EEBA Newsletter

The views expressed in these articles are solely those of the author and do not reflect the views of EEBA staff, officers, or board members. EEBA welcomes guest articles from qualified authors, and we offer these articles as a service to the high-performance housing industry as a way to encourage discussion and collaboration between industry professionals on relevant issues.

Posts From September, 2019

The Ultimate In High Performance

This award winner is just one example of the lessons builders will learn at this year's EEBA Summit.
The Ultimate In High Performance

This is the sixth year that EEBA will be hosting the DOE's Housing Innovation Awards at its annual Summit. The awards recognize builders who have pushed the envelope on the Path to Zero Energy Ready homes by showcasing projects that offer lessons for others builders. As such, the awards perfectly support EEBA's mission of educating the industry on how to design, build and sell high-performance homes.

An example of what attendees will see this year is a winner in the Large Custom Home category, a 4-bedroom, 4691 square foot zero energy home in Hampton, Virginia on a beach overlooking the Chesapeake Bay. It was built by Health-E Community Enterprises and in many ways represents the ultimate in high-performance: super-efficient, healthy, resilient and handicap accessible.

But while the home was obviously designed for a well-heeled custom buyer, builder Jay Epstein used design approaches and materials choices that he says apply to more mainstream projects. In fact, he offers similar designs at his new 75-unit production community.

The home's specs are summarized in the data box at the end of the article. When asked for the three lessons he would like to convey to other builders, he talks integrated design, the highly optimized building envelope, as well as how to communicate value to high-performance buyers.

Question Everything

This is the fourth Housing Innovation Award Epstein has won, a track record he credits in large part to a very deliberate design approach. The home achieved a HERS score of 47 without PV and -16 with it. The road to that result included seeking input from subcontractors and consultants before making key decisions.

For instance, Scott Sidlow of TopBuild Home Services, the HERS rater, says that Epstein modeled different insulation systems before settling on the one he thought was the most appropriate. "Most builders just want their homes to pass inspection," he says. "Jay is adamant about maximizing efficiency and takes a deep dive into all areas."

That means questioning every detail. For instance, the insulation systems Sidlow modeled included open cell plus closed cell, closed cell plus cellulose, and closed cell plus blown fiberglass plus continuous exterior insulation.

Sidlow says that builders who don't take the time to model these what-ifs, are leaving efficiency gains and money on the table.

The integrated design approach is also important when choosing mechanicals. The home has a Trane TruComfort variable speed heat pump and Trane Comfortlink controls that work with a network of sensors to monitor and optimize humidity and temperature.

Epstein says that an engineering consultant is invaluable for this part of the design. "We always use a third party to size our HVAC equipment," he says. While this is standard practice in commercial and industrial projects, it's probably safe to say that few residential builders do it. However, Epstein insists that, especially on a zero energy ready home project, it's unrealistic to assume the dealer will accurately size the equipment.

Flash-And-Batt Done Right

Epstein nicknamed the home "Noah's Ark," to make the point that everyone inside will stay safe and secure in even the worst weather. As such, he wanted an envelope that made the home not just super-efficient, but resilient in the face of North Atlantic storms defined by high winds and driving rain.

Of course, resilience starts with a solid structure. This home includes impact-resistant windows and fiber cement siding. It sits on an elevated steel substructure a full story above grade. The steel bears on a concrete grade beam, which in turn is supported by 36 pilings driven an average of 35 feet into the sandy soil. If a there's a hurricane-driven storm surge, the ground level (which houses a garage and a small conditioned entry) can flood without impacting the main living area above.

A truly resilient home will also stay habitable during a storm-related power outage. The home's solar panels, along with a backup generator, would supply the power in that case but what keeps everything warm and dry are the envelope details.

The wall is a "Hybrid" design, a combination of closed cell foam for air sealing and either blown fiberglass or open cell foam for additional R-value—in other words, flash-and-batt. But while flash-and-batt isn't uncommon, Epstein says it's often done in ways that put the home at risk of moisture problems.

To prevent moisture from migrating within a tight wall system, the home needs a climate appropriate ratio of air impermeable insulation (closed cell foam) to air permeable insulation (open cell or blown-in fiberglass). "In Zone 4 where this house is located, the impermeable insulation must supply at least 15% of the total wall R-value, and preferably more," he says. Other climates will have different requirements. (Epstein says the best resource for doing this right is Joe Lstiburek's Hybrid Attics and Hybrid Walls, available for purchase from the ASHRAE website.)

The closed cell foam also has a structural benefit. Because it was applied in all exterior floors, walls, and ceilings, it literally "glues" the house together. "The house doesn't shake during even the worst storms," he says.

