On May 3rd, the Baltimore County Council adopted new legislation amending their property tax credit for high performance homes.  The original legislation provided a credit for newly constructed homes that earned at least a Silver designation under the LEED for Homes green building system.  The new legislation makes a second option, energy efficiency, available as another way to earn the property tax credit.  The new legislation also makes the property tax credit available to existing homes, which could greatly broaden the impact of the legislation.

The way the property tax credit for energy efficiency works for newly constructed homes is as follows:  the newly constructed home must be at least 30% more efficient than the minimum allowable under the current building code.  If the home uses at least 30% less energy than allowable under code, then a 30% property tax credit over a 3 year period would become available to the purchaser.  If the property is even more energy efficient, then higher levels of a property tax credit are available.  For each additional 10% energy efficiency achieved by the home, the available property tax credit increases by 10%.

As a reference point, a new home that earns the Energy Star New Home Qualification is at least 15% more energy efficient than the minimum allowable under the current building code.  So, in order to earn this property tax credit, a new home would have to be twice as energy efficient as what is required by the Energy Star program.

In order to achieve a 30% energy efficiency over code minimum, there will be changes to typical building methods, materials and systems required.  These changes, such as higher efficiency HVAC systems and water heaters, will result in higher construction costs.  The challenge will be to determine the most cost effective way to achieve at least a 30% energy efficiency for a given house plan.   The property tax credit and the lower utility bills will help offset the higher construction costs and resulting purchase price.

Residential water use has not been of much concern to homeowners or prospective home purchasers in the past.  However, it is gaining importance as droughts hit metropolitan areas such as Atlanta or Nevada and Southern California and as municipalities increase fees associated with water and sewer systems in order to address aging infrastructure.  In May, there were local reports that both Baltimore City and Baltimore County were considering increasing their water and sewer fees 9% and 10%, respectively.  Now, the Baltimore Business Journal is reporting that Baltimore City’s spending board, the Board of Estimates, has approved the 9% increase in water and sewer fees to City residents.   The article goes on to predict that the increase will result in an $81 increase to the annual bill of a family of four.

In response to these issues arising across the country, water efficiency is gaining a higher level of awareness among home builders, product manufacturers and, finally, prospective home purchasers.  The EPA has released the WaterSense program which I blogged about back in January.  Essentially, the WaterSense program is a standard, similar to the Energy Star program, where manufacturers can certify their products are indeed efficient users of water, as compared to the typical product in their category.  The WaterSense program has released a specification for new homes, which requires the home to be approximately 20 percent more water efficient than a typical new home.

Not every prospective home purchaser is going to be interested in “green” construction, be concerned for water efficiency or be looking at housing in a location that might be drought sensitive.  But, most prospective home owners are interested in the cost of purchasing their home and the ongoing cost of living in their home.  Here is where considering water efficiency in the design and construction of a new home gets interesting.  The decision to pursue water efficiency is a “no brainer” based on dollars and cents alone.   Baltimore City is poised to raise their water and sewer fee 9% which is expected to increase the annual cost to a family of four $81 per year.  So, a 10% change in the water and sewer fees would be equivalent to $90 and a 20% change would be equivalent to $180.  A WaterSense certified new home, with its approximate 20% efficiency, would provide a savings of $180 annually to a family of four in Baltimore on their water and sewer bill.   The first $81 dollars of savings will be absorbed by the recently approved 9% increase in the water and sewer fees in Baltimore City.   The remaining $99 is savings to the family.

The WaterSense program also makes alot of sense when considering a new home that is served by a private well.  Private wells are tested to determine the amount of water they yield over a period of time.  A home that is 20% more water efficient than a typical new home is similar to getting a 20% increase in the yield of your well.

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If you have any questions about water efficiency or would like to know more about the 2009 WaterSense New Home Specification, please feel free to contact at us at sales@rupperthomesinc.com or at (410) 256-0793.

I recently found an interesting website called Walk Score.  The website uses an algorithm to determine the “walkability” of any address in the 40 largest cities in the U.S.   The level of “walkability” of an address is determined by the proximity of nearby amenities, such as parks, grocery stores and restaurants, and public transit.  The “walkability” score ranges from 0 to 100, with low scores indicating that an address is very car dependent and higher scores indicating a very walkable neighborhood.

I tried this out by inputting the address of our homes to be built on Morling Avenue in Hampden.   Although the Baltimore City public transit information is not included for some reason, the Morling Avenue  homes scored a 91 out of a possible 100 and is considered a “Walker’s Paradise” by Walk Score.   Had the information been available for the local MTA bus routes and the Light Rail station at Clipper Mill, the score would likely have been even closer to 100.

