by Phil Crone, Director of Government Affairs and Green Building Programs

A few weeks ago, I wrote that the North Texas Municipal Water District is considering a move to Stage 4 water restrictions (their highest contemplated level). Such a move would have a significant impact on the 1 million customers that get their water from cities that the District serves.

In furtherance of Stage 4 restrictions, a city may prohibit the irrigation of new landscaping using treated water, prohibit permitting of private pools, and initiate a rate surcharge for water use that exceeds normal rates according to the District’s Model Drought Contingency Plan. The plan, which was finalized in 2008, contains model ordinances for cities to adopt. Cities served by the District include Allen, Frisco, Garland, McKinney, Mesquite, Plano, Richardson, Rockwall and Wylie.

With the possible move to Stage 4 on the District’s Jan. 26 agenda, Mother Nature came to the rescue (unconfirmed rumors say that it was actually Jerry Carter’s rain dance that caused the heavens to cry uncontrollably). Whatever it was, it sure made a difference. However, there is still a chance that the coming months leave us high and dry once more.

The recent rain dropped between 4 and 5 inches on nearly all of the area, raising lake levels from 3 to 5 feet and replenishing about 10 percent of capacity in most places. In fact, Lake Grapevine, Lake Arlington and Joe Pool Lake are now completely full! Lewisville Lake and Lake Ray Hubbard are almost 90 percent there. While that is great news for others around the area, Lake Lavon is the one to watch for those served by the North Texas Municipal Water District (NTMWD). Although Lavon was raised 3 feet and replenished more than 10 percent of its capacity, it remains only about 64% full (its highest level since Aug. 20).

If you’re still reading this you’re probably asking why Lavon is still so low. That’s because this water restrictions issue has as much to do with zebra mussels as it does with the lack of rain. For some time now, the NTMWD has been fighting with one hand tied behind their back. Zebra mussels have rendered their secondary water source, Lake Texoma, off limits. This is why the NTMWD is on Stage 3 while other areas like the City of Dallas are only on Stage 1.

Zebra mussels are an invasive species that infiltrated the Great Lakes by way of ships from Europe. Far away from their natural predators, they have ferociously reproduced and wreaked havoc on the ecosystem of just about every lake they make their way into. As Dan Patrick used to say, “You can’t stop them; you can only hope to contain them.” That’s precisely what the federal government is doing by preventing the NTMWD from using its secondary supply of water.

Not knowing what Mother Nature (or Jerry Carter) has in store for us, we need to plan for the worst and hope for the best while gathering the facts that will help policy-makers make educated decisions on how to encourage water conservation. Instead of preventing the installation of new landscaping (and possibly new homes), builders can utilize drought-tolerant turf such as Bermuda or Zoysia. Although a couple weeks of watering is needed for the turf to take hold, it will emerge intact after long periods with no water. The right turf, combined with native plants, can cut a home’s water use in half. Moreover, the newer fixtures and plumbing layouts in today’s homes are up to 30 percent more efficient than typical existing homes.

Just like with energy, the smart money on water conservation lies in existing homes and buildings. The blueprints for successful municipal initiatives are all over the nation. Cary, NC, a fast-growing Charlotte suburb, reduced its retail water production by 16 percent through measures such as adding rain sensors to existing irrigation systems, providing free audits to assess water savings strategies with residents and public awareness campaigns. Closer to home, Dallas has had a great deal of success with its New Throne for Your Home program. As the name suggests, Dallas Water Utilities customers get a rebate voucher to obtain a low-flow toilet. The program saves the city 158 million gallons of water annually.

With the right information and proven strategies, we can do our part to overcome the zebra mussel drought. A little rain dance every now and then won’t hurt either. Thanks, Jerry!

Summit programming will focus on water efficiency as the industry grapples with increasing challeges arising from drought and access to sources of water supply critical to the region’s continued growth. Other seminars will feature some of the state’s leading building science professionals as well as policy makers who will be defining the market landscape at the state and local levels.

Summit partners and exhibitors will benefit from their ability to reach hundreds of potential customers on the Show floor and thousands more via the media outreach that will occur in advance of the Summit.

Discounted registration of only $65 per person is available for a limited time, visit www.texasgreenhomesummit.com to sign up today.

Several builders are currently piloting the new program in advance of its implementation. The HBA may take the feedback received from them to make slight adjustments or clarifications to the adopted protocols, but only as the need arises.

Builders are encouraged to contact their GBT verifiers for more information about these changes.

Green Built Texas Version 3.0 as approved by Green Built Texas Board of Directors.

This session is a great crash course for new sales staff and is beneficial for ENERGY STAR veterans looking to practice their messaging relating to Version 3 systems. This session is aligned with the Version 3 specifications, and will touch on some key differences between Version 2 and 3 homes.

click here to sign up

Congress is unlikely to extend by the end of this year several tax incentives used by developers and remodelers that expire on Jan. 1.