He sheathed the walls with Huber's ZIP R3.6 sheathing, which serves as an air and water barrier and also includes an insulation layer that serves as a thermal break. He added a layer of housewrap on the North and East sides—the parts of the house facing the water.

          Front of House                                          Foundation                                                            Deck

          

This Zero Energy Ready custom home is one of the Housing Innovation Award winners that will be showcased at this year's EEBA Summit in Denver. It was built directly on the beach and includes disaster resistance, handicap accessibility, and other features.

Of course, people don't buy R-values or mechanical systems; they buy things like health and peace of mind. Epstein has something to say about that, too.

The house design follows a path that ends at the Zero Energy Home Certification while also meeting the client's other expectations. That means asking plenty of questions. "When someone approaches us about a home, we start by asking a lot of lifestyle questions to help us better understand their expectations and priorities," says Epstein. If, for instance, they have allergies, he will make health a top priority and will focus on that during subsequent conversations.

He says that while it's important to help buyers understand how their home works, that information needs to be presented at the right time and in the right context. Health E-Community brands itself as a builder of eco-friendly solar homes with a traditional flair. Epstein finds that buyers are attracted to that message and that it opens an opportunity to talk with them about the home's high-performance features. However, the focus needs to be put on how those features will improve their daily life.

More details about this Zero Energy Ready home should be available on the DOE's Tour of Zero website sometime in October. Meanwhile, you can also learn more at the EEBA Summit in Denver from October 1-3. The Housing Innovation awards ceremony will be presented at lunch on the first day. And, of course, many of the other sessions detail the types of approaches used in this and other award winners.

 


 

Location: Hampton, Virginia

Conditioned space: 4691 square feet

Passive solar design with low U-value glass

13.1-Kilowatt solar array

Modeled Performance Data

• HERS Index: without PV 47, with PV -16

• Annual Energy Costs: without PV $2,000, with PV -$250

• Annual Energy Cost Savings: (vs typical new homes) without PV $1,800, with PV $3,900 

R-Values

• Roofs: 44.7

• Walls: 30.6

• Framed Floors: 56.2

WRB: ZIP system sheathing. Additional housewrap layer on the North and East walls.

Walls and roofs: Walls include closed cell foam, blown fiberglass insulation and Zip R 3.6 sheathing. Roofs use a combination of closed and open cell foam.

Heating and Cooling: Trane TruComfort XV20i variable speed heat pump, CleanEffects air cleaner, Zoned Comfort Link XL 1050 and XL850 touchscreen controls. Two-stage American Standard gas furnace provides backup in very cold weather.

Ventilation: Panasonic Intella Balance 100 ERV

Air Filtration: Trane CleanEffects filtration technology on heat pump. Panasonic MERV 8 filter in ERV

Hot Water: ProLine XE Hybrid Electric Heat Pump water heater.  Structured plumbing system with a recirculating pump.

Solving the Appraisal Problem

Appraisers will be better able to value high-performance homes when more builders start documenting those homes' features
Solving the Appraisal Problem

by Sandra K. Adomatis

Fannie Mae and Freddie MAC are in the process of revising the Uniform Residential Appraisal Report (form 1004). Although the draft has yet to be made public, I believe that it will provide a path for more accurately describing and valuing energy efficiency and green features.

The recognition by the mortgage industry that buyers are seeking green features—especially features that lower their monthly energy bills— is a step in the right direction. It should improve the appraised values of these properties as well.

But while better appraisal forms will help, they're useless if the appraiser and real estate agent aren’t provided with the home's high performance details. The appraiser can't value green features unless those features are documented, and that's the builder's job.

The fact that few builders provide adequate documentation is costing everyone. I've seen many high performance homes that were valued the same as similar homes built to a lower standard. Each of these contributes to a wider problem by helping build a database that says high performance homes don't warrant a sales price premium.

A case in point illustrates this. Not long ago I appraised a house that earned ZERH, ENERGY STAR, Indoor airPLUS, WaterSense, Florida Green Building Platinum Certification, and Florida Landscape Certification. The home had a 45 HERS score. The builder did not complete the Appraisal Institute's Residential Green and Energy Efficient Addendum (AIRGEEA), so I completed it.

I made an MLS search of that neighborhood to identify comparable homes. My search turned up 16 sales in the previous 12 months of homes with living areas within 100 square feet of this home. Prices ranged from $170,650 to $226,000, with an average of $188,000.

Upon receiving my appraisal report, the builder confessed that this high-performance house with five labels had been valued by another appraiser at $5,000 less than the 16 sales in the immediate area that were only built to code. The obvious question: Why?

When I investigated further I discovered the following.

