Dan Dunmoyer of the California Building Industry Association shares insight into Title 24 changes enacted January 1st, 2020, affordability, and more
GREEN HOME BUILDER: What surprised you most about the new solar mandate?
DAN DUNMOYER: I’ll start with what didnt surprise us. The issue of solar power has been promoted for decades. There was even legislation to mandate that we have solar roofs back in 2004. So what we weren’t surprised about was the interest in California — and that goes to republican governors like Schwarzenneger, and Democrat governors like Brown, and carried forward with our new governor, which is Governor Newsom.
What did surprise us, we were pleasantly surprised that the CEC agreed to give greater flexibility in how we can accomplish the mandate and gave the additional flexibility to use these tools or resources to comply
GHB: Governor Newsom has been addressing the housing shortage; what do you think should be the goal in addressing this?
DD: Well, for us it’s kind of multifaceted. One is, recognizing we have a problem, because not everybody shares in that. If you survey Californians, affordability of housing is a massively important issue, but how we solve that is not agreed on by Californians. For those of us in the homebuilding industry, we know its a supply problem. It’s a supply problem in that we need more homes and we need them at a more affordable price.
The basic two edges of the sword that are cutting the deepest for us are the fact that theres an unparalleled number of fees being added onto a home in California. We have over 500 fees that can be levied on us in any jurisdiction. Some you’d expect, like a traditional development fee, and some you wouldn’t expect, like artwork, community wellness, pension funds, or things that we dont really create problems for or need to be mitigated. But local governments are using new homebuilding as a tool to basically finance all the challenges of local government.
The second part of that, which is kind of intertwined, is just the lay or time it takes to get to yes. Pretty much every other jurisdiction in America, we can build a home in 2 years – in some places in 8 months. In California, it’s not uncommon to take 20 years.
So we work with Governor Newsom, and we’re looking at ways to reduce the fees or at least to make them equate more with what a new home’s impact to a community will be and then trying to expedite the review process. Because if we would have to wait another 20 years to solve this problem, it’s just going to become cataclysmic. So that’s our focus right now with the governor and his ambitious goals of building more housing units.
GHB: What impact do you expect the changes to make on the California homebuilding and housing market?
DD: Well, we’re always anxious about mandates even though we found a way to get to yes with the energy commission. We know that even when you add the simple cost of putting solar on the roof and having the homebuyer pay for it – because even if we pay for it, we pass it onto the homebuyer – that’s going to add 8-10,000 dollars a roof. So, we know that for every $1,000 in new homebuilding costs that we have to pass on to the customer, there’s almost 10,000 families who can’t afford to buy a home.
I’ll walk you through that. If you have a $300,000 home, then you have X number of people who can afford to buy it. If you move it to a $301,000 home, then it’s X-10,000 families who can afford it. If you add $10,000 to it, 100,000 families can no longer afford to buy that $310,000 home.
So we’re very anxious about a mandatory penny being added to the home because unlike other states, in California we have stunning demand for our products, but not at the price we’re able to deliver it. So we want very much to find ways to reduce that cost of housing, not increase the cost. So when you take 100,000 families out of the equation when you add a solar roof on, that’s still a concern. So, for us, we understand the commitment in California to reducing greenhouse gas and making this a better place to live, but we’re also mindful of the fact that having a place you can call home and being able to buy a home when you want to buy a home is truly another equally important priority for us as a state, and that’s the concern about the mandate.
GHB: Is there anything else you would like to add?
DD: We focused primarily on the energy code in terms of Title 24, and that’s appropriate because that’s where 95 percent of the activity is regarding Title 24. I would just suggest, for preparation purposes, that homebuilders look at some other requirements. The good news is they don’t go into effect until July of 2021.
There are a few minor increases in fire supression for homes based on the recent fires we’ve had in California. So in July of 2021, we’ll have to start building homes with a Class A roof. The good news is, the difference between a Class A roof and a Class B roof covering is pretty much identical in price. So it’s not a cost-increase code change, it’s just a type of roofing you need to use to mitigate fire activity.
The second thing is, they need to look at more fire-resistant vents. That’s the other part of the Title 24 code in July of 2021. So not next January, it’s almost two years away, but as they plan out their homes and look to develop them, they should take into account these modest changes.