In addition to providing a numerical score, Walk Score lists all of the grocery stores, restaurants, coffee shops, bars, movie theatres, schools, parks, libraries, bookstores, fitness, drugstores, hardware stores, and clothing & music stores in the area and their distances from the address in question.

Check out the website and find out what your Walk Score is.

On Thursday, February 5th, Senator Bernie Sanders (I-VT) introduced the 10 Million Solar Roofs and 10 Million Gallons of Solar Water Heating Act of 2009.  The bill was co-sponsored by 9 other senators.   The Act would provide a rebate to homeowners, businesses, non-profits, States or local governments who install photovoltaic systems and solar thermal water heaters.   For photovoltaic systems, the rebate would be a dollar amount per watt of installed capacity over the next 10 years.  For solar thermal water heaters, the rebate would be a dollar amount per watt thermal-equivalent of installed capacity during the calender year 2010.  The value of the rebates can not exceed 50% of the remaining cost of the system after all federal, state and local incentives and tax credits are applied.

Senator Sanders provided an example of the value of this rebate during an interview with David Roberts of Grist:  A homeowner may be interested in a $40,000 PV system.  The federal income tax credit of 30% of the cost would amount to $12,000.  The state income tax credit would typically be a maximum of $3,000.  If no property tax credits or other incentives were available, the remaining cost would be $25,000.  The proposed rebate would then be for up to 50% of the remaining $25,000.

There are a lot of reasons for Congress to support this proposed legislation; job creation, reduction of costs of housing for homeowners due to lower utility bills, reduction of greenhouse gases, etc.

We know through talking to our customers that prospective homeowners are becoming more educated and more interested in photovoltaics and solar thermal water heaters.  However, the upfront cost for both is still relatively high.   This legislation could have a significant impact on lowering the up-front cost and making the addition of PV or solar thermal a reality for many homeowners.

Last week, the NYT had an interesting article on energy efficient mortgages, also known as green mortgages.   This type of mortgage allows purchasers to qualify for a higher loan amount if the additional funds are for energy efficiency upgrades and if those upgrades can be demonstrated to yield long term savings in utility bills.

A spokesperson for Fannie Mae indicated that the company will introduce the loan program, by this summer, that will offer incentives for borrowers that use conventional loans and devote some of the loan funds to energy efficiency upgrades.

Prospective borrowers interested in this type of loan will likely be required to provide a home energy rating which indicates the energy usage and its energy efficiency compared to a benchmark home.   The home energy rating will be provided for free for Energy Star Qualified New Homes.   If the prospective borrower is purchasing a non-Energy Star home, they will likely need to hire a contractor to provide that service for them prior to settlement.

One issue that has been raised in the past with green mortgages is the appraisal of the home.  Appraisals often do not reflect an increased market value for energy efficient homes or for energy efficient upgrades.  The article indicates that the Appraisal Institute is training its members to better quantify the value of energy efficient homes.

Hopefully, green mortgages will get rolled out in a big way.   They, along with federal and state income tax credits and property tax credits, could go a long way to helping homeowners include items like solar water heaters or geothermal heating and cooling with their homes in order to achieve long term savings on their utility bills.

Ever hear of a solar thermal water heater?  It’s a system that uses solar radiation to pre-heat hot water for use in the home.  Typical water heaters are comprised of a storage tank and a heating device fueled by electricity or natural gas.  The heating device maintains the water at a set temperature to supply hot water as needed to the user.  A solar thermal water heater uses solar radiation to heat a non-toxic refrigerant that passes through a heat exchanger to transfer the heat to the water stored in the tank.  The heat transfered from the refrigerant may keep the water stored in the tank above the set temperature such that the back-up heating device is not needed for days.  During overcast conditions, the heat from the refrigerant may not be enough to keep the water in the tank above the set temperature and the back-up heater may be needed to boost the water’s temperature up to the user’s desire level.

While a solar thermal water heater typically costs $7,500 to $10,000 depending on the home’s hot water use needs, there is usually a payback period of less than 10 years.  This is due to federal and state tax credits.  Additionally,  some local municipalities offer real property tax credits, too.  On top of these credits that help reduce the up-front cost of the system, solar thermal water heaters can reduce the utility costs of providing hot water to the home by up to 80%.  After the payback occurs, the savings of up to 80% of the utility costs is locked in.

If you are interested in finding out more about solar thermal water heaters or if you have any other questions, please let us know.

If you are interested in the Wall Street Journal article, you can find it in today’s paper or on the Wall Street Journal website, in the Real Estate section.  The article’s title is “Cheap Hot Water?  Just Add Sunshine”.

