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Cottage Home Sets New Standard for Sustainable Lakefront Living

Using his home building expertise, Brian Bosgraaf started Cottage Home in 2000 specializing in building custom homes along Lake Michigan. Cottage Home has designed and built more than 70 custom homes along the West Michigan shoreline, including 13 LEED certified homes. In an interview with Brian, he expressed his passion for LEED certification and sustainable construction practices.

hen Brian and Jeremy vanEyk (Vice President) were asked about their commitment to building LEED, they responded that Cottage Home is committed to utilizing healthy, affordable, efficient, and durable construction practices that are already above code, energy star and even LEED at times. Brian says he considers LEED only one of the many tools in his toolbox. Other such tools include creative design, customer service, careful selection of materials, and creating a sense of place. In order to make it simple for the customer, Cottage Home uses a fixed price prior to starting construction which already includes LEED qualifications. This allows some of the cost of LEED certification to be absorbed by both the customer and through the Cottage Homes marketing budget.  Brian believes this method works due to his design and construction teams working together throughout the construction process, which creates a feedback loop that fosters constant improvement.  Including LEED certification into the final cost helps facilitate more sales than presenting each option with separate pricing.

Since many homeowners today are educated and concerned about sustainability and environmental issues,  many take time to study the details of LEED on the website of Cottage Home and take comfort in knowing LEED is a third party certification. Clients are aware of LEED’s achievements and credibility, and often wonder about how changes to the house affect the LEED certification level. Much of Cottage Home’s customer base is from the Chicago area where LEED is prevalent in their office buildings, and a result, many clients have experienced the advantages offered by LEED construction firsthand. These clients have often already invested in commercial LEED projects and are now ready to transition these same high standards to their personal lives. Jeremy decided to experience the benefits of LEED firsthand and chose to have his own house in Zeeland, certified LEED Platinum.

Building on the lake front comes with complications such as extreme wind loads, humid changes, temperature fluctuation, and other variables. To overcome these challenges, Cottage Home uses high performance home measures to control the entire process though design, build, and some maintenance which allows more control of green features. Cottage Home designs and builds what is right for each particular home which may result in homes varying in different HVAC, insulation, passive solar heating, and various climate control systems.  One particular feature that is commonly used in these homes, including Jeremys, is an ERV (Energy Recovery Ventilator).   An ERV automatically exhausts stale air from the inside of the house and replaces it with fresh air from the outside.  Another key feature used in many of the homes is a geothermal system.  There are a few different types used, but all contribute to the energy efficiency of the homes in some way.  Several techniques are used to increase water efficiency in the homes, such as tankless water heaters, which only heat water when necessary, water collection systems to help with sprinking and irrigation, and faucets and showerheads that work with less water than traditional ones.  Insulation, as well as materials such as flooring, home furnishings and walls are all aspects that need to be carefully considered when building these homes.

As leaders in the industry we asked Brian and Jeremy what they saw in the future of design and construction. Jeremy believes that being able to evaluate the effectiveness of high performance systems and insulation through energy bills is important. Along with water collection systems to reduce storm water runoff and help irrigate the lawn.  Brian agrees that we should have a system to allow clients to ensure they are getting the most effective homes. He foresees homes that can be manipulated to meet the client’s needs at any given time. An example of this would be homes with the ability to accommodate a family of four, which can then transition to accommodate sleeping arrangements for twenty. Along with being able to better meet a client’s needs, he would like to see energy loads distributed to only sections of the house in use, as well as the ability for clients to control how energy is used throughout the home (on site and from satellite locations).  Cottage Home sees one challenge to moving forward with these ideas is getting sub-contractors to approach basic air sealing, insulation, proper HVAC sizing, and design aesthetics with an effective mindset. Cottage Home has established themselves as innovators and leaders in the design of luxury LEED lake front homes. They continue to partner quality, design and the environment hand in hand to produce sustainability along our beaches.

Quick Numbers – Average HERS Score 51 Average LEED score 75 

Learn & see more about their LEED projects below.

51 W. Central

Beach House on Monroe Blvd.

Fabun Road Cottage

Green Cottage at Suequehanna

LakeBridge Beach House

LakeBridge One

Monroe Beach House

North Beach Cottage

Northgate Lake Home

Pier Cove Cottage

Summer’s Gate 4 and 8

The Havens Cottage

Waukazoo Woods Residence

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Green Labels add Value to Homes

More Evidence of Green Value

A recent analysis of homes done by UCLA Berkley researchers found that a green labeled home (LEED for Homes, NAHB Green, Energy Star, etc) had a mearurably higher value than non-green (standard) homes.

Green Homes Price Premium

Researchers from UC Berkeley and UCLA have found that green home labels typically add almost 9% to the value of a California home.

The “Value of Green Labels in the California Housing Market” study found that a typical California home valued at $400,000 sells for an average of 8.7%, or $34,800, more when it has a green certification label.

The study was conducted by researchers with UC Berkeley and UCLA who hoped to answer the question: Does the investment in an energy-efficient home pay off during resale? The short answer is yes.

