Author Archive

A New Identity and Predictions for 2011

Contributed by Aaron Fairchild:

While we have been certain of our business model for two years, apparently we haven’t been certain about who we are. J

From our retail brand name, to our websites, to our legal entity, to the shareholder base, to our corporate location, so much of our company has changed!  The result is that we are rolling into 2011 refreshed, recharged and ready.  We are now located in Fremont, as a C-Corporation holding a homebuilding company named Green Canopy Homes with roughly 20 shareholders.  The changes have established a highly resilient, well funded and determined group, with a healthy following of fans and supporters.

2011 brings with high hopes and expectations combined with plenty of unknowns.  We anticipate our local real estate market to remain relatively flat and for interest rates to be higher.  We believe that the NWMLS will have new check boxes to list energy performance scores among other make-sense sustainability features.  We hope that the City of Seattle will announce the coming of an ordinance requiring all homes to have energy performance scores assessed at the time of sale.  We are certain that 2011 will see increased awareness of the benefits of energy efficient homes, which will translate into shorter sales cycles for Green Canopy Homes.  Lastly, keep an eye out for Green Canopy to expand its business offerings and impact in the residential market.

All the best to you in 2011!


January 7, 2011 at 10:44 am Leave a comment

Keeping Out the Giraffes

Contributed by Sonja Gustafson:

What is Your Monster?

Last night was a beautiful Halloween evening; the sky was clear, the air crisp, and my neighborhood was alight with various ghosts and goblins going from door to door.   Then today came with gloomy grey skies and drenching rain, and we are faced not with the costumed monsters of our children, but the more terrifying specter of a cold, dark autumn.

This reminds me of a recent podcast I listened to where the narrator was working with his 5-year old daughter to caulk their home’s windows against drafts coming in.  The daughter watched silently as he ran the caulk along the window seams, and as their work progressed, finally asked, “Daddy, do you really think this will keep out the giraffes?”

I love the thought of that girl working out the problem in her head:  there are giraffes that want to come into our home!  Daddy is trying to protect us!  But really, how can this silly gummy stuff keep those monstrous animals out of our house?

Maybe we all have huge monsters in our minds that are keeping us from imagining how simple it really is to “keep out the giraffes.”    Or maybe it’s difficult to imagine how something as simple as caulk can make such a big difference in the comfort of a home.  And yet, take a look at the chart below to see how many areas of our home can be made more weather tight with the some simple attention. Each of these represents an opportunity to make your home more comfortable while saving money on utility bill.

Now wielding a caulk gun to ward off the drafts is not the only way to fight the energy monster, but it is one of a number of simple things you can do today to make your home more energy efficient.  In the spirit of easily keeping out the giraffes/monsters out of your home, here are 5 simple things you can do to ward off the cold and save on your energy bills:

5 Things You Can Get Done Today

  1. Buy caulk.  Then read this tutorial on how to fix leaks in your home. (You can schedule the work for this weekend!)
  2. Lower the thermostat on your hot water heater to 120°F.
  3. Install a programmable thermostat for your heating system.
  4. Air dry dishes instead of using your dishwasher’s drying cycle – let them dry overnight tonight!
  5. Use a power strip for your computer accessories, phone chargers, and other “vampire” devices and turn off the strip when you leave the room.

If after completing this list you are ready to take on more energy monsters, you should consider having an energy audit conducted on your home to more thoroughly determine ways to make your home perform to its best. (Seattle City Light customers can get a discounted audit here) You can contact your local home performance expert (Washington users can search here to find an energy auditor) to help you with next steps.

And then you’ll be keeping out those giraffes.

November 1, 2010 at 9:02 pm Leave a comment

Green Premium?

Contributed by Sam Lai:

Is there such a thing as a Green Premium?

This is one of the more controversial topics in the residential green development realm.  From the residential green and energy efficient advocacy perspective, we all want the answer to be unequivocally “YES!  There is a HUGE premium.”  Numerous  consumer surveys comport that a majority of Americans want green homes.  But I’m not so sure the “Green Premium” is the most accurate way to describe positive consumer response.

