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.

Should a Builder Own a Blower Door?

Yes, according to this high-performance builder, who uses it to constantly raise the quality bar
Should a Builder Own a Blower Door?

by Ben Walker

With codes and high-performance construction programs requiring airtightness testing, a small but growing cadre of home builders have been purchasing their own blower doors. They are finding that this tool's value goes beyond mere compliance.

One of them is Arrow Building in Columbia, Missouri, which owner Jake Bruton says builds "durable, energy-efficient, aesthetically pleasing homes." Most of his projects meet Passive House standards, which specify a maximum air leakage of 0.6 Air Changes per Hour at a test pressure of 50 Pascals (0.6 ACH 50).

However, he bought his first unit in 2014, before committing to those standards. He heard murmurs that air tightness testing would eventually be part of the code. No other builders in his market seemed to own one, so he figured that being the first would give him a competitive advantage.

(Bruton builds custom homes, but some Zero Energy production builders also own blower doors. One is Thrive Homebuilders in Denver, which completes about 100 homes per year. Company president Gene Myers says it's an excellent tool for quality control. "It's particularly handy for town homes, where party walls can be a challenge with airtightness.")

Driving Improvement

Bruton says the blower door proved its worth immediately. "We started testing everything to educate ourselves," he recalls. Although his new homes were coming in at a code-compliant 3ACH 50, he wanted to do better.

So, he began looking online for best practices in air barrier detailing. "We found architects that had done multiple Passive Houses and started calling and asking how they did it," he says. Test results quickly fell to 1 ACH 50 or better.

To maintain those numbers, he now performs three separate tests on every new home, as follows:

Test # 1: Sheathing. The first test is for overall envelope tightness. Arrow's homes are designed with a hybrid air barrier that includes the exterior sheathing and the ceiling below the attic. Both are installed and taped before this first test.

The framers don't cut out window openings yet: instead, they only cut out the door opening where the blower door will be installed. And rather than the standard 50 Pascal test procedure, they depressurize the house to 100 Pascals, then spray the outside with a hose to see if any water gets sucked in through unsealed seams and holes.

Bruton sometimes gets asked about pushback from the drywall contractor, who has to come to the house twice. His answer is that Arrow's homes are trussed to eliminate the need for interior load-bearing partitions. "The ability to install the lid in one monolithic run before we build those partitions saves the drywaller time in the long run," he says.

Test # 2: Windows and Doors. With the first test complete, crews install all windows and doors, after which Bruton runs a second test. Since the envelope has already been verified tight, this test pinpoints any problems with the window and door installation.

Bruton will also sometimes do another test, which is basically #2A. It's done before the drywall goes up, for instance after the spray foam insulation has been installed or after the mechanicals are roughed in. It depends on the home and the complexity of the details.

Test # 3: Everything Else. The final test is performed post-drywall at the standard 50 Pascal pressure, during which a fog machine is used to identify specific leaks that might have been added after the windows and doors have been installed, usually from electrical and mechanical penetrations.

The local jurisdiction also requires third-party testing, so this final in-house test ensures a passing grade.

Setting up and running a test only takes an hour, but Bruton shuts down production for each of the three days so there's enough time to fix any problems. "It's a worthwhile investment to ensure quality," he says. "Besides, weather delays eat more time on a build than the blower door tests."

The Retrotec Model 5000 blower door Arrow uses costs about $3500 and has proven a great investment. "The tests we do guarantee a much better home for our customers, and we couldn't afford to do them if we didn't have our own blower door," he says.

The unit works with Retrotec's GaugeRemote app, which lets the operator control fan speed from a phone or tablet, as well as its rCloud app, which geo-locates the home, adjusts for local weather conditions, runs the test and generates a report that can be saved, shared or printed. These apps mean the operator no longer has to take notes and can control the fan remotely while moving around the house focusing on finding those leaks.

Trust but Verify

Bruton stresses that his company's path to better air sealing didn't require radical changes. "We did switch from using house wrap as the exterior air barrier to using the sheathing, but otherwise don't detail our homes much differently than before," he says. "We mostly just pay more attention to the critical details. If the plans call for a bead of sealant, we make sure that whoever is responsible for that part of the job understands how to install that bead correctly."

The blower door also lets Bruton confirm that subs are meeting Arrow's air sealing specs. For example, spray-foam installers' work can be tested immediately, not weeks later. In addition, no one is allowed to drill holes without getting them approved, and everyone is responsible for sealing their own work. Subs are given cans of spray paint, with each getting their own color, and are required to mark all their penetrations. If they drill a hole without approval and the test shows that it leaks, they have to pay to fix it.

That's seldom a problem. "Although we verify everything, we work with conscientious, high quality subs," he says.

The bottom line is that the ability to test when needed has made it possible for Arrow to refine its construction systems and to raise the quality bar for everyone on the job. "The blower door is one of the most important tools we own," says Bruton. "I don't think we would be as good today without it."

Ben Walker is co-CEO of Retrotec. For more information on Jake Bruton's work, check out his articles at, or his videos at

Top Multifamily Design Mistakes

If your business includes apartments or condos, beware of these common, performance-enhancing errors
Top Multifamily Design Mistakes

by Steve Klocke

Although I'm an architect by training, I've worked for nine years as a sustainability consultant on low-rise multifamily projects. My designers and builders usually seek green building certification for their projects, whether ENERGY STAR or LEED for Homes. They want to be known for delivering high quality, high performance buildings.

