Measure Social, Economic Impact of Healthy Design

By: Brian Levitt , Chief Executive Officer, NAVA Real Estate Development

While our company was founded on the premise of developing properties that have a positive impact on its residents and surrounding community, no one could have predicted the prescient nature of the decisions made when Lakehouse – a 12-story, 196-unit community in Denver’s Sloan’s Lake neighborhood and pilot project for the WELL Building Standard – opened in March 2020. As the meaning of “home” expanded through the COVID-19 pandemic, the development’s foundational focus on wellness – with features like a proprietary building air filtration system, raised organic vegetable garden, aquatics room and access to self-contained health-related on-site amenities – proved particularly meaningful and useful to future residents. The forward-thinking decisions that were conceived working with the International WELL Building Institute and utilizing the WELL Building Standard are what helped enable us to deliver the right health-focused product in Colorado, in the right place next to Sloan’s Lake and at the right time, just when the global pandemic arrived.

At the outset of design for any project, it can be hard to predict what the world will look like when the property comes to fruition. The decisions that drove the development of the project began in 2014 at the IWBI WELL program launch in partnership with the U.S. Green Building Council at the Roosevelt Hotel in New Orleans. The inspiration gained from the WELL Building Standard layered with our wish for inspiring design and a connection to nature shaped our vision to create a place where residents would be more active, eat healthier and build deep connections with their neighbors – all of which would hopefully have a positive impact on their health. The community’s focus on human well-being was not a response to any trend or event, but rather an organic attempt to differentiate Lakehouse in the marketplace, appeal to Colorado’s health-conscious consumers and push the envelope of sustainable development in a meaningful direction.

The concept of healthy design has been around for centuries, but recent events have brought this topic back into the spotlight. The quality of the air, light, water and comfort one experiences in a space can have a profound effect on their health, personal relationships, work productivity, stress levels and even happiness. The WELL Building Standard, which has been used to certify over 4 billion square feet of space to date, provides a framework to analyze and direct development decisions regarding building infrastructure in ways that prioritize health and wellness for residents. With extensive on-site testing and verification of the infrastructure, which is unique for certification programs, achievement of the WELL performance requirements can be documented. What is new, and something we did not expect to find, is the data is now available that shows us just how impactful healthy design can be.

As one of the first multifamily residential projects in the U.S. to achieve WELL Building Certification, Lakehouse has been the subject of two recent studies that demonstrate the business case for its dual social and economic returns: on both the well-being of residents and the bottom line for multifamily developers.

Employing a data-driven approach. In collaboration with Colorado State University’s Institute for the Built Environment, the first research study analyzed the impact of healthy design and programming on Lakehouse residents’ health, well-being and happiness. The multiyear study found that residents experienced significant positive changes in their physical health and emotional well-being after moving into the community.

The study utilized pre- and post-occupancy surveys, as well as interviews, to assess 83 variables across four core areas: satisfaction with the building/community, social connections, emotional health and physical health. There were statistically significant improvements in almost 45% of the variables measured, showing that, overall, residents experienced a positive change in their perceived health, well-being and happiness after moving into Lakehouse.

In addition to residents reporting increased satisfaction with the development’s physical attributes like natural light, air quality, acoustics and amenities, they disclosed improved cognitive function and even feeling happier. They noted its sense of community, beautiful views and proximity to Sloan’s Lake as factors that lowered stress levels and strengthened bonds with neighbors. Some 80% of respondents noted that the building’s design enhanced their connection to nature. Physically, analyses showed a lower frequency of several physical health symptoms including tiredness, which coincided with the use of blackout shades, and 87% of residents reported an increase in their ability to lead a healthy lifestyle due to access to the extensive fitness amenities.?

According to CSU’s analysis of the study, the positive changes could be attributed to the healthy infrastructure and programming, including expansive outdoor spaces, gardens, biophilic design elements, a predominantly glass exterior, an organic urban farm, nutrition-related classes and access to a consortium of vetted wellness experts introduced by our nonprofit partner Realwell Inc. In a collaborative effort, the development team, designers and wellness experts determined what furniture, finishes, programming, services and staff would be needed to help residents make the best use of their WELL Certified community and ensure the fundamentals of healthy living continue into the future.

We also partnered with the IWBI to conduct an in-depth business case analysis on Lakehouse to reveal the potential financial costs and benefits of the WELL Building Standard. Beyond the pure marketing benefits of developing a first-to-market product like this, we believe that WELL certification also positively impacted the financial returns for Lakehouse through enhanced absorption and pricing. As described in the study, the costs for WELL Gold Certification were approximately $4,000 per unit, including certification and assessment fees. At the same time, the economic returns were estimated to be a multiple of this, providing traction to the condo sales program during the pandemic at a time when most would not have considered moving into a 196-unit multifamily community.

Together, the studies show that healthy building design can both measurably improve the quality of life for residents and open the door to new potential investment returns for developers. While return on investment is the fundamental requirement that makes all real estate activities possible, with careful planning and utilization of a meaningful framework, investment in real estate assets and their occupants can yield stronger and more meaningful returns. It is this dual social and economic impact that we hope will help to propel the healthy building movement and encourage more developers to pursue WELL Building Certification or like programs.

Ultimately, it would be wonderful if everyone could have access to spaces that prioritize and support basic health and wellness. One of our biggest takeaways was that achieving a healthier building does not have to be substantially more expensive than building the traditional way – it’s an attainable goal with the potential to positively impact end-users, even without the pursuit of WELL or Fitwel certification. Understanding the potential value that health and wellness best practices can bring is the key to dialing in the right amount of investment in this space for any community.

Collaborating with CSU and IWBI was a terrific learning experience that allowed us to more deeply explore the interconnected aspects of human and financial impact, offering practical insights and a blueprint for future projects – both our own and, we hope, those of our peers in the development community. Our buildings are not just our spaces, they can be our healing places.

Creating a healthier tomorrow. Just as LEED certification has become standard for communities across the globe, we hope and expect the same happens for WELL, especially knowing how profound of an impact these initiatives can have. The relationship between human and environmental sustainability is inseparable; one cannot be addressed without the other. It is our collective responsibility to integrate these aspects, creating a future where healthier buildings are the norm, enriching the well-being of our communities.

Our role as stewards of the movement to develop healthier places is about more than constructing buildings; it’s about enhancing lives and fostering healthier communities. When we construct healthier buildings while ensuring financial viability, it’s a win-win for everyone.

The above article originally appeared in the November/December Issue of Colorado Real Estate Journal’s Multifamily Properties Quarterly.