Cost-effective Green Building and Remodeling

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Green building doesn’t have to look any different from conventional building; it’s how it’s built, not what it looks like.

Indeed, green building is fraught with mythology: “It is too expensive;” “I can’t get green products where I live so why bother?” “I don’t want to live in some weird straw-bale house or log cabin;” “Solar is ugly;” “Nobody I know has ever done it;” “I’m not an old hippie and don’t want to live that way.”

Other people assume falsely that green building is too good to be true — that it is all green-washing and a marketing ploy on the part of the industry to dupe us once again.

Yes, some building elements do cost more. But many cost less! More importantly, green building is the way buildings will be built in the next decade and this is just the tip of the iceberg. When we describe what we do at What’s Working, we tell people that we consult in the growing field of applied common sense. Most of what green building brings to the construction industry is just a more systematic way of thinking about buildings. Looking at the big picture rather than just at the bricks and mortar adds a new perspective to how all the pieces fit together and the consequences, both near and far, of the decisions we make at the design stage of a project and the products we use to build it.

Green building need not be too expensive. When it is part of the initial process of setting goals for the remodeling project it becomes matter of fact — you, your architect, and your builder just make it happen. Many builders have found that the real cost is in the learning curve, not in the implementation of the building process. The products are becoming more available and more affordable all the time as major manufacturers develop new lines to meet the “green” demand. Paints are a classic case in point; paints that are low in volatile organic compounds (VOC are now featured in the product lines of all the major manufacturers. Keep in mind that green building doesn’t have to look any different from conventional buildings; it is how it’s built, not what it looks like. and most significantly, people from coast to coast and across the midlands are building and remodeling green.

Green remodeling actually makes and saves money. and this is not just long-term energy saving costs; the cost to implement green features (“first costs”) is often less than remodeling by conventional standards. In the long term, green renovations increase the resale value of your home. There are also financing options available for people who remodel with energy efficient features that can save hundreds of dollars. No matter how you look at it, green remodeling is a smart, moneymaking investment.

Be careful not to get caught in the “payback” trap for energy conservation features. Payback is an illusion for many reasons. If you save $12 per month on your energy bill will you even notice it? What is the payback of a night on the town? We don’t think about payback for anything but energy conservation or solar products: the only things that do have a payback. There are two better ways of thinking about the energy you use. The first is to look at your mortgage payments plus your monthly energy bills as one collective cost. Most often, the increase in monthly payments for energy upgrades is less than the savings on your utility bills, so it is money in your pocket. Perhaps more important is how much will it cost you in five years to heat and cool your house; just look at the increase in energy costs over the last five years. Installing energy conserving products such as insulation or solar panels is a cheap insurance policy against rapidly rising costs for fossil fuels.

Another way to look at the cost of green is what it is worth to you to reduce the possibility that your children will develop asthma or other respiratory problems. How valuable is the health of your family? There are many subtle savings and preventative measures that can’t be put into a bottom line cost/benefit analysis. How much do you value your Saturdays for family time rather than refinishing the deck? Is comfort on cold winter nights — thanks to energy efficient windows and increased insulation — important to you? All of these issues go into the “value proposition” of making green decisions.

For clarification, we’ve broken down how green remodeling saves money into five categories: general design strategies; landscaping; energy systems; products and materials; and job site considerations. Then we explain how you can fund your renovations in a way that maximizes the financial benefits of added energy efficient features. Finally, we demonstrate the advantages of making investments in your dream — green.

Can Green Remodeling Save You Money?

General Design Strategies

Remodeling existing homes instead of building new saves significant quantities of materials and energy, in turn benefiting the environment. Project costs are reduced and there may be significant savings in time and money associated with not needing extensive regulatory review and approvals.

• Good design is the best way to make your project affordable. It is much less expensive to make changes on paper than after construction has started. A few extra hours of your architect’s time can save hundreds if not thousands of dollars in construction changes.

• Integrated building design often results in first-cost savings, especially in the case of energy conservation (see Energy Systems below), but also in other areas of design. For example, including contractors in discussions with the architect and engineer can help identify ways to streamline the process and save on materials. Involving a landscape architect early may reduce the need for new costly plantings because he or she can protect existing plants from construction harm.

• Smaller renovations require fewer resources during construction, disturb less land during site work, and use less energy during operation.