Good intentions notwithstanding, I see the same mistakes again and again. This article covers the top four, all of which concern envelope detailing. Few projects have all these errors, but every project I see suffers from at least one of them.

These mistakes begin during design, which is why most of the live trainings I give on this topic are geared to architects. However, I also know that the most effective preventative measure is for educated architects and builders to help each other do good work. That benefits everyone.

The four top design mistakes are as follows:

1. Overcomplicated Geometry

Architects love to draw buildings with complex shapes. Maybe it's their training, or maybe it's because design competitions reward people who do something unique.

Either way, the belief that jogs, bump-outs, and cantilevers make a building more attractive is subjective, and tastes could change by this time next year. What's not subjective or temporary is nature: rain, wind, heat, sun, and gravity. These factors have way more impact on a building's durability and profitability than aesthetics, but people don't seem to spend enough time thinking about them.

A complex shape has more surface area than a simple cube. To build it you will need more materials and labor, and a longer construction schedule. Those jogs and bump-outs make it difficult to correctly install air and water barriers, which makes drafts and leaks more likely. They also complicate the insulation details needed to prevent thermal bridging. And with all that extra surface area, the mechanical system has to work harder to keep the building comfortable.

My point is not that you shouldn't incorporate interesting shapes into your design. However, you really need to be realistic about the costs of doing them right and the long-term risks to the building.

Figure 1 Figure 2

Although some architects love complexity, simple buildings have fewer problems and, as seen in the photo of these Brooklyn townhomes, can be quite attractive.

With that in mind, I want to make the case that simple buildings can be quite attractive if they're intelligently detailed. Just compare Figures 1 and 2, which show a complex apartment project and a row of condos in the Brooklyn's Park Slope neighborhood. The latter are simple, rectangular boxes but there's something very pleasant about the trim proportions and the regular window spacing.

2. Design Irregularities

This category includes a wide range of different errors. The big one is designing units in a wide variety of sizes and shapes, which unnecessarily makes life difficult for the rest of the project team, from the engineers and energy raters to the builders and their subs. All of this extra effort doesn’t come cheap, and it increases the chances for failure. Instead, consider offering a couple of floor plans and replicating them in a consistent fashion. Construction will be more predictable and it will be easier to correctly detail individual units.

Other problems include offering too many options in everything from light fixtures to mechanical systems. Keep it simple. Instead of spending time designing a good water barrier connection between three different types of cladding, just stick with one. Pick plumbing fixtures that are efficient, accessible, affordable and attractive, and use them as often as possible.

Of course, some architects can't help themselves and feel like they want to try a different design approach on every project. But the fact is that consistency is efficient and effective, and it can also make your designs more recognizable (and marketable).

To avoid unnecessary problems, costs and energy penalties, limit your offerings to a toolbox of proven design and construction details. If you want to show off your creativity, you can explore different ways of combining those details­—as long as you don't overcomplicate the building in the process.

3. Inadequate Air Barriers

This is more likely in complex buildings, but I also see it in the most simple of projects. Air barrier detailing is often left to the builder, but builders generally build the plan, so if the air barrier is not clearly defined there's a good chance it won't be done correctly.

You have to draw and detail the air barrier on the plans, and also include a performance requirement in the specs.

Figure 3


Plans for a multifamily building should show the air barrier surrounding the individual apartments as well as the building as a whole. This is a classic belt-and-suspenders approach.

Some people ask whether the air barrier should enclose the building perimeter or individual units. My answer is that you need to do both. That means the plans will show a bunch of little bubbles surrounded by a big bubble, as in Figure 3.

Why seal each unit individually? For one thing, it's required by most green building programs. For another, airborne annoyances like sound and cooking smells travel more readily through leaks than through solid assemblies. Finally, compartmentalizing the building like this supplements the structural firestopping.

It's a classic "belt and suspenders" approach. The individually sealed apartments reduce air pressures on the building air barrier, which in turn reduces air leakage to the outside. The tighter the little bubbles, the less hard the big bubble has to work.

My company has written an air sealing guide that you can insert into your drawings or specs, but the best approach is to incorporate our details into your details. First, identify the location of the air barrier (for example, is it at the ceiling drywall or at the subfloor of the unit above?). Then zoom in on every connection, transition and penetration to anticipate how to stop air movement.

To ensure good results, some builders complete a few units ahead of time and have a consultant like myself run a blower door test on them. What if the don't meet the air leakage goal? "Oops," I tell them, "Remember all that stuff I told you do to? You're obviously not doing it." That can lead to some interesting conversations between the building owner or contractor and subs, but the problems usually end up getting fixed.

4. Thermal Bridging

In case you haven’t heard it before, thermal bridging is where energy moves more quickly through the solid parts of an assembly. Basically it’s the path of least resistance between where energy is to where energy isn’t (inside to outside, or vice versa).

Preventing this means eliminating those paths, and the best approach is installing rigid foam on the outside of a roof, wall, floor or foundation. While this is simple in theory, not all thermal bridges are obvious, so in practice a lot of architects and builders miss them. These hidden bridges are more numerous on buildings with complex geometry, which is another reason to keep things simple wherever possible. (If you detect a theme here, you're right.)

However I also see a lot of thermal bridging on simple assemblies like slabs on grade, as you can see in Figure 4. The part of the assembly with the most heat transfer has the least insulation!

There are way too many potential thermal bridges to point out in a short article. The point is that you have to think through the insulation details on the plans and predict how heat might move through or around them. If you see any short circuits, then you need to add details to eliminate them.


This common slab-on-grade detail is a major thermal bridge. A better approach would be to put the insulation on the outside.

