2018 will continue to ride the coattails of a strong sustainable 2017
By SERGIO FLORES
Overall, the sentiment for U.S. homebuilding is strong. The industry ended 2017 on a strong note; builder confidence reached a 10-month high in November, despite facing natural disasters a few months prior. And to what could we credit the confidence? A few things, actually. First, the economy has been doing well, which has consequently led to an increase in new home production. The decrease in unemployment is evident in the rising demand for housing; unfortunately, there just is not enough inventory to provide for all, causing an increase in home prices.
There is also a strong sentiment towards the current administration. President Trump has promised to relieve the industry of a lot of red tape that has burdened the industry over the last few years. The Trump administration’s latest regulatory reform is bound to have a number of implications on the housing industry; it is a story we are all watching closely.
The sustainable and green homebuilding movement saw great strides last year, and the momentum continues as more homebuilders begin to realize both the demand for energy-efficient homes and the fiscal benefits they provide. Municipalities are joining in on the green movement, with many passing laws that will require structures and homes to meet distinct energy codes to ensure sustainability and energy efficiency.
In fact, California is on track to ensure homes meet ZNE standards by 2020. “Increasingly, government agencies have turned to codes to implement not just health and safety goals, but also other policies, such as energy efficiency, resilience, and sustainability,” explained Granger MacDonald, NAHB Chairman and a homebuilder. “NAHB is committed to ensuring that building codes are cost-effective and do not unnecessarily add to the price or operating expenses of a new home. Our policy also calls for codes to be flexible, market-driven, and performance based. For measures intended to improve energy efficiency, our policy calls for a payback period of 10 years or fewer, which is what consumers demand as well. It’s also important for government at all levels to encourage and incentivize retrofitting and other energy efficiency measures in older homes, which use significantly more energy than new and recently-constructed homes. That’s where the biggest savings take place: new homes built to today’s building codes are extremely efficient already.”
It’s always wise to study California, as it is often a pioneer in many societal trends. I have no doubt that the state will take the lead in energy-efficient building and that, over the years, this will trickle down to states nationwide as they begin to observe the fiscal and societal benefits that come with building green homes. North of California, in the city of Ridgefield, Wash., a recent city council meeting discussed development code changes and a green building program. From energy use, use of recycled materials, water heating, and piping, the benefits of adhering to a higher code standard and efficiency is being observed by builders and municipalities alike.
The myths that once plagued the green movement industry are being dispelled as more examples are viewed. Some of the biggest homebuilders are using third-party certification guidelines in designing, constructing, and developing their homes.
“Ultimately, the rise in green building in the residential sector is driven by market demand,” explained Mahesh Ramanujam, President and CEO of USGBC. “According to a study on green labels in the California housing market, the construction of new single-family green homes grew from 2 percent in 2005 to 23 percent in 2013, representing a potential $36 billion market opportunity. In 2018, the green single-family housing market is estimated to represent about 40 percent of the market in the U.S. and 84 percent of all residential construction will have sustainable features.”
In this issue, Jason Forrest, CEO and Chief Culture Office at Forrest Performance Group in Texas, explains that the true value of the green building movement as we enter the new year is its cultural relevance. Millennials are poised to enter the housing market in the next year in a serious manner; they might have dipped their toes in it in the last couple of years, but economists and analysts are predicting a more serious commitment in 2018. This is a generation that puts an emphasis on societal implications, meaning they would probably support a company that is delivering for the triple bottom line: people, planet, and profit. In comparison to Baby Boomers, they might not care about the traditional settings of a home, although a backyard seems to be on most of their wish lists, probably because of their infatuation with dogs. But a builder who is benefitting all of its surroundings will have a much better advantage than the traditional, old-school builder who has not retrofitted his business model for today’s buyer.
Sergio Flores is Senior Editor for Green Home Builder magazine. He may be reached at email@example.com.