We need a new generation of humanitarian design ideas underpinned by scientific research.
—NORMAN FOSTER
MANY PEOPLE FEEL IT is no longer acceptable just to work in a building that makes them less sick; employees are starting to demand a space that makes them “more healthy.” Getting there will require us to go from accepting “acceptable” indoor air quality (the current ventilation code) to demanding a space that is optimal for human health and performance. This is within reach.
Our goal in writing this book was to communicate, in simple language, the many ways in which our buildings shape our health and impact our businesses. If you remember nothing else in this book, we hope you will remember to ask yourself the question that we posed early on: “Why are we ignoring the 90 percent?”
We have become an indoor species, spending 90% of our time indoors. And while many countries have a comprehensive regulatory structure monitoring outdoor air pollution, there is nothing comparable for indoor environments. This is the case even though, as we have shown, the majority of your exposure to outdoor pollution occurs indoors. Further, indoor sources of pollution can be significantly higher than outdoor pollution, although we don’t tend to think of indoor contaminants as “pollution” per se. We should. There are signs that this is beginning to change. A 2019 article in the New Yorker spoke of the problem of “indoor smog”—a label that makes a strong link between our traditional notions of outdoor pollution and our indoor world.1
We also wanted to make the point that Healthy Building strategies are good business strategies. For many twenty-first-century “knowledge worker” businesses, people costs are by far the largest single portion of their income statement. Office rent may be second, and the two of them together might account for 90 percent of the costs of those firms. We argue that a work environment that helps people to improve their health, productivity, and creativity provides more bottom-line benefit than does scrimping on ventilation, filtration, materials selection, and the incremental energy and operating costs.
There is also a bigger picture and ultimate motivating force for our work together in writing this book. We want you and your business to win, for sure … but we also want you to see Healthy Buildings in the larger context of the global mega-changes of population growth and urbanization that we mention. The global changes coming are so massive—almost 2 billion additional people by 2050, the vast majority of whom will live in cities—that buildings need to be a part of the solution to our sustainable development challenges. Buildings last a long time and they affect our lives for decades—even centuries. The decisions we make today regarding our buildings will determine the collective health of people and the planet now and for future generations. There isn’t a lot of good news coming from scientists concerned with the environment, but buildings can be one of the rare cases where personal benefits and social benefits are not in conflict. We can have individual wins for our businesses while also having wins at a population-wide scale.
The way we see it, one of the most accessible ways to influence the health of people around the world is to influence the design, operation, and maintenance of the billions of square feet of enclosed space where we live, work, learn, play, pray, and heal. We think the key to making this theory of change operational is to show that it’s a “win for all” scenario; that acting in your own self-interest can influence others to do the same, and that, building by building, we can begin to improve the health of all people, in all buildings, everywhere, every day.
In the preface, we outlined four groups of people who might find our book useful: business owners; employees; building investors, owners, and developers; and all of us (society). The ultimate beauty of the Healthy Buildings movement is that there are wins for everyone involved once we consider how Healthy Buildings influence four performance factors: human performance, business performance, social performance, and market performance. These interests expand from individuals to businesses to regions to the economy. So let’s revisit highlights from what we’ve covered and group them among these four performance factors to make clear that with Healthy Buildings, everyone wins.
Let’s start with the unequivocal fact that a Healthy Building benefits the people who work and live inside it. We opened our book with a heavy focus on just a few factors where the science is irrefutable: bringing more fresh air into a building and filtering it more effectively are associated with better health outcomes. As a reminder, higher outdoor air ventilation rates have been linked with fewer sick building symptoms, lower disease transmission, and fewer missed days of work. More recently, rigorous double-blind method research in office environments shows that higher ventilation rates have a direct impact on our cognitive function. Specifically, better indoor air quality led to better performance in the decision-making of knowledge workers. This is not theoretical—we have shown you the empirical evidence.
We then extended this analysis by posing and answering the question, What else constitutes a “Healthy Building”? That brought us to the 9 Foundations of a Healthy Building, a synthesis of 40 years of science on all of the factors that drive human health indoors—ventilation, air quality, thermal health, water quality, moisture, dust and pests, lighting and views, noise, and safety and security. You are now armed with all the scientific evidence you need to create a healthier building.
Then, in Chapter 7, we ventured into the world of healthier building materials. Pretty building designs are sometimes mucked up by the junk we purchase and use inside them. (Recall our bodybuilder-on-steroids analogy.) Some products are laden with chemicals that act in a very subtle manner on our health; their slow workings on our minds and bodies are not easily sensed in the way that volatile organic compounds emitted from a scented surface cleaner immediately make your eyes water. These semivolatile chemicals slowly migrate out of products and into our bodies, quietly wreaking havoc on our hormone signaling system.
