all have in our lifestyles globally. I had the privilege of getting involved as a planner in the City of Vancouver very early in my career, as we worked on what many folks here in Canada have visited as the Olympic Village there, which was ultimately deemed by the U.S. Green Building Council to be, the greenest neighborhood in the world at the time when we got it created.

It's been a really interesting path to be part of this conversation coming from a time, I would say, maybe in the early '80s, Shaun, when nobody was paying a lot of attention to this. Greenpeace started in the '70s, and there was some discussion about environment, but what we began to understand was we need to have the environment, our social needs, and our economic needs all considered simultaneously. You can't ignore one of them. You have to look at all of them, because by ignoring one of them, they ultimately begin to fall apart.

Shaun: At that time, would you say that was a huge paradigm shift away from what it previously was in terms of thinking about profits, cheap designs, cheap builds, sourcing materials? Did that spread fast, or was that a hard uphill climb?

Mark: The report from 1987 that the United Nations did, called Our Common Future, pulled together a leading group of world economists, politicians, and scientists, and they said, "Can we keep doing this? What happens if we just keep doing what we've been doing as our population hits 7 billion, 8 billion, et cetera?" Interestingly, while the environmental movement has claimed the sustainability discussion, it was business people, it was economists that came back, and they were the ones that said, "We need sustainable development. We have to develop, but we need to do it in a way that uses less energy, produces less waste, uses less water, keeps our soils healthy, and things like that."

That was the big movement. You're absolutely right, Shaun, this was a paradigm shift. In about 10 years, between 1887 and 1997, it pretty much took the world by storm. It was fascinating to see all the universities begin to shift, engineering rethinking things, big movement in green buildings, landscape architects revisiting how we were doing our cities, so many different things. We now begun to think differently about them. Most generations of professionals since the late '90s have been taught a different way.

A lot of folks are now looking at it. The thing is that it takes a long time to change buildings. They last 50 to 100 years. Cities last thousands of years. The evolution takes time, but there has been a very, very big change. I think that's what's really exciting to see in the program here that we're talking about today is that the entire real estate industry is now stepping forward to embed that discussion in every thought and every discussion and decision that we have around the homes in which we live.

Shaun: Mark, I'm here now in Nova Scotia. Two or three days ago, it was 10 degrees and I was out running through some grass. Then I woke up this morning, about a foot of snow on the ground. When we talk about climate change and it's having such a massive impact all over the world, this is Nova Scotia, this happens regularly anyways. However, when we think about climate change and the potential hazards, how does all of this affect real estate overall? How is the design world working to handle all this?

Mark: It's a great question, Shaun, because climate change at the beginning of the sustainability discussion was under debate. We still see some debates, but most people don't take them seriously because the science is now many, many decades of patterns to show what's happening. Weather is becoming more unpredictable. With it, is actually some pretty significant impacts on real estate. We're seeing quite a few different areas of response. There's two ways we look at climate change and our communities or our buildings. The first one is maybe the older approach, which we would call it mitigation, which is trying to reduce our climate change emissions so that things don't get much horribly worse over long periods of time.

We're having some very, very good successes in some areas on that one because it essentially means we need to use less energy. We're seeing technology step in to really help us use less energy on many things. Some of the things that we're seeing, making buildings more efficient. We've been talking about this for a long time, but they continue to advance in our ability to do this. That's one of the first things that we're seeing in the climate change response, is use less energy, saves you money as well. That thereby reduces the amount of emissions that we're producing.

The other side, which is increasingly becoming more important, Shaun, in our discussions, is to respond to the changes that are already happening and are inevitable in climate because there's so many of us producing so many emissions for so long that we have changed the chemical makeup of the climate. It is heating a bit more. We do get some greater storms. We get changes in precipitation, flooding, and things like that. What we're seeing in real estate is looking at how we design buildings to withstand major wind storms. Now, living in Nova Scotia, you know all about wind. You guys know wind very, very well.

Here in the West Coast, we get storms, but nothing like the relentless blowing coming off the Atlantic. There's a reason why the Pacific Ocean is called the Pacific. It's a little more peaceful out here. We have big eaves. We get rain all the time. We have big eaves, but we don't get the same storms. Whereas if you built homes in Nova Scotia, historically, like we do here, it'd rip the roof off on any given weekend. We're seeing buildings being much more wind-resistant today. The idea of what we call hurricane clips. These are, like you built a building, you'll know when you put the rafters up against the top of the wall on the top plate. We used to just put them in there and toenail and a couple of nails.

Now we're actually taking steel bands, and we're attaching them together and that creates just a few more screws and a steel band that'll hold that roof from getting ripped off in a much higher storm. Far, far better. That is nothing but good things from that. There's one example. I would say maybe the biggest one we're seeing everywhere is attention to floodplains. Climate change increases the amount of water in the atmosphere. The warm air absorbs more water, and also more is just evaporating off the oceans and is filtering in the air.

We get much bigger storms and then much bigger flooding. Insurance companies are increasingly now getting a bit grumpy about insuring buildings that are in floodplains because you never know when the whole thing is going to come underwater and you're back in there pulling all the drywall off and fixing everything and putting it all back together again. That's expensive. We're seeing municipalities, cities, and insurance companies getting pretty grumpy about developing on floodplains, and where we do have buildings there, and entire cities are. Here on the West Coast, we have Richmond, BC, which is essentially below sea level on any given moment.

Lots of attention to how dykes, pumping, investing in these things in order to make sure that we're not putting our communities at risk. We're seeing new development permit areas around cities where there's a city and a big developed area, and the wind blows across it into a mountain range, or where there's forests. In that interface, because there's lots of sparks and energy and fires going on in communities, if it jumps into the wild area and you get a wind, then you get these huge wildfires that move into the forested areas around there.

We're seeing a lot more attention to wildfire-resistant homes. There's a number of guidelines that people can follow around that. Maybe the other way is renewable energy. We're also seeing folks look at-- Certainly, if you go to Hawaii, you'll see solar cells on just most of the roofs. Many of the roofs have PV arrays because energy is very expensive in Hawaii, and it's sunny all the time. Wherever that combination occurs, we're starting to see a lot of people very interested in getting solar on their buildings.

