This welcome and admissions center at Champlain College in Burlington, Vermont preserves and expands an 1860s historic structure. According to Goody Clancy’s Jean Carroon, FAIA, the college moved forward with this project during the recession in order to provide economic benefit to the local community; the timing had the additional benefit of savings on the construction cost.
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It’s been five years since our super-sized housing market collided with the iceberg of reality and began its long descent, eventually pulling the global economy into the frigid depths along with it. The magnitude and origins of this collapse are making the recovery a slow one—and uniquely painful for those working in building design and construction.
“It’s been a rocky three years for architecture firms,” said Kermit Baker, Ph.D., Hon. AIA. Baker, chief economist at The American Institute of Architects, told EBN that the profession had lost “close to 37% of employees” and that architecture billings, a leading indicator of growth in the construction industry, have been anemic for years and appear to be on a second downward trend after a very slight uptick at the beginning of 2011.
“The residential side is dismal,” he said, attributing this to overbuilding during the housing boom; and even on the commercial side “we still have excess inventory out there.” Baker has watched the construction industry struggle through a few recessions, but none this bad. “I think we’d have to go back to the ’30s to find anything that was obviously worse,” he said, adding that a recovery would normally take 18 months rather than five years or more. The housing bubble that helped build up the industry after the recession in the 1990s led directly to the current crisis.
That unprecedented level of development turns out to be unsustainable, both economically and environmentally, and it may not return in the U.S. in our lifetimes. Design and construction firms—particularly the smaller and leaner ones—live with these realities every day, and not all of them are sticking around to find out what happens next.
Not everyone is leaving the industry, though. Many are revising their expectations, altering their scope of service, and even making radical changes to their business models in order to stay afloat in an economy that is now commonly understood to be the “new normal.” Some are taking advantage of the slightly more stable green building market (see EBN’s January 2009 recession coverage, “Finding the Green Lining: Surviving and Thriving in an Economic Downturn”) and also thinking of the bigger picture as they adapt, hoping to find a way to grow that will be economically and environmentally sustainable in the long run. We asked our readers to share their most successful strategies with us; we dug deeply into their responses and are passing our ten favorites along to you.
1. Follow the Money
“The normal rule of thumb during recessions is diversify, diversify, diversify,” says Baker. “If
you just did retail, do offices. If you work in New York, go to L.A.” But this time around?
“There was really no port in the storm.” EBN found a few firms that are finally approaching
safe harbor, though.
Religion, education, healthcare
AIA Consensus Construction Forecast
Notes:
All forecasts are presented in inflation-adjusted dollars. Forecasts
submitted in current dollars are deflated by AIA to be comparable with
the inflation-adjusted forecasts.
The AIA Consensus Forecast is computed as an average of the
forecasts provided by the panelists that submit forecasts for each of
the included building categories.
There are no standard definitions of some nonresidential building
categories, so panelists may define a given category somewhat
differently.
Panelists may forecast only a portion of a category (e.g., public
buildings but not private building); these forecasts are treated like
other forecasts in computing the consensus.
New buildings and retrofits for schools, churches, and hospitals seem to be holding steady
even in the most devastated regions of the country. Most of these projects require
sustainable design to some degree, and many are immune to both federal and state budget
cuts. Although most architects throughout the U.S. told us their states were slashing capital
spending for K–12 education, the college and university market has remained fairly stable.
According to Betsy del Monte, FAIA, sustainability director at the large, Houston-based
design-build and sustainability consulting firm Beck Group, the market is still going strong in
both higher education and religion. She told EBN these two types of clients are similar in
that they take the long view about fundraising for projects as well as about the buildings
themselves. “It takes both of these groups so long to put together a budget,” she said. “You
don’t get the plug pulled on it that rapidly.”
Once planning begins, both churches and higher education institutions also tend toward
sustainable design and building. “They are most concerned about the overall quality and the
future utility costs,” according to del Monte, in part because “it’s a lot sexier to raise money
to build a new building than to raise money to pay your electricity bill.”
