September column for Builder & Developer magazine now online

My column for the September 2014 issue of Builder and Developer magazine is now posted online.

For this issue, entitled "The Politics of Drought," I wanted to review the current state of the extreme drought impacting the western U.S. and how the building industry is adapting to it. An excerpt:

"...there are some important differences between this event and the last major drought to hit California in 1976-77, in which the state’s reservoirs plummeted to 41 percent of average. On the demand side, although the state’s population has doubled since the last drought, per-capita water use has also dropped with the use of new water management technologies. It was actually the drought of 1987-92 which marked the beginning of modern water-use practices, including more efficient use of water for agricultural which made more growth in the cities possible...

On the supply side, new homes are actually exponentially more efficient than older ones, especially those with water-hogging plumbing fixtures. According to a report commissioned by the CBIA, an average three-bedroom home with four occupants built today uses 29,000 fewer gallons of water than smaller homes built in 2005..."

To read the entire column, click here.

To read the entire September 2014 issue in digital format, click here.

July column for Builder & Developer magazine now online

My column for the July 2014 issue of Builder and Developer magazine is now posted online.

For this issue, entitled "Green Building Takes on Climate Change," I reviewed the June report released from The Risky Business Project and what that could mean for the building industry.  An excerpt:

In late 2013, a trio of business leaders including Michael Bloomberg, Hank Paulson and investment fund billionaire Tom Steyer teamed up to found the Risky Business Project with a simple mandate: Determine the potential consequences for the U.S. economy without significant changes in the way we consume and deploy natural resources...

Several years ago, the NAHB conducted its own research into the effects of housing and homebuilding on GHG emissions using data from the Department of Energy, the Census Bureau and other agencies. The association hired its own researchers and economists to review existing data on density, land-use patterns and vehicle usage.

What they concluded was that given the complexity of building communities, caution is strongly recommended as choices are made about the future due primarily to the law of unintended consequences. Solutions that may seem simple on the surface are actually much more complex, and would involve various tradeoffs that could create new problems to solve...

To read the entire column, click here.

To read the entire July 2014 issue in digital format, click here.

A new problem: too few homebuilding workers?

Now that the housing market rebound finally seems to be gaining strength, it seems that there's a shortage of field workers needed to build those homes.  From a CNBC article:

Many former construction workers moved on to facilities maintenance work or remodeling, or whatever jobs they could find. Replacing them is difficult because today's market demands highly skilled workers, and there is simply no available base. In the past, builders would hire workers and train them on the job. 

"They don't have the luxury of that now," says John Courson, CEO of the Home Builders Institute, an industry training group. "They want workers that are available to them, that come out trained with a skill, and ready to hit the ground working. They don't want the expense of on the job training."

Home construction technology has changed dramatically just in the past decade, as builders must adhere to green building standards...

The shortage is across the spectrum, but especially in need are framers, concrete workers, plumbers, roofers and painters. The shortage is also felt most in areas where housing is coming back strongest, and permitting is easiest, like Texas and much of the West.

Click here for entire story.

February column for Builder & Developer magazine now online

My column for the February issue of Builder & Developer magazine is now posted online.

For this issue, entitled "The Green Building Revolution Expands," I discussed the merging of green building and smart building techniques for all types of new building projects. As part of this column, I also interviewed CityView CEO Henry Cisneros (former HUD Secretary under President Clinton) and AMCAL President Arjun Nagarkatti.

An excerpt:

For the last two decades, we’ve continued to hear about the advantages of “smart growth,” and in most cases that means new developments which promote efficient land use, urban redevelopment, neighborhood revitalization and economic opportunity.Over the past few years, that definition has also expanded to include green building techniques, especially those related to energy efficiency and sustainability. Once relegated to certain project types, today smart, green building encompasses everything from high-rise office buildings to low-rise affordable housing options...

To read the entire column, click here.

To read the entire February 2012 issue in digital format, click here.

Beware the Politics of Economics

If you listen to most of the contenders for the GOP nomination for President of the United States, they’d have you believe that if we could only shrink the size of government, reduce regulations and get rid of ‘Obamacare’ then the economy would almost immediately rebound.

If you listen to the Obama Administration, they’d have you believe that if we could simply repatriate manufacturing jobs to the U.S. and force large companies to spend the trillions on their balance sheets to hire unemployed workers, then our economic malaise would be magically solved.