Shaun: When I'm thinking about all the new builds, obviously, they're being infused with a lot of this new technology. What are some very specific elements in a new build REALTORS® can identify for their clients that can be like, "Hey, this is very thoughtful, what you're getting with this home, X, Y, and Z," whether it be the smart home, the new smart home set up? Is it how people are wiring the buildings now? Are they having a big impact, considering this new climate change reality that we're in? What are some of those elements that REALTORS® can point to for their clients?

Mark: The things that we see the most often, Shaun, that a REALTOR® and a home buyer can look at starts with insulation. Insulation is one of those-- particularly in the attic. Some homes don't have attics, but many do. Depending on the age of that home. I remember one I bought had no insulation in it at all. Okay, we've got a lot. We can make some quick progress here. Sometimes there's four to six inches. An ideal insulation that is easy for a homeowner to put in or a contractor to put in costs very little is to upgrade your insulation in your attic to R50. That's about 12 inches. Batts of insulation often come in six inches. That's just two layers up there. That's the thickness.

We use the word R-value because it's called resistance. You don't want heat to move from one area to another area. You want to keep them separate. That's R-value. Yes, the first thing that a REALTOR® and a potential home buyer can look at is what's insulation there. Now it's easy to fix. It's not a reason to not buy the place, but that would be the first one. The second one is windows. Our windows used to be single-pane. In the '70s, we had lots of single-pane windows. Today, obviously double-paned is the default. Then there's better double-paned windows and ENERGY STAR rating for those.

In fact, we're starting to see some buildings now based on the slowly reducing cost of triple-pane windows. What that does is it creates a vacuum between the two panes or the three panes. It takes a lot more energy to get the energy to get the heat across that gap. There's not much in there to transfer the energy. Better windows. Interestingly, windows are a good payback system for REALTORS®. Investing in a new set of windows for a building, you can get your money back from that. Not only with better energy efficiency, but people like nice windows

Shaun: We're talking about insulation. When I hear insulation, I just think heating your house, keeping your house warm. Growing up in Newfoundland, you got to go have insulation in your house because if you don't, you're going to freeze in the winter. Windows, same thing. It's more about keeping the wind out and the elements out. You're saying there's a more active-- it sounds like it's a little more active in its function. Tell me a bit about that.

Mark: One of the things in terms of heat and windows is it keeps the heat in so long as the air isn't turning over. The other key thing that we look for is a good sense of sealant, making sure that the place is well sealed because when the wind blows, and like we noted, in Nova Scotia where you are, the wind's blowing, it puts a bunch of pressure on one side of the building. Interestingly, it's like a airplane wing. As the air goes over the building, it creates a vacuum at the other end. You not only are pushing, but you're sucking. You can literally move all the air in a home out of that home very, very quickly if it's not actually well sealed.

What we'll see in renovations is what we call a blower door test, where they'll actually bring a big fan and they'll put it in the door and they will try and suck the air out and they'll see how well it performs. Then they can go around with you and point out, "Okay, you need to seal this and seal that." Funny story, I bought a big old heritage house and we did a blower door test on it before we put in all the new windows and did the upgrades.

We blew insulation in everywhere. He started it and he said, "Okay, something's open." We walked around the whole place. Nothing was open. Everything was tight. He said, "You basically have the equivalent of two full-size doors wide open to the outside. That's how leaky your house is." Yes, we spent the next several years fixing that and sealing it up. We got it to almost a base new home level by the end of it.

Shaun: It sounds like when you're talking about energy efficiency, that is not an efficient house. Then that translates, if I'm a buyer or I'm a REALTOR®, I think to myself, "Cost of just operating the house is going to go way up," right?

Mark: Absolutely. In some cases, REALTORS® will include an ENERGY STAR rating of a home if they know what that is. You'll see that in some new homes where the builder or the developer has actually said, "Hey, we've gone above and beyond on this. Not only should that make you feel good that you're not using lots of energy and creating emissions, but you're actually going to pay less. Every month, you will pay less than your neighbors will be paying for heating and or cooling in the summertime."

Shaun: I think that's what so many people are feeling right now, generally speaking, is "How can I save money?" It's funny, you put a little bit of money in to save a lot of money on the back end. You mentioned heat pumps. We had a program in Newfoundland of my little tiny house. I own a house there, 120 years old. It was dragged up on the ice back in the day, used to be in a small little-- Not very well insulated, but we always used a furnace, an old school furnace in the basement.

They had a rebate program, and we got the heat pump. It's a small house, but it does amazing. It's very efficient, costs so much less. It seems like this is a very high-value item to have now in your home. Tell me about heat pumps and how they're going to transform a lot of the energy systems in houses.

Mark: Heat pumps are a great story, Shaun, because you know what? We have had heat pumps for over a century. We just don't call them heat pumps. You know what we call them? Refrigerators. Folks have had refrigerators in their homes forever. That's all a refrigerator is, is it takes the heat out of what's in the box and it just goes to the coils in the back and it just goes into the room. Somewhere along the line, about 25 years ago, 30 years ago, we went, "Hey, we could do this at a much bigger scale." Thus, the industry of heat pumps was born.

If you want a story of how you can be more comfortable, save a lot of money, and save the world at the same time, heat pumps is right there at the top of that parade because they put a little bit of money into them, but you're going to make all that money back in the savings. Not only that, you don't have to put in air conditioners because a good hot summer in Nova Scotia or here or anywhere in North America, you get a good heat wave there. You're not sleeping very well. The whole place is just baking. These things will cool your house just as easily as they will heat them. Heat pumps are a fantastic move.

The incentives that you experienced, many provinces have those incentives in place, and the federal government has had some as well, because they just save so much energy, and it costs so much less for a government to give you an incentive to get a heat pump than it does for them to then have to work with their utilities to put up a new dam, start a new gas-fired power plant, or generate more energy.