The above errors aren't the only ones I see in multifamily projects. Other common ones include a lack of lighting controls, improperly sized HVAC, antiquated ventilation and oversized domestic hot water distribution. I cover these in my live trainings (including one at the 2019 EEBA Summit), but you can also find more information here.

One last point: Preventing these issues doesn’t just happen on paper; it requires collaboration and communication. In fact, I find that good communication—between the architect, consultants, builder, subs and the building owner—to be the major difference between a successful project and a failure. If everybody is on the same page and willing to learn from each other, your chance of creating a high quality and cost effective building increases exponentially. Who wouldn’t want that?

Steve KlockeSteve Klocke is a Senior Sustainability Consultant with Steven Winter Associates in Norwalk, Conn.

Air Sealing Triage

A simple protocol will make your results more predictable and consistent
Air Sealing Triage

by Mark LaLiberte

High-performance builders have long understood the importance of good air sealing, but the topic is now attracting interest from conventional builders as well. With codes mandating confirmed air leakage numbers of 3 ACH 50 or better, those builders are realizing that they need help.

Along with my business partners, Justin Wilson and Gord Cooke, I teach air sealing as part of the Applied Building Science classes at Construction Instruction. Again and again, we've seen builders of all types challenged by this important step.

But the truth is that effective air sealing isn't mysterious, even if some builders seem intent on over-complicating it. Some complain that the amount of information on the topic is overwhelming and contradictory. Others point out that they can't know for sure before starting a house where the air leaks will be. While both of these objections may be true, they're really just signs that the builder lacks a defined air sealing protocol.

This article outlines the basic framework for devising such a protocol. Once you understand air sealing best practices and how to prioritize them, you can be pretty confident of the likely results.

You're Halfway There

A great starting point is something Gord likes to say: "The home is already made of air barriers; all you have to do is connect them." Air barrier materials consist of sheet materials like housewrap, as well as foam board, sheathing and drywall.

Regardless of which one you choose, the basic job is as follows:

  1. Designate one of these components as the home's primary air barrier.
  2. Seal any holes or gaps in and around the sheets or panels with sealants; tapes or sealants that the manufacturer recommends or lists as compatible.
  3. Connect the air barriers on adjacent assemblies to create a seamless whole. Again— air sealing is about connecting. That means paying close attention to common problem areas like roof/wall intersections as well as walls or ceilings that separate the garage from the living space.

Innie or Outie?

What you designate as an air barrier material will depend in large part on whether you want the air barrier to be on the inside or outside the conditioned space. In most cases, I find that interior air barriers are good, but that exterior ones tend to be better.

Inside Job

When carefully detailed, an interior air barrier can get you down to 3 ACH, which is good enough for most codes. When using an interior approach, drywall typically serves as the primary air barrier material.

Interior air sealing includes details like:

  • Adding a bead of sealant to the underside of bottom plates at exterior walls.
  • Stapling drywall gaskets to the exterior wall top plates
  • Foaming wire and pipe penetrations
  • Specifying LED ceiling can lights, which are significantly easier to seal than conventional recessed lights.
  • Using electrical boxes with built-in drywall gaskets. (These will cost you about a dollar apiece rather than the 50 cents you pay for a conventional box.)

Interior detailing includes problem areas that don't come into play on the outside of the house. For instance, you need to remember to insulate and air seal behind showers on exterior walls before installing the shower unit. There's a good video on the project here.

Sealing Outside

I always advise people to consider prioritizing exterior air sealing when possible. (Though I realize this may be difficult in a cold climate in winter.) That’s because, in my experience, the exterior is a lot simpler to detail because it's often part of the water management layer, which all builders are really focused on.

With exterior air sealing it's also easier to get down to 2 ACH, though reaching that goal means carefully taping, gasketing or applying sealant to seams between sheets or panels, as well as sealing around plumbing, electrical and other penetrations. It also means paying attention to things you may not have given much thought to in the past. For instance, if you're using housewrap as the air barrier you need to tape the tops and bottoms of the sheets, something not all builders do.

Note, too, that if the attic is not part of the conditioned space then your exterior air barrier will have an interior component: the ceiling plane on the home's uppermost floor. The edges of that ceiling plane need some sort of bridge to connect it to the exterior air barrier.

Another advantage of most exterior air barrier materials is that (unlike most people), they're good at multitasking. That's because every building has four control layers—Rain Control, Air Control, Vapor Control and Thermal Control—and one product can usually address two or more of them.

A good example of this is a coated sheathing, which has a moisture barrier built into the surface and can, when properly taped, serve as a rain and air barrier, as well as offering structural strength. It costs more than regular OSB but serves multiple functions without the need for multiple trades.

An Even Better Approach

As I mentioned, you can get down to 3 ACH or even 2 ACH with careful detailing. But while that may be sufficient for code-minimum construction, high performance builders generally aim for 1.5 ACH or less, and getting there with tapes and sealants is a challenge, to say the least. The crew can't know for sure if they sealed everything until the blower door test. If the test shows that they missed some holes, finding those holes can be extremely time-consuming.

This is why so many high-performance builders use spray foam, whether as a flash-and-batt option or as the home's primary insulation. It's an excellent material for filling gaps and voids in wall cavities.

The problem, of course, is that many air leakage points aren't within wall cavities and thus don't get sealed by the foam. That's why (at the risk of sounding promotional) I like to recommend AeroBarrier as a final step.