Both groups are wrong, and count on the economic ignorance on the American public to believe that these simplistic band-aids would have any long-run benefit.

The reasons that we’re unable to rouse ourselves from our economic doldrums are much more complex that you’ll hear from those running for President, and are a generation in the making. This isn’t “Obama’s Economy” or “Bush’s Economy” or even “Clinton’s Economy,” and to look for a political boogeyman as a scapegoat not only deliberately misses the point, but distracts the national conversation from the tough choices we’re going to have to make over the next generation.

Probably the most important point to remember is that the booms in the housing market and for dot.com stocks both masked a troubling reality, which is that average incomes have stagnated for the last 30 years. For workers without high school diplomas or working in many blue-collar industries, their “Great Recession” has been a constant companion since the 1980s.

For many years, having mothers entering the workforce or asking fathers to work an extra job helped families stay afloat, but even the job surge during the Clinton years were service-oriented jobs replacing higher-paying manufacturing jobs that were leaving the country in search of lower labor costs. Of course we know now that what fueled the housing boom were not higher incomes, but easy debt which allowed aspirational households to buy now and worry about paying it off later.

So far, the policy prescriptions offered to fix what ails us are not only re-treads of ideas which haven’t worked sustainably in the past, but aren’t bold enough to replace 30 years of temporary patches. The immediate austerity solutions offered by groups such as the Tea Party, while worth a look in the long run, risk tumbling the country back into recession. Even worse, the refusal by politicians to compromise and support the economy in the short-term while cutting long-term spending has increased uncertainty to levels which make it difficult for employers to expand beyond their current needs.

What we should demand from our elected government is the truth about our strengths and weaknesses in a global world. Our strengths remain solid, including a younger, less-taxed population versus other developed countries, a more innovative economy and the dollar as the global reserve currency.

But our weaknesses remain formidable, including a two-party system which discourages compromise, self-absorbed seniors who have no problem forcing younger generations to pay for now-outdated retirement plans, income inequality which hinders growth, an education system which can’t seem to churn out globally competitive students and a crumbling infrastructure whose price tag is apparently too high to seriously debate, much less repair.

For the building industry, simply voting for those who want to prop up the housing market as if it exists in a vacuum isn’t good enough. What we need are candidates who are willing to support higher education standards, a national infrastructure bank to ensure that our transportation networks and technology are both globally competitive and environmentally sustainable, and the wisdom to refuse getting sidetracked by social issues which only prolong the agony.

Social Networking Replacing Traditional Advertising?

Although most of the attention given to the ‘green revolution’ in home building has been focused on sustainable design, alternative energy uses and low-impact construction methods, another resource-saving trend continuing to impact the industry is how builders and developers market their products to customers.

Whereas advertising-centric messages such as billboards, ads in newspapers or new home guides and on-site printed collateral certainly remain part of a marketing director’s arsenal, over the last several years they’ve had to expand their artillery to include an online world which continues to evolve and expand. After all, what better – and paper-saving -- way to tell potential customers about the latest updates in green living?

A decade ago, it was considered essential for a serious company to at least have a traditional Web site. But since then, the combination of ever-evolving technology and shorter attention spans now suggests marketing campaigns should also include Web site versions for smart phones, traditional blogging, micro-blogging (Twitter), video (YouTube) and regular social networking (Facebook) to connect with potential buyers.

To be sure, most small companies aren’t set up for this additional workload, so many outsource the new tasks to their respective PR firms, or even hire specialists who focus exclusively on helping maintain an online presence. For example, if a builder wanted to launch a comprehensive campaign on their green building practices, a package could include blogging and Twittering several times per week, reciprocal links with green-oriented blogs and Web sites in the area, shooting informational videos for YouTube which rank high on various search engines and tapping Facebook fans or friends to help consistently spread the word.

At the same time, however, the most successful campaigns manage to pair these online offerings with traditional offline events such as model opening parties, community gatherings or even charity benefits. The goal of that is also increasingly long term: if a company shows that they’re truly invested in the local community, then buyers are more likely to gravitate to their products and services.