According to the study, price premiums resulting from green certification were closer to 12% in hotter parts of the state. It also found the premiums were strongly correlated with an area’s environmental ideology as measured by the number of hybrid vehicle registrations — a phenomenon dubbed “the Prius effect” by visiting UC Berkeley professor Nils Kok, who led the study.

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Just as “people sometimes buy a Toyota Prius not just because of the fact that it’s more efficient but because of environmental virtue,” Kok said, “people might buy a green home because of ideology. In areas where the penetration of hybrid vehicles is higher, we find the premium paid for green homes is higher as well.”

Even though buyers of green homes were likely to save an average of $700 in energy bills annually, “consumers value aspects other than just energy savings alone when purchasing a green home,” said Kok, who cited intangibles such as enhanced indoor air quality and better insulation.

The study estimated that the cost of making a home 35% more efficient was $10,000, “so the benefit of green homes far outweighs the cost,” Kok said.

Green home labels seem to be increasing in value. Kok noted that green-label homes sold in the latter part of the five-year study period “seemed to have gone up relative to the beginning of the sample period.”

What about areas outside California?  Well increasingly as more regional areas add green MLS fields that support identification of green home features, it is becoming easier for real estate appraisers to identify the local impact on market value. Learn more at our Green Real Estate Toolkit.

Reprinted from LA Times Article

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Determining Value of Solar Just Got Easier

The additional property value of solar has always been an issue in the industry. Homeowners and professionals both recognize the inherent asset value of solar just as you realize asset value for other home improvements such as a kitchen remodel or bathroom addition.  But quantifying that for real estate appraisers, brokers, and lenders has been an issue – until now.

Consistent appraisals of homes and businesses outfitted with photovoltaic (PV) installations are a real challenge for the nation’s real estate industry, but a new tool developed by Sandia National Laboratories and Solar Power Electric™ and licensed by Sandia addresses that issue. Sandia scientists, in partnership with Jamie Johnson of Solar Power Electric™, have developed PV ValueTM, an electronic form to standardize appraisals. Funded by the Department of Energy’s Office of Energy Efficiency and Renewable Energy, the tool will provide appraisers, real estate agents and mortgage underwriters with more accurate values for PV systems.

“Previous methods for appraising PV installations on new or existing construction have been challenging because they were not using standard appraisal practices,” said Geoff Klise, the Sandia researcher who co-developed the tool. “Typically, appraisers develop the value of a property improvement based on comparable properties with similar improvements as well as prevailing market conditions. If there aren’t PV systems nearby, there is no way to make an improvement comparison. When a PV system is undervalued or not valued at all, it essentially ignores the value of the electricity being produced and the potential savings over the lifetime of the system. By developing a standard methodology for appraisers when comparables are not available, homeowners will have more incentive to install PV systems, even if they consider moving a few years after system installation.”

The tool uses an Excel spreadsheet, tied to real-time lending information and market fluctuations, to determine the worth of a PV system. An appraiser enters such variables as the ZIP code where the system is located, the system size in watts, the derate factor – which takes into account shading and other factors that affect a system’s output – tracking, tilt and azimuth, along with a few other factors, and the spreadsheet returns the value of the system as a function of a pre-determined risk spread. The solar resource calculation in the spreadsheet is based on the PVWattsTM simulator developed by the National Renewable Energy Laboratory, which allows the spreadsheet to value a PV system anywhere in the U.S.

“With PV Value™, appraisers can quickly calculate the present value of energy that a PV system can be estimated to produce during its remaining useful lifetime, similar to the appraisal industry’s income approach,” said Johnson. “Additionally, a property owner thinking about installing PV can now estimate the remaining present value of energy for their future PV system and what it could be worth to a purchaser of their property at any point in time in the event a sale of the property takes place before the estimated payback date is reached.”

The tool is being embraced by the Appraisal Institute, which is the nation’s largest professional association of real estate appraisers. “From my perspective as an appraiser, I see that this is a great tool to assist the appraiser in valuations, and it connects to the Appraisal Institute’s recent Residential Green and Energy Efficient Addendum. It’s an easy, user-friendly spreadsheet that will not bog the appraiser down with a lot of extra time in calculations, and if they fill out the addenda properly, they’ll be able to make the inputs and come up with some numbers fairly quickly,” said Sandy Adomatis, SRA, a real estate appraiser and member of the Appraisal Institute.

Although the tool is licensed for solar PV installations, it could be used for other large green features in a home that generate income, such as wind turbines. The spreadsheet, user manual and webinar explaining the tool are available for download at http://pv.sandia.gov/pvvalue.

Solar Power Electric™ located in Port Charlotte, Fla., is an electrical contracting and solar integration company specializing in the installation of commercial and residential photovoltaic systems.

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New Appraisal Form details Green and Solar Features

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, has made it easier to identify attributes of green homes. Last week, they released a form intended to help analyze values of energy-efficient home features. It is the first of its kind intended for appraisers’ use.

The new form is intended to be used as an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for mortgage lending purposes. Used by Fannie Mae, Freddie Mac and the Federal Housing Administration, Form 1004 is completed by appraisers to uphold safe and sound lending. Currently, the contributory value of a home’s green features is rarely part of the equation.