Building on these foundations, in Chapters 8 and 9 we showed you not only that the science is clear but also that all of this is actually measurable and trackable using Health Performance Indicators (HPIs). We have given you the four-quadrant framework for measurement with HPIs, discussed certification systems that allow you to independently verify that performance (and offered our view on what every Healthy Building certification system should include), and talked about new sensor technologies that allow us to manage our buildings (and measure the health of our personal environments) in real time. This part of the book is the key link between the academic science and action in the real world. We can talk all day long about what should be done in the abstract based on the hard science, but unless there is a way to measure and track this, health performance of the building won’t be part of the equation for most businesses.
You now have the tools to design, operate, maintain, and manage a Healthy Building. If you follow a Healthy Building strategy, you can create a building that not only is not assaulting your health or that of your employees but is in fact acting as a place of refuge and health promotion. So the first winners are the people inside buildings. That is enough of a motivator for some, but so far this has not been sufficient to spur all landlords, tenants, and investors to seek action and move us up the adoption curve. What’s the next step?
While the basic health science on indoor environments has accumulated over decades, this alone has not really influenced practice. But newer techniques and new learning about how indoor environments affect human cognitive performance, concentration, and productivity have been a game changer. How so? They have brought in another winner in the Healthy Buildings movement: the business owner. We believe that these research findings flip the conversation. Instead of incremental decisions about additional costs, more rigorous health measures are now about profit. To wit: rather than tighten the budget on energy for ventilation, it’s understood that spending a little more on better indoor air will allow you to reap dividends in the form of greater productivity, fewer sick days, better employee retention, and a net benefit to bottom-line profit. Until recently, the industry couldn’t really measure how buildings were affecting the people who worked in them. Now we can.
Here, again, the evidence is empirical. Recall in Chapter 4 that we explored the costs of higher ventilation rates. We put this into a pro forma for our hypothetical consulting company, Health &Wealth, Inc. and saw that, indeed, there were costs for this company to increase ventilation rates. But that’s a naïve analysis that doesn’t factor in the benefits. Once you account for benefits from lower absenteeism and better human performance (“payroll effect” and “productivity boost” in our financial model), we showed that the costs for this one improvement are trivial compared with the significant benefits to the company—a 10.7 percent net gain to the bottom line. For one intervention. Where all the employees had to do was breathe! No training needed. No yearlong rollout of a new program. No change to workplace culture. Just breathe.
Even better, we showed in our model that there is room for the building owner to charge the tenant a rent premium for this better building. In our case, we factored in a substantial increase of 10 percent. This part is absolutely critical because it begins to address the issue of split incentives that have long hindered the adoption of Healthy Building strategies. Why would a building owner take on any additional costs if the benefits were to go to the tenant? Well, now we have the answer—they can take on the additional cost and justify a premium for that better building. The financial gains from adopting Healthy Building strategies are so massive that there is plenty to go around. The employees win, the business owner wins, and the building owner wins.
Therein lies the central tenet of our book: buildings impact people’s health, and now we can objectively quantify how an investment in the building is an investment in the company. Healthy Buildings improve human performance. Better human performance improves business performance.
We spent most of this book on the first two factors—human performance and business performance. Then, in Chapters 10 and 11, we introduced some new ideas regarding factors that will enable the nascent Healthy Buildings movement to scale faster and farther: social performance and market performance.
In Chapter 11 we looked at how buildings impact health and wealth beyond the four walls, leading to better social performance. This is big, because it moves the Healthy Buildings conversation from being one about individual gains to being one where the people outside and around the neighborhood also benefit. Healthy Buildings are central to the larger conversation about sustainability, environmental health, and public health.
Our climate is changing, and this is a direct result of climate-forcing gases that are being released into the atmosphere. A changing climate has brought on important questions about uncertainty, risk, financing, and resilience in the real estate sector. Consider our hypothetical building owner, Mary, and her counterpart from the bank, Nancy. A redrawn flood map moved Mary’s property from a 1-in-100-year risk to a 1-in-20-year risk, putting her in violation of the loan agreement. This raised important challenges and questions that we are seeing all over the country—and world—today. Does Mary take steps to “harden” her building against extreme weather? Does the bank foreclose or refinance? If it refinances, under what terms? Beyond the local level, these types of questions are being asked at the institutional investor level as well. Sophisticated investors are using machine learning techniques and geographical information systems (GIS) to overlay real estate data with atmospheric data, climate predictions, and social demographics to estimate financial risk and support better decision-making.
With the building-energy-health-climate-resiliency nexus concept, we showed that buildings are part of the problem, yes, but also that Healthy Building strategies are part of the solution. Our energy system, dominated by fossil fuel combustion, is releasing greenhouse gases like carbon dioxide. With an all-out effort under way to address this situation, it’s only natural that in addition to focusing on the generation side of the equation—moving to renewable energy sources—we also need to focus on the demand side. Here is where buildings enter the spotlight. As consumers of 40 percent of energy globally, buildings are responsible for a third of all greenhouse gas emissions (80 percent of global energy from fossil fuels × 40 percent used by buildings).