Although much of this work is being done by PR firms which specialize in the building industry, generalists with experience in other industries are also beginning to meld their press contacts and event experience with online social networking. For example, Sharon and Bob Jimenez, who have experience as TV news correspondents and currently co-host the show “L.A. Business Today,” launched ICON Imaging Public Relations in the mid-90s to assist clients in building their own brands in multiple media. With a resume that includes two Presidential campaigns, Common Cause, the City of Los Angeles and several real estate-oriented companies, Sharon was also instrumental in producing 2010’s “Gerrymandering: The Movie” and founded a non-profit to bring jobs in entertainment production back to California.

Of course in the PR world, results are what matter. By merging her offline contacts with the online world, Sharon helped her candidate raise over $10 million online, and managed to snag a coveted slot in the annual Tribeca Film Festival to promote her movie. Adds Sharon, “Although technology has certainly changed the way we promote a client, the basics of consistency, creativity and authenticity remain the same whether it’s on Facebook, Twitter or simply talking with a reporter.”

For those builders looking to promote green building or sustainability and compete with lower-priced foreclosures -- as well as the homes they themselves built just a few years ago -- social networking is providing an important new framework in which PR is slowly supplanting advertising. But, like with anything else, the framework only works if it’s intertwined with authentic messages which find the right audience.

November column for Builder & Developer magazine now online

My column for Builder & Developer magazine is now posted online. For this month's issue, which is entitled "Promoting Green Living as a Lifestyle" -- I wanted to discuss how builders can leverage their model homes to show prospective buyers how using green products throughout the home can extend far beyond brick, mortar and drywall.

An excerpt:

Imagine, if you will, walking through what looks like a fairly typical model home complex for a new green community. Perhaps it offers the latest in energy-efficient appliances, LED lighting, solar panels, drought-tolerant landscaping, and more. But in addition to that, the homes in question feature an array of sustainable consumer products – tightly secured to tables, cabinets and countertops, of course -- that the eventual occupants might use in their daily lives.

From household chemicals and children’s toys to food and personal care items, to obtain ratings on the greenest of the green, these shoppers would only need to scan product bar codes via an iPhone application or visit the Web site for a new company called the Good Guide. Started in 2004 by a professor of environmental policy at UC Berkeley named Dara O’Rourke after he realized he didn’t really know what was in the sunscreen being applied to the face of his two-year-old daughter (which, after testing in his lab included a suspected carcinogen as well as a chemical which could disrupt hormones), O’Rourke’s goal is to bring academic-quality research on everyday products to the masses.

As I was reading this story recently in a national newsmagazine, I couldn’t help but think how easy it would be for homebuilders to leverage the mainstreaming of green products into their own sales and marketing campaigns. In September of 2010, the site for Good Guide tracked 300,000 visitors who reviewed its ratings on more than 75,000 items, so the interest is certainly there. It’s also an opportune time to provide objective research – sort of a Consumer Reports for green products – to a general public who overwhelmingly say they prefer environmentally responsible products in surveys but have grown increasingly wary of ‘greenwashing.’...

Click here to read the entire column.

Click here to read the entire magazine in digital format.

Promoting Green Living as a Lifestyle

Imagine, if you will, walking through what looks like a fairly typical model home complex for a new green community. Perhaps it offers the latest in energy-efficient appliances, LED lighting, solar panels, drought-tolerant landscaping, and more. But in addition to that, the homes in question feature an array of sustainable consumer products – tightly secured to tables, cabinets and countertops, of course -- that the eventual occupants might use in their daily lives.

From household chemicals and children’s toys to food and personal care items, in order to obtain ratings on the greenest of the green, these shoppers would only need to scan product bar codes via an iPhone application or visit the Web site for a new company called the Good Guide. Started in 2004 by a professor of environmental policy at UC Berkeley named Dara O’Rourke after he realized he didn’t really know what was in the sunscreen being applied to the face of his two-year-old daughter (and which, after testing in his lab included a suspected carcinogen as well as a chemical which could disrupt hormones), O’Rourke’s goal is to bring academic-quality research on everyday products to the masses.

As I was reading this story recently in a national newsmagazine, I couldn’t help but think how easy it would be for homebuilders to leverage the mainstreaming of green products into their own sales and marketing campaigns. In September of 2010, the site for Good Guide tracked 300,000 visitors who reviewed its ratings on more than 75,000 items, so the interest is certainly there. It’s also an opportune time to provide objective research – sort of a Consumer Reports for green products – to a general public who overwhelmingly say they prefer environmentally responsible products in surveys but have grown increasingly wary of ‘greenwashing.’

