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If all goes according to plan, a new program that encourages Delaware residents to buy new homes certified under the National Green Building Standard by offering incentives of up to $6,000 will jumpstart the state’s economy, spur more construction jobs and result in significantly more energy-efficient new housing stock.
The result of a cooperative effort among HBA leaders, state officials, environmental advocates and the NAHB Research Center, which will certify the new green homes, Delaware Green 4 Green at a minimum provides other home builders associations with a blueprint for success.
“This is a case in which the federation really worked and brought incredible value to the membership,” said NAHB Research Center President Mike Luzier.
Leaders of the Home Builders Association of Delaware began meeting with Delaware’s Department of Natural Resources and Environmental Control (DNREC) two years ago to discuss a program the state called SuperGreen, recalled Jennifer Casey, the executive officer of the HBA.
Progress stalled when the state and the home builders could not agree on appropriate measurements or standards for either homes or for builders and home buyers. But after the 2008 elections brought a change in state cabinet leadership, the HBA tried again, setting up a meeting with newly appointed DNREC Secretary Collin O’Mara.
O’Mara has a background both in business management and environmental issues as well as a strong interest in green building; he has a LEED-AP accreditation.
“Our first goal was just to sit and meet with him, because we understood how much DNREC would steer our business,” Casey said, with the state planning an increased emphasis on storm water management, energy codes and other topics of vital interest to the residential construction industry.
The HBA leaders also wanted to talk about the revival of SuperGreen — this time, not reinventing the wheel with a new set of guidelines and standards, but basing the program on the newly approved National Green Building Standard.
A little dubious about a certification program that had the backing of a trade association rather than an environmental advocacy group, O’Mara was at first not convinced of the standard’s authenticity as a green rating system, despite its approval by the American National Standard Institute.
“Our challenge was to establish an alliance with him, walk him through NAHBGreen and have him consider it along with LEED to establish a green building program going forward,” Casey said.
But first, they had to lay the groundwork for a good relationship on other issues affecting home builders. Over the next several months, Casey and the HBA leaders worked with O’Mara on issues including the adoption of the 2009 International Energy Conservation Code and a bill on solar and wind power. “He understood the value of business in fixing the environment and that the free market needed to drive it,” she said.
The state HBA also emphasized its “green bona fides” and commitment to environmental stewardship by organizing and sponsoring events encouraging consumers to choose sustainable products and services.
Sponsoring Green Fest
In April 2010, the HBA sponsored the Delaware Green Fest, which attracted thousands of families to vendor exhibits, product displays and even a songwriting contest on the grounds of the state capitol building.
The idea, said Casey, was to emphasize the HBA as a “thought leader,” not as an organization that merely reacts to mandates. “We were letting environmental activists be the leaders in the green movement, which put us in the position of being the bad guy, and we were not the bad guy,” she said. “We had made a commitment to the green movement and we were supporting it.”
At the same time, the HBA was working to encourage the state to create jobs by providing incentives for home construction. It invited NAHB economist Eliot Eisenberg to speak to state leaders about the positive economic impact of home building. “He established the groundwork that the important thing in reviving the economy was jobs, jobs, jobs,” and that tied in with still another initiative, which was a new bond issue for the state housing authority for first-time home buyers that included downpayment assistance.
With new money available for the housing authority program, it was a good time to bring green building into the mix, she said. “We said, this is the time to put a program together,” and started to talk again about incentivizing green building with the standard.
Educating Environmental Leaders
As the state HBA continued to work with elected and appointed officials on a wide range of housing-related issues, the HBA’s green building council and the NAHB Research Center continued to educate environmental leaders on the standard.
“We wanted to help sell green and green programs and also provide economic stimulus in the form of new construction,” said Howard Fortunato, chair of the HBA’s green building council. Whatever they came up with would have to be simple to understand yet able to achieve significant savings for consumers — both in terms of the home price and utility costs.
Luzier and Michelle Desiderio, director of green building programs at the Research Center, next traveled to Dover, the state capital, to walk O’Mara and other state officials through the standard.
“Michelle studied the data regarding average electricity consumption in Delaware and how that could change for homes built to the 2009 International Energy Conservation Code,” which the state had just adopted.
Achieving the standard’s Silver level indicates that the home’s energy efficiency is 16% higher than the stringent requirement of the 2009 IEECC. A Gold home is 34% more efficient. Data like that, Fortunato said, “gave them the information they needed to be able to say that this is a good investment of the state’s stimulus money. This was tangible evidence that it was something that would benefit buyers and stimulate the economy.”
Spending Stimulus Money
The stimulus money came from $47 billion in federal funding under the American Recovery and Reinvestment Act for various energy programs, including weatherization initiatives.
Delaware was looking for a way to efficiently spend its allocation, aware that in some other states energy initiatives were either oversubscribed or their administrative costs were so high that little money was left for the actual program.
Luzier had several meetings with the DNREC secretary and staff, including one in which he walked them through the National Green Building Standard scoring tool at www.nahbgreen.org, explaining how builders could accumulate points toward scores in energy efficiency as well as the other aspects of green building — including water- and resource-efficiency, indoor environmental quality, lot and site development and home owner education and maintenance.
“We have a highly efficient administrative process for all types of projects while remaining rigorous,” Luzier said. “Most programs can’t do that. They aren’t very rigorous in terms of the inspection, they aren’t a very stringent standard or they have thousands of dollars in consulting services required to get a builder through,” he said.
“We view this not as a service to the industry, but as a business,” he added. “The value to the industry is that we have to make a financial go of it, and if we can’t make a go of it, then the market doesn’t want it.”
DNREC was also swayed by the NAHB Research Center’s ANSI accreditation, Luzier said. “One of the things that went a long way in opening the minds of the policymakers is our status as an accredited third party. Nobody else in the certification business is an accredited third party, and that creates a mind set and culture of credibility, transparency and operation that is free of conflict.”
By the spring of 2010, state officials were beginning to come around to the idea of using a portion of their stimulus funds to provide incentives for green building under both the standard and LEED-H. Consumers could be eligible for $6,000 if the home was certified to the Emerald, or highest, level of the standard, $5,000 for Gold and $4,000 for Silver. LEED-H-certified homes would be eligible for $5,000.
Running the Program
In terms of an incentive for home buying, the he timing was perfect, Casey said. “It picked up immediately where the federal tax credit stopped on May 1.”
The HBA volunteered to run the program at no cost to the government and as a service to its members, Casey said.
She jettisoned a planned week’s vacation to work on the new Green 4 Green website, where builders could sign up as participants, qualifying communities could be listed and consumers could find out how the incentives worked.
The HBA will eventually see a revenue stream from certification rebates from the Research Center, which shares fees with partner HBAs and members who join the HBA. More importantly, Casey said, “this program will secure out position in the green economy.”
Casey currently is focused on speaking to Realtor® groups and the sales forces of home building companies to explain how the program works and how to sell its benefits to consumers. If the program is successful in creating jobs and more demand for rebates, the state has indicated it will commit more money to the program. Its initial $300,000 investment is expected to go to between 70 and 80 homes.
For more information, e-mail Calli Schmidt, or call her at 800-368-5242 x8132.