It's way cheaper to save energy than to generate more energy. We're seeing a lot of really exciting incentives for homeowners, and I think today a lot of REALTORS® appropriately are up to speed on that. It's a really great way to-- It adds value to your house. If someone knows they're coming into a heat pump field house, they know they're going to pay less, and they know they can have a nice cool, they're going to sleep well in the summertime. That is a true win-win-win.

Shaun: Absolutely. Old school, it was either wood furnaces in Newfoundland, where I was raised, or now oil furnaces, they're still a thing. It's good to hear we're moving in that direction. Now, you mentioned about certain classifications that buildings get. I remember hearing about LEED-certified buildings. I was so, "Wow, this is a LEED--" You walk up to a building and you see LEED Gold, and you're like, "Oh, this is incredible."

I had no idea what it meant, and I had no idea how to decipher what makes this a LEED-certified home. How do REALTORS® look at these certifications and be able to decipher what that actually means? How can REALTORS® decipher this information and say, "This is what it means," practically for their clients? If you're a LEED-certified home, what are the things that translate? How does that translate?

Mark: It's a great question because with a certification program comes credibility and an accountable promise level of performance. We have seen over the last 25 years the rise in, we call them eco-certifications, for pretty much everything in our lives in different ways. My firm and my team have built some of these. They're very interesting. They allow you to take what is a very complex thing, like a building that's got all these different factors we're looking at, and reduce it, add them all up, and give you an answer.

This is good, Goldilocks, small, medium, large. This is low, medium, high. They've been really successful, certainly in the early years of us trying to make this much more normal. LEED was one of the ones that was definitely the highest profile, I would say, in the last 20 years. I was part of the team that helped bring it to Canada because it's an American program and we Canadized it over a little while, which was great.

Shaun: What does it stand for?

Mark: It stands for Leadership and Energy and Environmental Design, L-E-E-D. It's a formal program done by the U.S. Green Building Council and the Canadian Green Building Council. One of the things that is interesting for REALTORS® is REALTORS® that are selling multifamily homes, they're much more likely to engage the conversation around LEED. If you're in a city like Vancouver, all new residential condos, the big high-rises, they all have to be not just LEED-certified, they got to be LEED Gold. There's only one higher level. In fact, today, many of them achieve that LEED Platinum level, because the whole market has changed and has embraced that.

If you're looking at a single-family home or a townhouse, there is a program within LEED, but it hasn't been taken up very much. You're unlikely, a REALTOR® that's out there working at the ground-oriented level of housing, are unlikely to run into too many LEED homes, but they will run into another one. This is called Built Green. This was a program that also came out of the US, came out of Colorado, and then Alberta stepped up to adopt it. Then it came from Alberta to the rest of Canada. We see it most actively in play with the Canadian Construction Association.

As I used to tell my students, I said, "Between the cowboy boots in Alberta and Colorado, they kicked all the flaky stuff out of this one. This is a good program. This will withstand the common-sense test." Built Green is a good one for newer buildings and single-family homes, duplexes, townhouses. We see a pretty good uptake all across Canada of the Built Green program. It's not expensive to implement. It makes common sense, and it gets down to the nitty gritty of the kinds of things we're talking about. How well-sealed is this building? How good is the insulation? How good are the windows? What venting system does it have? Et cetera.

They also look at some health factors around the materials that are used, and do they like off-gas, volatile organic compounds, and things. I really like the Built Green system because it's really clear. You can also get certifications for some of the individual things in a building. ENERGY STAR is the highest profile eco-certification for windows and sometimes appliances, and a few things like that. The ENERRGY STAR logo, and below it, you'll often see a little slider bar. It'll tell you where in the performance level this [unintelligible 00:25:12] appliance meets.

If you want to go buy an $800 dishwasher, that's very advanced, it's going to be quiet, and that little bar is going to be way up in the edge. You're going to use less water, and you're going to use less energy for that one. If we buy a really old, cheap one for the landlord special, they're going to be down there. It's going to be using more and more, but you get to decide how much money do you want to spend for what level of performance. ENERGY STAR is a really good one. FSC is another one. This is the Forest Stewardship Council, and they classify the sources of wood as are they from sustainable forests and recycled wood, or not.

FSC, we've seen a huge growth in FSC in the last 20 years, which is very exciting because they're focusing on making sure our forests are there for the next generation. There's a few more advanced ones that have come up. In some of my slides, Shaun, I'll have an entire slide just full of all the little eco certifications. It's a quite a booming industry, but the bigger ones in realty, the latest two that have come out in the last decade, I would say are Passive House and Net Zero Homes.

This is really pushing back on the climate change agenda where we're trying to use less energy, and thereby produce less emissions. Passive House is a program that came out of Europe and has been embraced by a whole stream of developers and builders in North America. Essentially, it means that your house is going to use very, very little energy. The Net Zero next version of that means maybe with some solar cells or a few other things, you may actually produce as much energy as you use at the end of the year.

Shaun: Can you sell that back to the grid? Is that thing now? Depends on the province, I guess.

Mark: Yes. Many of them now essentially use, we call it net metering. You'll use energy sometimes, and then you'll be able to sell back at a future time. We're seeing that system grow quite significantly, including being able to tie your hybrid car into it. You can literally plug your car into your house now in the more innovative green homes. Say it's six o'clock at night when kids are on their computer doing work. You're cooking dinner. You're watching TV for the next three hours. Part of your TV may be powered by your electric car, but then, come 10:30 at night, everybody's tired and they all head off to bed. Now your car recharges off the grid. At the end of the day, you're paying the least amount for energy you possibly could pay over a 24 hour period.

Shaun: This is amazing. This needs to happen a lot more all over the country. My question about that though, is how well-versed in all of these classifications do REALTORS® have to be? Because I would imagine there are some that are more legit than others. If you're in America, which is the wild wild west of, it's like, "I am green certified." What does that mean?

