Greener Building Codes: Cool But Costly

By Jane Hodges April 27, 2010

Green house by PB Elemental in Mount Baker.

While you were out celebrating Earth Day last Thursday, I sat down with Garrett Huffman, a spokesman for the Master Builders of King and Snohomish Counties, to talk about the new energy efficiency standards buried in 212 pages worth of new state building codes that take effect this summer.

To hear Huffman tell it, the new standards could add $20,000 to the cost builders pay for new construction—and at least $10,000 to the asking price on those homes. Furthermore, he says, in many areas outside Seattle, builders who’ve paid more to add energy-efficient features have been unable to recoup those extra building costs because buyers outside yuppier zip codes can't (or won’t) pay more for these properties.

“This is a very detrimental code,” Huffman says. “This will make homes harder to sell.”

Huffman says he and other concerned builder types will soon travel to Olympia, where they’ll present a laundry list of code complaints to Keith Phillips, an executive policy adviser in Governor Christine Gregoire’s office and also a member of the Clean Energy Leadership Council formed last summer. Phillips couldn’t be reached for comment on the meeting.

Huffman said that his organization isn’t opposed to green building and energy efficiency. Many builders, in fact, have capitalized on the demand for green construction by making it their niche, allowing them to qualify for green bragging rights with a variety of certifications (LEED, the less stringent, industry-backed Built Green program, etc.) or showcase cutting-edge design for clients. But moving from a world where some builders voluntarily use best green practices to one where all builders are required to do so is a bigger paradigm shift.

Tim Nogler, managing director of the Washington State Building Code Council, said that the revised code going into effect in July is an outgrowth of recommendations from Gov. Chris Gregoire's climate action team. The team recommended a goal of making residential and commercial buildings 30 percent more efficient.

"It's a very big step," Nogler says.

Separately, the legislature passed SB 5854 last year to take steps toward "reducing climate pollution in the built environment." The bill summarizes its mission in part as follows:"The [Building Code] council must adopt state energy codes that require homes and buildings constructed from 2013 through 2031 to incrementally move toward a 70 percent reduction in energy use by 2031."

While the ship has sailed on changing the code that goes into effect on July 1, Huffman says the builders want to see amendments or pre-emptive measures introduced to modify it so they don’t eat all the costs of introducing a brave, green world of construction to recession-slapped buyers unwilling to pay for it.

According to Huffman, the code requires a number of extremely ambitious requirements that come at a difficult economic time for both builders and buyers. For instance, he says, builders must start installing windows so efficient they’re only available custom-built (read: expensive) and each new home must undergo a $1,200 blower door test verifying that it is airtight.  Sure, some of the code changes sound like good common sense: Who'd complain if some of their light sockets only took energy-efficient bulbs, if their place had a highly-efficient furnace, or if their home or condo unit came with an in-home energy metering system to spur less wasteful behavior?

Huffman and his organization do have a point about the cost factor: Getting a “green premium” for energy-efficient features is tough even for builders who want to build a better home and buyers who specifically want to buy one. Last month, CNNMoney reported on the difficulty many would-be green homeowners have securing financing for such homes due to debate over their valuations.

Recent research from Seattle-based GreenWorks Realty indicates that homes with green building certifications do fetch more from buyers. But some say Seattle is an anomaly in a world where many smaller towns and suburbs don’t see buyers willing to pay higher prices for more energy-efficient homes.  GreenWorks owner Ben Kaufman noted in a Daily Journal of Commerce report earlier this year that one reason builders don’t always get a premium for green features is that they don’t bother to certify their homes with marketing designations that lure the buyers willing to pay that premium.

There’s ongoing concern in the green building community that appraisers tend to lowball green home values for lack of other homes to compare them to and that, as a result, buyers may not get necessary financing. Sales of green homes, some say, depend on continued efforts by many parties to “green” the Northwest Multiple Listing Service (the local database of all agented homes for sale) so that buyers willing to buy green—and pay more for it—can easily find the homes they want.

And builders of energy efficient homes do acknowledge they cost more to construct. Brad Liljequist, a project manager with the city of Issaquah, says that the cost to build the ultra-efficient zHome townhome community (a low-impact development) is roughly 25 percent higher than the cost to build conventional townhomes. To offset increased building costs, Issaquah donated land worth about $1.5 million to the project.

"Sometimes it's a good role for government to help broker a project," Liljequist says. "Part of the purpose of zHome is to show that there's a market for these homes."

Luke Howard, an instructor who teaches builders state building code via the Washington State University Extension Energy Program, acknowledges that adding the latest energy-efficient twists to new construction will cost builders more—and he understands their complaints.

“Once you’ve built it, you’ve got to sell it,” he says. “There are definitely additional costs to make the changes.”

However, he debates Huffman's estimates of extra costs. He says that the new energy-efficiency requirements and other changes required by the latest state building code will cost builders perhaps an extra $1.25 per square foot. Given that the average home size in Washington is 2,240 square feet, that works out to about $2,800.

“You always have these battles whenever there’s a code change,” Howard says. “Some years have bigger code cycles than others, and this year it’s a big push.”
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