To understand this product think "Fix-a-Flat." The applicator tapes off doors, windows and duct grilles, then pressurizes the house with a blower door. Molecular-sized particles of an acrylic latex are sprayed into the air and forced by that pressure into any unsealed gaps in the building envelope. The particles, which are similar to an aerosolized white glue, coagulate on the edges of a hole and slowly seal it. It's possible to plug holes as big as 5/8 inch diameter.

People worry about the spray coating the walls but that's not a concern; it only seeks out actual holes. Any excess just dries out and falls to the floor where you can sweep it up.

The AeroBarrier process also lets you fine-tune the results. The blower door constantly monitors air leakage during application, so the applicator can just keep adding more spray until reaching the target number.

With an exterior air barrier, you can do this work after rough-in, when the windows, doors and attic hatch have been installed. If you're using drywall as an interior air barrier, then do it right after first mud. Many builders in the far north will choose the drywall as their primary air barrier, as AeroBarrier requires that home's interior be warmed to at least 40 degF. That's a lot easier to do with portable heaters after the home has been insulated.

Gord was so impressed with the product that he partnered with his son to open an AeroBarrier installation company in Canada. They have completed more than 200 homes, with averages costs of about $1.50 per square foot, or $3,000 for a 2000 square-foot house. That's in line with what builders in other markets tell me they are paying.

Pricing will no doubt come down as more builders get on board. Meanwhile, if you're using flash-and-batt for air sealing, you may be able to get better results from this approach without the foam.


Mark LaLiberte is a partner in Construction Instruction, which offers hands-on building science training at its location in Denver.

This house illustrates best practice approaches for interior and exterior air sealing, with drywall gaskets, sealant applied to the bottom of exterior wall plates and housewrap taped on all edges, including the top and bottom of the wall.

Drawing courtesy Construction Instruction

The Rater as Healthy Home Advisor

If you want to build homes with better indoor air quality, this professional can be a great resource
The Rater as Healthy Home Advisor

by Steve Byers

Attend an EEBA Summit or any other gathering of high-performance builders, and you will learn a lot about how to build healthy homes with great indoor air quality (IAQ). The attendees will all seem committed to building such homes, making it easy to conclude that health has become a priority for the industry.

The problem is that it hasn't.

I love these conferences because they attract the best builders, but they can also be an echo chamber. My interactions with code-minimum builders—who represent most of the industry—have taught me that for most, IAQ isn't even on their radar. This obviously begs the question of "how do we reach those builders?"

Getting Motivated

Helping them want to build healthy homes takes a stick and a carrot, with the two ends of the stick being liability and reputation. On the liability end, an asthmatic child developing problems after the family moves into one of your homes is a worst-case, and lawyers will likely be involved.

It doesn't even have to go that far; people need not actually get "sick" to notice problems. Indoor air quality monitors are available on Amazon for as little $110, and though most aren't particularly accurate (I've talked with experts who say that if you spend less than $500 on a monitor you're wasting your money), a lot of homeowners are buying them. Something as minor as a slightly elevated CO2 level could generate a warranty call or an online review that's a real hit to your reputation.

That hit will sting even more if you compete with builders who are enjoying the proverbial carrot. These builders understand the power of the healthy home message. Some participate in a program such as EPA's Indoor airPLUS (IAP), which provides them with a healthy home checklist to follow, while others have simply embraced IAQ best practices and emphasize those practices in their marketing.

If you're interested in building healthy homes, the first question is where to begin. I would like to suggest a good home energy rater as a starting point. I wrote in a previous article about how raters are an underutilized risk-mitigation resource, but they can also be invaluable when it comes to building a healthy home.

How Raters Help

While raters aren't healthy home experts per se, their basic diagnostic skills are the exact ones needed to ensure that your homes meet basic IAQ principles. That's because the rater is trained to measure air leakage in the building envelope and the ductwork, both of which have a big impact on a home's air quality. Raters can also assess the performance of the ventilation system, another key to good indoor air.

High performance, healthy home builders live by the three-part mantra of build tight, ventilate right, and choose non-toxic materials. A good rater can help with all of these criteria.

1. Build tight. Besides measuring overall air leakage, a skilled rater will be able to use diagnostic tools like a blower door to both find and quantify the leakage.  

This is crucial. Say the home has an attached garage. If the envelope between the home's conditioned space and the garage isn't properly sealed, pressure differences between inside and outside can easily draw in carbon monoxide from car exhaust and fumes from chemicals stored in the space. But you need to do a blower door test to determine if that's happening.

The trick is to remember that every air leak is a potential contaminant pathway. Your rater is trained to find these pathways. During the blower door test, the rater can simply feel around for those drafts or can use a smoke generator.

The rater can also make sure your ducts are properly sealed.

If the home has a forced-air system, a duct leakage test might show that a return running through that garage is sucking up those contaminants and dumping them into the home. Similarly, leaky returns in a damp crawlspace or basement might be a pathway for mold spores, while one in the attic might be sucking up insulation fibers. Anywhere that ducts are outside of the conditioned space they need to be well-sealed.

2. Ventilate right. With the envelope tightened up, the rater can help you choose the right ventilation equipment for your home and your climate.

3. Material selection. While material selection may not seem exactly like the purview of a HERS Rater, as with many other things, your rater is probably eager to be a part of the solution to your problems.

The name of the game in improving IAQ via material selection is to reduce VOC’s. While there are no easy answers here, there are resources that can help both rater and builder make more IAQ friendly choices. The Red List from the Living Future Institute is one such resource. The Indoor airPLUS program also has a list of standards and 3rd-party certifications for low-emission products.