1. The builder had verbally given the certification details to the previous appraiser but had not provided written documentation, like the AIRGEEA and the green certificates.

2. There were no labels inside the home documenting the certifications.

3. The appraiser lacked the knowledge and training needed to accurately value high-performance features.

As of today, most publicly available records, like the property appraiser’s records, don't even identify solar photovoltaic systems, which are often visible from the street. Those records certainly don't include behind-the-wall details.

The Environmental Protection Agency doesn't collect or list addresses of ENERGY STAR certified homes on its website. The MLS, the database most appraisers use, needs improvement. Not all MLS's have searchable green fields and for those that do, the fields often aren't populated because the agents lack the documentation needed to verify the features.

Exceptions are RESNET and the Appraisal Institute (AI). RESNET's Appraiser Portal, which is available to Appraisal Institute Members, lists ENERGY STAR Certified homes by address. The organization also has a public database that anyone can search to find homes by address to find their HERS Ratings. AI has a database of confirmed HERS Ratings and ENERGY STAR Certifications.

Of course, you need an appraiser who knows how to use these resources.

Problems at Resale

Lack of documentation isn't just an issue with new construction—it also causes many high-performance homes to be under-valued at resale. Often, the owner no longer has the green certificates, the AIRGREEA, or other documentation.

If the home earned a low HERS score or green certificate when it was built, chances are the paperwork will have been lost by the time the home goes up for resale. If the features that went into earning those certifications are not highlighted when marketing the home for resale, there's little chance that it will sell for more than those code-minimum homes.

Why should a builder care about their homes' resale value? The answer is that homebuyers who enjoy the benefits of high-performance features and see a sales price premium when they sell are more likely to refer that builder to friends and acquaintances. After all, they likely paid a premium over the cost of a code-built home, so they will expect one when they sell.

Paths to Value

This all begs the question of how to document those features and how to make sure they're properly credited during an appraisal.

One step is to place stickers with the HERS rating and any certifications in a place where they won't be disturbed. I recommend placing them on the electrical box because it's something homeowners don't take with them when they move. If the local building code doesn't allow posting in the electrical box, post the information on a nearby wall or on the HVAC equipment.

This isn't a new idea: manufactured home companies have been doing it for years. I have inspected 30-year old manufactured homes’ model names, climate zone data, and insulation factors, all still visible inside the box.

You also need to search out a qualified appraiser. If the lender or the appraisal company assumes the builder used code-minimum construction, they won't go the extra mile to find an appraiser with the training and experience needed to value high performance homes, and you may need to get involved to make sure they do so. (The Appraisal Institute's Residential Green Registry is a good place to find someone with this training.) If you need leverage, remind them that Fannie Mae, Freddie Mac, and FHA all require that the appraiser have requisite knowledge of the property type.

Even with the right appraiser you will still need good documentation. The AIRGREEA lets you base inputs on preliminary or projected ratings. If the home isn't completed yet, the appraiser can make the appraised value subject to completion and confirmation that the final ratings match or exceed the projected ones.

Also make sure to give the appraiser the complete HERS Report based on a projected rating from plans and specifications.

If you want more detail, a good resource is the brochure, “Appraised Value and Energy Efficiency; Getting It Right.” It includes links to the secondary mortgage market guidelines, documentation needed by the lender and appraiser, and a sample lender letter for the borrower to take to the loan application.

Marketing Green

Documented green features make a great addition to your marketing toolbox. This is another area where a lot of builders could be doing better.

As soon as windows are installed on a new home, place the projected HERS Score in the front window. Buyers may not know what the number means but they will ask questions about HERS or look it up on their smartphones.

Encourage REALTORS to make a .jpg of the certification or energy scores to place in the home's online listing along with any photos, renderings, or plans. Potential buyers will review these before they read the listing information, and if they see a certification they will ask questions about its meaning or benefit.

Ask your agent to attach the full AI Residential Green & Energy Efficient Addendum to the home's MLS listing. This will help appraisers and potential buyers understand the behind-the-walls features that make the home high performing.

In the end, the work of documenting and promoting a home's green features benefits all parties. It will be easier for homeowners to borrow the money needed to pay for energy-saving features. Each high-performance home that sells at a premium over a similar home without the features serves as a potential comp for future sales, ultimately making the process easier for everyone.

And if you're a builder, imagine the boost to your reputation if you're known for quality homes that are high performing AND offer a good resale value.


Sandra K. Adomatis, SRA, LEED Green Associate, is the owner of Adomatis Appraisal Service in Punta Gorda, Fla. Her book, Residential Green Valuation Tools, was published by the Appraisal Institute in 2014.