When the NAHB released its green building program in early 2007, Andy Toms was curious. Like many builders, he wanted to know how his homes, unchanged, measured up to the program’s standards and rating system. “We found we were building to a bronze level, almost a silver, without making any adjustments,” he says. Toms, the director of production for EGStoltzfus Homes in Lancaster, Pa., a diversified firm with about 169 starts a year, says he compared specifications and used the program’s online scoring tool. “We knew we had a good product, but we’d never pushed the energy or green angle [in our marketing efforts].” Given his findings, Toms became interested in the process to get his company’s homes certified and what marketing benefits might result—especially in a slumping housing climate and an area with little experience in green building practices. “Nobody here, including subs and suppliers, had any working knowledge of green building,” he says. “We were blazing the trail.”
Toms selected an existing 2,600-square-foot plan within the company’s Hempfield Crossing community to serve as a guinea pig. His intention was to build the two-story house as a model home certified to a gold rating under the NAHB program, which would enable him to determine the right mix of specifications against both a budget and buyer demand, gauge potential utility savings and payback for those efforts, learn the ropes of periodic independent inspections to verify his work, and see if prospects would bite.
Finished in August of last year, the model home is generating interest and traffic, if not sales. To spur some conversions and also test whether green would sell in a buyer’s market, Toms offered a choice: 10 percent off the price of any home or a 5 percent discount plus a free upgrade to the gold rating, alone a $12,000 benefit with potential energy and water savings of about $1,000 per year.
No one took the green option. “In this market, price trumps everything,” he says. In addition, Toms blames the 10-year return on investment he calculated based on total energy and water savings the green-built home can likely achieve. “People just don’t stay in their homes that long anymore. If it was in the three-year range, it might sway more people.”
A faster return on investment will only happen, he says, when manufacturers and building materials dealers reach a tipping point and put their green products on the primary production line. “When those items cost less, I can sell the house for less,” he says. The premium to build the model home to the gold rating was about 4.8 percent of its $408,000 price tag—too high for his price-sensitive buyers. Despite a lukewarm reception in terms of sales, Toms is confident the market will eventually come around—and that EGStoltzfus Homes will be well positioned to serve demand for green-built homes. Local electrical rates have been targeted for a 30 percent increase early next year, which Toms anticipates will inspire some action. He also hopes to hone his specs to those that provide a faster payback, such as tankless water heaters and dual-flush toilets and the bulk of his energy-saving package (including the use of precast concrete walls), perhaps offering a silver option to make the numbers work better for buyers.
He’s also now versed in the verification and certification process (which has improved, he says, as more verifiers are trained and available) and sees long-term value in the NAHBGreen certificate. “It may not mean much to a buyer today, but when they go to sell the house, it will mean a lot compared to homes without it.”