Eco Friendly Real Estate Blog

Before you comment on this post you may want to read it all the way through first.  Chances are, you will either strongly agree or strongly disagree.  But if you are in Real Estate you need to consider all of the different sides before you make your decision on exactly how you feel about all of this.

First, if you read Katerina's post regarding Cap and Trade - Or if you are reading any other article for that matter - I want you to do me a favor for the sake of this post.  Completely take out the words Greenhouse Gases, Climate Change, Carbon Footprint and any other word that can be related to Environmental Topics.

What you have left is verbiage regarding creating jobs, energy efficiency and Building Code.  As a Certified EcoBroker and CGP - I have closely followed proposed Legislation regarding these same exact topics regardless of where they have been proposed.

These topics are not new by any stretch.  State and City Legislation have been battling these very topics heavily for a few years now.  Everything from Energy Ratings, requiring homes to be X% more efficient by X year, raising the Building Code, etc.

Certain areas, for example, Texas (specifically Houston) that thrive on Affordable Housing have expressed their concern over strict guidelines because it raises the cost of construction.  Some people can not afford to make these changes.  For every $1,000 that you raise the cost of a home, it takes X number of buyers completely out of the equation in being able to afford the home.

It's all been talked about time and time again. 

However, I am a little concerned about the people that are adamantly against making homes more affordable to LIVE in.

'To LIVE in' - This is the part of all of this that in my opinion is completely overlooked.  While I'm not a Fan of much of the recent Legislation for the most part - This particular one I think deserves a little more consideration from the Consumer side of things.  I don't think we should rule it out as completely negative yet.  Here are just a few of my reasons:

• Homes really DO need to be more Energy Efficient.  How about the First Time Homebuyer that is excited to move in to their First Home - They spend money on getting some new furniture, lawn equipment, etc.  THEN, they get their first electric bill to find that it is Quadruple the cost of what it was in an Apartment.  The cost of actually LIVING in a home just became a realization.
• With the cost to LIVE in a home at top of mind, how about the home that put $100,000 in to putting Granite Countertops, a pool in the yard, Hardwood Floors and made it look pretty - Then went and sold it at the Top of Market Value for the new homeowners to realize that the home Sucks Energy like crazy.  Was the home REALLY worth it? 
• Over the past 2 years many have realized that we need to consider how much home we need vs. how much home we want.  With disclosures on Utility Costs required, do you think that people would reconsider buying that home they can't afford?

Now, the part of the Bill that discusses existing homes being brought up to Today's Energy Codes - I have a question to propose.  Are there even enough items manufactured to bring every single home on the market up to Today's Energy Code?

The next thing to consider is the Cost of Building a home vs. who can afford it.  Most people believe that only the people who CAN afford it will get an Energy Efficient home.  Is that right?  It is the people who CAN'T afford it that need Energy Efficient homes the most.  Would a stricter Energy Code - Regardless of it being passed at a Federal or State Level - Would that really be a bad thing?

Quite honestly, I am offended when I see 'Affordable Homes' that I know will have an extremely high Utility Bill.  I personally think it is an injustice to the people that need it. 

Truly Energy Efficient Products - There need to be more of them.  Supply and Demand.  Who makes the products?  People.  Jobs.

The Real Estate Industry, and I have mentioned this before, we need to Grasp these changes and accept them.  It will not make our lives and jobs more difficult.  It will help our clients choose what home is really the best for them.  It will help them choose a home that is the most affordable for them. 

As an industry we need to look in to learning more about Energy Efficient Mortgages, Renovation Loans, Energy Efficiency Legislation (not just at a Federal Level), Energy Audits and Ratings.  We need to Network more with the Folks that do this as their chosen Profession.

The cost to make a home 30% more energy efficient can be as little as about $300 - That $300 could have a 500% return in a lot of homes over a year or two.  Many States offer programs to do this to existing homes for FREE.