To address its own environmental footprint, WalMart effectively became the most powerful regulator in the market back in July of 2009 by setting up sustainability requirements for suppliers and manufacturers. By 2012, the retail giant hopes to offer product ratings on its vendors’ ecological footprints to its customers with the idea that such transparency is good for business.

At a time when up to 70 percent of companies listed in the S&P 500 have issued their own targets to release greenhouse gases, managing the corporate green reputation is becoming almost as important as hitting financial targets. Moreover, following one of the worst oil spills in history and the eventual day of reckoning when oil supply can no longer meet demand (also known as ‘peak oil’), the awareness of investing in renewable energy has probably never been higher.

Few industries will be able to benefit more from these trends than homebuilding. For those builders which have strongly promoted solar energy, their homes have been selling at a faster clip then the rest of the market. According to market leader SunPower Corp., the additional cost for the solar systems are often more than paid for through higher absorption rates, helped in part by federal tax credits and California’s own Million Solar Roofs rebate program. To find these green homes, Web sites such as Listed Green® Homes and some local Multiple Listing Services now allow potential buyers to seek out sustainable new homes and retrofits when conducting their own online searches.

As homebuyers increasingly look for a sustainable lifestyle that accompanies a home, those builders and developers willing to invest in the technology and creativity to promote green products throughout the homes they’re marketing can potentially increase sales velocity while adding to the bottom line. At the same time -- like Wal-Mart -- they can also continue to reinvigorate their own brands for a new decade.

Green Building Success Requires Proper Execution: Education and Customer Service are Critical

Recently, I walked into a retail store to pick up a bottle of wine for a party. And yet despite the enormous selection provided by this national chain, the line was so long – and the store so chronically under-staffed – that I immediately went somewhere else. That visit reminded me that even if a company offers great products and selection, if they drop the ball on execution, they risk losing customers.

For the building industry, given the complexity of marketing, merchandising and selling the benefits of sustainability and green technology, education during the sales process and customer service after the closing are critical components that not all builders provide.

To this day, I still remember walking through models in the late 1990s when builders were trying to showcase options such as home theater systems, whole-house audio and structured wiring. And yet more often that not, I’d see TV sets flashing a “signal missing” message, fake computer monitors, sales agents who could only refer my questions to an outside vendor, and brochures that gave only a passing glance on these new features.

Fortunately, builders such as Pulte Homes have clearly improved on that history, and now feature a Quality Construction Center as part of the sales complex in some communities. Inside one of these centers in Las Vegas, the builder provides three-dimensional displays comparing Pulte construction techniques versus what the code dictates. For example, potential buyers can feel how well low-e glass holds back the desert summer heat while dual thermometers compare differences between the air-conditioned center and the attic above, thereby showcasing how much better cellulose insulation works when stapled to the roof struts as opposed to the ceiling deck.

And, since the best HVAC systems are only as good as the quality of the installation, Pulte hires independent inspectors to conduct critical duct tests and visual inspections before any sheet rock is installed. Other green features include a right-sized 15 SEER HVAC system (which is matched to the size of the home so it operates at peak efficiency instead of constantly cycling on and off), pressure balancing between rooms to avoid hot and cold spots, and a focus on ensuring the entire exterior is sealed to avoid the loss of conditioned air.

For skittish customers not entirely convinced of green building techniques, Pulte also offers a guarantee through its Environments for Living (EFL) package, which promises that savings on heating and cooling bills will live up to their promises. Started by MASCO in 2001 and now offered on all area homes built by Pulte, the program provides a framework for green building that often frequently exceeds traditional Energy Star® standards.

For potential buyers not able to make it to the model complex, Pardee Homes has created a separate area on its Web site which showcases green building features related to solar power, engineered wood, carpet recycled from plastic soda bottles and low-VOC paint. Building green isn’t new for Pardee, which built the first Energy Star®-branded home in 1998, launched its own LivingSmart program in 2001 and last year committed to building 100% green homes in all future communities. For customers already living in these green homes, forward-thinking builders have also beefed up their customer service departments with additional training and out-sourcing to experts when appropriate.