Engaged, professional HERS Raters are always looking for ways to increase their value to builders. If you're a builder, you can suggest that you and your rater both become Indoor airPLUS partners and that your rater reviews the Indoor airPLUS Construction Specifications and suggests simple adjustments to your home package that result in certification. If you build enough homes to account for a large portion of the rater's business, you might consider making that a condition of work.

The bottom line is that while indoor air isn’t part of the HERS system by definition, it is certainly part of what serious raters should be thinking about and developing further skills around.

Steve Byers is CEO of EnergyLogic, Inc., a building performance consulting company in Berthoud, Colorado.

Financing Zero Energy

Some ideas on how to have the money discussion with homebuyers
Financing Zero Energy

by Bruce Sullivan

I've seen lots of articles that try to educate homeowners about zero energy construction by diving right into the building science and construction details and leaving the financial payoffs until the end. When I teach EEBA's Path to Zero course, however, I flip that sequence. I always begin with an in-depth discussion about money issues because I know that's the gorilla in the room. Once the attendees understand the financial benefits of this way of building, their minds open to learning more.

Of course, the EEBA audience is a professional one, but the approach also works with homeowners, making it a good idea for the builder to consider having this discussion early.

In my conversations with builders, however, I find that many aren't sure about how best to have the money talk. Fortunately, it's not that difficult. Most homeowners already have an intuitive grasp of the fact that energy-saving improvements, such as adding insulation and high-efficiency heating systems, will benefit them in the long run. Helping them put numbers to that understanding is a matter of framing the discussion correctly and presenting the right financing options.

It's About Income

How can we encourage more people to build zero energy homes and pay for them with sound financing? There is a simple market-based approach that encourages people of all income levels. It’s an approach that requires no subsidy, making it sustainable in the long term.

Every home has a monthly utility bill. By reducing the utility bill, occupants not only save money: they gain buying power. Every $10 in savings is really $10 more income, and that extra income can be put towards the monthly loan payment. Phrasing things this way helps people see that energy-saving features begin paying for themselves from the very first month.

Although most EEBA readers build new homes, a home improvement example can help get the point across.  

A good one is the purchase and installation of a 50-gallon heat pump water heater. The heat pump unit might cost as much as $1000 more than a standard electric model, but it will save $330 a year on the energy bill for a household of four. The monthly savings come to $28 per month, which will help the family qualify for a loan to install the equipment. For a 5-year, $1500 home improvement loan at 5% interest, the payment will also come to $28 per month, so the extra cash flow from that savings will cover the loan payment. After five years, the loan is paid off but the homeowners continue to reap that extra cash flow.

It works the same way when you add up all the energy-saving upgrades in a new zero energy home. A simple mortgage calculation will tell you that just $10 more income per month will allow a homebuyer to qualify for an additional $2000 in mortgage financing on a 30-year loan at 4% interest. (You can calculate this for yourself on any mortgage calculator. Just enter $2000 as the principal amount, 4% as the interest rate, and 30 years as the duration.) If energy modeling of your energy upgrades shows an extra $100 per month in cash flow, which  is easily achieved, that's an extra $20,000 in borrowing power.

Builders I've heard from who use this approach say that it resonates with buyers. One is T.W. Bailey Sr., president of Bailey Family Builders, Frisco, Texas. He used to communicate the return on an energy improvement by telling homeowners how long the energy upgrade would take to pay for itself. However, he finds that people are more responsive when he presents the savings as extra monthly income. "It's more effective to show them that the return on investment on what they spend for green building will be realized the first month they're in the home," he says. 

"Take the example of a 3,000 square-foot home with a $300/month average utility bill," he continues. "If you spend $10,000 additional on the green aspects of the home, you can reduce that energy cost to $150 per month. At today’s mortgage rates, the $10,000 you spend costs you about $30 per month. You’ve saved $150 in utility costs and you’ve spent $30 to do it. Your positive cash flow that first month is $120, and it will be at least $120 a month after that. Whenever I’ve explained that to a customer, whether they’re buying a $100,000 home or $3 million home, they’ve never failed to embrace it and find great value in it.”

Navigating The Lending Landscape

For people who qualify for the loan based on their existing capital resources, this is a good investment, and one that frequently beats stocks. For lower and middle income consumers however, there is often a missing link which, if fixed, would help more of them qualify for loans that cover the added costs needed for a zero energy home or an energy efficiency upgrade to their current home.

Lenders typically base loan approval in part on the cost of home ownership. They calculate a borrower’s expenses as principal, interest, taxes, and insurance – also called PITI. Energy costs are ignored even though energy bills are due every month and can be greater than some of the other factors that go into the lender’s calculation.

If lenders would simply add energy costs to their calculation (PITI+E), a world of new opportunities would be available. In effect, occupants would be allowed to shift money from monthly utility bills (an expense) to home improvement, or a zero energy home purchase, financing (an investment). The total monthly budget would stay the same. Borrowers get a better home for no additional cost, while the local economy gets a boost and emissions are reduced.

The chart compares the monthly payments for a zero energy home with the monthly payments for a similar code built home using typical numbers for PITI+E. While the payments in this example are equal, the owners end up with a much better home for the same cost per month. The energy savings from a zero energy home are actually added income that allows you to purchase a superior home. In other words, that is a smart investment!

Since current lending practices do not embrace this common-sense idea, legislation or new regulations may be required to compel mortgage lending regulators and the secondary mortgage market to include energy costs as a loan qualification criterion.

If your bank doesn't yet accept PITI+E as standard practice, there are lending programs that can be used by any lender, including Greenchoice from Freddie Mac and HomeStyle by Fannie Mae.