The clock is running down on the New Energy Efficient Home Tax Credit (45L), the only federal incentive available for efficiency in new home construction. It provides a $2,000 tax credit to builders and developers for the construction and sale of homes that achieve a 50% improvement in energy efficiency over the 2004 International Energy Conservation Code.

Also nearing an end is the Existing Home Retrofit Tax Credit (25C), which provides consumers a tax credit of up to $500 for the purchase of qualifying energy-efficient products. Remodelers often leverage 25C tax incentives when working with clients.

NAHB is actively working to extend these tax credits.

Both 45L and 25C are traditionally renewed by Congress at the end of each year as part of a package of expiring tax credits.

Commonly referred to as “tax extenders,” this package has become more difficult to pass due to the government’s fiscal belt-tightening.

Because extending these tax credits would increase the deficit, Congress is required to offset the cost of the extension by either cutting spending or raising other taxes. Finding bipartisan “pay-for’s” has been difficult.

Last year, the credits were allowed to lapse for 11-1/2 months before Congress finally extended them retroactively for 2010 and until the end of 2011.

In addition to pushing for an extension, NAHB is working with a broad coalition of product manufacturers to modernize the 25C tax incentive.

In 2009 and 2010, Congress temporarily increased the 25C tax credit to allow taxpayers to claim 30% of the product cost — up to $1,500 — for installing eligible energy-saving retrofits in their homes.

These higher tax credits were involved in more than $25 billion of remodeling activity in 2009, which NAHB estimates was associated with over 276,000 jobs.

For 2011, 25C fell back to its pre-stimulus level of 10% of the installed costs, with a maximum credit for all qualified retrofits of $500. In addition, many products have lower thresholds, which have created confusion among taxpayers.

NAHB and its coalition partners are working with allies in the House and Senate to introduce legislation to increase the $500 cap to $1,000.

In addition, NAHB is proposing to eliminate the lower, individual product thresholds and permit taxpayers to claim labor costs for all qualifying products. For consumers, this would create a more robust — yet simpler — tax credit.

Although the tax extender package has been renewed before without controversy, taxpayers cannot assume that Congress will proceed as it has in the past.

While support in Congress remains high for extending these incentives and lawmakers have renewed these tax credits retroactively in the past, their fate remains in doubt as Congress wrestles with offsetting their costs.

Recognizing the uncertainty confronting small businesses and consumers, NAHB is continuing to urge lawmakers to extend these tax credits in a timely fashion.

For more information, email J.P. Delmore at NAHB, or call him at 800-368-5242 x8412.

More details can be found at the EPA’s Energy Star for Homes website.

Version 3 Training Requirements: Builder Training Requirements:

Builders must complete the online ENERGY STAR Orientation Training to be eligible to build homes qualified under Version 3. Effective January 1, 2011, new builders must take this training to become partners. Builders who joined prior to 2011 must complete the training by December 31, 2011 to remain ENERGY STAR partners.

Verification Partner Training Requirements

Verification partners, including HERS raters and Field Inspectors, must complete ENERGY STAR Version 3 Rater Training through an Accredited Training Provider . Effective January 1, 2012, new raters must take this training to become partners. Raters who join prior to 2012 must complete the training by December 31, 2011 to remain ENERGY STAR partners.

HVAC Contractor Credentialing Requirements

To be eligible to install HVAC equipment in homes qualified under Version 3, HVAC contractors must complete ENERGY STAR Version 3 Training and be credentialed through an EPA–recognized industry organization. For information on working with ENERGY STAR qualified homes as an HVAC contractor, please visit the EPA’s HVAC contractors webpage.

Most houses have all sorts of exhaust appliances (bathroom fans, clothes dryers, wood stove, power vented water heater, etc.), but kitchen range hoods are typically the most powerful, pulling between 100 to 1200 cfm of air out of the house. As Isaac Newton told us in elementary school, for every action there must be an equal and opposite reaction. As such, every time air is removed from the house, an equal amount of air must enter.

Typically, this air enters through gaps and cracks in the building envelope. However, the concern now is that the combination of homes getting tighter and hood fans getting more powerful will lead to bigger problems than impromptu toilet flushing. Specifically, that problem would manifest in the form of air back drafting through water heater flues and through wood burning chimneys, bringing carbon monoxide with it when the range hood is activated.

In an attempt to address this issue, the 2009 IRC requires that range hoods pulling more than 400 cfm need to be provided with approximately the same amount of makeup air through means of an automatic damper that operates as soon as the hood is activated. Though this provision is well-meaning, the cure may be more harmful than the disease in this instance.

For starters, the makeup air has to come from the outside, which in our area usually means that air is hot and humid or nice and cold like it is now. That places a greater load on HVAC systems, and could result in systems being oversized in their design (a classic building science no-no), and may make the house an uncomfortable place to live, at least when the range hood is running.

