Builders in Colorado have seen and felt the excitement of green building before, back in the late 1970s and early 1980s when incorporating passive solar into homes was spurred by federal tax credits.
Though that wave of home building environmentalism petered out as the tax rebates dried up in 1985, another and more nationally vibrant green movement is alive and kicking today. Even builders not based in California, Colorado, Austin, Texas, and other green building hot spots are finding their customers asking about energy efficiency or homes that are built more sustainably.
But something is different this time around, says Tom Sattler, owner and president of Sattler Homes, based in Greenwood Village, Colo. Sattler is a custom builder who has designed a line of energy-efficient production homes. He soon will be building all his homes to at least that standard, if not to Colorado’s Built Green standard, which requires that homes be at least 50 percent more efficient than code.
The difference in the environmental movements then versus now, Sattler thinks, is momentum.
“It is getting very, very strong,” Sattler says. Green building is projected to grow as a share of the overall residential construction market from just 2 percent in 2005 to between 12 percent and 20 percent in 2012, according to research presented at the National Green Building Conference in New Orleans by Harvey Bernstein, vice president of Industry Analytics, Alliances and Strategic Initiatives for McGraw Hill. In dollar terms, that’s an increase in business from $7 billion in 2005 to between $40 billion and $70 billion in 2012.
But the surge in interest is coming not only from environmentalists, but also from regular families trying to save money on their energy bills.
“With our buyers, it all boils down to dollars and cents,” says Vernon McKown, president of sales for Ideal Homes, a Norman, Okla.–based builder of energy-efficient entry-level homes, and one of Builder’s America’s Best Builders in 2007. “It’s got to save them money.”
A GREEN PERCEPTION
That’s because Ideal, which faces price cutting in its market from competitors such as D.R. Horton, passes all of the costs—roughly $3,000 more than it would cost to build conventionally—on to the consumer with a promise of low monthly energy bills.
And while there is no hard statistical proof yet that consumers will pay more for green, Ideal ranks as the No. 2 builder in Oklahoma City with a 5.5 percent market share, outselling its competitors using energy efficiency as a key differentiator.
“That’s a significant amount of money, $3,000,” says McKown, for homes that range from $109,000 to the low $300,000s. “But $24 a month, in our typical house, is the guaranteed utility cost. Our buyers’ homes are running cheaper than our competitors by $60 to $100 per month.”
Every year, Ideal examines how much extra it spends building homes to be energy efficient and determines if that cost to compete is still worth it, McKown says. It is as long as consumers are willing to pay. That’s the bottom line; currently, consumers are driving green building, and with energy prices the way they are, it’s a push that is unlikely to lose momentum.
Learn more about markets featured in this article: Austin, TX.