Academic work does not remain strong everywhere, however. According to Jean Carroon,
FAIA, who specializes in historic preservation and adaptive reuse at mid-sized Goody Clancy
in Boston, “We saw academic work in New England slam to a stop, which made this
recession unusual, because academic work often increases in an economic downturn to take
advantage of the good pricing.” Carroon is seeing a turnaround but says the market is not
back to normal and the competition is fierce.
Terry Osborn, AIA, whose small firm has seen revenues plummet 50% every year since
2007, told EBN that the economy in Florida is in a downward spiral. “People working in the
trades and so forth just had to pick up and move” to greener pastures, like New Orleans
and Houston, he said—and the population loss has made the problem worse by decreasing
the need for retail, services, and housing. But even in economically ravaged Sarasota, “the
medical community is still cranking,” he adds. “That’s the only glimmer here.”
Osborn’s 30-year history in the area and his reputation as a sustainable design pioneer have
helped get him through so far. Thanks to some prior work designing nursing homes—when
his firm was larger—Osborn has been able to secure some hospital renovation projects and
has established a solid relationship with a construction firm specializing in Veterans
Administration projects.
Government projects
Despite the political rollercoaster that both state and federal budgets seem strapped into,
many architects and builders continue to work on government buildings and other
government-funded projects.
The Springs, a multifamily affordable housing community
in McCall, Idaho, was built during the recession and is
targeting LEED Platinum.
“Schools have definitely slowed down,” said Steve Benner, AIA, an associate at the midsized
CSHQA, headquartered in Boise, Idaho. Some state work has remained steady,
though, including one of Benner’s specialties—affordable multifamily housing. “It’s not a
huge part of our firm,” he said, “but it’s a very important part of our workload that doesn’t
seem to fluctuate as much as some of the other sectors.” The pace has slowed somewhat,
thanks to intensified scrutiny from lending organizations—“probably a good thing in the final
analysis,” he pointed out, “but it does slow everything down.”
Fortunately for Benner, a LEED AP, this scrutiny includes certain incentives for green design
features, with entities like Idaho Housing and Finance giving higher marks to projects that
are energy-efficient and focus on indoor environmental quality; these higher marks in turn
lead to higher tax credits. “It seems like green building is mostly the only kind of building
going on right now,” Benner said, “and we were pretty well positioned to take advantage of
that.”
These projects also pay dividends for tenants: Benner recently worked with The Housing
Company, the development arm of Idaho Housing and Finance, on a LEED Platinum
multifamily project in snowy McCall, Idaho. “We had people come to look at our apartments
who spend $400–$500 on utility expenses every month,” said Douglas Peterson of The
Housing Company. Monthly utility bills for current tenants in three-bedroom apartments are
averaging $70–$80 a month, he said. While work may be hard to come by now, results like
these help establish a good track record that is likely to be worth a lot when the market
regains momentum.
With the U.S. General Services Administration (GSA) seeking to achieve “zero
environmental footprint,” the federal government and building owners who lease to federal
agencies are creating some demand for design services—but dicey federal budget talks are
causing widespread uncertainty. Thanks to an influx of stimulus funds in 2010, GSA is
moving forward on many retrofits as well as new buildings throughout the country, but time
will tell which projects will ultimately be funded.
2. Flash Your Green Creds
Benner is not the only person who has noticed the “green lining” in the current recession. In
Green Outlook 2011: Green Trends Driving Growth, analysts at McGraw-Hill Construction
reported that green building construction starts were up 50% in 2010 compared with 2008,
and that green building accounts for 25% of all new construction, 33% of all new nonresidential
construction, and 40% of all new healthcare construction. Given these levels of
growth—and McGraw-Hill Construction’s report predicts even greater increases over the
next five years—architects with sustainably designed projects under their belts may have an
easier time finding work than those with less experience.
Early adoption
“When we formed this business 8½ years ago, we were in a recession,” explained Ralph
Bicknese, AIA, principal at Hellmuth + Bicknese in St. Louis, Missouri. Bicknese and his
partner Dan Hellmuth, AIA, “felt deeply that green design was necessary for the world and
would grow in importance” and believed that “we would have a head start on the
competition based on our depth of knowledge and past experience in the field.” That
intuition has served them well for years. Although this recession is still challenging them,
Bicknese told EBN, they have not had to let any full-time staff go, and business has picked
up in 2011 after two very hard years. “A lot more people are doing LEED now, but we’re
able to do it a lot more cost-effectively than some other folks,” he said.