I am really not sure why 400 cfm is the magic number chosen by the code. I have not been able to find a building science article explaining how the IRC drafters came up with it. The cynic in me says it is because most range hoods on the market are rated higher than 400 cfm. Assuming though that 400 cfm is indeed the magic number, the code allows you to have a 400 cfm fan with no makeup air.

However, if you have one rated at 600 cfm, you would need to provide 600 cfm of makeup air from the outside. Again, if 400 cfm is the magic number, it would seem to me that the code should require only 200 cfm for a 600 cfm fan and so forth.

Manual dampers (long recognized by the code) do quite well at introducing fresh air into the house without the added expense and impracticality of an automatic system. Additionally, sealed combustion appliances and fireplaces have their own air supply and are not at risk of back drafting dangerous gases into the house.

In the coming months, the HBA will be discussing this code provision and possible solutions that would provide greater flexibility with local code officials. We will also make this a topic of discussion at the North Central Texas Council of Governments’ Regional Codes Coordinating Committee that we serve on. That group has begun evaluating the 2012 codes, which will provide an opportunity for the industry to propose a long-term solution.

The highest-priority green feature for most clients is energy efficiency, Spence said, followed by indoor air quality, water efficiency, and materials. She provided advice on marketing each of these green features.

ENERGY EFFICIENCY. For most customers, the most pivotal benefit of a green, efficient home is reduced cost of ownership. “People want to be insulated from future expenses,” Spence said. “No one knows what energy will cost. We provide information on what might happen [to energy costs] in the future.”

(read full article at EchoHomeMagazine.com)

U.S. Senators Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.) introduced a bipartisan bill that would enable better mortgage underwriting, reflect the value of energy performance in the appraisal, encourage investments in energy efficient homebuilding and create more than 80,000 construction jobs.

Under the Sensible Accounting to Value Energy (SAVE) Act, federal mortgage loan agencies would consider a homeowner’s expected energy costs when determining the homeowner’s ability to make monthly mortgage payments.

There are two main elements of the proposed legislation. The first is the recognition of the energy as an housing cost. This would change the current PITI (Principal, Interest, Taxes and Insurance) into PIETI (Principal, Interest, Taxes, Insurance plus Energy). This means that with every dollar the home saves in energy it would increase the buyer’s ability to afford the efficient home by the same amount. This has been a structural reform advocated by RESNET since 2006 (see RESNET Policy on Energy Efficient Mortgages)

The second main element of the SAVE Act is the Loan to Value Adjustment, which incorporates the Net Present Value (NPV) of expected energy savings into the home’s appraisal.

Both elements will allow homeowners to invest in improved energy performance and finance it through the traditional mortgage.

The proposed legislation would recognize RESNET home energy ratings for calculating the energy savings for the mortgage loan.

According to the legislation’s sponsors, the average homeowner spends more than $2,000 each year on energy costs – more than on either real estate taxes or homeowners insurance, both of which are regularly accounted for in mortgage underwriting. On average, these energy costs amount to more than $60,000 over the life of a 30-year mortgage. The SAVE Act would address this blind spot, giving a more complete picture of the costs of homeownership and borrowers’ capacity to service debt.

Under the SAVE Act, lenders would account for expected energy costs along with other recurring payments in the debt-to-income qualifying ratios, which test the borrower’s ability to afford regular monthly mortgage payments. According to a new study from The American Council for an Energy-Efficient Economy, the SAVE act is predicted to create 83,000 new jobs in construction, renovation and manufacturing by 2020.

“It is rare to have such diverse interests come together, and that’s because this is a common-sense bill,” said Bennet. “The Save Act would help provide access to useful information about energy usage that home owners, buyers, appraisers and underwriters want and need. It would lead to more complete and accurate mortgage underwriting, would encourage investments in home energy improvements, create more than 80,000 jobs and lighten the load for Colorado families’ budgets.”

“As someone who has 30 years of experience in the resident real estate industry and who has lived through multiple recessions, I understand that recovery in the housing market and job creation in the construction sector is pivotal to getting our economy back on track,” said Isakson. “I place my support behind this bill because it has the potential to create jobs without any cost to taxpayers, and it will also improve mortgage underwriting in this country by including energy as a factor in the process.”

The bill has support from a broad coalition of real estate, business, building trade and conservation groups, including RESNET, Leading Builders of America, Appraisal Institute, U.S. Green Building Council, National Association of Manufacturers, International Code Council, U.S. Chamber of Commerce, ASHRAE, Efficiency First, Alliance to Save Energy, American Council for an Energy-Efficient Economy, American Gas Association, American Public Gas Association, Natural Resources Defense Council, and National Association of State Energy Officials.