Finally, since any chain is only as good as its weakest link, in 2007 Pulte launched its internal Green Team. Reporting to senior management, the team’s role is to stay on the cutting edge of green building products and practices, review divisional performance, stay on top of new legislation and ensure that new initiatives fit overall corporate strategy.

The future of new housing is green

When green building terms and techniques first entered the construction industry’s policies and procedures manuals, they were initially designed for new commercial office buildings, allowing developers and cities to advertise their forward-thinking designs with iconic structures in well-trafficked locations.

Today, however, with increasing consumer sensitivity towards sustainability and a higher awareness among home builders that energy-efficient homes can boost both absorption rates and profits, building green homes will likely become the most important trend this industry has seen in a generation.

The market could be huge: according to a McGraw-Hill Construction Residential Building SmartMarket Report from 2006, green homes could make up as much as 10% of new construction by 2010 – a quintupling from a comparatively measly 2% in 2005. Seeking to retain its leadership in a quickly changing world, the National Association of Home Builders (NAHB) recently announced that more than 2,700 builders, remodelers have achieved the Certified Green Building (GCB) designation, which requires 24 hours of classroom instruction, two years of industry experience, commitment to continuing education and adhering to the CGB code of ethics.

Not to be outdone, the U.S. Green Building Council’s now-ubiquitous LEED certification (Leadership in Energy and Environmental Design) -- which began for commercial structures in 2000 -- naturally led to “LEED for Homes” in late 2007 following a two-year pilot program. The national certification program, which awards points for various categories and ranges from simple certification (45-59 points out of 136) to Platinum (90-136 points), has quickly become a powerful marketing strategy that now mirrors the EnergyStar® label for appliances.

Since applying for the LEED Platinium status is so rigorous, most green builders today are opting for the more permissive Silver label, but in all cases applicants are judged in eight primary categories: Innovation and Design, Location & Linkages (site placement), Sustainable Sites (using the entire property responsibly), Water Efficiency, Energy & Atmosphere (especially heating and cooling design), Materials and Resources (minimizing waste, using local supplies when possible and selecting environmentally friendly materials), Indoor Environmental Quality, and Awareness & Education (to the homeowner, tenant, or building manager).

In many cases, green building techniques simply involve some common sense and creativity, such as including larger, south-facing windows for more natural light (and free solar heating), installing second-generation low-flush toilets, using factory-built components such as roof trusses and pre-hung doors whenever possible, and adding covered entries over exterior doors to prevent water intrusion. In other cases, such as re-introducing drought-tolerant landscaping in arid climates, preserving trees on building sites and striving to cut down on the two tons of waste that the average new home throws into landfills, some builders will lead while others will choose to follow – if at all.

But for those who do lead, the benefits are hard to ignore. In the master-planned Whitney Ranch community of Rocklin, California, in January of 2007 local builder Grupe Company created Carsten Crossings, the country’s first all LEED-certified new home community. Ranging in size from 2168 to 2755 square feet, not only did the builder’s plans out-sell its competition by a factor of 2:1, but found that having a third-party reviewer as judge and jury dramatically reduced customer calls and complaints.

At the same time, Grupe managed to divert 75% of its waste from concrete, drywall and wood from the local dump, squeeze out energy efficiency ratings 35% higher than what California’s tough laws require and installed on-site solar arrays that can reduce electricity bills by up to 70%. Not bad for construction costs of $70 per square foot!

In San Jose, First Community Housing was so good at proving that green building techniques could also be applied to multi-family affordable units, in January of 2008 it won California’s first LEED Gold certification for its 35-unit Gish Apartments project. Although the green features increased building costs by 1-2% to $145 per square foot, various sources of funding helped pay for the extras, and a grant from the city chipped in for the rooftop photovoltaic array.

But let’s also not forget some extra bonuses. Firstly, homes offering the latest technologies in energy efficiency and sustainable components will, by definition, no longer have to compete with similar designs built by the same builders in the recent past. Secondly – and perhaps more importantly -- builders who’ve long been chastised for contributing to insensitive urban sprawl can now actually lead (if they so choose) the way for a sustainable planet.

The future of green homebuilding

Although 'green building' has been noted a lot the last couple of years, it wasn't until recently that homebuilders have instituted a national set of standards to bring various local groups together. On a local level -- such as in Atlanta, GA -- green building techniques have helped to spike sales while offering homebuyers greater efficiency in a time of scarce energy resources.