Let's take a different look at all of this.  Without the words Greenhouse Gases, Climate Change, Climate Initiative, Carbon Footprint.  Oh, and sorry for not having any pictures.  Just got a new laptop and have not transferred over any of my data.

But more importantly, it's the people that drive it. Without jobs we have no money.  Without money we have no economy.  Without both, we don't exist. The world is changing.  We are in an amazing era of awakening.  It is said that the jobs that our Middle School Age children will have when they graduate from College do not even exist today.

I often get asked why I am so passionate about Green Real Estate.  Preceding that question is why I am in Real Estate.  While that is a long story, I will sum it up in just a few sentences. 

Real Estate is a Major driving force in our economy.  Real Estate is an investment.  Real Estate and Homeownership is not only a dream in America but across the Globe.  How it differs from Location to Location is not the dream, it is the design.  Some Cities grow up, others grow out. Regardless, I find it fascinating on many levels.

To build a single Community, let's take in to consideration how many people it takes. 

It starts with a Vision, probably from a single person.  We then have an Architect or maybe even a team of architects.  Electrical Engineers, Plumbing Experts, HVAC Contractors, Landscape Architects, Transportation Engineers - Teams of people that figure out how in the world to get Electricity and Water to all of these people.

The list could be a blog post in itself.  But that is not the purpose of this.

The purpose is the People.  The purpose is how Real Estate alone can single handedly drive an economy and why it is time to stop ignoring it.  More specifically, how GREEN Real Estate is KEY to a Future Sustainable Economy.  I do not mean Sustainable as in Eco Tree Hugger like Economy, I mean a Sustainable Economy in which we thrive and flourish.  This post is the first of a Series about how Real Estate is often overlooked in the larger picture.  Actually, the people within the Industry.  It's not about CEO's that want bailed out because they made extremely poor decisions on how to handle their money.  It goes way beyond that.

We hear about Foreclosures, Short Sales and lack of Financing available.  But it goes so much further than that also.  Think about the whole picture.  The people.  How many people that have gone in to Foreclosure have jobs directly or indirectly related to Real Estate?  Most of them.

Engineers that design Commercial Buildings, Bankers that Finance those projects.  The people that are actually out there swinging the hammers to build all of the above.  All the way down to people that work in the Retail stores that sell products to our Communities and our Baristas at Starbucks that are working in buildings that are on...Real Estate.

But, enough of what is happening now.  What is going to happen in the future?  The Economy will turn around eventually.  And while we are all suffering in one way or another we should be careful to NOT be hasty and make rash decisions on how to fix the Economy right this second.  I said the other day on my Facebook that:

"I am offically redefining the term 'recession' as Get off your butt and think outside the box"

The key to Real Estate and it directly being a driving force in our Economy is not just about the Real Estate Agents.  It's not just about the Homeowners or even the Banks that give the Financing. 

The key is the number of jobs that it can create.  Specifically the number of jobs it can create with a Sustainable and Forward thinking approach.  We may be losing jobs, we may continue to lose jobs for another couple years.  Do we just sit around and watch it happen?  Personally, I do not like to think about what is wrong, I prefer to think about how to fix the problem. Every Business likely has a Business Plan.  Our Economy is one large Business.  Shouldn't it have a Business Plan also?

What we need is to combine another driving factor in our Economy with Real Estate.  Education - Job Training.

Education is looked at most often as for children.  Our Future.  And while the jobs that our middle school children will have when they grow up do not exist today, that does not fix right now.  I believe that we will see a surge in the number of College Students that will pursue Engineering and Architecture degrees.  But the term Engineer and their job profile will change dramatically over the next 15 years.  The people that will educate and train our children are right here today in the work force.

Again, Real Estate being a driving force behind that.  I believe that we, as an industry, will be forced to raise the bar in professionalism, knowledge and expertise.

The next post will be regarding possibly the absolute most important part in the Future of Real Estate. 