It's a really challenging landscape to navigate, I can imagine. I feel like Canada is probably a little more regulated and a little better at making sure that anybody who claims something actually is something. Is that something that you see in Canada? They're very tight about that? I'm just thinking in terms of what a REALTOR® has to go through to understand all of these certifications.

Mark: Yes, Shaun, you've hit on one of the key words in this field, which emerged a few years into it, called greenwashing. This idea that you do a little bit of something green, and then you declare your whole house, your whole project, your development, your product, all to be, "Hey, it's all sustainable." Today, I think folks are a lot more cynical and educated on-- They might appreciate you saying, "Yes, I'm a little more energy efficient," or "I've got some low-flow fixtures in here that use a little less water or something." I think what we're seeing for any home buyer, home builder, seller, or REALTOR®, they're clear about what specifically are we talking about here because there's many things to consider.

Greenwashing can lose you a lot of credibility, even for the good things you're doing, really, really quickly. We're all increasingly careful about not saying, "Well, the building is sustainable." What we'll say is, "We put low-flow fixtures in it. We have high-efficiency LED lighting. It has a heat pump, so it's going to use less energy and produce less emissions, and you'll be more comfortable." If our landscape still has lots of water-hungry lawn and a bunch of other things, we just don't talk about those, or we'll be honest about that and say, "We haven't put in drought-tolerant landscaping or things like that." Because it's desirable, people feel the urge to want to inflate the greenness of things. It's really not a good idea because someone's going to catch you out instantly on that, and then now you've lost all your credibility. Greenwashing is something for REALTORS® when they're listing a home, highlight what's good about it, but don't go on to say more than that. Stay honest about it because that's the way to go.

Shaun: I love that. I'm just learning about this program now, but it's an incredible program that is available to REALTORS® in Canada, brought to you by CREA. It is the Canadian Certified Green Representative certification, which I think is absolutely amazing. I would encourage everybody to go out and take that course and get that certification because then you really do know exactly what everything is and the direction that we're headed. I think it's a good move for REALTORS®.

Mark: I would completely agree, Shaun. I have had the privilege of looking through the CREA program. I was super impressed. As I said, I've been in this space for 30 years, 35 years, and I was really impressed with what I saw as I went through the materials that they show. They talk about all the different rating systems, they talk about all the things that you can do and should look for in a home. They get into the much more complicated issues of embodied energy, embodied carbon, the energy and carbon, and the maybe toxic materials used just in making the products in our homes, and the materials that we make our homes up from.

Someone who's gone through CREA is going to understand what they need to know to make an educated decision, not only on whether to buy a home or what they're walking into, but how to go about thinking about upgrades they may want to do, renovations that they may want to do, and also what to avoid and where the problems can be. I think it is a real big gift that the real estate association has done this because we have tens of thousands of REALTORS® out there, and when we make a home decision, we're financing that decision with a mortgage for long periods of time.

What that means is that savings and things like energy efficiency, you can actually receive the paybacks from those and doing investments, fix up your kitchen and your bathrooms, raises the value, doing the same thing as energy costs keep going up and carbon pricing keeps moving around, but it's not going away. It may disappear into the producers from the consumers, but it is not going to go away. These are all really smart decisions. That program, I was super impressed at how fast and how understandable it was to explain things that when I took them, you had to be in graduate school studying from a professor to understand what was being talked about.

Shaun: That's great. Yes. The more knowledge, the better. I think REALTORS®, get out there, take that course immediately. Now, speaking of REALTORS®, I'm really excited because we have some REALTORS® who have some very specific questions to you. We've been talking generally about a lot of broad strokes, ideas, sustainable building, and all these programs. Let's start with our very first question from a REALTOR® right now. Let's take a listen and get your thoughts on the other side.

Phil Moore: I'm Phil Moore from Vancouver. I'd like to know a little bit more about green space. How important is it, and how do we move the needle?

Mark: It's a great question, Phil. Green space is a really critical piece of our communities. It's interesting because as we've been pursuing sustainable communities, we've been trying to use up less of the planet to house ourselves, just go and bulldoze the next forest, sprawl out with the next subdivision. We've been trying to make things a little more compact. The challenge with that is it's a zero-sum game.

There's either trees and green space or there's housing and other community elements. The more of us that live here in the same space, interestingly, the more green space we need for things. It's a very, very good question. Phil, if you're from Vancouver, you know how that challenge has played itself out in that city because we just keep adding more people into the Vancouver area, and there's no more land.

This has become a very big area. In Vancouver, at one point, they spent 10 years of their park acquisition budget to acquire half a block downtown, so there was a big enough park for everybody to use and have their dogs come out and their kids use. It's a very big issue. Some of the reasons why this is so important, Phil, and it's great that you raised it, is the first thing from a climate point of view and a comfortable point of view is what we call the urban heat island effect.

Now, this hits us in Canada maybe a little less than the US in many cities, but when we get rid of all the forest and we put in lots of concrete and buildings, the sun just beats down all summer long, and it gets really, really hot. That's not comfortable for us, and in fact, actually, a lot of people die prematurely from just overheating, so we have to start air conditioning things. Whereas a forest, an area with more vegetation, can be 25-30% cooler just because of the vegetation. It's absorbing the heat, it's providing shade, et cetera. Larger trees are really key to that one.

In the US right now, 6% of their entire energy consumption is just going to air-conditioned homes in the summertime. That's how much energy is used. Things that we can do, if we can try and plant more trees, street trees, trees anywhere you can, that's great, it provides shade, but any vegetation is better. We're seeing a couple of other components to this to a more healthy and sustainable community. Green space helps your kids grow up healthier and smarter. There's a whole bunch of studies that have been done about the relationship to green space and kids.

Now, for those of us who are older and grew up in environments that had a lot more open space, we chuckle at that. If you think back to when you were a kid, you got out, you played in the mud, you found an earthworm, you messed around with the bugs, and you did what you did as a kid, what's actually happening, apart from the fun of play, is you're actually learning about the natural world.