The Energy Star program, developed by the U. S. Environmental Protection Agency, is a well known energy efficiency designation for consumer products such as computer accessories and appliances.   Most people don’t realize, though, that the certification program extends to new homes, too.

For a new home to earn the designation, the home must be at least 15% more energy efficient than the required under the 2004 International Residential Code.  There are numerous ways a builder can achieve this level of efficiency in new home construction.  The Energy Star website lists several of the common methods:

1)  Effective insulation

2)  High performance windows

3)  Tight construction and ducts

4)  Efficient heating and cooling equipment

5)  Efficient products (lighting, ceiling fans, appliances, etc.)

In addition to the products and methodologies that are used to construct a new home when pursuing the Energy Star designation, third party verification is required.  The third party auditors help to guide a builder through the process and they verify the products and materials used during construction of the home and test the home for to ensure that it performs as proposed.

A home that has earned the Energy Star designation benefits from better building materials, equipment and construction methods.   A purchaser of an Energy Star Qualified new home benefits from lower cost of ownership due to the lower utility bills, better performance of the home due to better protection against cold, heat, drafts, moisture and pollution and increased value of the home due to the recognition of the Energy Star designation.

Ruppert Homes, Inc. has been an Energy Star New Home Partner since 2001.

For more information on the Energy Star Qualified New Home program, please check out www.energystar.gov/index.cfm?c=new_homes.hm_index .

The EPA has begun a new product certification program; it’ s called WaterSense.  The certification applies to products that are about 20 percent more efficient in their use of water than the average product in their category.  So far, the product categories are toilets, faucets, flushing urinals and new homes.  The EPA is working on adding showerheads as an additional product category.

WaterSense works like this:  a typical bathroom sink faucet has a flow rate of about 2.2 gallons per minute.  To earn a WaterSense certification, a bathroom sink faucet would have to  have a flow rate of 1.5 gallons per minute or less.  That equates to about a 32% water savings per minute.

Here are some of the benefits of using WaterSense products:

1)  When used in a home served by a private well, WaterSense certified products will lower the demand on the well and reduce the possibility that the well will run out of water.

2)  When used in a home served by a public water system, WaterSense certified products can help reduce the amount of water used and therefore reduce the home’s water bill.

3)  WaterSense certified products automatically earn points for new homes in both the National Green Building Standards and LEED programs.

4)  WaterSense certified faucets (and in the near future, showerheads) can help lower your monthly gas and electric bill because the reduced flow rate translates to a smaller amount of hot water needed.

When I discuss the WaterSense certification with customers, they are often concerned that there will be a reduced performance associated with the reduced water usage.  In the case of sink faucets and toilets, technology has solved this issue.  There is virtually no performance difference between typical faucets and toilets and WaterSense certified faucets and toilets.

I would highly recommend WaterSense products to anyone interested in building a new home or remodeling their existing home.  Especially, bathroom sink faucets.  There are models available for the same exact price as non-WaterSense models.

Baltimore County has adopted legislation that authorizes a property tax credit for “green” homes.   The property tax credit is available for homes that achieve specific certifications in the LEED Rating System and can vary from 40% to 100% of the property tax assessed on the home and land for a period of three years.

We think that a property tax credit aimed at green homes is a great idea.  While green construction for large commercial buildings has become very cost competitive with standard construction practices, the same is not true yet for single family homes.  This property tax credit, in addition to the lower utility bills associated with green homes, can go a long way towards offsetting the higher cost of construction for a new, green home.

We would like to see the property tax credit expanded to include other nationally recognized and third party audited green building standards.  The issue is that LEED for Homes is aimed at the top 25% of the housing market.  As such, it can be an expensive certification to pursue and achieve.  There are other green building programs that are likely less expensive to be certified under.

If you have any interest in learning more about this property tax credit, what needs to occur in order to use it and how much the credit may be worth in real dollars, please let us know.

Ruppert Homes, Inc. is proud to announce it’s membership in the Maryland Residential Green Building Council (MRGBC).  The MRGBC is a newly created organization that is focused on green and sustainable new home construction, remodeling and development.  As a builder member of the MRGBC, Ruppert Homes, Inc. will have to meet or exceed education requirements set by the Council and will have to build homes that meet a green building standard, such as the ANSI approved ICC 700-2008 National Green Building Standard, on an annual basis.  Ruppert Homes, Inc. is represented on the MRGBC by the company president, Jake Ruppert, who is co-chair of MRGBC Board.

For more information on the MRGBC, please go to http://www.homebuilders.org/page/marylandresidentialgreenbuildingcouncil/

For more information on the ICC 700-2008 National Green Building Standard, please go to http://www.nahbgreen.org