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Stephen Myers, son of Gene Myers, owner of New Town Builders, can afford to buy one of his father’s $400,000 homes in Stapleton.
But just barely.
If Stephen wants to pay an additional $26,900 for the one of New Town’s “net-zero energy” packages, he wouldn’t be able to qualify for a loan.
That is stupid, the senior Myers says, because the package, adds only $100 per month to the mortgage, but saves $100 a month from one of New Town’s already efficient homes. In other words, it is a wash.
“If you compare it to a standard home built to code, it will save you $200 a month,” said Myers, one of Denver’s top production builders when it comes to energy saving features. “So if you compare to a typical home, he comes out 200 bucks ahead. If you roll the extra $100 into the mortgage, as most buyers do, you actually come out slightly ahead on a net basis, after you deduct your mortgage payment on your taxes. And the $100 is a fixed cost for the life of your mortgage, which is not something you can say about your Xcel bill.’
Stephen is a perfect example of who would be helped by a bill co-sponsored by Colorado Sen. Michael Bennet, called the SAVE – Sensible Accounting to Value Energy – Act. Bennet is scheduled to appear with Myers on Wednesday at Stapleton to tout the act, which Bennett, a Democrat, is sponsoring with Sen. Johnny Isakson, R-Ga.
The SAVE Act makes it easier for consumers to qualify to buy an energy efficient homes, Myers said.
First, it will require lenders to include expected energy costs in debt-to-income qualifying ratios, which determines a buyer’s ability to make mortgage payments. Along the same lines, lenders must also include the value of expected energy savings when calculating the loan-to-value ratio of a mortgage, allowing homeowners to finance the cost of energy efficiency improvements as part of their mortgage.
It also will require appraisers to include the energy saving features in determining the value of the homes, Myers said. If energy saving features such as photovoltaic systems are not included as adding value to home, it may not appraise for the purchase price, Myers said.
“Energy saving features should provide ‘bonus’ value,” Myers said.
Bennet and Isakson estimate the SAVE Act would create more than 80,000 jobs.
“First, this is all just common sense. Most economists believe the overall economy will not truly recover until the housing economy gets back on its feet, and this will create tens of thousands of jobs in the homebuilding industry,” said Myers, who believes New Town is currently the only production builder currently rolling out such a zero-energy option in the Denver area. Other local builders, however, are expected to offer their own versions of these type of energy saving plans in the near future.
New Town has set the bar high when it comes to being green.
SAVE Act a game changer
SAVE Act will be a game changer for energy efficient homes, Myers said. He said some big national builders in California and elsewhere already are incorporating energy saving features into production homes, although he is not sure they do it to the levels New Town is taking green building.
New Town is using the HERS Index, established by the Residential Energy Services Network, an independent, non-profit group, to measure its energy efficiency.
“HERS gives you the equivalent of MPG for a car,” Myers said. “But I tell people, like in golf, a low score is better.”
A typical homes will have a HERS score of 130, he said, a newer home built to code will have a score of 100, while an Energy Star home will have a score of 85.
But a New Town home with its energy package of added insulation, Energy Star appliances, energy efficient heating and cooling systems and about 10-kilowatt solar photovoltaic panels, “will have a HERS of negative 1. Typically, we will produce slightly more energy than the home uses. First, we build the home with added insulation and very tight construction, so it doesn’t consume much energy, and then we add things like the solar panels that generate energy.”
The SAVE Act will encourage more homes built like the net-zero homes planned by New Town. Not only does it save energy and help the environment and create job, but it helps reduce the country’s reliance on foreign countries that may not always be friendly toward the U.S.
“It is a way to encourage the construction of more energy efficient housing, without the government having to subsidize it,” Myers said. “This is not a grant program, so there is no out-of-pocket costs to increase the deficit. And because Bennet has a Republican co-sponsor, it has bipartisan support, rare these days in Washington. But the big question in my mind is given how partisan and dysfunctional Congress is, is there any hope it is going to pass? I don’t know the answer to that, but it something I’m going to ask Sen. Bennet when I see him tomorrow.”
Myers’s word echoed Bennet’s, when he made the announcement about the SAVE Act last October.
“It is rare to have such diverse interests come together, and that’s because this is a common-sense bill,” Bennet said last fall. “The SAVE Act would help provide access to useful information about energy usage that home owners, buyers, appraisers and underwriters want and need. It would lead to more complete and accurate mortgage underwriting, would encourage investments in home energy improvements, create more than 80,000 jobs and lighten the load for Colorado families’ budgets.”
Bennet elaborated on the SAVE Act today.
“When the construction and finance industries realize the benefit of accounting for energy efficiency, thousands of new jobs are sure to follow,” Bennet said. “The SAVE Act would provide owners, buyers, appraisers and underwriters access to useful information about energy usage that will lead to lower energy costs for consumers and thousands of jobs for our economy.”
If passed, Myers knows one person who will directly benefit – his son, Stephen.
One of the best features of the program, for Stephen or anyone else, is that there is no waiting for a payback. Sometimes, it can take years, or even decades, to recoup the cost of energy savings.
“People sometimes ask how long they have to wait to recoup their zero-energy option’ investment – but there is no wait,” Myers said. “If you take out a mortgage, the loan covers the cost of the Zero-Energy Option, and then you just pay the bank with the monthly savings and pocket the rest.”
To find homes by New Town Builders on the resale market, please visit this COhomefinder.com link.
Contact John Rebchook at JRCHOOK@gmail.com< class="related_post_title">Related Posts:>