Let’s start from what most people think of when we say “Green Premium.”  For example, Joe the builder just finished up on an Energy Star-certified and 4 Star BuiltGreen-certified home.  Joe’s home is at the tip-top of the local market in terms of marketable appealand functional utility.  There are plenty of conventional high quality homes that have recently sold in the immediate vicinity of similar design, appeal & functional utility for $815k, $822k, $830k & the highest sale in the area $835k.  Joe and his real estate agent decide that the home might be worth about $830k if it wasn’t green.  But they decide that because there is a “Green Premium” of 6% based on a recent research study, the market value of the property should be $880k.  The definition of “Green Premium” from this example is the premium a green home yields above the competitive market.  This is a great way to not sell a house.

The question of whether or not there’s a “Green Premium” reminds me of a scene in a mockumentary movie “Spinal Tap”, where guitarist Nigel asserts that his guitar amplifier goes to eleven.

Every market has an upper threshold whether you call it 10 or 11.  From a valuation or banking perspective, if a home is superior to the rest of its market it is overbuilt because at some point the market stops responding.  Although most consumers in America desire green characteristics in their next home today doesn’t mean that they throw all other deciding factors aside.  Green characteristics are weighed alongside all other distinguishable marketable characteristics including price, functional utility, aesthetic appeal and quality.

Speaking of quality, how does the market distinguish quality in residential homes?  I would assert that our homes can be seen as an emblem of the leading cultural values of the moment.  In 1999, common characteristics for what was considered high quality new construction home would be 5,000 sq ft of living area, master suite with whale size soaking tub, “drive-through” shower and of course a gourmet kitchen with Viking range and Sub-Zero refrigerator.  Shifting values of our time are reflected in the kind of quality buyers are looking for today:  energy-efficiency, ‘quality over quantity’ and low-toxic finishes.

So, is there such a thing as a “Green Premium?”  Or, does it go to 11?  Sure, call the “tip-top” whatever you want.  We believe that green characteristics will continue to be the hallmarks of quality in residential homes into the future.  We just need to remember that people primarily buy homes for location and you can’t just slap on a “Green Premium” and expect the market to agree.   Do you agree?

October 6, 2010 at 11:28 am 4 comments

Buckle Up

Contributed by Aaron Fairchild:

Buckle up, there will be turbulence
“Plunge in Home Sales Stokes Economy Fears” WSJ article said the following about the national real-estate market on Wednesday, August 25, 2010:

  • “Sales of previously owned homes fell 27.2% in July. . . Lowest level since (NAR) started tally in 1999.”
  • “Economists say sales drop…means another drop in housing prices is on horizon.”
  • “High unemployment and meager wage growth and falling home equity means depressed consumer spending.”

In the same WSJ issue the editorial page reported that national homebuilders’ stocks rallied on Wednesday as the news of the decline in home buying was announced.  Apparently investors believe the time for getting into the real estate market is now, when home prices and employment rates are at or near their bottom.

Is there really a “National Real-Estate Market”?
According to the Bureau of Labor and Statistics the Seattle area unemployment rate in June was 8.6% and holding steady.  Employment in our region is anchored by desirable jobs in growing sectors of the economy.  We live in a beautiful part of the world with plenty of water, mountains and forests.  People continue to move here as the map published by Forbes (June, 2010) illustrates below.  Red lines indicate a net migration away from the city, black indicates net movement into the city.

The last time we saw more people leaving than coming to our state was in 1982 and demographers expect growth in this region to continue as unemployment, poor economies, water shortages, and desertification continue to push people out of other regions of the country.  Additionally, homes in Seattle are more affordable today than they were during the period of our local depression, where 1 in 8 people were unemployed, from 1969 to 1973.