And as with any loan, documenting the value of home energy features and the modeled energy savings is still important. The ability to do so more easily seems to be coming. In fact, a recent article in this newsletter [Sandra Adomatis' appraisal article] noted that Fannie Mae and Freddie MAC are in the process of revising the Uniform Residential Appraisal Report (form 1004). That should make it easier for appraisers to value energy efficiency and green features.

These changes have the potential to generate millions of dollars of business for local contractors and suppliers. Lenders will make more low-risk loans. Working people will have more stable finances and more comfortable homes. And as a society we will be further reducing our carbon emissions. This is a win-win-win solution.

Of course, it may take a while for these programs to become mainstream. Meanwhile, you can help the homeowner present the above facts to the relevant decision makers. Whether it's a small energy savings project or a zero energy home, you can show these savings to the loan officer and/or appraiser as part of your documentation, and explain that these energy savings are really income that allows you to make the payments on the energy upgrades.

Even though they do not officially make energy savings part of their formula, by documenting these earnings, it's possible to build enough trust and confidence with the loan officer that they are more likely they will approve the loan.

Bruce Sullivan has been helping building professionals increase energy efficiency for more than 35 years. In writing, consulting, and training, he places a strong emphasis on real-world obstacles and practical solutions.  In 2006, his personal high-performance home was honored with the NAHB Research Center’s Energy Value Housing Award and the NAHB Green Building Award. In 2015, he and his wife built a home that generates enough electricity to operate the home and an electric vehicle. He is currently technical director at the Zero Energy Project, where he published an earlier version of this article.



High Performance Basic Training

Some of the things I learned at Houses That Work
High Performance Basic Training

Although the 2021 version of the International Energy Conservation Code has yet to be finalized, chances are it will get most new homes very close to Net Zero Ready. Builders and architects need to understand the best ways to meet the code requirements for a particular floor plan in a specific climate without creating moisture, health, or other problems.

The escalating demand for building science knowledge on the part of industry professionals is why, over the past few months, we have encouraged people to attend EEBA's annual Summit, a 3-day educational and networking event with the top designers and builders of green, high-performance homes. This year's gathering was October 1-3, and in our last article EEBA President Geoff Ferrell offered an insightful summary of how Summit attendees are shaping our industry's future.

But of course, the once-a-year Summit isn't the only education that EEBA offers.

There's plenty of gold in our full-day training seminars: Houses That Work, High Performance Mechanicals, HERS Associate, Selling High Performance Homes, and Path to Zero. These are scheduled all year throughout the U.S. (as well as at the Summit) and offer great value not just for industry newcomers but for those of us who think we've nailed the basics.

I place myself in that latter group. After writing about building science on and off for nearly three decades, I decided to attend Houses That Work, which I assumed would be a helpful review. It was all that and more. Eight hours with instructor Andy Oding was truly humbling, because it drove home how much I did not already know.

EEBA's trainings are designed to complement each other. For instance, Path to Zero (which I wrote about a few months ago) focuses on "how" to design and build Zero Energy Homes, with instructor Bruce Sullivan giving students a menu of options they can choose from. Houses That Work covers more of the "why." It's the basic building science everyone needs to make informed decisions about those options.

The seminar's underlying principle is that high performance building requires a systems approach in which walls, roofs, windows, insulation, air sealing, and HVAC are all recognized and treated as interdependent systems. It presents the foundational knowledge of that approach.

Code mandates are making a grasp of those interdependencies more important than ever. "It's just a matter of time before every new home in North America will have to meet Net Zero standards," said Oding. However, the airtightness and insulation levels needed to get there create risks that require skill and knowledge to mitigate. "If you want a more efficient, more durable, healthier home rather than one with condensation in the walls and sick occupants, then you need to understand the principles behind how all the home's elements interact with one another," he adds.

A grasp of these principles will provide insight on how to design and build great homes using today's materials in ways that avoid problems while delivering the benefits homeowners want. That's the definition of a house that works.

The basic information presented in the course offers value to pros of all skill levels. Topics covered include: how air, heat, and moisture move through a structure and how changes in various parts of the system affect those flows; insulation and air sealing strategies; the importance of windows, roof details, and mechanical systems; principles and strategies for keeping rainwater and groundwater out of the structure (no small matter considering that 80% of building failures are water related).

The course also includes illustrations of these principles in action, as well as other details that builders and designers can use in their work. There are too many to go into here, but I'll mention a few:

Loads are changing. "Thirty years ago, the largest energy load and the highest energy cost by far in most homes was heating," says Oding. Today, air conditioning is a bigger expense than heating even in northern climates. "That's because a lot of heating is done with gas while all cooling is done with more expensive electricity."

This makes SHGC for windows more important than ever, even in Northern climates.

Windows have taken center stage. Back in the 90's windows accounted for 8-10 percent of the average home's wall area. They were important but not a super big deal. Today, however, 18-25 percent is more typical, so windows have a bigger effect on bottom-line performance.

Oding worked on a research study for a major window manufacturer and found that in cold-climate homes with those window ratios, upgrading from double to triple pane glass (with U-values of .25 to .20) can add more R-value to the home than putting an extra two inches of foam on the exterior—a result that will be confirmed by a Manual J or HERS Software tool.

Warmer glass has another benefit—reduced condensation potential in the winter. "At those U-values it could be -10 outside, but with a healthy indoor relative humidity of 35%, you might not be able to see any condensation on the interior glass."

