"Green buildings make sense environmentally and fiscally," Reed said while standing in the sunshine outside a "green constructed" housing development in San Jose. With the rising cost of energy and uncertain water supplies in California it makes sense to construct buildings that conserve resources, he added.

The Private Sector Green Building Policy has guidelines for private development within the city limits that call for increased energy efficiency, less water usage, encouraging residents to use public transportation and diverting waste from landfills, according to Reed.

Housing developments with 10 units or more will need to achieve either 50 points on the Build it Green's GreenPoint rated scale or certification through the U.S. Green Building Council's Leadership in Energy and Environmental Design program, according to the city. High-rise residential buildings -- over 75 feet tall -- will need to achieve LEED certification and smaller projects will have a green policy checklist to familiarize the developer with green building practices.

New commercial and industrial buildings under 25,000 square feet will be required to use the LEED checklist for building, while structures larger than 25,000 square feet will need to achieve LEED Silver certification. The policy also stipulates that in 2012 the threshold for certification will drop to 10,000 square feet.

President and CEO of the Home Builders Association of Northern California said builders are seeing a growing demand for green homes and the proposed policy sets "reasonable goals, and will result in more sustainable development."

San Jose policy currently requires that buildings larger than 10,000 square feet constructed by the city or the San Jose Redevelopment Agency acquire Silver certification from the LEED program.

"This policy will encourage our development community to make good economic and environmental decisions to facilitate the expectations of our workers and residents," Reed said.

Reed announced his Green Vision plan Oct. 7, 2007, which sets 10 goals for environmental protection and economic development for the next 15 years. The vision calls for creating 25,000 Clean Tech jobs, building or retrofitting 50 million square feet of green buildings, installing 100,000 solar roofs, reducing per capita electricity by half, becoming a zero-waste city, recycling and reusing 100 percent of the city's water and moving to 100 percent renewable energy, according to the city.

The City Council will vote on whether to adopt the Green Building Policy during its 1:30 p.m. session Tuesday.