“This addendum is another example of how the Appraisal Institute is at the forefront of real estate valuation,” said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. “It will help the industry standardize the way residential energy-efficient features are analyzed and reported.”

The Appraisal Institute’s addendum allows appraisers to identify and describe a home’s green features, from solar panels to energy-saving appliances. Form 1004 devotes limited attention to energy efficient features, so green data usually doesn’t appear in the appraisal report, or it is included in a lengthy narrative that often is ignored.

Magdziarz pointed out that the Appraisal Institute’s form also will make it easier for appraisers to determine whether recent home sales should be used as comparable sales. Sales that are truly comparable are key components in determining a property’s value.

While the addendum won’t guarantee that an appraiser will raise a property’s value by tens of thousands of dollars for energy-efficient upgrades, it should guarantee at a minimum that energy improvements will be taken into account based on value adjustments consistent with local market conditions. More importantly, appraisers using the new addendum should be better equipped to identify accurate, area-specific comparable sales.

One of the interesting aspects of the form is the emphasis given to describing renewable energy systems such as solar photovoltaic. The form has an area where data collected by the appraiser could easily be used to calculate the net present value (NPV) of the energy savings from a solar energy system.  Other aspects include identification for third-party certifications such as LEED for homes.

It’s worth noting that this is an optional addendum to a traditional 1004 appraisal form. Hopefully the lending community will embrace this and builders, architects, lenders, appraisers, and other real estate professionals all find value in encouraging the use of this form for green homes.

Download the Appraisal Institute’s two-page green addendum,  which is also listed as part of the Green Real Estate Toolkit.

Green Homes Cost of Ownership Research

Research – LEED Homes Cost of Ownership

Learn more about the Green Addendum and how it will be used at a free event on Oct 24, 2012 in Oak Brook, IL.

And don’t forget to review the Green Home Institute research report showing the total cost of ownership savings found from building healthy, efficient green homes.

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Certified Green Homes Have Price Premium

In 2007, the Portland Regional Multiple Listing Service (“RMLS”) began tracking sales of homes with a green certification such as Energy Star, LEED for Homes, or Earth Advantage New Homes. The Earth Advantage Institute, an Oregon-based non-profit doing work in the green building sector, annually reviews this information in order to glean home valuation trends.

Specifically, Earth Advantage found that existing homes with a green certification sold for 30% more than homes without such a certification. Earth Advantage also found that new homes with a green certification sold for 8% more than new homes without a certification. The research is based on sales between May 1, 2010 and April 30, 2011.

In addition, Earth Advantage found that of 2,237 new homes sold in the last year in the Portland RMLS area, 408 of those homes were certified to some green standard.  Thus, the Portland area is seeing about 18-20% market share of certified new homes and these homes all have a sizable price premium.

Read the report summary by Earth Advantage Institute.

How does that impact Green homes located in the Midwest? Well first it provides support for general market trends. Furthermore, when you have appraisers calling for collaboration on green home values, and an increasing number of real estate boards adding Green MLS features, local research on cost of ownership, and lenders starting to offer green financing, it paints a pretty rosy picture for continued growth in the green homes market.

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New analysis: Green Homes Outsell the Market

In a real estate market such as this, any edge helps. What if your home sold for 9.1% percent more than the competition? Why might a home do this you ask – because it is a certified green home, such as a LEED home.

Real estate professionals have anecdotally reported for years that Green homes sell faster and for more money than traditional (brown) homes. Now there is additional hard market data to support this, from an area that has had a Green MLS for quite a few years: Seattle.   And the data is recent – up to January 2010.

Here’s the full article and report:
http://www.djc.com/news/en/12015059.html

Similar to the ability northern Illinois agents now have, real estate agents in Seattle can note whether a home has certifications from Built Green, Energy Star, LEED for Homes or other third-party verification. Agents can also download the certification as an attached document to the listing.

As a result these Environmentally-certified (“e-certified) homes have had some trend analysis done. There is a great accompanying graph showing trends in the Seattle area. It reveals that:

“certified green homes made up 33 percent of the new home market, sold for a 9.1 percent premium per square foot and were on the market for 24 percent less time. Further, from November 2009 through January 2010, King County non-certified homes continued to decrease in value as certified home values increased.”

Most interesting from a valuation perspective from this article is the following:

“It was eye-opening for appraisers to hear that in July 2009, two years of steady growth in market share of green homes culminated in over 49 percent of new homes sold that month with a certification. Over 50 percent, and appraisers will be required to discount any home that is not green, as that will have become the [new] market norm.”

So why are people (aka. the Market) paying for third party certification of their homes? The reasons vary among items such as the improved comfort and energy efficiency, the health of the home, and the durability and lower maintenance.

Granted, this data is from the Pacific Northwest market, not Illinois. But since Northern Illinois recently implemented a green MLS, this could be a picture of future trends a year or two down the road, once some market transactions start occurring.

These are exciting times for Illinois green building and LEED homes! For the full report, please visit: http://www.djc.com/news/en/12015059.html