What does this mean? "When people see ice dams they often immediately think they need more insulation," says Oding. "But if you understand how insulation affects stack effect you realize that you really need to pay more attention to air sealing."

Continuous exterior insulation will be the rule up north. Exterior insulation is a good idea in cold climates but Oding believes it will become a code requirement for Zones 5 and higher sometime in the next 10 years. He says it's a durability issue. Exterior insulation helps the building last longer by controlling the dew point (e.g. limiting the condensation potential at the back side of the exterior structural sheathing).

Behavior matters. Once you have succeeded in creating a new, Zero Energy Ready Home, according to Oding, the biggest loads tend to be occupant loads: cooking, bathing, clothes washing, and lighting. These occupant loads can make up 50% to 60% of the total energy use in such a home.

Builders can help the owners of these homes save more energy by helping them choose more efficient appliances and educating them on the consequences of their behaviors.

Clean air is HUGE. The US EPA estimates that Americans spend about 90 percent of their time indoors1, so it's no surprise that air purifiers are a multi-billion dollar business and one of the world's fastest growing industries.2 Nonetheless, a recent survey for VELUX suggests that people perceive that we only spend about 18 percent of our time indoors, highlighting the general confusion that persists—and the consumer education that is still needed—surrounding indoor air quality (IAQ).

Oding insists that some consumer air purification devices have limited impact and that good IAQ requires eliminating the sources of the problem (like wet materials, chemicals) and providing the home with well-designed mechanical ventilation (an HRV or ERV). "IAQ is an emotional issue that’s very important to most people's decision making," says Oding.

This is obviously a great opportunity for high-performance builders who offer real indoor air quality improvements.

Visuals have power. If you've gone to the trouble of building a Zero Energy Home, then you need to show people the benefits.  

Oding cited a UK study in which people who saw an image of thermal bridging in their homes were 4.9 times more likely to do something about it. With infrared cameras available that fit on a phone costing as little as $250, there's no reason a high performance builder can't show the difference between their homes and typical, code-minimum construction.

In fact, Oding says that when he worked for a Canadian production builder, it wasn't unheard of for a client to use an infrared camera to confirm that the home was properly insulated and air sealed.

Of course, if you take a Houses That Work seminar, that scrutiny won't be a problem. That's because you will be on the way to designing and building homes of such high quality that you welcome it.

The Other Half of Water Conservation

Low-flow fixtures are important, but if you're really serious about saving water you may need to re-think your plumbing system.
The Other Half of Water Conservation
by Tim Kampert

Bathrooms account for more than 50 percent of all indoor water use, according to the EPA. That makes WaterSense fixtures a great choice for any project, and a must for anyone claiming to build green homes. But while low-flow fixtures are important they're not the whole story. In my experience as a building performance specialist working with production builders across the U.S., I have learned that there is plenty of additional savings to be gained from more efficient plumbing.

It's not uncommon for a homeowner to flush thousands of gallons down the drain each year waiting for hot water to reach the tap. The effect on the water bill is certainly an issue here, but so is homeowners' frustration with that wait time. In fact, a common complaint our builder clients hear from homeowners is that "it takes forever to get hot water."

Considering the frequency of those complaints I'm surprised more builders don't do something about them. The truth is that wait time is actually easy to fix and won't add to job costs.

The underlying problem is one of benign neglect. Builders don't include plumbing layouts on their plans because they assume it's the plumber's job to determine where the pipes will go. But if the pipe layouts I see in many homes are any indication, most plumbers give little if any thought to wait time.

Those water-saving fixtures can actually increase the frustration. When a faucet or showerhead has a lower flow rate than older models, fewer gallons per minute will pass through it and hot water will take longer to reach it.

Some custom builders keep hot water at the tap by installing point of use heaters near critical fixtures or with a hot water recirculation pump. A recent field study found that domestic hot water circulation can save an average of 4500 gallons per year.1

But while these devices get the job done, they're too costly for most production homes, especially at the lower end of the price spectrum. They also raise the homeowner's energy bills, something high-performance builders work hard to avoid.

A better alternative for production homes is a deliberate plumbing layout that's structured to reduce pipe runs. It offers the same benefit as a point-of-use heater and adds nothing to the job costs—in fact, it requires less pipe so it will probably save the builder a few dollars. It will eliminate wasted water as well as a lot of those homeowner complaints.

Shortening Runs

The most obvious step the builder can take to reduce pipe runs is to re-locate the water heater. In most homes, the water heater is in the garage, far from the taps. I prefer to see it in a central closet (not in the attic, however: a water leak there can be catastrophic).

Putting the water heater inside the home will, of course, reduce the amount of interior space by a few square feet. However, consider getting customer feedback on whether the space lost to a small utility closet is worth the price of those thousands of gallons of wasted water and those long wait times. You may find that the benefits of that central location are actually a sales advantage.

The other step is the structured plumbing layout mentioned above. The plans given to the plumber need to show the location of all pipe runs and the builder needs to make sure the plumber follows that plan. Of course, that means the field managers have to check to make sure the job was actually done to plan.

The plan should require that the supply loop in a trunk-and-branch layout be routed as close to the fixtures as possible. That will shorten the drops that branch off of it. The ideal length of a drop is less than six feet.

PEX systems can have drops of varying length originating from multiport tees placed close to fixture groups. When designed correctly, this approach goes a long way toward shortening runs. It's best to locate each tee where the fixture with the highest flow rate will be served by the shortest drop.


