Sustainability attributes in real estate development: Private Perspectives on advancing energy regulation in a liberalized market

Abstract

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