Hellmuth + Bicknese designed the Tyson Living Learning Center, completed in 2009, one of
the first two buildings in the world to achieve Living Building status. While most clients don’t
hope to attain a green rating at that level, this small firm’s deep green roots—and its
commitment to staying on the cutting edge even after the recession hit—has opened doors
nationwide, Bicknese explained, with clients like Berea College in Kentucky seeking their
expertise for a new student residence hall that is targeting LEED Platinum and being
designed so it can achieve Living Building status over time. When EBN reached Bicknese in
St. Louis, his partner was taking core samples from trees on the future site of the new
dormitory so the trees’ structural properties could be assessed.
“For our firm, continuously raising the bar on what we’re trying to accomplish has helped us
be successful”—and you don’t have to be a Living Building Challenge pioneer to use this
advice, he said. “We looked at ways we could differentiate ourselves,” and what that is will
be different for firms depending on their size, their areas of expertise, and the demands of
their local markets.
Analysis during schematic design
One skill set that is fairly unique to sustainability-focused firms is comfort with integrated,
multidisciplinary design. Even if your firm is very small and you have no engineers on staff,
says Betsy del Monte, you can leverage that basic understanding to lower costs for your
clients while also encouraging green design. “Whether your project is a large one or a small
one, the decisions made early on impact the level of efficiency and performance that you
are able to achieve with your building,” she said. Even the tiniest firms can “invest in tools,
knowledge, and understanding” that allow them to do “very early energy modeling
analysis.”
Bicknese concurs. “You can only go so far with insulating a building like a thermos bottle,”
he told EBN. “Sunlight, wind, and views help shape the building. I think a lot of architects
understand those issues and just don’t know how to use them and optimize them very
well.” His firm often works as a subcontractor in order to perform this service.
3. Expand Your Repertoire
Small firms with sustainable design experience may find
opportunities to work on larger projects if they play their
cards right. Hellmuth + Bicknese helped this Las Vegas
office building achieve a LEED for Commercial Interiors
Silver rating by acting as the sustainable design and LEED
consultant for a local design-build contractor, The Korte Company.
Both single-discipline and multi-disciplinary design firms are finding markets for skills they
picked up incidentally during the boom times. While perhaps not as lucrative as traditional
design work, these skills are providing a decent source of income to help firms stay afloat.
Many small firms, like Hellmuth + Bicknese, are taking a back seat on big projects, acting
as sustainability consultants or LEED APs for larger firms less experienced with green
building. Others told EBN they are performing energy audits for schools and commercial
buildings. Designing renewable energy systems for both public and private clients has also
been a new source of business for some firms.
Even in the absence of a construction budget, potential clients are still making long-term
plans for new facilities, often with an emphasis on energy efficiency. “Regulations and client
requests are motivating large organizations to assess, report, and reduce their carbon
emissions,” Wendy Meguro, associate at the environmental consulting firm Atelier Ten, told
EBN. Atelier Ten has helped with master planning and carbon accounting for major
transportation hubs, campuses, and companies with large building portfolios, but many
smaller clients need sustainability consulting of various types as well.
Design teams that have led charrettes for sustainable building projects in the past are in a
good position to facilitate planning for developers, commercial and industrial building
clients, institutions, and even municipalities. An architect at another firm told us that “in
contrast to architecture, our planning and urban design group is wildly busy, and we are
turning RFPs away.”
4. Retrofit, Renovate, Reuse
Amherst, Massachusetts-based firm Coldham&Hartman
has turned to deep energy retrofits for at least some of
its bread and butter. Shown with taped exterior sheathing
to provide effective air sealing, this home was part of a
pilot incentive program sponsored by regional utility National Grid.