Architecture.

Architects hold the expertise to help make our future flourish and create jobs.  More specifically they are the key to a Sustainable Economy - and this time I mean in the way that most people would consider Tree Huggerish. 

But looking at the larger picture, its not about being a Tree Hugger.  It's about Smart Growth.  It's about not making a quick decision on how our future is going to work and how our economy will continue to thrive day in and day out.  It's about the people.  It's about us and our children.  Working.  Living.  The Dream that most of us in the Real Estate Industry are so passionate about.  Our Homes.

Because I write about Green Real Estate, well, always...I hear this.  "I don't care." "I'm tired of hearing about it." "It will never go mainstream"  "It will go away like in the 70's and 80's"

I understand what you are saying.  I really do.  Before we consider a few things to help make a point, I'm going to go way out on a limb, in writing.  The term 'Green' in 'Green Building'. Yes.  It will go away.  Homes built to what is considered to be 'green' today will not be called this forever.  As a matter of fact, I predict that within 7-10 years the term will completely go away, if not sooner.

Notice I say 'the term'.  The science behind 'green building' is going no where.  'Green Building' will be NORMAL.  In no more than 10 years I predict that 'Green Building' will be CODE in most large Municipalities around the Nation.  There, I said it. I also predict that within the next 2-3 years the building industry will be taken by storm with reports on how unhealthy some of the building materials are that we use and it will be backed by major and well respected Non Profit organizations.  For example, maybe the American Cancer Society.

Now.  Let's consider the 'term' Code.  We know this as the law in which homes MUST be built.  However, I'm going to translate the term Code using a definition from someone I know.

"Code. If a builder tells you that their home meets Code, what they have just told you is that essentially they have just built you the WORST possible product allowed by Law."

Consider that.  Why in the world would I say all of this?  It's not because this is what I do.  It's not because I think every builder and City across America is going to all of the sudden want to save the Environment.  It's not about being a Treehugger.

Here are a few things that have happened just in the last 12 months:

• There are now Cities that require a HERS Rating to be performed on both new construction AND resale homes
• The City of Houston as well as others require Commercial Buildings over 10,000 sq ft to be built LEED Certified.  (that means Green)
• The City of Houston adopted the IEC 2006 as Energy CODE for Residential Properties built within the City limits.  To translate, that is said to be close to 10%-15% above Energy Star

Quick side note.  Energy Star is supposed to be 15% ABOVE Texas Building Code.  Not only have we seen an increase in required ratings for Energy Star products, but will possibly see Nationally, an increase in what is required for an Energy Star home because that worst possible home built in some Cities EXCEEDS ENERGY STAR STANDARDS.

• The State of Texas is considering making it mandatory to have a HERS Rating as a mandatory field on all MLS, but not necessarily required to have one performed. We can tell where that is headed.
  
• The City of Houston is making a website where you can go to see how your Energy Usage compares to your neighbor's

I could go on and on.  If you go to a home show it is not uncommon to have a Consumer stop by a booth and know more about the systems involved in Green Building than the builder themselves.  What do they do?  Well, they move on of course.  They find one that knows what a sealed attic is and how to do it or whatever else they are looking for in their home.

We are at a tipping point now where it is almost a liability to NOT know what this stuff means. 

Like it or not, the writing is on the wall.  Energy Codes are changing at Warp Speed and 'Green' is a major component of that.  We as an industry need to stay up to date and educated about all of it.  Regardless of what industry you are in or if you are a consumer- If you are rejecting the idea of learning about it now is the time to start.  If you are a Real Estate Professional, don't let it get to the point where your clients know more about it than you do. 

It's no longer going to be questions about post tension slabs and double pane windows.  It is overall Home Performance.  No one is trying to shove a concept down your throat or change your beliefs, it's just a little food for thought.

***Shameless Plug***  If you want to learn more about all of this, feel free to sign up for my webinars or listen to the recorded ones.