My most recent article for Builder & Developer magazine discusses these trends in more detail:

It was in early 1977 when a newly elected President Jimmy Carter donned a cardigan sweater on national television, urged Americans to do the same and then asked them to turn down their thermostats to conserve energy. But who could guess that he was on the forefront of a movement towards resource sustainability that would take another 30 years to coalesce? Not only has green building and conservation emerged as the most important trend in homebuilding, but according to some experts will help drive the U.S. economy once the current recession eventually rebounds...

...according to the NAHB 2007-2008 Consumer Preference Survey as analyzed by Jonathan Smoke at HousingIntelligence.com, nearly 90% of respondents are concerned about the impact their homes have on the environment. Yet because only 16% are willing to pay extra to address that concern, homebuilders would be wise to first target those consumer segments actually willing to spend a premium. Fortunately, Smoke thinks three of his defined consumer groups fit into this category, including “Feature and Location,” “Elite” and “Active Adult Elite” buyers, who share in common a desire for quality, prestige and community. To further increase the odds of success, he suggests builders focus on top-rated green items including Energy Star-rated windows, energy-certified appliances and generous insulation while getting rid of now-dated design features such as two-story foyers which are expensive to heat and cool...

For those harried sales agents already under pressure to explain the specifics of a home plan and neighborhood, when it comes to explaining green building – or green mortgages, which allow buyers to qualify for higher loan amounts when they’re buying energy-certified homes -- it’s best to let simple displays in the model homes and colorful collateral in the sales office do the talking.

With some clever design elements, that collateral could easily double as a benefits list for comparison shopping – and pity the poor builder who thinks green building is just another fad, because they’re now in the minority. In a 2007 survey conducted by Professional Builder, 70% of homebuilders agreed that this is a trend that’s here to stay, and of those respondents, 83% considered it extremely important to their marketing strategy which has had a positive impact on sales.

KBHome declared greenest builder

According to the Calvert Group, an investment management firm, and the Boston College Institute for Responsible Investment, homebuilder KBHome is the builder adhering most closely to green building concepts. Although none of the builders studied are fully green, Centex, Pulte and Lennar were each singled out for specific items. From a BuilderOnline.com story:

KB Home ranks first among the largest public builders in terms of sustainability in the areas of energy, water, timber, and land use, according to a joint report released today by Calvert Group, an investment management firm, and the Boston College Institute for Responsible Investment.

But the report, which looked at builders' policies, programs, and performance in the areas above, also found that none of the firms qualified as fully green. "Of the 13 major home builders, only six had explicit commitments to environmental sustainability, energy efficiency, water conservation, or responsible land management, and no company published a comprehensive sustainability report," it stated.

On a regional basis, however, builders looked a little better. The report specifically cited Centex for its marketing of Energy Star-rated homes in California and Nevada, Pulte for its energy efficiency efforts in the West, and Lennar for its use of solar technology in California.

Overall, the report ranked builders in the following order:
1. KB Home
2. D.R. Horton and Pulte
4. Centex
5. Lennar
6. Ryland
7. Beazer
8. Meritage
9. Toll Bros.
10. K. Hovnanian
11. MDC Holdings and Standard Pacific
12. NVR

For more information, visit www.calvert.com/Pdf/7776.pdf.

Is there really gold in building green?

“Our greatest responsibility is to be good ancestors.”
-- Dr. Jonas Salk, developer of the polio vaccine

It was in early 1977 when a newly elected President Jimmy Carter donned a cardigan sweater on national television, urged Americans to do the same and then asked them to turn down their thermostats to conserve energy. But who could guess that he was on the forefront of a movement towards resource sustainability that would take another 30 years to coalesce? Not only has green building and conservation emerged as the most important trend in homebuilding, but according to some experts will help drive the U.S. economy once the current recession eventually rebounds.

So how can builders and developers hope to capture both the imagination and the dollars of homebuyers given the enormous complexity of ‘green’ building? Primarily through consistent and comprehensive education, not only for those executives making design decisions, but also for buyers throughout the entire marketing and sales process.

Fortunately, that hurdle has become much easier thanks to standards and practices adopted by the federal government (Energy Star, Building America), U.S. Green Building Council (LEED), American Lung Association (Health House), Masco (Environments for Living) and others. Not to be outdone, the NAHB officially launched its own National Green Building Program at this year’s International Builder’s Show. The hope for this plan is in providing a much-needed framework for a variety of local green building programs already operating throughout the country, many of which were started in association with local HBA/BIA groups as early as the mid-1990s.