Healthy Building strategies that reduce energy use come with a health co-benefit in terms of reduced emissions of greenhouse gases. More immediate are the health benefits to the surrounding community from the reduction of air pollutants that are emitted from fossil fuel consumption. Air pollutants like PM2.5 that have an acute effect on health will be reduced as buildings reduce their energy use. As with human performance and business performance, the social performance benefit can also be quantified. And these benefits are massive—for every $1 saved in energy in the United States, another $0.59 is gained in health and climate co-benefits, on average. In the developing world, it is closer to $10 saved in health and climate benefits for every $1 saved on energy.2 As the energy grid gets cleaner through the adoption of renewable energy sources, buildings will not be off the hook. Over the past few years there is intense scrutiny of on-site fossil fuel consumption in buildings and the embodied carbon in materials like concrete and steel. The conversation on the social performance of buildings is just beginning.
Expanding the definition of Healthy Buildings to include energy conservation and other quantifiable outward-looking measures becomes a way to link the business interests of the property industry with the business interests of the public. Put another way, we can empirically demonstrate that Healthy Buildings provide benefits not only to the individuals in the building and the owners of the building but to everyone else as well—to society as a whole.
Why does this matter? It means that governments and municipalities have a reason to get in the Healthy Buildings game. Rest assured, the quantification of health co-benefits does not just matter to governments. It matters for real estate developers, owners, and investors, too. With the rise of environmental, social, and governance (ESG) investing, real estate developers, owners, and investors are now being asked about the S in ESG. What is the social performance of your real estate asset? This has been hard to quantify in the past—but that is no longer the case.
Rounding out the list of winners are the owners, developers, and investors who will win with the rise of informed shoppers and with the growing market demands for Healthy Buildings. For starters, let’s look at how Healthy Building investors are poised to win, and how this will help propagate the Healthy Building movement. When David Levinson and L&L Holding show that they can command some of the highest rents in New York City for their “Tower for the People” at 425 Park Avenue, the value of that property increases, as does the value of the investment for their primary investor, Tokyu Land US Corporation. What do you think is likely to happen with Tokyu Land’s next investment? It might choose to only invest in Healthy Building projects in the future, because it will have been demonstrated that this is a competitive advantage and a winning investment strategy.
What do you think Levinson’s competitors will do when they see his building has commanded these high rents? New billion-dollar buildings and developments are going up in Manhattan every month. We can guarantee you that others will see what’s happening and respond with their own designs. They recognize demand. When a player like Amazon hosts a nationwide competition for its new headquarters, developers, investors, and owners perk up—“How can I attract the Amazons of the world to my building?”
And then what do you think is happening in other markets beyond New York City? They are paying attention, too. From Seattle to Boston, from London to Hong Kong, from Shanghai to Bangkok, developers are planning new Healthy Buildings.
In the mind of an investor and developer, perhaps even more important than competing today is competing in the future. In Levinson’s vision, pursuing elements of a Healthy Building at 425 Park Avenue is about future-proofing the building; if he doesn’t aim for a Healthy Building now, the tenants who can pay the high rent premiums this year will just skip on over to the other side of town for a developer at Hudson Yards or around Wall Street who will offer a measurably better environment for the health and productivity of the tenant’s knowledge workers. It’s an arms race to better indoor air quality—and that’s a good thing.
But more important than the top-down approach to Healthy Buildings is what’s coming next—the rise of the informed shopper, whom we introduced in Chapter 11. The ubiquity of data and a barrierless approach to sharing personal information are creating bottom-up pressures for Healthy Buildings. Not only are we seeing buildings install sensors, but we are seeing workers bring their own sensors with them. Smaller, cheaper, better, and more connected. This is changing how the big commercial real estate players are thinking about their business. Bryan Koop, executive vice president for the Boston region of Boston Properties, a listed real estate trust with $2.5 billion in annual revenue, gave us this example. He has seen workers in some of the buildings his company manages bring in inexpensive real-time air-quality sensors and then bring that data to management. Not only did they bring the data to management, but they also brought the data to all of their coworkers in the same department. Real-time building environmental data is now being shared at the proverbial water cooler. The ensuing concern essentially shut down work in that department for over a week while the issue was addressed.
Koop sees this as all part of the shift from caveat emptor (“buyer beware”) to caveat venditor (“seller beware”) that’s happening in every industry. Car buyers walk into a showroom these days and know more about the market price than the sellers do. Long gone are the days when the salesperson plays a game and walks to the back room to talk with the manager to “see if I can get you a better deal.” Nowadays, while that salesperson leaves to talk with the manager in the back, the shopper is on his or her phone comparing car prices from every showroom in a 50-mile radius. By the time the salesperson comes back, the buyer knows more than the seller. Progressive Insurance jumped in front of this trend years ago with a set of advertisements telling customers that Progressive was posting all of its competitor’s prices on its own web page; it knew customers were searching for the best deal across several websites anyway, bouncing around from site to site comparing prices, so they simplified the process for shoppers and put its prices next to their competitors on their own website.