There are studies that are done that looked at a thing we now call the nature deficit syndrome, which is children that don't grow up around green space end up not caring about other species on the planet near as much later in life. The long-term community and societal objective is we need green space for our kids to get out because they need to meet nature. They need to come to understand that they're part of a much bigger world.

As many of us increasingly live in multifamily homes because of the cost of housing, we lose our back yard and our front yard. If you lived and grew up or lived in a single-family home, "Hey, I got my backyard," let the dog out, go out and play, have the barbecue, go do some gardening. If you live in a townhouse, maybe you have a postage stamp one. If you live in a condo, you don't have anything. The public green space, the use of a park, what a city park is is now much, much more exciting and interesting because it's got to be the backyard for hundreds, even thousands of people, which if you think about it is fun if we do it right, because it becomes a backyard party.

It becomes a place where you can have a group barbecue. It becomes a place where all the kids play, where all the dogs run around. It's not been the way we've been thinking about green space, but as we try and use less of the planet, both to supply us with what I need, including our housing, this becomes an increasingly greater attention span or an area of focus for us. One of the interesting observations about this is that it can cost a lot of money to buy a new park space as we grow in, but most cities own a third of their city. It's called streets. Almost 30% of any community is streets, maybe more in some cases.

Many of those streets have almost no cars on them much of the day. You go to a quiet residential neighborhood in the middle of the day and there's nothing. There's nobody on the street. There's nobody on the sidewalk. It's just a big piece of asphalt sitting there. What we're seeing now is parks departments and engineering departments getting together and starting to look at how we can think about these streets. Can we narrow them a bit? Can we take away a little bit of parking? Can we mix parking and trees? Can we get a linear-- We're calling them essentially greenways or linear parks.

They're actually how many of us want to use a park anyway. We'd like to go out of our house, take the dog, go for a walk, let the dog do its business, go down to the corner store, go pick up our kids from school, whatever it is, if we're in the neighborhood. This idea of linear parks is now moving increasingly into our thinking around how we get green space into our cities without having to buy up residential land and unhouse people in order to get a big piece of lawn that may be empty much of the time. It's a very exciting time right now in how we bring green space forward into our cities, as more of us have to live in the same space.

Shaun: I would imagine that green space is such a valuable part of when you're trying to sell a home or buy a home. It is for me. There's rural, there's living in the woods, but then there's-- In a city like Los Angeles, where I have lived for the last 20 years, we were so great, Griffith Park was right behind us. There's upsides and downsides. Obviously, you saw with the fires. The upside of being able to walk into nature from my house immediately and be surrounded by coyotes, squirrels, animals, life, and green far outweighs the risk of the fire in that moment, because it could happen anytime. Anyway, I think that's a great question from Phil. Okay, let's check out our next question.

Jen Aunger-Ritchie: Hi, I'm Jen Aunger-Ritchie. I come from Smith Falls, Ontario. My question is around technology. As a older-ish millennial, I'm wondering about what type of role technology plays when developing community or urban planning, as such? How are we looking to the future and bringing that future into the planning now?

Mark: It really is a great question. It's particularly an interesting one for the millennial generation. An older generation like myself, which is just one generation older, I went through school before there were even computers in some cases. I didn't get my first computer until I was deep into university. It's a very interesting one. During the lifetime of the millennials, we went from the very first cell phones that first came into existence, a long time before smartphones were there, to where we are now, where everything is wired. This is a really interesting question. The trajectory of that evolution is not slowing down.

I think the answer to a few of ways that certainly I'm seeing in our practice and in projects we're involved in, the first one was 5G bandwidth. This was all the rage a few years ago. Now we don't talk about it too much, but it's actually a very interesting piece of infrastructure that is now being fed in quietly across all cities in Canada. Very interesting one, where we've got essentially a tiered sandwich structure of Wi-Fi repeaters that then work their way up into a fiber optic and satellite web that then start connecting everything in the world. What that does is that enables things.

We're seeing a lot more investment in that, particularly for smaller rural communities, as folks do want to work from home and First Nations communities that need to be able to access education and other systems from home, particularly as a lot of our infrastructure, our appliances, and everything are increasingly wired. It's very helpful to have that coverage. I think the next thing we're all seeing in that regard is the smart homes, smart cars, and smart objects. We call it the Internet of Everything.

Most of us are increasingly aware, and there's just a huge industry of feeding us smart doors, smart safety mechanisms, cameras, thermostats, alarms, et cetera. It's a great way to allow us to manage our homes and our lives, both for convenience, but also for energy efficiency, also for increased safety. It's a really great movement, and we're just going to keep seeing more and more of that as we go.

Shaun: Mark, if I could just ask you a question on that very thing. When you talk about this connectivity now that is not just at one home but entire communities, are there ways of looking at the entire communities from a technological perspective? If you have a home that's certified, are there entire communities now, because of this connectivity through 5G and whatnot, that they can monitor and say, "Oh, the energy use on this corner up by that river is being used a little more than this area down here where it's more concentrated, there's more homes and buildings that are--"? Are they looking at using this technology as a more holistic way of designing entire communities as well?

Mark: They are, Shaun. It's been around for a little while. It hasn't taken a lot of root, increasingly where you'll find it as part of every new project. The main reason is privacy. How much energy each person is using tends to fall under certain legal privacy concerns. Who can have access to that has been an issue. The thing you just described is what we call a smart grid. We do see them in certain areas where particularly a mixed-use community that maybe one developer has done, and maybe they own a lot of the buildings and lease them out, is that they can put in place a smart grid that's tracking where things are being used and where they're not.

One of the more advanced systems that we see in some communities is it's a thermal grid. A smart grid, we would think of as power and where people are using more electricity or not. The thermal grid is even more exciting because if we put in a medium temperature water line that connects every building in a neighborhood, then when I need a lot of energy for something I'm doing, but you're not there, then I'm pulling energy out of it. Other times, I'm trying to cool something.