Building owners who don’t have the money or the inclination to build new are taking a look
at their energy bills and wondering about cost-effective ways to lower them. Federal and
state energy-efficiency tax credits aimed at both homeowners and businesses are spurring
activity for design firms in many areas of the country.
Energy retrofits for homes
“We organized ourselves to really serve the retrofit market” for single-family homes before
the recession began—a decision that proved fortuitous, says Bruce Coldham, FAIA, of
Coldham&Hartman Architects in Amherst, Massachusetts. “We felt someone needed to do it
and we wanted to be that someone,” he added. Coldham’s firm “invented a way we could do
that relatively affordably but still maintain our standards,” and these projects gave younger
staff members a greater level of responsibility for project management while they learned
the ropes. After the recession began, deep energy retrofits turned out to be essential for the
firm’s survival—and for keeping that younger generation employed. “It’s been spectacularly
successful and opened a lot of doors,” Coldham said.
The market for home retrofits is also strong in semitropical Florida, where Terry Osborn
often gets referrals for this work through a nonprofit energy auditor. “Down here we say
home remodeling is rocket science,” he quipped. The extreme humidity makes any energy
retrofit quite complex, making knowledge of building science crucial—and that’s expertise
you don’t normally get from an HVAC or insulation installer.
Renovation and adaptive reuse
A major renovation and addition to the Museum of the
Moving Image in New York’s Astoria neighborhood
continued apace through the recession due to staged funding.
Architects throughout the U.S. are seeing an uptick in renovation and restoration work. One
firm reported that the percentage of renovation projects had escalated from 20% prerecession
to 60% now, while another’s had gone from 10% to 90%. Jean Carroon is seeing
“an increasing number of RFPs that involve renovations and adaptive reuse of existing
buildings from the second half of the twentieth century. This is almost entirely in the
academic market, both public and private.”
Carroon said her firm “had seen in increase in renovations in federal government buildings”
early on, “but this appears to have stalled in the current budget arguments.” Carroon likes
the trend toward reuse, arguing that reusing older buildings not only avoids massive
environmental impacts but also helps stabilize local economies: “Every dollar spent in
renovation creates 20%–40% more jobs” than new construction, “and the jobs are local,”
she told EBN. “If institutions want to act as regional economic catalysts, then renovation
and maintenance are the way to go.”
5. Market Quality and Value
“There is a flight to quality during a recession,” says Peter Pfeiffer, FAIA, at Barley & Pfeiffer
Architects in Austin, Texas. Many of his clients “like waiting for the building industry to
settle down before they build their homes so they can get better attention to detail and
better pricing.” Green building is strongly associated with quality, particularly when it comes
to homes, Pfeiffer points out.
After 30 years in the business, he has also learned to market green building as a value
proposition. “We have been able to sell the concept pretty successfully that we could do
green homes without eco-bling,” Pfeiffer said. “Most people want to do something green,
but during these economic times people are looking at their pocketbooks very closely.”
Barley & Pfeiffer recently designed a 3,200 ft2
(300 m2
) home with a 2.5 kW solar array; the
home’s utility bills average $15–$25 a month, he said. A competitor designed a very similar
home that same year—but that other home required an 8 kW solar array to achieve the
same energy results, adding $65,000 to the price of construction. “That [contrast] has
helped us a lot when we were interviewing,” Pfeiffer said. “We can point out the results we
can get without spending an absurd amount of money.”
Mark Tremmel, AIA, agrees wholeheartedly but says his firm chooses its words carefully. In
Tremmel Design Group’s Colorado Springs market, “green equals gizmos and sustainability
equals sacrifice,” so he avoids those words altogether. “We talk about more sunlight, more
fresh air, having to clean less. People are selling green to you because they’re a business. It
really means how our grandparents did things.”
6. Think Small
Pfeiffer also noted that home size has been shrinking as people pull back and start looking
at the long-term consequences of owning larger homes. The size of buildings is not the only
thing shrinking, though: job size in general is much smaller than it was pre-recession, and
most architects we spoke to had been gladly taking on several small jobs in place of one or
two larger ones. Tremmel refers to the 1980s recession as “the doghouse and carport era,”
and says this one is even worse. Adjusting expectations about job size, at least for the short
term, can work in a smaller firm’s favor in a number of ways.
