Why being environmentally conscious is usually the “road less travelled”..
If we went to a cocktail party and asked everyone what it means to be green, we’d get so many different answers. Some would say it means reducing waste. Others would want to adopt conservation-minded technology, like solar panels. Some would say it means eating less meat.
In home construction, green can mean a bunch of different things: sustainable materials, the latest in energy efficient mechanicals, tighter envelopes, reduced consumption of precious resources. And no matter which tactic a builder takes, the effort to be responsible is important and noble.
So then what gives? There’s no doubt that being green, if we have the option, is the better choice to make. So why does it seem so hard to make substantial progress on this? Well, we can tell you why. Because way too often it’s easier, even more valuable, to be irresponsible than it is to be responsible.
Here’s what we mean…
Instant hot water heaters are more efficient and will lower utility bills, but they’re more expensive to install than the old tank-based hot water heaters.
Flooring a home with sustainable wood or using similar framing materials is going to drive up your costs. Same goes for low VOC paints. And you’re going to pay extra for extra insulation or HVAC units with higher SEER ratings.
Rooftop gardens and urban farming are among the “green” trends becoming popular in big cities across the U.S.
A builder might do all of this in service of earning green certification from one of the agencies that does that kind of thing (such as EarthCraft of VA). And it’s likely going to tack on an additional 3-5% more to the final construction tab. If you’re looking at a $400,000 home, that’s about $12,000-20,000. That is real money. Are people going to pay for that? Increasingly so, yes. But they’re not necessarily the ones getting in the way of progress.
What is then? It’s that little thing called the appraisal. When a home is purchased using borrowed money, banks are going to require an appraisal. And if the appraiser doesn’t give premium value for whatever green components are included in the construction, then the value is artificially depressed. It’s possible the deal gets more complicated. It’s possible the borrower has to pay a higher interest rate. It’s possible the borrower might need to bring more cash to the table. None of these scenarios is good. All could possibly stunt the expansion of green building.
And we need to do exactly the opposite. We need to encourage builders to build—and buyers to buy—new green homes. We can’t let mortgage lending be the tail that wags the dog, not on something this important. This is a time for policy makers and the markets to lead.
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