Homebuilders tout benefits of green design

Nobody thinks about saving a rain forest as a result of "green building" techniques, but they might think about saving more than $1,000 a year on utility bills, a Las Vegas homebuilding executive said.

Thus far, the green-building sustainability movement has caught on more with environmentalists, urban planners and think-tank scholars than with consumers.

It will probably take some hard numbers to change people's homebuying parameters.

To that end, KB Home conducted a pilot study in Southern California that found gas and electric bills for energy-efficient homes averaged $85 a month, or $1,020 a year.

In contrast, a 2008 study performed by the U.S. Census Bureau found that homeowners living in the same area spent about $195 a month, or $2,340 a year, on those bills.

Further research is required to determine whether similar savings can be achieved in other areas.

"We expect to find the same results here, if not better," said Jim Widner, regional president for KB Home in Las Vegas.

KB has built more than 60,000 Environmental Protection Agency-rated Energy Star homes in the United States at no additional cost to buyers, he said.

Homes qualify as Energy Star if they have a HERS index, or Home Energy Rating System, of 85 or lower on a base scale of 100, which means they're 15 percent more efficient than a standard home. A decrease of one point in the HERS index corresponds to a 1 percent reduction in energy consumption, such that a net-zero energy home would score 0.

In Las Vegas, KB builds its homes to Energy Plus standards, which is a 15 percent improvement over Energy Star, or a HERS score of 70 or below, Widner said. KB homes in Avellino Ridge community near St. Rose Parkway and Bermuda Road have an average score of 65.

Widner emphasized features such as tankless water heaters, vinyl window frames, radiant barrier roofing and foam sealant for the home's "envelope" that eliminates hot and cold spots.

"The new homes we build today are substantially more efficient than used homes," Widner said Dec. 21 during a construction tour at Avellino, where prices start at $138,000. "Very few used homes are Energy Star, but next to none are Energy Plus."

Estimated at $36 billion to $49 billion, the green building market is considerable and expected to increase twofold between 2009 and 2013, McGraw Hill Construction reported.

Remodeling older homes with "green" features can double their value, said Philip Beere, president of Phoenix-based GreenStreet Development.

His company remodeled a home in Phoenix that was named the 2010 Green Remodel of the Year by the National Association of Home Builders. Purchase price of the three-bedroom, 1,228-square-foot home, built in 1947, was $89,000; improvement costs were $65,000; and sales price was $240,000, or $208 a square foot. It sold in 22 days on the market.

Beere bought another home in Phoenix for $25,000, put $31,000 into remodeling and sold it for $99,000. The HERS score dropped from 195 to 120, saving an estimated $640 a year in water and energy bills.

Another remodeled green home sold for nearly $200 a square foot, compared with $95 a square foot for homes in the same neighborhood. That brings everyone's home values up, Beere said.

"When people talk about green, they talk about energy savings and forget about water, which is just as important, especially out here," Beere said during a Dec. 16 business presentation in Las Vegas. "We're not talking about water right now, but it's a serious issue."

Case studies prove that green remodeling and weatherization of homes can cut energy and water use by 50 percent to 60 percent, he said.

Beere plans to expand his business model from Phoenix to Las Vegas, Denver and Los Angeles in 2011.

"You have a shortage of good, comfortable homes, just like we do," Beere told the Las Vegas Review-Journal. "Not necessarily in the suburbs, but centrally located. Older homes have beautiful charm and people want to live close to the city."

Beere has identified several houses in Las Vegas with GreenStreet renovation potential, most of them real estate-owned and trustee sales. For example, a $33,000 home at 1005 N. 21st St. is valued at $95,000 after remodeling; a $30,000 home at 210 Mojave Lane in Henderson is valued at $130,000; and a $45,000 home at 5317 Plainview Ave. is valued at $115,000.

KB tracked about 50 homeowners in Riverside, Calif., who had lived in a KB Energy Star home for at least a year. Homes were three and four bedrooms.

In cooperation with local utility companies, the sample of homeowners agreed to voluntarily share their monthly gas and electric bills from June 2009 to July 2010.

Nevada passed legislation effective Jan. 1 that requires a home energy audit before a home is sold, though it can be waived if both the seller and buyer agree, Nevada Association of Realtors President Linda Rheinberger said.

"We're not opposed to energy audits or inspections, whatever's good for the consumer," she said. "But we don't want to create a mandate at the point of sale where people are forced into these."

A November survey by Calvert Investments of sustainable practices by the homebuilding industry ranked KB Home No. 1, followed by Pulte Homes, Meritage Homes, Toll Bros. and Lennar.

The homebuilding industry's environmental impact is tremendous, accounting for one-third of national softwood use and nearly one-fourth of all energy use, according to the Calvert report.

"In order to sell environmentally sustainable homes, companies need to market their advantages more explicitly," the report said. "Educating consumers about the benefits of green home ownership can influence demand and push the industry to adopt sustainable design as the expected rather than exceptional standard."

Jason Manwaring, sales representative for Dunn Edwards Paints in Las Vegas, said green building must make sense for it to gain widespread acceptance.

"We hear about green building and we're not sure what it means," he said. "Green is efficiency and it's green in your pocket."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.