Builder in Temecula, Calif., Says Green Homes Are Finding Buyers

By Leslie Berkman, The Press-Enterprise, Riverside, Calif.

Jul. 27–Valerie Beckham, 42, said she and her husband were house hunting in March, when they were lured into a Temecula sales office by a sign that said they could save up to 60 percent a year on their electric bills.

The builder, Woodside Homes, reports that since April, when it began offering an aggressive energy savings package — including rooftop solar panels — as standard on five subdivisions in Temecula and Menifee, home sales have surged from between two or three a month to between four and five.

Looking for a way to compete in a tough market, Woodside Homes of California president Tim McGinnis said he already had reduced prices to 2003 levels. He said he figured that investing in an energy savings strategy would be a better way to attract buyers than if he further cut prices or piled on yet more designer upgrades.

Beckham said she can have her husband put in upgraded carpet but he couldn’t install the $30,000 worth of energy conserving technology that was built into the Woodside house they bought.

“The energy savings will save us money and the upgrades won’t save us anything. They just make the house look good,” she said.

The cost to builders like Woodside to produce more environmentally friendly homes — including energy-efficient air conditioning, insulation, drought resistant landscaping, and irrigation systems that automatically adjust to the weather — can’t be easily recouped in this housing market, company officials said.

“We absorb the cost of it,” McGinnis said.

Facing diminished sales and stiff competition from a flood of foreclosed homes, few home builders are starting new projects. But those that are building are looking for a “market differentiator and green is probably the most popular one today,” said Mike Hodgson, president of ConSol, an energy consulting firm.

Builders say the marketing payback has been significant and reflects increasing public interest in cutting utility costs and fighting air pollution.

“Right now, builders are telling us if you look at two communities in a master-planned development and one is with solar and high energy efficiency features, it is outselling the one across the street,” said Amy Morgan, spokeswoman for the California Energy Commission.

Builders say energy saving features also will increase a home’s resale value and, if electricity costs rise as they expect, that value will grow with time.

Judi Schweitzer, a Lake Forest consultant on green development, studied homes built with solar-assisted electric systems in south Orange County’s Ladera Ranch. Two years after they were built in 2004, they sold for a higher price than similar houses built without solar, she said. And some builders who two years ago told her they were not interested in solar are now rolling out “full-blown green solar programs”"Something has changed in the last two years,” Schweitzer said, referring to the market downturn. “They need to innovate to survive.”

Because the momentum behind green building coincided with a home building slowdown, it will take time before the impact is felt. Morgan said that statewide 36 home builders have applied to construct 4,823 solar-equipped homes with the assistance of state rebates but most of those houses will not be completed and occupied until near the end of 2009.

Many builders have put their housing projects on hold but still have signed up for an Edison-sponsored program to upgrade their energy efficiency designs, said David Jacot, manager of Southern California Edison’s new construction efficiency program.

“They want to be ahead of the curve when the market comes back,” he said.

This month California adopted what government officials tout as the nation’s first “green” building code. The new mandates, most of which will become effective in 2011, will require a 20 percent reduction in indoor residential water use, a 50 percent reduction in construction waste such as wood through recycling, and interior paints and finishes that are healthier and less polluting.

Green programs have proliferated in the building industry, each a bit different but all claiming to exceed the current state building code.

Some builders say their houses are Energy Star certified, meaning they meet federal Environmental Protection Agency criteria, while Southern California Edison has a separate energy conservation program for home builders.

Also the California Building Industry Association has its California Green Builder Program, which, in addition to energy, covers water conservation, indoor air quality and waste reduction on the construction site. Water savings are achieved by choice of plants, irrigation, plumbing configuration and low flow toilets.

Borre Winckel, executive officer of the Riverside Chapter of the California Building Industry Association, said the building industry’s voluntary program can cost as much as $10,000 per home and does not include solar.

In launching its SolarAdvantage program, Woodside invited the public to a weekend expo and dedicated a room in its sales complex that describes the advantages of solar panels, tankless water heaters, and a roof sheathing that reflects heat away and cools the attic. Signs also tell shoppers of a federal tax credit if they buy a solar-equipped house before the end of the year.

The Shea division that develops Trilogy communities for people age 55 and older, also has embraced green in its marketing. Shea gave a free Prius to buyers of 14 homes in its La Quinta Trilogy development in a month-long promotion that ended in mid June.

Perry Devlin, general manager for Trilogy at La Quinta and at Glen Ivy south of Corona, said Shea recently adopted building standards that exceed the EPA Energy Star requirements.

The Shea Certified Green program, as described on the company Web site, includes attic ventilation systems, upgraded insulation, construction with lumber from tree farms, weather tracking irrigation and garages equipped with charging stations for electric cars and golf carts. Devlin said this weekend Trilogy is rolling out a solar option that will be available to La Quinta home buyers free of charge through August.

Devlin described Trilogy home buyers as sophisticated and well-to-do, with an interest in conservation that goes beyond utility bills.

“I think the idea of doing the responsible thing for the environment of the planet is just as important to people as the money they are saving,” he said.

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