Anyone adding Energy Efficiency into their Rehabs?

Question

Hi, my name is Chris and i am curious if anyone is doing any rehabs with Energy efficiency or Green products included? Also have you experienced any interest from buyers  in this regard.

Thanks Chris

Josh Harris · Answer

Our main business is building new custom energy efficient homes.  We expanded into building our own rental properties, recently building a super energy efficient duplex.  We thought it would be hard to sell the idea that the tenant's utility bills would be lower.   So we pay all utilities, and that is reflected in the higher monthly rent.

We knew that our tenants would come out ahead by just paying us a higher rent and letting us worry about the utility bill.  We were disappointed to find that prospective tenants failed to quickly add our competitor's rent and their subsequent utility bills to discover we were the better deal.  It didn't matter their profession or level of education.

Educating our prospective tenants will be our biggest focus on the next project.

Account Closed · Answer

I think it boils down to money, meaning the cost of energy has not pushed the average person to care about how much energy and water they waste.

It also has to do what is trendy and flashy. There's no flash in insulation or a tight building envelope. The average home buyer cares about what they can see and show off ( kitchens,baths,flooring etc) not whats in the attic and behind the drywall.

Hopefully these attitudes will slowly change over time!

Roy N. · Answer

Chris C.

It's been demonstrated in Europe (thousands of times) and even in the U.S.A. (10s of times) that you can build a house or apartment building to Passivhaus standards for 10-15% more upfront capital cost than base code construction.    Your resultant operational costs will be 70-80% less than a base code construction.

For the life of me, I cannot figure out why we have not made the building code more stringent.  Canada, despite being the home of one of the early efficient home projects in the 1970s which inspired the development of the Passivhaus standard, is a serious laggard in this area.

Roy N. · Answer

Chris C.

A safe, healthy, efficient home is core to our business.  We acquire quite a few older properties and typically set a goal of improving the property's energy efficiency by 40 - 70%.  To-date, our lowest came in at 48% and we have one old Victorian whose consumption improved by more than 75%.

We are working on an acquisition that will have sufficient lot size (~36,000 ft^2) to allow us to eventually replace the existing structures with a 8-10 row house units built to Passivhaus standards.

Account Closed · Answer

Hi Tanya

That's great that there is interest from tenants on the subject. I guess a lot of building owners only see the money side and want to spend as little a possible on there properties.

Madison probably in general is more progressive then  Chicago. I think in general Illinois is near the bottom when it comes to energy efficiency and renewable energy.

I am encouraged by younger people as there seems to be no argument from them on climate change and they seem a bit more interested on how to change things.

With last years cold winter in Chicago brought  more awareness to homeowners on the benefits of insulation and air sealing on there comfort and gas bills.

Account Closed · Answer

That's an interesting idea. I haven't heard of anyone doing that. Do you find there is any interest from tenants or fellow property owners?

I am strictly a rehabber. Haven't seen much in the way of energy efficient rehabbing going on in Chicagoland. I'm sure there most be some interest in it though.

Account Closed · Answer

I do rehabs with energy efficiency in mind, mostly because it's a passion and a hobby of mine. It also doesn't add a great deal of cost when you have the house opened up already. Unfortunately you are right that most home buyers and the public in general are uneducated about how inefficient most homes are.

I haven't seen any rehabbers in my area doing or advertising any energy efficient upgrades to there project houses. Until more people are interested in it rehabbers and builders aren't going to go in that direction.

Account Closed · Answer

Roy, i like the fact that your business model is to achieve a safe, healthy and efficient home. I am of the same mindset. I have a hard time with cutting corners and doing sub par work just to get done and make a quick profit.

The homes in my area are all built in the fifties with no insulation and the vast majority have not been updated so its a great time to make them more efficient and comfortable without bringing the cost up to much.

Thanks for the reply.

Kirk R. · Answer

Chris C. I rent out some rooms.  currently price is all inclusive.  Thinking about going ala carte might bring in more$$

Roy N. · Answer

Chris C.

You are spot on.

Several years ago by sister and her {no ex} husband had a new house built.  In order to get the absolute most square feet they could possible afford, they took the cheapest options the builder offered for windows, HVAC, plumbing, an lighting  {The builders's higher end options were nothing to write home about, from an energy efficiency point of view, either}.    I sat down with them and demonstrated that they could improve the efficiency of the house by over 50% with an 8 - 12 % increase in materials cost or, postpone finishing the basement and actually spend less.  The additional energy savings would pay for finishing the basement in 4 - 6 years.

Needless to say, I was ignored and it wasn't until the electrical bill came the second January in the house that there was an admission they perhaps should have listed. :-)

So far attitudes are such that we cannon demand higher rent for our buildings that have undergone a deep energy retrofit, but we are noticing that turnover is down.  We even had the lady who rents next door to the Victorian duplex we overhauled ask to be notified of a vacancy when she learned they heating bill was almost half of hers.

Anyone adding Energy Efficiency into their Rehabs?

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