Last week Earthcraft Virginia recognized Latitude 38 for building two of its Top Ten Most Energy Efficient Homes of the Year at 776 Ridge Street and 413 10 1/2 Street, both in Charlottesville. We are excited to build to Earthcraft’s high standards of measuring:
- Site Planning
- Construction Waste Management
- Resource Efficiency
- Durability and Moisture Management
- Indoor Air Quality
- High Performance Building Envelope
- Energy Efficient Systems
- Water Efficiency
- Education and Operations
Having third party verification of our construction through preliminary and confirmed energy modeling, design review, a pre-drywall inspection, a blower door test, and a final inspection, makes us stay on top of our game. We appreciate our relationship with our local auditor, John Semmelhack from Think Little, who helps keep pushing us to use new science to make our homes ever more comfortable, energy efficient, high performance homes. If you have any questions about Earthcraft Virginia, please contact us!
One of the hurdles of making energy efficient features cost effective for builders is that they are rarely are incorporated accurately into the sales prices of homes, at least not consistently across a market. One of the key players in this equation is the appraisers, who use available one year comps in the immediate locality to determine if a sales price is “fair market value,” or justified for a bank to make a loan. If a buyer values paying more for an energy efficient home with the expectation that their long term operating costs will be lower than a comparably built home (in size and location, without such efficiency features), but the appraiser cannot show why that additional value is justified, then the buyer may not get the appraisal they need. If builders cannot find buyers with cash to pay for the the additional features, they may have difficulty selling, and then less likely to incorporate said efficiency features in future homes. This is not the fault of the appraisers individually, but more of the whole multiple listing system and appraisal standards, which have not developed simple ways to compare homes based on energy efficiency.
Various parties have been at work nationally to bring the appraisal process up to speed with the growth in the number of energy efficient features that can significantly change the value of a home more than just its age, square footage and location. Just this week the Appraisal Institute entered into an agreement with Resnet, which developed the HERS index, one of the leading green building rating system, to produce their Residential Green and Energy Efficient Addendum. This is a good step towards making energy efficient features more of an integral part of any appraisal. We are still pretty far from that uniformity, but each step is appreciated. Here is more info if you are interested:
Appraisal Institute Residential Green and Energy Efficient Addendum
RESNET News about partnership
In practice, we have not chosen to cut back on energy efficiency features, although we are not sure if we are getting the appropriate value they deserve when looked at life cycle value. We have always had appraisals come within about $3000 of the sales price (always over), which leads me to question how the appraisal process works, as I have trouble believing that our pricing is so exactly in line with other new construction. However, I would say that we do keep fairly close to the general market, as we do not want to overbuild for a particular neighborhood, which is very possible building on infill lots in older neighborhoods.
We are about to get an appraisal done on our newest home, which was built to Passive House, EarthCraft and Energy Star standards. Since the mortgage crisis, lenders no longer can select their appraisers. Our bank has a list from which they get quotes and they make their selection on price, availability, experience and perhaps other features of which I am not aware. Regardless, if you have green features in your home that you would like to be valued in the appraisal, you have no control over getting someone with experience in that area.
Not that there is currently a good system for comparing houses with green features to really determine how they affect value. Nationally, the USGBC LEED and EnergyStar green certification programs are sometimes used by lenders/insurance providers to give a discount or additional coverage. For appraisers, the market is extremely local. First off, the MLS system is regional and the database is created for/by locals. We are starting to get to a point where CAAR is looking at introducing more environmetal features to their listing database, which would allow an appraiser/realtor to look up comps. The regional EarthCraft program is a an easy check-off feature to compare home sales. However, this is not yet clearly available to consumers looking for environmentally-conscious or energy efficient homes. Thus, even if “green” features, eg reduced energy bills, legitimately affect the value of a home, it is not always calculated into the valuation.
Now, I am sort of confusing two issues. One is value for appraisals that leads to financing. The second is value that consumers place on a property. However, in both cases, I would like users to be able to make better comparisons to other properties.
One new step in this direction is an addendum (Residential Green and Energy Efficieny Addendum) released this year by the national Appraisal Institute to help appraisers better value green features. I am glad they have initiated this, and that they are now offering classes for appraisers looking to learn more about these valuations. I have MANY edits that I would like to see incorporated into this document (honestly, I’m not sure how it got made), but it is a start! I am now going to fill out this form for our house, pass it on to the appraiser (luckily someone local), and see how she uses it in her valuation.
John Semmelhack of Think Little ran his final blower door and duct blast tests at Riverbluff today as part of our Earthcraft certification. When he was setting up the blower door fan to stabilize the house pressure for leakage testing, he found the house so tight that he had to add a “C-Ring” to the fan to get enough resistance. The result: 0.06 ACH = 357 CFM50/5898 SFBE (Air Changes per Hour = Cubic Feet per Minute of air leakage / Square Feet of Building Envelope at 50 Pascals of air pressure). Let’s just say that the house is very tight. Tighter than the almost 100 Earthcraft houses that John has tested to date. Good thing we have an Energy Recovery Ventilator to bring in fresh air to the home.
The duct blast test then showed 0 leakage, which was to be expected, as we have all the HVAC duct work in the enclosed conditioned space of the house. We were also a little proud that John had no comments to make about the HVAC equipment, as we had already made a few key adjustments back before the drywall was installed. Now we will wait for John to finish his modeling and submit his paperwork to Earthcraft to get our HERS (Home Energy Rating Score) and Earthcraft rating.