Homebuyers shopping in Denver’s huge Stapleton development know they’re going to get an energy-efficient home because that’s all the master developer will allow. But Wonderland Homes is betting that its continued success in Stapleton depends on not taking energy efficiency too far.
“We’ve always tried to involve ourselves in the best practices that strike the balance between affordability and being respectful of the resources and giving people value for their money in terms of energy savings,” says Michael R. Hart, Wonderland’s vice president for sales and marketing.
“We try to be in the forefront, but not necessarily the trail-blazers.”
Stapleton Denver is, according to its developers, one of the largest urban infill projects in the country, occupying some 4,700 acres 10 minutes from downtown Denver. Construction started at the site of the former city airport in 2001. Roughly 4,000 homes have been built to date, with an equal number still to come.
Wonderland is one of a number of builders taking part in the project managed by Forest City, a real estate development company that was named master developer in 1998. Each builder is assigned a specific market segment, keeping competition among Stapleton builders to a minimum. “Their approach is to invite you in, and once you’re invited in they say, here’s your price point, and here’s your market segment,” Hart says. “And if you don’t like that, then you don’t build there.”
Wonderland’s established slot is single-family homes under 2,000 sq. ft. and mainly in the low-to-mid $300,000s, what Hart describes as “effectively the entry-level point” for the development.
Lot size: Ave. 3,900 sq. ft.
House size: Ave. 1,815 sq. ft.
Ratio of one- to two-floor houses: 3-to-20, or 15%.
Days from break ground to ready for sale: 127.
Days on market: Currently sold out at release.
HERS rating: Ave. 56.
Air tightness: Ave. 2.0 air changes per hour at 50 pascals.
Houses offer many energy efficient features
As far as Forest City is concerned, nothing less than Energy Star performance will cut it, Hart says. As a result, when compared with houses built to code minimums, Wonderland Homes offer a long list of energy-saving features that green-savvy buyers will appreciate: water-saving showerheads, low-e glazing, Energy Star appliances and whole-house ventilation. Houses are framed with engineered lumber.
Each of the 100 or so houses Wonderland will build at Stapleton this year will get blower-door tests for overall air-tightness as well as duct leakage tests. The idea is to catch and fix construction and installation missteps that cost buyers money.
On average, houses have HERS ratings (a standard measure of energy efficiency) in the mid-50s, meaning they are about 50% more energy efficient than a standard new home, says director of operations Kolby O’Herron. Buyers who want even better performance can choose energy upgrades from an a-la-carte list, lowering the HERS rating into the high 40s.
But Wonderland is purposely not in the business of pushing buyers toward net-zero-energy or Passive House performance. “Frankly,” Hart says, “part of that is we see other builders in the neighborhood who have done that and it’s not being met with an enthusiastic response. There is a builder out there who has been shooting for a net-zero house for years, but he just can’t get people to pony up the money to do it.”
Low energy costs make a persuasive argument
Because standard Wonderland houses already outperform conventionally built homes, and local energy costs are relatively low, the company doesn’t see much to be gained by going to energy conservation extremes, Hart says.
Wonderland last year took a close look at what its buyers were paying for energy and found bills were typically about $120 a month over a six-month stretch that included spring, summer and fall.
“When you say your energy costs are maybe $100 to $130 a month for the typical home that we build on a year-round average,” he says, “it’s hard to get somebody excited about adding a $20,000 PV system unless they’re absolutely convinced that environmentally that’s the right thing to do. We don’t see a lot of evidence that’s the case.”
The difference between Wonderland’s standard home and one with the most energy upgrades possible is about $8 per square foot, O’Herron says. Direct comparisons are a little hard to make, he adds, because the most efficient plan Wonderland sells is attached and flat-roofed, which bumps the per-square-foot cost up.
Although it might be better for Wonderland’s bottom line to sell more energy features, O’Herron says, the company probably sells more houses because they come with standard features that buyers want.
“Homeowners don’t have to make a decision between a tankless water heater and the nicer carpet,” O’Herron says. “They get them both.”
Possible energy upgrades include more efficient air conditioning equipment, rigid insulation on exterior basement walls, 1 in. of closed-cell foam in exterior walls followed by blown-in fiberglass, and an upgrade from open-cell to the higher-performing closed-cell foam in the roof.
But, O’Herron says, less than 5% of buyers choose any upgrades at all.
Aesthetic variety makes a difference, too
Wonderland’s successful formula doesn’t rely entirely on better than average energy-saving features. Buyers can choose between three broad architectural styles: single-family houses with a “chic, contemporary vibe” called “Expressions;” a line of contemporary row-homes called “The Edge;” and a line of more traditionally styled single-family homes called “Heritage.”
Anne Postle, owner of Osmosis Art & Architecture, which designed houses in the Heritage series, says more than a dozen variations are available.
“They have lots of flexibility designed into the plan,” she says. “You can add bonus rooms, you can add luxury masters, you can add space over the garage. So within these plans there’s a lot of flexibility to meet the lifestyle of the people who are buying them.”
Designs are aimed at specific demographic groups, with optional features designed to meet the needs of particular buyers. Houses intended for families with teens at home, for example, could include separate washer-dryer hookups so older children could take care of their own laundry. Older buyers like laundry access off the master bedroom. Other buyers might like built-in recycling bins, a dog wash in the garage or a “pocket office” that can house a printer and space for files.
While paying close attention to national trends in the features buyers want, Postle also looks for ways to give the houses architectural vitality at a modest cost. On exterior surfaces, for example, she’s using different types of siding and lots of detail in the trim instead of costlier masonry surfaces.
Houses are built in clusters of about 10 units around small neighborhood parks, giving people a sense of community. The result has been high demand, even through the worst of the recession.
“You wouldn’t choose a Wonderland home if you wanted the most inexpensive home on the market, but they offer so much,” Postle says. “You choose a Wonderland because you’re looking for a better home.”
The Biggest Challenge? Labor
Wonderland Homes doesn’t have to sell anyone on the merits of energy efficiency. Potential buyers walk in the door expecting that. But building at Stapleton does have its challenges, chief among them the shortage of skilled labor.
“The three most important elements except for location, location, location are labor, labor and labor,” says sales and marketing vice president Michael J. Hart. While there are shortages across the board, foundation, drywall and framing are three particular concerns.
And trades that get lots ready for construction also are in short supply, making lot delivery slower. Operations Director Kolby O’Herron says the labor issue has been the “Achilles heel” of the project over the last 18 months.
Learn more about markets featured in this article: Denver, CO.