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Building Equity Into Green Homes
Patrick Rollens, 27 Nov 07

Residential home ownership is in a state of extreme flux right now. The mortgage industry is in shambles, and the fallout is reverberating through the U.S. financial markets. In the ensuing chaos, people are starting to question the age-old idea of home ownership as the ultimate goal for a family. It’s a fair question—after all, the disparity between the very rich and the very poor is widening every day. Fewer and fewer people actually qualify as “middle class” here in America. With mortgage lenders girding themselves for more losses, the actual cost to buy a home has increased accordingly.

Now consider green building. The entire industry is built around energy efficiency—literally getting more bang for your buck. Green building is marketed to businesses and developers who want to offer tangible results and a healthy dose of street cred to large corporations. Residential green building, however, caters to a much more diverse and populous clientele. Homeowners are taking significant risk to purchase a home, and they want assurances that sustainable design and construction can help them improve that all-important aspect of home ownership: the equity.

Some people aren’t even waiting for their ideal home to be built. A burgeoning industry has sprung up around sustainable home renovations, and it’s attracted the attention of Wells Fargo, one of the largest home mortgage lenders. The bank has an entire section of its web site devoted to sustainable home improvement, and the suggestions make a lot of sense when considered alongside the current financial storm.

With most of us spending more than 80% of our time indoors, green remodeling is the healthy, commonsense choice for a better life. As it stands now in traditional construction, the quality of our indoor environment is often far more polluted than outdoors due to various building materials, inadequate lighting, and a variety of other variables.

According to EPA reports, the air in new homes can be up to ten times more polluted than outside air due to volatile organic compounds (VOCs) and other chemicals used in product manufacturing. Contrarily, homes that follow green remodeling guidelines use healthier paints and building materials and adhere to stricter gas emission and ventilation requirements, improving the quality of a home's indoor environment.

Green remodeling can also indicate that fewer natural resources are required during construction. According to the U.S. Department of Energy's Center for Sustainable Development, buildings consume 40% of the world's total energy, 25% of its wood harvest, and 16% of its water. Compared to traditional construction, a green home takes some of this pressure off the environment.

At this point, however, things get a little murky. The U.S. Green Building Council launched the Green Homes Guide as a way to benchmark residential building, but the program is in its infancy. Challenges abound, even as we take our first steps toward sustainability in residential building. An MSNBC article from earlier this year sums up both the problems and opportunities of the ongoing paradigm shift.

[H]ow do you tell if a “green” home is truly green?

It depends on whom you ask. There are some 80 different local and state green building organizations and at least two different national groups promoting their own rules on what constitutes a green home. The result: a contentious war over whose rules become the national standard for making a house sustainable. It also means more confusion for homebuyers.

“You can’t just go and buy a green home with a magic stamp on it that you know is green,” said Monica Gilchrist, national resource center coordinator for Global Green USA, which helps people walk through the green building process.

Around the same time, Emily Gertz wrote about efforts to green NYC’s residential co-ops, and in November, a small group of real estate agents in California banded together to create the Eco Broker designation, which they hope will set themselves apart from the competition. Change is in the air, and I’m reminded of McGraw Hill Construction’s 2005 report, which predicted that the green home market would hit $20 billion by 2010. Let’s make it a priority to reach that goal—ahead of schedule.

Image: Flickr/Payton Chung

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It sounds good, but building a green house is way too expensive. I tried to do it, but the green builders are more than $25 per sqft expensive. For a 2000 sqft home, $40k is too steep for the middle class family. Also, considering average we stay in a home for doesn't make sense...financially!

So, I went with the regular national builder.

Posted by: Kris on 28 Nov 07

Gosh, Kris, I'm sorry for your experience. I make my living designing "Green" buildings, and we manage to get them built for the same price as any good-quality custom home. When there are extra costs involved, the payback is generally under 5 years, but often we don't need to rely on payback - we just shift costs around, for example, paying for a better building envelope with simplified and smaller mechanical systems. Green buildings cost more when sustainability is something owners tried to "purchase" as another "feature." Instead, sustainability needs to be integrated into the building design from the outset - with diligent attention to life-cycle economics.

Posted by: David Foley on 28 Nov 07



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