This is the great balance between, say, an office building and a residential building. Residential buildings need heating, office buildings, because of computers, servers, people, lights, and everything, they tend to be cooling themselves. You'll actually see office buildings in the middle of winter in Canada busy belching out all kinds of heat because they've just got so much body heat and equipment heat in there they have to cool. We're seeing those two kinds of grids. They're complex, because of privacy, because of ownership, and because of utilities requirements, it takes a little bit of work to put all that together. We're seeing some of those.

A few of the others that are maybe a little more unseen but are fascinating to watch come into the housing environment is the digitization of the building design and construction process. Most architects now are working on a system we call BIM or building information systems. They're all using AutoCAD or other similar programs. These are increasingly getting now linked into the entire construction process.

What you draw, the computer is automatically calculating how many materials are going to be used of different types, they're already beginning to draw out construction drawings based on your initial schematic design, they're checking for code compliance, et cetera, et cetera. We're seeing a really interesting-- AI is only going to drive this forward really, really fast.

Jen has hit on a really interesting question here. We are just on the cusp of an increasingly rapidly moving field here, and it's really exciting to see how it can make things more energy efficient and make them more financially viable.

Shaun: Amazing. Amazing. See, Jen, you didn't know you were opening up that box. My issue, though, is I would not want to be on that smart grid because I still have one of those old tube TVs, the big ones. You have to walk over and turn the channel. I have 12 channels. Okay, here we go. Ready?

Neda Beaulac: I'm Neda Beaulac. I'm from London, Ontario. My question is: how do we incentivize people to buy and maintain green or sustainable homes, how to educate them on how to maintain their homes, and what is in it for them?

Mark: Shaun, Neda's question is the $64 million question. It's such a great question you raised, Neda. Where we need to go with this is a slow and steady rethinking of our financing system. Neda's on to this. This is a financial question. We've structured how we build our cities, build our homes, quality of life, and businesses around a simple throughput mechanism of we just pull resources and energy out of the planet, we run it through as fast as we can, and we dump the waste out the other side. We're now looking for ways to, two things, close that loop so that that's more expensive than doing it right and not causing those problems. The other one is the financing of these.

Because we're doing what we're doing now because it's the cheapest way, we have to make it now more expensive and make other ways less expensive. In the end, especially in real estate, so much of everything comes down to financing. This is really where we need to go. That's going to be a combination of some government guidance and regulations and working with the financing sector, for businesses, for real estate, for pretty much everything, to essentially change the financial equation so that it is cheaper and better to be green than to not be green.

For instance, let me give you an example. Shaun, if I come to you and I'm a solar utility and I say, "Shaun, I'd like to rent your roof." You're going to look at me strange going, "Okay. For what? A birthday party or a sign? What are we doing here?" "No. I want to put a bunch of solar panels on your roof. I'm going to pay you every month for the rental of that real estate. I'm going to sell you some of that energy cheaper than you would otherwise buy from the power company where you live, et cetera. I'm going to net meter the rest of it out." You're going to go, "Well, that's a win-win." Now I've got a utility.

We're fairly new to this. This is interesting to see some of our politicians today and the world financing industry beginning to get on board. The insurance industry is driving some of this because they're having to pay the outcome costs of climate change. They're really interested in changing some of these things. We're starting to see a real interest in the financing industry. We're starting to see new funds emerge and models of how we can finance more sustainable cities, buildings, and infrastructure in a different way because they have better outcomes.

In the end, a lot of them actually save money in the long term. Just like your mortgage, we just spread the costs out over a long period of time. In this case, then, the positives actually offset those costs. This is a new field that we're all beginning to look at, but anybody who can find a way to innovate and make that work, potentially could get very, very successful.

Shaun: I do want to follow up because I think Neda was talking also very specifically about a REALTOR® to client to get them to buy into this movement. What are ways that the client can see the opportunities that motivate them? It's got to be by dollars and cents. I think it has to be by dollars, no? How can they be incentivized? Is it bragging rights that I have a greenhouse, or does it actually affect my pocketbook?

Mark: There's a small number of people who are prepared to do bragging rights. I think what matters there and the answer to that really good follow-up question, Shaun, is it's one of the key roles of luxury homes. For folks who have extra money and can afford a luxury home, they're not just trying to get that extra bedroom for their kids and just make it work financially, they have the opportunity to really push the boundaries out on this.

What's interesting actually, is that if you're not just trying to make ends meet and you look at financing a different way, you look at it as an investment, this is where all the conversation changes on many of these green innovations. I'm going to put $10,000 into solar cells. Yes, I'm going to get $10,000 back in 7 years. If I look at that as an annualized return on investment, I'm making 50. What am I making? 12%, 15% return on investment because I'm going to get my $10,000 back in 7 years.

Now that's not bad. That's beaten the market almost any year in history of the stock market. For the higher-end homes, the investments in efficiency, energy supply, and a lot of these other sustainability things, they actually pencil out in a very, very reasonable way. It's not necessarily the way, we need other incentives. We need to literally, "Our society values these. It's for our kids." We need to provide incentives for folks at the entry level, the rental homes, et cetera.

As soon as we move into more expensive areas, REALTORS® can talk about this with their clients from a return on investment point of view, which actually pencils out a lot better than many other investments that we might have our, "You know energy is not going to get cheaper. This is your house, and you know it's all there. If you're planning to stick around for seven years, not only you're going to get it all paid back, that's called a pretty good investment in your money."

Shaun: That's great. I think that's super clear. I think Neda can take that to her client and say, "Hey, what he said." Next question. Have a listen.

Sam Wyatt: Hi, I'm Sam Wyatt from Vancouver. My question is: how can we get traditional builders into this newer technology where they're building in micro factories with robotic systems to build homes faster and cheaper? How do we actually get them into the transition?

Shaun: Sam is touching on something here, Mark. It's a great question because the world is changing.

Mark: What we have now literally dates back hundreds, even thousands of years in the training programs for carpenters, tradespeople, and masons, et cetera. Our whole building industry is based on a lot of institutions, practices, training programs, schools, building codes, bylaws, particularly municipal bylaws, local city bylaws, zoning, and things like that. Unions, there's many layers to the transition. The technology is advancing, I'd say a lot faster. This is what Sam can see. He can see, "Hey guys, we've got some really great stuff happening here. How do we get it into the mainstream?"