This LEED Platinum home relies on natural ventilation,
daylighting, and strategically placed shades to help control
energy costs. Focusing on passive strategies rather than
“eco-bling” brings down costs, says Peter Pfeiffer, AIA,
one of the home’s designers.
“We’ll handle your ingrown toenails as well as your major operations,” said Terry Osborn in
Sarasota. “Even for some very minor work you still need a building permit,” he pointed out,
and that gives architects a leg up. “We know how to talk to the building department and all
the inspectors and help them out quickly.” He said in the current renters’ market many
people are moving into smaller offices at the end of a long-term lease, so he is also getting
some work here and there doing tenant improvements. Odd jobs have included everything
from a new partition in an office building to a wheelchair ramp for a hospital emergency
room. Such work may not be lucrative, but it can help firms through the toughest times.
There is some risk associated with taking smaller jobs and charging rock-bottom fees,
Osborn cautions, because in a recession “everyone knows everyone’s hurting and
everyone’s trying to beat everyone down.” With the bidding process red in tooth and claw,
fees can get too low, which means that “one curveball or one mistake and you’ve lost
money,” Osborn said. If it helps you maintain good relationships with others in the industry,
though, even operating at a loss for a job or two could turn out well in the long run.
7. Volunteer
Whether to give away work for free is a more controversial matter, but many architects
advocate community service as a normal part of a firm’s business model, and for a
sustainability-minded firm volunteering may be an even higher priority. Some believe that
volunteering becomes more important during a downturn, in part because more people
need your expertise and in part because it helps you get out into the community. If your
firm is already well known among the sorts of organizations you like to work with, you may
even end up on the short list later on when designers are needed and money is flowing
more freely.
“Some of the architects here have done a lot of pro bono work” during the downturn, says
Catherine Nueva España, an associate at Atelier Ten’s San Francisco office and a member of
her local AIA chapter’s communications committee. “Some firms think it’s a really good
investment, designing something small” as a community service, and many “get a bigger
commitment out of it later on,” she said.
8. Stay Connected
Like volunteering, “networking” is a long-term investment that has been crucial during the
recession to many architects EBN spoke with for this article.
Bruce Coldham recognized years ago, after doing extensive work in cohousing projects, that
people would call him up randomly and “want to pick my brain about one thing and
another.” So he decided to formalize the brain-picking a bit and make it more of a two-way
street in the process. His firm has a regular “happy hour” to invite various people from the
community into their offices—including potential consultants and even potential
competitors. “We turn that into a social event as much as possible,” he said, but they still
do serious work, learning more about daylighting or sharing some of their own insights and
expertise. “Joint ventures have come of out this,” Coldham said, though he readily admits
this strategy “doesn’t necessarily have a short-term implication.”
Others have worked hard to maintain past relationships too, ensuring they are kept in the
loop when RFPs come out. Terry Osborn told EBN that he keeps in touch with homebuilders
he worked with in the past, letting them know he’s available for any jobs that are too
complicated for the drafting services they normally use. He has also set up a permanent
relationship with a construction firm specializing in Veterans Administration work; because
Osborn is a licensed architect and specializes in sustainable building, that partnership is now
considered a design-build firm with green building expertise, which means they may be
looked upon more favorably when new projects come along.
9. Team Up
Joint ventures tend to become much more popular during recessions, and this time is no
different. Smaller firms can’t compete on their own for the larger institutional and
development projects, but some of the larger firms have less green building experience;
acting as a sustainability consultant is a fairly popular way to find work.
This rendering created for Castle Rock, Colorado came
out of a “catalytic design charrette” facilitated by the
Colorado Springs-based Collaborative Design Group. The
collaborative’s unique structure allows smaller firms to
go after bigger projects as a group. The top photo
shows the existing Castle Rock space.
Others are getting even more creative. Mark Tremmel has teamed up with a number of
other design firms and sole proprietorships in a variety of disciplines to create the
Collaborative Design Group (CDG) in Colorado Springs. According to CDG’s attorney, Ryan
Riesterer, the collaborative began as a loose collegial relationship—but as a member of the
group (wearing his LEED AP hat) as well as its legal counsel, Riesterer suggested formalizing
things before going after work together.
