U.S. home builders are bullish on sustainability.

They believe that buyers want green homes and are willing to pay up to 5% more for them, according to a new study, which found that by 2020 more than half of them will be heavily involved in green building.

Donna Laquidara-Carr, industry insights research director for Dodge Analytics, talked about the report’s findings at a session during this week's Greenbuild International Conference and Expo in Washington, D.C.

Many builders are already heavily involved in the green segment, she said. Twenty-one percent have built a net zero or net zero ready home in last two years.

At the same session, Jacob Atalla, KB Home’s vice president of sustainability, jokingly told audience members that all customers love green homes, but they fall into two distinct categories: “Some of them love green dollars in their pockets from the savings they see on their monthly utilities and the other category is those who are interested in the environment, in leaving it a better place for the next generation.”

The Los Angeles-based home builder has a different sales approach for each set of buyers, Atalla said. For those who are savings-driven, sales associates show them how much they can expect to save on energy and water bills. KB, which has built 90,000 Energy Star certified homes since 2001, was the first builder to offer an energy performance guide for its homes, similar to an MPG sticker on new cars.

Jacob Atalla
Jacob Atalla

For instance, at the firm’s Edgewood at the Cove development in San Jacinto, Calif., a homeowner can expect to save $27,000 on water and energy in 10 years. “That can go into the college fund or pay for a few really nice vacations,” Atalla said.

Education is key to wooing KB's environmentally conscious buyers. The builder’s E Difference marketing program walks them through four areas: energy efficiency, water conservation, indoor air quality, and technologies and connectivity. Salespeople discuss the details behind green building certifications like Energy Star and LEED, which the builder also participates with. “This group of people is eager to learn about what we can offer them,” said Atalla.

All home buyers are after a good price, and KB is able to leverage its size and scale to make sustainability affordable to the customer, Atalla said. Green building has been a game changer for KB, the sixth-largest builder in the country. During the recession it helped the company to compete with foreclosures of older, less efficient dwellings in many markets. “It was a great way to differentiate against resale homes,” he said.