It's going to happen. It's inevitable. There's far too many advantages for this not to happen. It's just basically a process of innovation, developers, builders, REALTORS®, taking the innovative step to take a risk on let's build this one in a more modular and efficient way, let's get that in there, and people look at it and go, "Hey, that actually looks pretty good." One of the biggest leaps in this thinking happened about 15 years ago when Glide homes came out and everyone started to think differently about them. This is a really interesting way to go.

There's a lot of benefits to these. They may not be that much less expensive to produce. You still require wood, insulation, cladding, lighting, wiring, plumbing. The core materials are a little different. They generally are better built, Shaun, because they tend to be built in a big warehouse, at least all the panels are. It's climate-controlled. They're not getting all wet. It tends to be better. You know what building in Nova Scotia in the wintertime is like. That's a dicey project. That's the same for all across Canada. There's a lot of benefits to this. We're going to see a lot more of it.

The other thing is in construction timing, because you can order that building and have it built very quickly in pieces. The construction delays of on-site building can add hundreds of thousands of dollars to a large project in costs, because every extra day that you have to do that, you're paying interest on the land, you're paying interest on all the loans, because almost 100% of construction is financed with debt. Any delay is a lot of money. It's just going to take a while for all of those regulatory, trades, and financing pieces to get in step with what we're producing here.

Shaun: Do you think that these traditional builders they have to start investing in the technology? Do they have to rethink their business model? If I'm a Beverly builder, I own a company, I've been doing it this way my whole life, and now all of a sudden, this modular world is happening so fast around me, how would these individual smaller companies be able to keep up? They obviously need to innovate and find a way.

Mark: It's a great question, Shaun, and we're going to see it play out slightly differently, depending on what kind of home they're building. We're used to thinking that a builder is going to go on site with a hammer, nails, saws, and they're going to build it. We may well end up with builders that are essentially like the folks you pay to put together your Ikea furniture, where you can literally buy a whole series of panelized from a company that just produces these kinds of panels, you just basically plug them in. You've now broken apart the construction process into smaller pieces.

This is still new days. We're waiting to see how this emerges, but there's far too much upside for this not to begin to take note. Sam's question is a great one, and it's an exciting new chapter we're all going to watch unfold. I call it progressive capitalism. Some things will succeed, some won't, but we're moving in the right direction.

Shaun: Yes. Look, obviously, REALTORS® are really interested in gaining more knowledge about green building and sustainable practices. Again, we have to talk about the way you do that is by signing up for CREA's new Canadian Certified Green Representative Certification and learn a whole lot more about that. I think we're almost there, Mark. This has been such an incredible conversation. I think REALTORS® are going to take a lot away from it.

In terms of the future, what are the most scientifically exciting things that we can wrap up our conversation with to talk about the future of sustainable design, sustainable building, and the future cities, towns, and houses for Canada and beyond?

Mark: We've talked about a number of them here as we've gone, Shaun, and it's a rapidly evolving field. I think we're going to see the technology of smart, intelligent management, tracking, assessment processes, et cetera, continue to advance. That's going to show up for your average REALTOR® in quite a many different, diverse ways between the products that are available, the expectations of the buyers. It's very quick.

The thing about a home and garden channel, you get a bunch of home TV out there, you get a lot of social media. What the buyer wants can advance really, really quickly, frequently faster than in real estate. It takes us quite a while to respond because it's pretty complicated and expensive. I think we're going to see the buyer starting to really pull us all forward to be more efficient, to be more environmentally friendly.

If you've got someone who's grown up with the question of climate change and sustainability, Greta Thunberg around them since they were a child, they keep looking at us because where they're starting from, maybe you and I have spent decades working our way to get there. That's where they're starting from. They're like, "Well, we need to do better. Why can't we do better?" In 10 years, they're the buyer. I think the exciting thing is the evolution of values and the response to the future that the next generation of buyers is going to pull us forward very definitely.

We've talked about modular 3D printing prefabrication. This work is already being done. It's just a matter of getting traction here. For instance, Central Canada, where in Ontario and further east, they've got lots of steel construction for buildings, even just within Canada. Here in BC, we've got almost nobody who supplies it. We bump out at about six stories on our buildings because you need to get to steel to go beyond that one, or concrete, and concrete's the most expensive. We don't generally build in concrete unless it's a very expensive building, until we're up at 16 to 20 stories. We go from 6 to 16.

Steel is a beautiful mid-sized. It's the scale of Paris, Vienna, and all the European cities, but we just don't have any suppliers out here, and we're in the same country. This evolution of technology, methodology, and prefab, we're going to see. It's not that we have to invent something new; we just take what's already the best practice in certain areas and get it spread much further than that.

Mass timber is going to be one of the most exciting ones. Right now it's pretty expensive, but this one combines ecology and digital world, so you have to design the building to a very high level of digital accuracy, Shaun, down to where every wire goes. The design of the building literally pre-drills the hole for every wire and pipe in the whole building, and then that entire digital package is sent to a plant and they create wood panels, posts, beams, floors, ceilings, and they basically flat pack it and send it to your job site and you literally put it together like an Ikea machine, you bolt the building together. It's already pre-drilled, pre-done, you just run the wires, run the plumbing.

These buildings go up really quickly. They're made from wood, which we have lots of in Canada, and it is beautiful to live in these buildings. They are these big, beautiful beams, and this natural wood everywhere, this warm-- It's just amazing like that. That's one of the ones that I'm watching. The only reason, Shaun, why it's not happening everywhere all the time is simply economies of scale.

This is a new innovation that's come into our market in the last 10 years. They're literally building 16, 20-story towers out of this in Europe and the US now. As we can build that industry here in Canada, then REALTORS® will be having these conversations about some of the most advanced, exciting, comfortable, and really cool technology. It's coming. It's a big wave that's coming.