“They envisioned a situation where each of these independent professionals would come
together and not only refer work to each other but would essentially join forces to tackle
projects too big for individual firms to handle,” Riesterer told EBN. “We set up an
independent entity to be the epicenter for this whole thing.” The collaborative is a limited
liability corporation (LLC) that “operates as a project clearinghouse,” with individual
businesses choosing to work on projects only when their particular services are needed and
their own circumstances allow. Unlike a joint venture, which is almost always a singleproject
contract, this long-term corporate structure allows the members a great deal of
flexibility.
CDG’s only completed project to date has been a “catalytic planning charrette” for the city
of Castle Rock, Colorado—but Tremmel says the collaborative has lots of work in the
pipeline, everything from a single-family home to an urban development project, and he
thinks this business model will outlast the recession, since it allows the smaller firms to
come together only as needed, which results in less overhead—and lower bids on big
projects. He also has no intention of giving up this collegial relationship with others in the
sustainable design business, which he says has enriched his life and his work. “There’s an
ethical overlay to what we do,” he said—and there’s a lot of brain power too. “I have
greater access to more knowledge than I had before,” says Tremmel, adding that when the
collaborative worked with Castle Rock, the city officials “couldn’t believe all that talent could
exist for them in one place.”
10. Know Thyself
As Tremmel and many others expressed, for most small firms, sustainable design is a not
just a way to make a living: it’s a way of life. Fortunately, the economic downturn does
seem to have a “green lining,” however faint, but as the economy begins to turn around and
more projects are available Bruce Coldham cautions against turning away from your core
values.
During an economic downturn, everyday buildings are
more likely to be adapted for reuse rather than torn down.
This 1970s pharmaceutical research building renovated
with architecture firm Goody Clancy now houses laboratory
space for the University of Connecticut’s cell and genome
research and is targeting LEED Silver.
“Sometimes the unimaginable has to be imagined,” he said, but so far his firm has not been
tempted to take work outside its normal green building scope just to “keep the wolf from
the door.” That’s easy for an old hand to say, but when EBN asked his advice for emerging
architects, Coldham stayed on message.
“A lot of people are in difficulty,” he acknowledged, but added that whether you’re in a
recession or not you still have to consider “the fundamental question about how you
develop your business.” He attributes the firm’s success directly to its mission of deep green
design. “I think this is one of the reasons we weren’t so adversely impacted by the
downturn,” he says. “We have looked to ourselves and to each other and said this is
important to us. And having made that mutual commitment, you don’t easily deviate from
it.”
Tremmel echoes these sentiments, adding that the Great Recession, while truly devastating
for many people, is a perfect opportunity for the larger culture to reconsider its consumption
habits and make a positive, lasting change. And he plans to be part of that. “We are starting
to see now with the slowdown that people can actually think about these things,” he said,
offering the example of Castle Rock, which went from imagining “flags on light poles” to
revitalize its downtown to “finding the identity of their community” after years of unchecked
development of strip malls, big box stores, and other “generica.” Tremmel notes that after
the 1970s oil crisis, the idea of wearing a sweater in the winter instead of turning up the
heat suddenly became ridiculous, and the comfort range in homes became much smaller—
but he believes this longer economic downturn is leading people to a more radical and longterm
attitude shift.
“People don’t want to be just a little chilly in the morning,” he said, but as energy prices rise
and salaries shrink, people are finding a new connection with nature through natural
ventilation and daylighting. “People are finding the joy again of understanding where the
wind comes from, where the sun comes from,” he said. “We’re starting to find that joy back
in architecture again.”
Whether this change will really stay with us when times are better no one knows. We do
know that much of what we plan, design, retrofit, and build right now will still be around
after we’re gone—so if you are lucky enough to have work, this might be a good time to
take advantage of the slowdown by thinking carefully about your business decisions and
ensuring your contribution to the future is something you can be proud of for decades to
come.