The timing couldn’t be better: according to the NAHB 2007-2008 Consumer Preference Survey as analyzed by Jonathan Smoke at HousingIntelligence.com, nearly 90% of respondents are concerned about the impact their homes have on the environment. Yet because only 16% are willing to pay extra to address that concern, homebuilders would be wise to first target those consumer segments actually willing to spend a premium. Fortunately, Smoke thinks three of his defined consumer groups fit into this category, including “Feature and Location,” “Elite” and “Active Adult Elite” buyers, who share in common a desire for quality, prestige and community. To further increase the odds of success, he suggests builders focus on top-rated green items including Energy Star-rated windows, energy-certified appliances and generous insulation while getting rid of now-dated design features such as two-story foyers which are expensive to heat and cool.

In terms of marketing green building, selling the benefits more than the technology is the key, especially when they coincide with consumers’ existing focus on rising energy costs, an epidemic of allergies and asthma and the importance of sustainability. That’s also when partnering regionally with a local BIA makes sense; by leveraging its membership base, a local or statewide association can tap major product manufacturers as sponsors and create advertising campaigns that would be far too expensive for one builder to pursue alone. In Atlanta, for example, the “EarthCraft House” green building program developed by the local HBA in conjunction with the NAHB Research Center has become its own popular brand suggesting higher quality. In fact, recent buyers cited the EarthCraft certification as one of their top three reasons for buying a new home.

For those harried sales agents already under pressure to explain the specifics of a home plan and neighborhood, when it comes to explaining green building – or green mortgages, which allow buyers to qualify for higher loan amounts when they’re buying energy-certified homes -- it’s best to let simple displays in the model homes and colorful collateral in the sales office do the talking.

With some clever design elements, that collateral could easily double as a benefits list for comparison shopping – and pity the poor builder who thinks green building is just another fad, because they’re now in the minority. In a 2007 survey conducted by Professional Builder, 70% of homebuilders agreed that this is a trend that’s here to stay, and of those respondents, 83% considered it extremely important to their marketing strategy which has had a positive impact on sales.

Gold in building green? It certainly looks so -- and makes us good ancestors in the process.

Beazer Homes launches eSmart green building initiative

Although some builders are partnering with local builder's associations to brand their green building efforts, Beazer Homes has announced their own, called eSmart. The first Top 10 builder to do so, it comes right on the heels of a national branding campaign announced by the NAHB in February at the Int'l Builder's Show. I'd certainly look for other large builders to follow suit. From the press release:

Beazer Homes USA, Inc. (NYSE: BZH), one of the nation’s top 10 homebuilders, today launched eSMART by Beazer Homes™, the first comprehensive program of its size designed to increase energy and water efficiency, and improve indoor air quality, for every home it builds.

The innovative program combines high-performance products from GE, Honeywell, Moen and others with industry-approved green building practices, and is designed to have an immediate impact on the home’s annual operating costs. The new eSMART features will be made available at no additional cost to buyers.

Going forward, every newly-started Beazer home will include products designed to increase energy and water efficiency, including Honeywell FocusPRO™ Programmable Thermostats, GE EnergySmart™ compact fluorescent light bulbs (CFLs), GE Energy Star® dishwashers and MOEN water-saving bathroom faucets and showerheads. Additionally, each new Beazer home will incorporate products designed to improve indoor air quality, including air filters with a higher minimum efficiency rating value (MERV), and carpets and paints that emit lower volatile organic compounds (VOCs)...

eSMART by Beazer Homes™ will provide homeowners immediate annual energy savings when compared with a similar home built without these features. For example, converting the typical 3-bedroom, 2½-bath Beazer home to EnergySmart™ CFLs will save homeowners approximately $331 in annual energy and replacement costs* (at 9.7 cents/kWh).

According to Callahan, Americans’ expectations about energy efficiency in new home construction are changing. Some 66 percent of consumers polled by Beazer Homes in March 2008 report being more conscious of the environment and the need to conserve natural resources today than they were five years ago. And nearly three-quarters (73 percent) said that builders need to do more to make an affordable "green" home available to the average American. Driving this point home, two-thirds of survey respondents ranked the importance of energy-saving features, such as programmable thermostats and CFLs, on par with higher-end kitchen features when making a new home purchase decision.