• Paying attention to solar orientation by locating more windows on south facing walls can reduce energy costs by 10 to 40 percent right off the bat. Using your home to respond to the natural energy flows of your micro-climate means you reduce your need (and cost) for expensive mechanical systems.

• Minimize cooling loads (and costs) by reducing window area on east and west facades and , where there are windows, by incorporating shade plants to reduce the heat buildup.

• Leave floor slab exposed. Eliminating carpet will avoid mold and other biological pollutants, the environmental impacts of manufacturing the carpeting, and the cost of the carpet. Consider texturing and pigmenting concrete: it is beautiful and less expensive than carpet alternatives.

• Optimal Value Engineering (OVE) and advanced framing reduce waste without compromising structural performance. Some builders have found that they can reduce the framing materials by 20 percent and increase energy savings at the same time. You reduce overall material use, thereby benefiting natural resources and saving you money.

• Open layouts help distribute daylight, reduce ducting requirements for conditioned air distribution, simplify reconfiguration of space, and reduce material use.

• Optimize building dimensions to reduce cutoff waste. Anytime you reduce waste you save resources and money by buying less material, reducing onsite labor (for measuring and cutting), and paying less for disposal.

Landscaping

• Indigenous landscaping like prairies, woodlands, and desert gardens support wildlife and biodiversity better than conventional turf. Native landscaping does not require irrigation or chemical treatments, generally making native plantings less expensive to maintain. Moreover, native plantings reclaim weekend time for the family by eliminating the need to mow the lawn.

• In areas with low annual precipitation and areas that are prone to drought, provide xeriscaping (dry-adapted plantings) to obviate the need for irrigation systems and more expensive plantings.

• An integrated design makes it possible to pay for increased energy conservation measures through savings in heating, ventilation, and air conditioning (HVAC) equipment. For example, a tight, well-insulated building envelope with high-performance glazing and shading strategies may enable you to downsize or eliminate conventional heating and /or cooling equipment. We have worked on many homes in the harsh Colorado climate that use only a typical water heater to heat the entire home.

• Using a water heater to satisfy heating loads saves first costs for an unnecessary furnace.

• Specifying specific glazings (windows) for different window orientations usually does not cost anything more than conventional windows. This allows the south windows to help heat your home and reduces heat gain from east and west windows that would otherwise drive up air conditioning costs. It almost always results in future savings from passive solar heating and cooling — reducing the need for mechanical equipment.

• Using ceiling fans increases air flow and occupant comfort in homes without mechanical cooling. This significantly reduces equipment costs.

• Keeping ducts away from exterior walls will improve energy performance and save money because less ducting is required.

• Reducing outdoor lighting by using motion sensors will save energy and reduce light pollution.

Products and Materials

• Salvaged materials can often be obtained at lower prices than new, virgin materials, depending on labor costs. This benefits the environment because fewer resources are used, thereby also saving landfill space. Salvaged materials include lumber, millwork, windows, cabinets, some plumbing fixtures, and hardware.

• Use more durable materials that require less maintenance. Brick facades may cost more up front but you never have to paint or repair your siding.

• Recycled content composite decking will outlast wood by two to three times, never requires paint or finishes, and will not burn or splinter bare feet in the summer.

• Using structural materials as finish materials eliminates a costly and resource-dependent building component. For example, use exposed beams or concrete floor slabs.

• Downsize the supply pipe diameter with water-conserving fixtures (such as low-flow showerheads and toilets) to deliver hot water faster, reduce standby losses from hot water pipes, and reduce water waste. Smaller diameter pipes are less expensive.

Job Site

• Protect existing trees during remodeling. It may cost a bit more, but these costs are easily recouped by having to spend less on plantings when renovations are finished. Large trees also boost property value, and the shade and cooling effect they provide allows homeowners to downsize air conditioning equipment.

• Recycling job site waste avoids expensive landfill disposal costs.

Although this list is far from complete, it demonstrates just a few ways green remodeling is more affordable on the first cost side. The most important aspect is thinking in terms of building integration, or the house as a system. An over arching framework makes it possible to incorporate many strategies that, taken

alone, might cost you more.

The following section on financing your renovation was written by a financial expert. He lives in Northern California, but his influence as a leader in socially-responsible investments is recognized internationally.

How much does green remodeling cost?

Green remodeling can be less expensive when you consider options in the context of the entire house. What you save in one area can be applied to another area.