“The SAVE Act creates private sector jobs while making our homes more energy efficient,” said Ross Eisenberg, Environment and Energy Counsel at the U.S. Chamber of Commerce. “And by accomplishing these goals without the need for major federal spending, the SAVE Act will spur job growth in the private sector without adding to the federal deficit. That is a ‘win-win’ for the business community, and is the kind of realistic, commonsense policy everyone should want to get behind.”

“This bill is a win for homeowners, the economy, and a cleaner environment. The legislation would empower homeowners and lenders with better information about energy bills so they can make more informed decisions. This proposal would enable increased investment in the energy efficiency of homes, leading to lower energy bills. At the same time, it also would help create jobs and reduce toxic pollution from wasted energy,” said Philip Henderson, senior financial policy specialist, Natural Resources Defense Council.

“We strongly support this legislation because it will improve mortgage underwriting performed by federal mortgage agencies by ensuring that energy costs are included in the process,” said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. “It would require use of qualified, competent appraisers and would help ensure that appraisers have access to data needed to analyze the effects of energy-efficient home improvements in the marketplace. Consumers would benefit from the bill’s efforts to help ensure they receive a reliable, credible opinion of value.”

“With this act in place, we believe it is possible to substantially increase the energy efficiency of new homes over the next decade while retaining affordability for our customers. This truly is a win-win opportunity for our customers, the economy and our environment,” said Ken Gear, executive director of Leading Builders of America, Inc.

The SAVE Act is one of RESNET congressional priorities. The RESNET network is urged to contact their Senators, educate them on the need for such legislation and urge them to co-sponsor the legislation.

The first of its kind, the three-page Residential Green and Energy Efficient Appraisal Addendum is intended to be used by appraisers and is designed to be attached as an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for lending purposes.

“This addendum is another example of how the Appraisal Institute is at the forefront of real estate valuation,” said Appraisal Institute President Joseph C. Magdziarz. “It will help the industry standardize the way residential energy-efficient features are analyzed and reported.”

NAHB has long advocated a better system for taking into account green home features during the home appraisal process.

Historically, there has not been a consistent process in place for the lending community to differentiate between homes that feature energy- and water-saving techniques, greater durability and other green aspects from homes that do not.

These features contribute to the value of a home because they can dramatically reduce monthly utility costs, which represent a significant expense for home owners.

The new addendum was designed to enable appraisers to better identify and classify green features, with a goal of establishing the most accurate assessment of the value of the homes that have them.

Over time and as it becomes broadly used, the addendum is also expected to help establish the incremental value of specific features on a comparative basis.

“We hope this new form will be a big step toward establishing more accurate home valuations that recognize all of the key features of a home,” said Kevin Morrow, senior program manager of green building programs at NAHB.

“Green homes can offer significant cost savings to home owners over a comparable home built to code, so we are pleased that this new form will finally provide a vehicle to demonstrate some of these key differentiators,” he said.

The form allows users to report on energy-efficient items such as windows, appliances and insulation; to list any applicable energy ratings; and to note the home’s average utility costs — demonstrating any savings to the home owner.

Green features are also among the items included in the new form, most notably, in a section that allows users to indicate if the home has been certified to the National Green Building Standard.

Solar panels and site details such as house orientation and landscaping are also evaluated, in addition to the property’s walkability and proximity to public transportation.

The form also provides space to indicate if the home has qualified for any federal, state or local incentives.

“We are thrilled that certification to the National Green Building Standard is finally getting the recognition it deserves in the appraisal process,” said Michael Luzier, president of the NAHB Research Center.

“For a long time we’ve known that our third-party green certification conveys tangible, financial benefits to a home and its occupants,” Luzier said.

“Specifically referencing this type of national certification in the valuation process finally provides a way for appraisers to recognize and benchmark that value.

“We also appreciate the fact that energy efficiency upgrades and certifications are captured separately from whole-house green certifications. Energy efficiency is only one portion of the green equation, so to get the true value of a green home necessitates it being appraised beyond just its energy attributes.”

Home owners, sellers, buyers, refinancers and realty agents don’t have to wait for an appraiser to use the new form.

They can download it at no cost and ask that it be made part of the appraisal submitted to the lender. This will also help ensure that the appraiser uses the best and most accurate comps available that include similar green features.

“We hope lenders, home builders, real estate agents and home owners will take advantage of this new tool,” Magdziarz said.

“Mortgage lenders who want to see energy features analyzed should request the green addendum to be included with Form 1004.

“We also encourage lenders to provide the green addendum to home owners so they can fill it out and provide it to their appraiser.

“If a new home is being appraised, home builders can use the addendum to provide data to appraisers. Real estate agents also can use the data to help populate the MLS.”

NAHB is currently evaluating the form for improvements and fine-tuning that may increase its usefulness for association members.

For more information, email Kevin Morrow, or call him at 800-368-5242 x8375.