How does all this affect G2B?
Less Competition at Acquisition
G2B continues to believe that in the near to mid-term, property values will remain flat or rise only with the rate of inflation.  This will shrink margins for investors who look to buy and hold.   The uncertainty in our real estate market will continue to drive nervous investors and speculators to the sideline leaving less competition for acquisitions of fixer properties in neighborhoods where G2B thrives.
More Competition at Sale
This situation continues to play to G2B’s strength.  G2B differentiates its homes in the direction the market is trending.  G2B designs comfort, quality, energy efficiency, and green into existing homes in neighborhoods with a strong sense of community.  G2B’s differentiating design appeals to the values that homebuyers are demanding.  The current market conditions only enhance G2B’s edge when competing for precious homebuyers.
Knowing the Market with Deep Experience
G2B knows how to accurately value homes at acquisition and sale.  Having compared and evaluated over 15,000 homes in Seattle’s good and bad times gives G2B the strategic edge needed to exploit opportunity in uncertain markets and create additional value.

We are certainly living in interesting economic times.  Turbulence and uncertainty provides opportunity for smart moves and strong profits.  We are excited about this market and extremely well positioned to thrive!

August 26, 2010 at 6:08 pm Leave a comment

Cars and Retrofits

Contributed by Aaron Fairchild:

Last year there were 3 home remodels marketed for sale on the NW Multiple Listing Service as a BuiltGreen certified home.  Our West Seattle home, the Sequoia House, was one of the three.  If this seems shocking to you, imagine how we felt!  Yet the trend is clear; we know that homebuyers are looking for and demanding energy efficient and green homes.

But don’t take it from us; a 2010 national AVID Builder survey indicates that green features are the most important “must have” for a future home purchase. AVID surveyed 20,000 existing homeowners and asked which features were “must haves” in their next home.  Just over 60% of surveyed homeowners pointed to green features. In 2009, 40% of all residential new-construction in the City of Seattle was certified BuiltGreen.

Yet only 3 out of roughly 5,000 existing home sales were marketed and sold BuiltGreen certified!? According to a report published by Equilibrium Capital out of Portland in April 2010, “…the biggest long-term impact economically and environmentally is retrofitting existing buildings.”

Right now G2B is out raising equity in our company.  We have calculated how much carbon is offset with one $25,000 investment in our company and the results are compelling.  The amount of carbon emissions mitigated, calculated over the lifetime of efficiency measures retrofitted in one of our homes, is equal to removing 23 cars from the road for one year.  Breaking that out per one $25,000 investment in our company is equal to roughly 6 cars over year one and 50 cars over 5 years! As one interested investor just said, “So for the cost of a Prius I can take 54 cars off the road (in five years) and get a return on my investment (as opposed to losing money on a car).  Nice.

Retrofitting and redeveloping existing buildings is done using today’s technologies and the deep efficiency measures can function optimally for 30 to 40 years!  In 40 years we will still be dealing with our transportation problems and trying to create new renewable fuel sources.   Meanwhile, our efficient homes will continue to roll along the road to sustainability.

August 3, 2010 at 3:33 pm Leave a comment

Our Pride. And Joy.

Contributed by Sonja Gustafson:

This spring, after only 7 days on the market, G2B Homes entered into a sales contract for The Sequoia House!  The final sales price was within .05% of our listing price, so we essentially were able to command our price – an excellent indicator of market response to our product.

As a team, we couldn’t be more thrilled with the fruits of our efforts at taking a neighborhood eyesore and turning it into a lovely jewel of green and efficiency.  Not only is it aesthetically beautiful, the house was certified 4-star BuiltGreen and energy testing revealed a tripling of its per-square-foot energy efficiency!

I could go on and on about The Sequoia House (and encourage you to view our cool Before/After video here) and our innovative, sustainable approach to reviving homes in vibrant neighborhoods.

But what I’d rather reflect upon is the affect this project has had on our team and the full complement of specialists and tradespeople who worked on this wonderful home.  From our beginning “charette” meeting where we invited various experts to the house to give us their perspectives (captured in this KUOW radio story), to the local Eco-Building Guild seminar on air sealing, to the house color vote where 40+ votes were cast by engaged neighbors, the home became a place where people could come to imagine, design, learn, teach, and otherwise get involved in sustainable building. Some 86 tradesmen and women plied their skills during the course of construction, many of whom learned about advanced drywall approach, rain gardens, or solar hot water for the first time and can now employ these skills with future clients.