Tim Kampert is a building performance specialist on the PERFORM Builder Solutions team at IBACOS. A version of this article originally appeared on


1 From a presentation given by Haley Monson of the Elsinore Valley Municipal Water District in California at the Water Smart Innovations Conference on October 2-3, 2019.


High Performance Coming of Age

This year's EEBA High Performance Home Summit was confirmation that our industry is headed in the right direction.
High Performance Coming of Age
by Geoff Ferrell

If I had to choose one word to summarize this year's EEBA High Performance Home Summit in Denver, it would be optimism. The most visible sign of that was our record attendance of nearly 400 people, which reflects a growing interest in high-performance homebuilding.

But while the numbers were encouraging, where I really heard that optimism was in the presentations I attended and the conversations I had. It was by far the best energy I've felt at any industry gathering. Ever.

The sessions included lively and constructive debates, exciting research reports and stories of homes, buildings and communities that put the best research findings into practice. Everyone was fired up about the work they were doing.

As is true every year, one of the educational tracks focused on sales, marketing, and business performance. Excellence in these areas is exponentially more important in the high-performance world because every one of us is fighting to differentiate ourselves. To control costs, our businesses need to be well-oiled machines; to attract customers we need the marketing skills to demonstrate why our homes are great investments.

We also heard from local and national government officials, including representatives of the Department of Energy and the Mayor of Denver. It was a reminder that there are many in government who understand the value of high-performance building and want to encourage it.

One shift I noticed this year was an increased focus on building practice.

We have always had lots of great presentations on building science theory, but this year also saw more builders than ever teaming up with manufacturers to profile actual projects, like the amazing Atlanta home where builder Luis Imery partnered with Mitsubishi. It was gratifying to see research presented in previous years paying off in the field.

Industry Disruptors

In fact, many of manufacturer sponsors I heard and spoke with on the exhibit floor seemed intent on finding ways to drive the industry forward. Instead of just figuring out how to meet code, they were discussing how to truly disrupt the housing market and looking for builders to partner with.

Of course, that disruption has been underway for some time. For instance, five years ago the concept of balanced ventilation was cutting edge. However, the presentations at each successive Summit have seemed to reflect a better understanding of airflow in buildings and a higher priority on building healthy homes. Today, it has evolved to become a standard in approach among high-performance builders.

That evolution has included equipment. Not long ago the company I work for was installing ERVs that cost around $2,000. Today we're using a new model that's just as capable, and better in some respects, which costs only $800.

In fact, this year we had at least three ERV manufacturers exhibiting, along with companies in categories that ranged from testing equipment to heating and cooling, insulation, and air sealing.

What manufacturers get from having a booth or table at EEBA is different than what they get from a bigger show like IBS or PCBC. Those shows are focused on sales leads and on answering basic questions from builders. Manufacturers do get leads at EEBA, but from what I hear, those leads are more valuable.

Two manufacturers told me independently that this gathering isn't about quantity; it's about the quality of the attendees. Rather than having to explain the basics, they get to have fun, meat-and-potatoes conversations about what the product does and how to apply it. It's also an opportunity for manufacturers to hear valuable feedback from EEBA builders on how their products are working in the field and how they might be improved.

Opportunities for Collaboration

Another interesting thing I noticed on the expo floor was that vendors were interacting with each other. The battery folks were talking with the air barrier people and the air barrier people with the heat pump makers. Some of these discussions were about how their products can work together to create a better value proposition for the builder and the homeowner.

We've been talking for years about the need to think of the home as a system. Those conversations were one more indication that people are thinking in those terms.

All this interaction reminded me that, at its core, EEBA is a community—a community of like-minded people who all believe that we can build better homes if we work together and collaboratively share information.

And share we did. One great thing about this community is that we tend to freely discuss issues with one another. The builders, raters, specifiers, architects and manufacturers in attendance all wanted to talk about the progress they were making to drive the industry forward, and where they wanted to go next.

To be fair, unguarded collaboration is made easier by the fact that most discussions are between builders in non-competing markets. However, that's not always the case. In fact, one of my company's competitors was there, a company that will build 100 really great homes this year. They were more than happy to openly collaborate on their processes and the challenges they were striving to overcome just the same.

The bottom line is that high-performance homebuilders represent a small percentage of the U.S. construction market. We're all striving to build homes that are better for our customers, better for the environment and better for our businesses. We need each other to make that happen.

What's Next

Not surprisingly, there are things I believe we could do better. We're already thinking about next year's Summit, and our goal is to grow our community as well as our offerings.

For instance, I want to work at getting more large volume builders involved. Our builder community weighs heavily towards small to mid-sized production companies. They're doing great work, but we really need more involvement from the Builder 100, just the top 10 of whom closed nearly 170,000 homes last year in markets all over the U.S.1 These builders have the resources to drive affordability in high-performance housing without hurting quality.

I would also like to add sponsors and expand our educational tracks.

Our call for papers earlier this year yielded more session ideas than we were able to accommodate in the space we had available, and it was very difficult for the Summit committee to pass on topics they really wanted to include. Next year we hope to have the extra space to accommodate more of the great ideas we receive.

Next year's summit will be back in Denver, September 29th to October 1st.  For anyone interested in presenting to our community, a call for papers will go out in February, and registration will open shortly after that.

If you want to succeed in the high-performance homebuilding business, do yourself a favor and be there.  







EEBA president Geoff Ferrell is Chief Technology Officer for Mandalay Homes in Prescott Valley, Ariz. He oversees Mandalay’s home innovation, implementation, and strategies to improve efficiency, durability, health, and comfort, while maintaining market competitiveness.


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 


• 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.

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