KEY:

0 = no cost   L =low cost   $ = more costly

$ - energy-efficient washer and dryer

$ - light-colored, reflective roofing

$ - whole-house fan

$ - I.c. recessed lighting

$ - ridge vent

$ - radiant foil stapled to rafters

$ - PV panels

$ - check and seal ducts with mastic

$ - ceiling fan

$ - energy-efficient refrigerator

L - removable shade cloth

L - deciduous trees on south and west aspects of house

L - trellis with deciduous vines

L - permeable paving

L - low voltage landscape lights

L - portable fan

L - low-flow toilet and showerhead

0 - set water heater to 120

L - compact fluorescent floodlights

$ - low-E skylight and screen which opens

$ - R-38 attic insulation

L - drape or blind all sun-facing windows

L – awning shade window

How to Pay for your Green Renovation

There is a growing awareness and a deep yearning to understand how “greening up” a home can create a healthier living environment and save money. Financing healthy home upgrades and improvements can be easy, depending on your income, the equity you have in your home, and your credit scores.

If you have money in the bank or in an investment portfolio that, if liquidated, won’t generate substantial capital gains taxes, the simplest way to finance your renovations might be to write a check. Once your renovations are complete, you can refinance the property at a higher market valuation, take out some or all of the additional equity invested, and put it back in the bank or into the stock market.

If you have good credit and a long-term low interest rate credit card and don’t need extensive renovations (i.e., under $15,000), you might want to use your card (and maybe even get frequent flyer miles). Once the work is complete, you should refinance and pay off your credit card(s). -

A local bank will often finance renovations. This should be a relatively painless process if you have substantial equity in your home; the bank will simply extend you a home equity loan. If you have good credit, solid, verifiable income, and /or substantial investment assets, the bank may be willing to lend you money for renovations as a personal loan, secured by your personal guarantee.

Construction-to-permanent one-time closing loan packages make a lot of sense if current interest rates are lower than your existing permanent loan.

Essentially, you apply for a mortgage based on the “future completion value” of your home as determined by an appraisal. Loan amounts range up to 95 percent of the future completion value and closing costs are rolled into the construction loan. Your existing mortgage is paid off, and additional payments are made to the contractor as the renovation work proceeds. Upon completion, the lender extends a permanent loan to you based on current market interest rates with no extra cost. Overall, closing costs are lower, especially when compared to paying for two separate loan transactions. This approach works best for higher cost renovations, say $50,000 or more. Only a few select lenders offer this type of product. You are not likely to find it at your local bank.

Another unique loan package that you won’t find at local banks is generically called an Energy Efficient Mortgage (EEM). The Federal Fannie Mae, a financial products and services provider, is piloting a green mortgage product in a few states. A certified energy rater will analyze future energy savings you can expect from your renovation and calculate the present value of those savings. That dollar amount can be considered additional equity in your home, thus increasing the amount of money you can borrow, or reducing the amount of cash you need for a down payment. For some borrowers, the additional equity could mean hundreds of dollars saved annually by reducing or possibly eliminating private mortgage insurance.

Energy efficiency upgrades can help increase the value of your home and provide a resale advantage over other properties in your neighborhood. According to a study published in The Appraisal Journal in October 1999, the selling price of homes increased by $20.73 for every $1.00 decrease in energy bills. Think about it: if you could save $350 in utility costs annually, your home might increase in value by more than $7,000.

You can profit by investing in efficiency measures regardless of how long you live in your home. If the reduction in your monthly energy bills exceeds the after- tax mortgage interest paid to finance the energy efficiency upgrades, you will enjoy positive cash flow as long as you live in that home. and if energy prices spike as expected, energy efficiency may be one of the best investments you will ever make.

A healthy, energy efficient home often means you can borrow more or finance a higher percentage of the property value. Or you could use all of your energy savings to pay down your mortgage faster. If you make one extra payment per year, it is possible to pay off a 3o-year loan in closer to 20 years — and save thousands of dollars in interest!

These are just a few of the financing options available to you; many solutions must be customized. Contact a local professional who is familiar with financing green, energy efficient renovations for help with these critical decisions.

Choose Only the Options You Can Afford

The renovations we present on this web site are limited by what we can afford to finance, therefore we hope this section’s overview of cost-effective green building options combined with expert financing tips will enable you to consider creative green remodeling options. Green remodeling and construction is not about opening your wallet; it’s about opening your mind!

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