Part 4: The Green Premium
Rated homes sell for more. The honest number is smaller than the marketing suggests — and it still clears the cost of the upgrade.
The case for building past code rests on three things: the rebates, the buyer incentives, and the resale premium. The first two are programme rules — you can look them up and they either pay or they don't.
The third is a market claim, which means it needs evidence rather than assertion. Here's what the research actually supports.
What the research says
| Study / source | Finding | Asset class |
|---|---|---|
| Wang, Lee & Han (2025) — global meta-regression, housing | 4.2% sale premium, rated vs. unrated | Residential |
| Multiple studies — rated / ENERGY STAR homes | 2–8% depending on market | Residential |
| JLL — green-certified property | ~7% sales premium (North America) | Commercial |
| CBRE — 2,800 LEED buildings | 3.7% rent premium | Commercial office |
The commercial numbers are the ones you see quoted most, and they're the ones we're not using. A LEED office rent premium in Manhattan tells you nothing reliable about a four-plex in Surrey. Different buyers, different decision drivers, different market.
The figure we're working to is 4.2% — from a 2025 peer-reviewed meta-regression across global housing markets, which is the most methodologically solid residential number available.
The two scenarios
Same building, same lot, same market. The only variable is what it was built to.
| Factor | Scenario A — code minimum | Scenario B — as built |
|---|---|---|
| Energy Step Code | Step 3 (required) | Step 4 |
| Zero Carbon Step Code | — | EL-4 |
| Rated energy use | 136 GJ/yr reference | 75 GJ/yr |
| Step 4 upgrade cost | — | $11,000/unit |
| Rebates captured | — | $12,000 – $15,000/unit |
| Net cost of the upgrade | — | Rebates exceed the upgrade |
| Expected resale premium | — | +4.2% |
| Buyer's mortgage insurance | full premium | 25% refunded |
| Buyer's energy use | baseline | ~45% lower |
On an illustrative $1,000,000 unit, a 4.2% premium is about $42,000. Across twelve units, roughly $500,000 — against an upgrade cost the rebates largely absorbed.
Illustrative figure. Actual pricing will be set by the market at the time of sale.
Why we trust it enough to build on it
Three reasons the premium is more defensible here than the general research implies:
The rating is documented. The premium in the literature attaches to rated homes — homes with a certificate a buyer can see. This project has an EnerGuide rating, Step 4 compliance, and Zero Carbon EL-4 on file. The evidence doesn't reward being efficient; it rewards being demonstrably efficient.
There's a mechanism, not just a correlation. Buyers aren't paying for a label. They're paying for a building that uses about 45% less energy, and for a mortgage insurance refund worth real money at closing. The premium has something underneath it.
Supply matters. JLL's research found the green premium moves inversely with the supply of certified buildings — the fewer there are, the more they're worth. Step 4 isn't mandatory in most of BC yet, so the supply of rated new multiplex product is thin. That works in our favour now and less so later, which is itself an argument for building early.
Where the evidence is weaker than we'd like
Being straight about this, because it's the softest number in the series.
BC residential data is thin. The 4.2% is global. The Canadian 3–5% figure traces back to a lending blog, not a study, so we treat it as directional only.
Premiums vary by market, and Surrey isn't in any of these datasets. We're applying a global average to a specific submarket, which is a reasonable assumption and still an assumption.
The research measures certified homes broadly, not Step 4 multiplexes specifically. Closest available proxy, not a match.
We'll know our own number when the units sell. That result goes in this series either way.
What's next
Part 5 — Progress: permit status, servicing, and the first construction milestones.