Shaun: I love it.

Mark: What I think is great about the CREA program and this progressive thinking that the Real Estate Association is taking is it's preparing all of its members. It's preparing all of the folks who are at the table when we make the most important decision of our lives in terms of where we're going to live, where we're going to raise our family, where we're going to retire, what building are we going to be in, and it's making us think about the future.

Historically, we've thought about the present and maybe just around the corner. This alone is going to be, I think, a very exciting real pull forward for all of Canada to begin moving in continually to become far more sustainable in how we build our communities and our homes.

Shaun: Mark, we've talked so much about all the amazing technologies that are now coming in to the system. Some of them, the smart home stuff, just talking to your lights to say, "Can you please dim yourself?" These kinds of things, "Turn down the thermostat." What were some of the things back in 30, 40 years ago that people were having that same thought about back then that now are ubiquitous?

Mark: It's such a great question, Shaun, because it can feel sometimes like we're trying to climb Mount Everest to make these changes. Because they happen slowly, as we've talked about on a number of points here, it feels depressing and tired. When you answer the question you've talked about, there's a lot of hope in this. We can actually make some big changes. Then you look back at what we've done. Solar panels, solar panels used to be freaky 1970s, very inefficient, great, big, huge, luggy things that were hard to get a hold of. You had to have a big battery pack in your basement. It was all plugged in order to make this thing work. Now, solar is everywhere.

The signs along the sidewalk or along the highway they're all solar-powered. Folks have got solar on their RVs. We've got solar on our houses. The price of solar is just continuing to fall. The price of energy is going up. The business model is starting to make this work. Almost all homes in Canada now, because of the building code, have to be solar-ready. They have to have conduits in the wall from the electrical panel up to the eaves. You don't have to be ripping out drywall and tearing your house apart in order to put on a solar panel in the future. You just fish the wire down the conduit and stick it on the roof. These are simple changes that are now basically setting us up to a whole new world of solar.

Heat pumps. We talked about refrigerators. Never thought about the fact that we could heat or cool our whole house that way. They're now everybody. Everybody's got them. Most new homes that I'm working on, even the condos, most of them are all heat pump driven. Low-flow toilets. That's another one. I remember when I was the manager of the sustainability office at the City of Vancouver getting a call at about 5:30 one night by a panicked architect who was trying to get a LEED certification for this new hospital building they were doing in Vancouver.

There was one supplier, think about this, Shaun, one supplier in the world that supplied a low-flow dual flush toilet. The bowl was the wrong dimension, so it violated our codes. They couldn't put it in. We were going to end up with these big water pegs in this huge building because of that. They eventually found a way past it. Today, $100. Go down to Costco, nice two-piece, low flow. A low-flow toilet, you can get, put in, it looks nice. It's all fashionable. Those old toilets, 5 gallons of water every time you flush them. These ones, less than a liter. Massive changes.

LED lighting. Remember the first LED lights to come in? We went through CFLs. They were weird and cold and tried a bunch of different things. Then LED came out. They were weird, worse, green, and whatever else. Today, they look just like-- In fact, you can hardly buy a regular bulb anymore. The LED lights use 80% less energy. When you think about the targets for energy reduction and emissions reduction, we're trying to target 80% less by 2050. We did it in a couple of years with LED lighting for that piece of the budget of the energy budget.

FSC sustainable wood, almost impossible to find 20 years ago, everywhere now. You can get it off the shelf at Home Depot. We're seeing such a huge change in so many things when the market is there, when technology comes on board, when the governments change the regulations to support it. That's why you hear some optimism in my voice, is just over my career, I've seen so many things go from where we'd be literally at tables going, "How can we do this? Where's the waste heat? Where's the waste energy? How can we plug them in? Maybe we could do that." Then here we are. They've completely replaced everything that was on the shelves in the common store and changed the whole building code.

Keep your hope up, keep going at this because we're going to be successful in the end.

Shaun: I don't know how much it costs to cryogenically freeze your brain and then reanimate you in 30 or 40 years, but we may need to do that because you're a brilliant man and we need you in the future.

Mark: Likewise, Shaun, we need you frozen as well because we've got to laugh. Laughing is what gets us through all this.

Shaun: Oh yes.

What a great conversation, Mark. I've learned so much. Personally, I think our REALTORS® they have a lot to take away from this and a lot to chew on. Of course, every single REALTOR® is going to go out there and take the certification course because you will have another arrow in your quiver when you're talking to your clients. Mark Holland, man. Thank you so much. This has been a great chat. I wish you well and keep up the good work.

Mark: Thanks so much, Shaun. It's been a real pleasure talking with you. It's a great program.

Shaun: Wow. You can see how Mark is such a great professor. I could listen to that guy talk for hours. In fact, I did today, and that's why this is one of the longest episodes we've ever done, but for good reason. It was just so reassuring to hear from Mark that the future of building design is heading in a sustainable and green direction, and it has to be. For REALTORS®, truly knowing what your client wants and understanding how sustainable housing affects your business is a key to being a leader in the industry.

I got to tell you, after hearing Mark talk about it, he saw it himself, everybody out there who's a REALTOR® right now needs to go out and get their Canadian Certified Green Representative Certificate right now. You heard Mark say, it's truly a world-class program. Make sure you go out there and get that so you can be ahead of the game on all fronts. What a great episode. If you liked today's episode, make sure you go to your favorite podcast platform, give us a review, give us a like, share it with your friends. Make sure you do that.

Today's episode and every episode is brought to you by the Canadian Real Estate Association. The production is brought to you by Alphabet® Creative. I'm Shaun Majumder. Thanks for joining me on the podcast. This has been REAL TIME. We'll see you next time on REAL TIME.

We all have a responsibility to-- [phone rings] To turn off our phones. Ron, I'm doing my podcast. I'll call you after.

Ron: Okay. Sorry. I love you.

Shaun: I hate you.

Ron: Bye.

Shaun: Okay, here we go. He's great. He's my bromance.