This is coming to the real estate sector, and forward-thinking executives are preparing. Like Progressive, Koop at Boston Properties has a plan for how to leverage this shift in mind-set and put Boston Properties out in front. His strategy is to talk about air quality and other Healthy Buildings factors first, so that when a potential customer goes to another building and that building owner doesn’t talk about air quality, Koop will win. “Who wouldn’t want to be in a healthier building, and who wouldn’t be willing to pay for it?” he asks.
The final piece of the bottom-up pressure is coming from the crowdsourced approach to evaluating companies and products popularized by websites like Yelp and Trip Advisor. With a few clicks a potential customer will know more about your restaurant or resort than you do by reviewing inside accounts about the service, experience, and impressions—complete with pictures. The days when a company controlled its brand with grandiose prose on its website next to Photoshopped images of its property or restaurant are over.
This approach has now reached commercial real estate with websites like Glassdoor. The vast majority of comments today on Glassdoor are about concerns like salaries, titles, and management styles. But we pulled a few examples of cases in which employees were starting to talk about their buildings and shared these with you in Chapter 11. This, we hope, is eye opening to our readers. As a forensic investigator, Joe has been called to the scene for investigations of cancer clusters and disease outbreaks in buildings, but in prior years these have largely remained under the radar, staying out of the news and the public realm. What happens when employees in a building where an alleged cancer cluster exists start posting on a site like Glassdoor? When the next talented recruit does her research on your business and sees that negative buzz, do you think she’ll accept your job offer? When the owner goes to sell the building, will a potential buyer and investor see these issues and walk away, or will they demand a discounted price? In addition to potential health risks of a poorly performing building, there are very real brand risks. Healthy Buildings will become a risk-management tool for companies, helping them to protect their employees, brand, reputation, and investment.
Top firms are acting on these principles. When we spoke with Maureen Ehrenberg, global head of facilities management at WeWork, she said that most employers today seek to have a happy, healthy, and engaged workforce and want to attract and retain top talent. She also agreed with the central concept we present throughout this book—that the building is key to making this happen. When she talks about a “smart” workplace, the goal is to leverage technology for the purpose of enabling better operations of a space from a comfort, ease, and access perspective that drives employee productivity.
It doesn’t stop there. For Ehrenberg, it’s also about “a commitment to the environment, health, and well-being, and an emphasis on helping people to ‘do what they love’ … founded upon the principles of a better tomorrow.”3
In essence, she is saying indoor air quality is good business, yes, but creating healthy work environments is also a commitment to a better future for all. Human performance meets business performance meets social performance meets market performance.
This book is aimed at the commercial real estate market in leading cities. But the lessons extend to other building decision makers, whether for a house purchase or a courthouse or a hospital or an airport, from New York to Singapore to Lagos. Individuals, vendors, lenders, and owners make choices. Here are a few of the key action steps:
With the analysis presented in this book, we think we’ve given evidence that overturns many of the arguments used as traditional barriers to adopting Healthy Building strategies—concerns about single winners, split incentives, first costs, certification costs, energy costs, and scientific evidence on health and performance. We’ve given you strong arguments to break these barriers down. Doing so will require, as many things do, smart leadership; leaders who can realize that the benefits far outweigh the costs. So much so that the decisions you make today about your buildings could very well determine whether you and your company are successful.
Just a few years ago, John wrote a Harvard Business School case study called “Design Creates Fortune: 2000 Tower Oaks Boulevard” that explored the economic benefits of better indoor environments and better employee health and performance through Vedic design.4 The financial benefits were easy to model in a spreadsheet but hard to prove at that time. What wasn’t clear, until now, is how the building performance and those benefits could be objectively quantified using health science.
Just a few years ago, Joe and his team conducted the COGFx Study, which explored the health benefits of better indoor environments and included some initial analysis of the economic benefits of this approach. The health benefits were clear, but what wasn’t clear, until now, is how the financial performance of Healthy Building strategies could be objectively quantified using business science.
This is why we sought each other out to collaborate on this book. We were both tired of the hand-waving in our respective fields. For Joe, it was hand-waving around the financial performance of Healthy Buildings. For John, it was hand-waving around health performance in buildings. With this book we’ve turned the hand-waving into a handshake between the business and health worlds. We are happy to take your hands as well and walk together, using these new tools and techniques, into a future of healthier buildings and healthier people, more effective workers and stronger bottom lines, and more resilient cities and communities.