And it won’t be the last time.  Our team at G2B has proven to itself and to the market that our approach of turning existing homes green in healthy urban neighborhoods works.  It really works – seven days to sales agreement, solid pricing, happy homeowners, and energy savings of 15,000 kwH/year certainly support this point!

We are eager to get working on another home, and another, and another still.  Our team has spent the past weeks documenting best practices, finding ways to be even better next time, and getting ourselves ready to roll.  We are heading out to the investment community to raise the funds necessary to operate our company and bring it to scale.

And I just want to say what a joy it has been to work on this project with such talented and passionate people.   It’s a joy to make this one home consume a mere third of the energy it otherwise would.  It’s a joy to have created not just a house, but a home that a community has touched.  And it’s a joy to be working on sustainable, energy efficient housing in an era and community where these ideas matter.

June 29, 2010 at 10:03 pm 1 comment

The Energy Rebound Effect

Contributed by Canuche Terranella:

Peter and Kristi live in a 1915 un-insulated Craftsman house.  In the first months in their new home they kept their thermostat at 68 degrees.  In December, with their first energy bill, they learned this behavior costs $350/month. Oh the financial pain!

Energy efficiency improvements are motivated by pain.  Energy pain comes in two varieties: financial and comfort.  Most energy models are based on customers like Peter and Kristi making energy improvements to reduce wallet pain.  As soon as they’ve insulated their home they will continue to keep their thermostats at 68 degrees but consume less energy.  These models point to great reductions in energy demand based on customers with financial pain installing cost effective weatherization and insulation measures.  If utility companies can use rebates and incentives to encourage customers like Peter and Kristi to invest in improvements to their homes it will be as good as investing in new power generation equipment to keep up with demand.   The assumption is that the pain of high utility bills will motivate investment in energy efficiency improvements and decrease energy demand.

Another possibility, however, is that their twins, frugal Keith and Patsy, might choose to put off the efficiency improvements and instead turn the thermostat down to 50 degrees and put on a hat and scarf for dinner.  This choice shifts the pain from financial to temperature discomfort, a challenge for the traditional energy models.  When utilities predict savings from improvements to homes incentivized by rebates they don’t usually predict what happens when Keith and Patsy finally make energy improvements and take off their sweaters.

After saving for a year frugal Keith and Patsy install attic insulation and weatherize their home. Now they can turn the thermostat up to 68 degrees.  Their energy bills are a much more reasonable $100/ month but they are consuming more energy than they were when the thermostat was at 50 degrees.

This results in what building scientists call the rebound effect. The rebound effect describes the difference between the actual society wide energy savings after energy efficiency improvements are made and energy savings as predicted in the lab models. Sometimes the rebound effect can be so large as to even result in an increase in energy used across the society. The UK Energy Research Center studied this effect and pointed to human behavior as the key component of the rebound effect. While seemingly counterintuitive, the examples above make the point clearly for residential customers.

The commercial impact is even more striking. If a local bike manufacturer invests in a new, more efficient, welding process and can therefore produce bike frames more profitably, then it will likely build more bikes. More bikes mean greater electricity use and a net increase in demand to the utility.

Does this mean we as a society should stop investing in energy efficiency? I’d say no.   The bike manufacturer is now making more bikes every month for less energy per unit. More bike production means more economic activity for the region.  Peter and Kristi have a higher quality of life in their home and are likely more productive members of society as a result. The utility company increased the efficiency of the energy used in both cases. Overall the demand for energy may be higher but the benefit to society per unit energy used is improved. Incentive decisions must measure society benefit in addition to energy savings to decide which new efficiency programs to fund.

G2B Homes makes smart efficiency improvements to homes to help families find the sweet spot where energy savings and comfort create lower operating costs and a higher quality of life.

April 6, 2010 at 10:27 am Leave a comment

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