Developers can create new housing projects that provide the latest in environmentally friendly features­­­—solar power, water recycling, pedestrian safety, and transit access—but only about 10 percent of buyers will go looking for those features or be willing to pay a premium for them, panelists said at the ULI Spring Meeting last week in Vancouver.

Instead, what attracts people—and what they are willing to pay for—is the opportunity to buy into a development that creates a sense of community or promotes physical health, the panelists said at a session titled “Building with Health in Mind: Real Deals Tell All.” The three panelists have built a variety of projects that focus on the environment, provide a healthy environment, and foster social connection.

Asani, a small firm that operates largely on Bainbridge Island just west of Seattle, is developing a large multiphase neighborhood called Grow Community. “We built our project with very healthy materials, energy-efficient mechanical [systems], solar panels on the homes. It is becoming the largest solar neighborhood in Washington state,” said Marja Preston, company president.

“It turns out buyers were just as interested in the community aspect. That’s been a huge lesson for us because we were so focused on energy efficiency. It’s not the solar homes; they want to connect with their neighbors.”

That desire was so strong that the company sold out its first phase of 24 homes before they could be listed on the Multiple Listing Service, even though the market was in a downturn at that point in 2012. Although the homes were priced competitively in order to lure young families, she said, they were still fractionally higher in cost than others nearby. That did not stop the buyers.

The pattern does not vary for large development companies.

Gerding Edlen Development Company started in Portland, Oregon, but now develops on both the U.S. West and East coasts, with projects from Boston to Venice Beach that are exclusively concentrated in urban areas near transit.

At the Venice Beach project, the company did the usual green, sustainable things, said Mark Edlen, company chief executive officer, but it also arranged for a local artist to paint a mural. It created a garden on the roof, which then supplied produce to a local vegan restaurant that has become an icon for the neighborhood.

That is exactly what the company was aiming for. “If we can create that community sense, we’re going to win,” said Edlen, whose company has developed 60 projects certified Platinum or Gold under the Leadership in Energy and Environmental Design (LEED) program, including many in Portland’s booming Pearl District, a former industrial area. “So we think it’s really important to knit ourselves into the neighborhood.”

Creating social interaction was also important in the Fayetteville, Arkansas, project Specialized Real Estate Group renovated, turning it from a dumpy, low-rent complex into the green ECO Modern Flats, said company CEO Jeremy Hudson.

His company added a roof deck and a pool, along with other shared spaces to encourage interaction. But he believes it was the health aspect that was the big attraction. “Not everybody cares about sustainability; they’re not going to spend money for it,” he said. “But everybody cares about health.”

One renter in the building told Hudson that her asthma attacks had declined dramatically since she moved into the building, which was renovated using no products containing volatile organic compounds and incorporates much more natural light and fresh air.

Like Preston, Hudson said people are willing to pay a premium for those features. Rents at the 96-unit apartment building have risen 150 percent to about $850 for a 600-square-foot (56 sq m) unit. The development has 100 percent occupancy, plus a waiting list; before renovation, occupancy was 75 percent. The sustainability-focused renovation also benefited the company: utility costs are down 35 percent despite the addition of appliances and more lighting.

The three panelists said it costs slightly more to build with an emphasis on the environment, health, and community, though the expense has declined from when people were experimenting with green design and making mistakes.

But developers who want to create these kinds of projects need to demonstrate to potential buyers what they are gaining, the panelists said.

“The sustainability in high rises is buried in the guts,” said Edlen. “How to we bring that to the surface? We need some measurement tools.” (The same is not true for commercial clients, he said; they are stampeding to sustainable development and understand completely the payoffs in energy savings and workplace health.)

Preston agreed, saying buyers need to be educated about the long-term benefits of sustainable housing. “Our price for our homes is a tiny bit higher, but people have no energy bills and they can share cars,” she said. “And if you’re living in a healthy place, you’re not spending money on doctor bills.”