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Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market

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  • Felipe Encinas

    (Escuela de Arquitectura, Facultad de Arquitectura, Diseño y Estudios Urbanos, Pontificia Universidad Católica de Chile, Providencia, 7520245 Santiago, Chile
    Centro de Desarrollo Urbano Sustentable (CEDEUS), Providencia, 7520246 Santiago, Chile)

  • Carlos Aguirre

    (Escuela de Construcción, Facultad de Arquitectura, Diseño y Construcción, Universidad de las Américas, Sede Providencia, Providencia, 7500975 Santiago, Chile)

  • Carlos Marmolejo-Duarte

    (Escola Tècnica Superior d’Arquitectura de Barcelona, Centre de Política de Sòl i Valoracions, Universitat Politècnica de Catalunya, 08028 Barcelona, Spain)

Abstract

In real estate markets where energy efficiency certificates are not mandatory, such as Santiago in Chile, incorporating solutions that respond to the growing demand for sustainability entails a natural tension between their acceptance as necessary measures and the way they are addressed by the market. Under this mechanism, sustainability attributes have been introduced that are communicated individually through real estate promotion. A methodology consisting of two approaches was utilized to investigate the cross-validation of attributes, in terms of supply and demand, and the evolution of them in 8255 real estate advertisements for the period 2012–2017. Their positioning was more evident in higher-value homes, where they were identified as consolidated attributes, while they are considered innovations at the lower end of the market. However, as evidence suggests, sustainability attributes decline in relative importance over time, ceasing to be considered marks of distinction. This suggests that this model should be reviewed from a public policy perspective, with the understanding that the current voluntary standards must compete with other attributes. At the same time, it is necessary to make progress in the improvement of the obligatory minimum standards with the objective of establishing a more demanding baseline that incentivizes competitiveness in the market.

Suggested Citation

  • Felipe Encinas & Carlos Aguirre & Carlos Marmolejo-Duarte, 2018. "Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market," Sustainability, MDPI, vol. 10(1), pages 1-26, January.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:1:p:146-:d:126090
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    Cited by:

    1. Carlos Marmolejo-Duarte & Ai Chen, 2019. "The Uneven Price Impact of Energy Efficiency Ratings on Housing Segments. Implications for Public Policy and Private Markets," Sustainability, MDPI, vol. 11(2), pages 1-23, January.
    2. Felipe Encinas & Carlos Marmolejo-Duarte & Elizabeth Wagemann & Carlos Aguirre, 2019. "Energy-Efficient Real Estate or How It Is Perceived by Potential Homebuyers in Four Latin American Countries," Sustainability, MDPI, vol. 11(13), pages 1-24, June.
    3. Felipe Encinas & Carlos Marmolejo-Duarte & Carlos Aguirre-Nuñez & Francisco Vergara-Perucich, 2020. "When Residential Energy Labeling Becomes Irrelevant: Sustainability vs. Profitability in the Liberalized Chilean Property Market," Sustainability, MDPI, vol. 12(22), pages 1-17, November.
    4. Marilena Mironiuc & Elena Ionașcu & Maria Carmen Huian & Alina Țaran, 2021. "Reflecting the Sustainability Dimensions on the Residential Real Estate Prices," Sustainability, MDPI, vol. 13(5), pages 1-28, March.
    5. Francisco Sanhueza-Durán & José M. Gómez-Soberón & Claudia Valderrama-Ulloa & Felipe Ossio, 2019. "A Comparison of Energy Efficiency Certification in Housing: A Study of the Chilean and Spanish Cases," Sustainability, MDPI, vol. 11(17), pages 1-16, September.

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