Builders going 'green' out of necessity

When sustainable development first emerged a few years ago, most builders weren't willing to risk their production schedules for new building methods and options that were either untested, not in demand by buyers, or both. Even as recently as a couple of years ago, buyers claimed they wanted 'green' homes but weren't willing to pay the extra freight for its benefits. But now, with LEED energy certified projects in much greater demand (especially for commercial buildings but increasingly for residential developments), builders are finding that offering energy efficiency far beyond what's currently available in existing homes can sometimes pry skittish buyers out of hiding. From a Wall Street Journal story:

More builders are adding "green" features to their new homes. It is a strategy born out of necessity.

In October, the Trilogy division of Shea Homes rolled out a program dubbed Shea Superiology for its 1,500 to 2,000 new homes this year. The homes will have environmentally friendly features such as increased insulation and energy-efficient electronic appliances. KB Home this year also began including appliances awarded the federal Energy Star rating for high energy efficiency as standard in homes, even though they cost more than those without the designation. And Pulte Homes Inc. is adding more insulation and energy-saving appliances at some of its subdivisions in the southwestern U.S...

he push for environmentally friendly construction comes as the housing industry remains mired in a deep and protracted slump, with single-family housing starts off more than a third from 2005 and widely expected to keep sliding this year. To stand out from the crowd, big home builders are going green for the first time or are expanding their existing programs -- a departure from previous practice, when environmentally friendly building was mainly limited to a niche of smaller builders. But results so far are mixed: some developments report increased traffic but no pickup in sales. Other builders say sales are on the upswing but it is too early to tell whether it is at a faster pace than their comparable, nongreen developments. And the higher cost of green construction is proving a hurdle for some companies.

Overall, as much as 10% of all housing starts, at a market value of $38 billion, are expected to include environmentally friendly construction by 2010 -- up from 2% of starts, or $7.4 billion, last year, according to the National Association of Home Builders. The trend is also getting a boost from the federal government: The Department of Housing and Urban Development has in the last year sponsored "concept homes" in Omaha, Neb., and Charleston, S.C., that include various green features...

Consumers have also responded favorably to Shea Homes' new green program. Although sales prices of the homes with environmentally friendly features run 3% to 4% higher than those of comparable properties, buyers told the Scottsdale, Ariz., builder in surveys that they would be willing to pay more for a green home in return for energy savings. In one Phoenix-area subdivision, Encanterra, Trilogy officials say they have sold 83 homes since opening it in November, or twice as fast as the local market...

Among other obstacles, green building can be costly. Industry experts figure that features such as energy-efficient appliances and better insulation can add 3% to 5% to the cost of a home...

Such costs have taken a toll. Pardee Homes, a Seattle-based builder that is owned by forest-products giant Weyerhaeuser Co., is backing off a green program it started last year to include Energy Star appliances as a standard feature in its homes. It costs about $50 more for an Energy Star dishwasher than a conventional model...

Environmentally friendly building doesn't always result in immediate new sales. At its 78-home Timber Creek development in Las Vegas, which opened in April, Pulte Homes had retrofitted in January the models to be certified as green under local green building standards. Features include ultraefficient air conditioners, dual-pane windows with a metallic coating that blocks out the sun's heat and low-flow toilets.

The Bloomfield Hills, Mich., builder says visitor traffic to the development has since increased, with customers drawn in part by estimated monthly savings of $60 to $80 on their power bills because of increased insulation in the Nevada heat. Still, Pulte officials say it is too early to tell what impact the move will have on sales; to date, 50 of the homes in the Las Vegas development have sold...

Meanwhile, Cherokee Investment Partners, a private-equity fund in Raleigh, N.C., in December opened a show home that has been certified by the builders' association as the first green home built in an existing development. Officials of the equity fund, which specializes in socially-responsible investments, say they built the five-bedroom, $500,000 home with traditional-looking designs to show other builders it could be done.

Among its features: a wheat kitchen cabinet coated with a cherry veneer, and solar shingles that match the look of shingles of older homes in the neighborhood. Jonathan Philips, senior director for the firm, has moved into the home and says builders from all over the country have come to tour it.