A high performance home, like the beautiful home in Hattiesburg i recently verified to the NAHB green building standard is one that takes advantage of energy efficient sustainable construction. The definition of a green built sustainable home varies widely.

The fifth edition of The Dictionary of Real Estate Appraisal defines sustainability as the practice of developing new structures and renovating existing structures using equipment, materials, and techniques that help achieve long-term balance between extraction and renewal and between environmental inputs and outputs, causing no overall net environmental burden or deficit.

In 2007 the National Association of Home Builders (NAHB) and the International Code Council (ICC) partnered to form and establish a much-needed and nationally-recognizable standard definition of what is meant by “Green Building.”

A consensus committee was formed to develop this standard in compliance with the requirements of the American National Standards Institute (ANSI). The resulting ANSI approved ICC-700-2008 National Green Building Standard defines green building for single and multifamily homes, residential remodeling projects and site development projects while still allowing for the flexibility required for regionally-appropriate best green practices.

NAHB Green Building Standard is made up of 6 chapters:

1. Land Use
2. Resource Efficiency
3. Energy efficiency
4. Water efficiency
5. Indoor Air Quality
6. Home Owner Education

The USGBC’s LEED program, the EPA ENERGY STAR, and over 100 other green programs exist in the US today. There is no  doubt that learning all the nuances of these programs is a challenge to the appraiser.  So let’s look at a couple of steps that an appraiser can take to gather data in an effort to not only define green but to properly give it value.

If the green home you’re asked to value is part of a third-party rating, like the NAHB program, there will be a paper trail to document the analysis needed to produce the appraisal data. So ask for the following:

1. Any scoring sheet of the green building program
2. A home energy rating or HERS report
3. Fannie Mae Energy Report
4. Documentation of any incentives
   1. An IRS tax credit
   2. Utility rebate
   3. Real estate tax discount
   4. Lower interest rate mortgage
      1. i.      EEM – Sponsored by FHA, VA, Fannie Mae and Freddie Mac as well as some conventional lenders, it credits a home energy efficiency in the mortgage itself and stretches the debt to income qualifying ratio allowing the home owner to qualify for a larger mortgage amount.

Another challenge to the appraiser might be describing improvements. Begin with the site and pay attention to shading, landscaping materials and water use techniques. Include language that describes the use of solar panels, low VOC paints, recycled glass counters, structural insulated panel (SIP) outside walls and energy efficient heating and cooling systems.

When comes to comparables don’t be fooled by the home with an energy efficient kitchen. That’s a far cry from a home with a green certification. Green built homes are also built “above code”, meaning that you’ll need to pay closer attention to the quality of construction line in the URAR. Actually there are three lines that need special care. Those lines are:

1. Quality of construction
2. Heating and cooling
3. Energy efficient items

If you’ve not made an adjustment in those area a comment should be made as to why they’ve been left off. Items that are not covered in quantity may be addressed in quality. Again, look for incentives, monthly energy savings, and lower maintenance items as good talking points in your analysis.

Appraiser should also remember that some loan underwriters may indicate that Fannie Mae does not allow adjustments for energy efficient features, but that is not the case. You may be called upon to support the energy adjustment, which can be done by multiplying the energy savings by the gross rent multiplier.This is a common capitalization technique and a way to place emphasis on energy efficiency contribution.

Fannie Mae’s Selling Guide includes the following:

“Special energy-savings items must be recognized in the appraisal process. Appraisers must compare energy-efficient features of the subject property to those of comparable properties in the “sales comparison analysis” grid to ensure that the overall contribution of these items is reflected in the market value of the subject property.”

Finding value in a new market can be a challenge but should not be considered impossible. Soon everyone will realize the importance of and recognize the value in building energy efficient.

Site preparation includes several steps. A survey comes first. Topographical features — trees, streams, rocky outcroppings, relative elevations, and open areas — are carefully marked, providing the basis for everything that follows. Property lines must be located precisely to confirm setbacks (the allowable distance between a structure and a property line) in compliance with local codes. Streets and sidewalks are mapped and flagged. Then the surveyors stake out the location of the various underground utility conduits through the neighborhood and to each house. In the case of a single house under construction, the existing utility services in the neighborhood must be located and the connections to the proposed house carefully plotted. Finally, a soils test is ordered to help determine the type and design of the foundation construction.

Most, if not all, of this information is mandated by the local building authority. Copies of the surveys and tests, usually signed and stamped by a registered professional engineer, must be attached to the proposed construction drawings and submitted for permits or approvals from that authority.

Once those steps are taken and the plans are approved by the building department, the next “site prep” step can be taken. The location of the foundation or footprint of the home is staked to provide a guide for excavation. Typically, the stakes and batter boards (which demarcate every corner or turn in the layout) are connected by nylon strings to outline the exact perimeter of the foundation to be built.

Then backhoes or excavators can get to work, digging ditches to extend existing or new utility conduits — for electrical, plumbing, natural gas, etc. — to serve the house (or houses). Foundations are excavated using the staked-out lines as a guide. The plans will call for footings and — according to individual designs — a crawl space, full basement, concrete slab, and/or perimeter foundation walls in preparation for concrete forms, blocks, or other materials to support the main floor.

Every new-home project requires these site prep steps, and it is important for our homebuyer clients to understand this phase of the job to track our progress and get a complete picture of what is required to build their new home.

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The building process is relatively foreign to those outside of the industry. The best way to help a homebuyer understand the construction process and appreciate the value of the high-quality materials and methods we employ is to schedule visits to the job site at key milestones.

Walking through a newly framed home, for instance, allows us to point out the tight tolerances we require from our framing crews. On-site, we can show examples and explain why these standards help to ensure reliable performance and comfort in the finished home.

After framing, homeowners can watch the ways that we install the home’s wiring, plumbing, and mechanical systems. Our exacting specifications make sure that those systems perform as designed and promised. As construction continues, we encourage new homeowners to schedule similar walk-throughs so we can showcase the high-level materials and methods we use to build homes. What is difficult to articulate in the office becomes clearly demonstrated as the house takes shape.

We also consider the conditions of our job sites as an indicator of quality. We expect, for instance, that our crews and trade partners maintain a clean site. Disposing of trash and scrap materials not only makes for a professional work environment, but also a safe one. We believe that our insistence on a professional looking job site translates to professional, superior-quality workmanship.

As a new home nears completion, quality is even easier to see and understand from a homebuyer’s point of view. Again, adhering to tight tolerances, we work hard to make sure that walls are smooth, that cabinets, trim, and other fixtures fit snugly into place. We make certain that windows and doors operate smoothly, and that flooring and other finishes are installed to meet the expectations of our discerning clientele.

But the true test of quality construction is occupancy. New homeowners will understand what we mean by quality after living in their home for a while. How our homes stand the test of time and the rigor of everyday living is a testament to the quality we strive to achieve from the foundation to the rooftop.

What are President Obama’s targets for GHG reductions?  Initially, the U.S. will pursue a 17% reduction below 2005 levels by 2020 (to put this goal in historic context, the modest Kyoto targets were 7% below 1990 levels).  This proposed target corresponds to the GHG limits contained in the climate change legislation passed by the U.S. House.  It is worth noting that the U.S. Senate is considering a bill that would set a more aggressive target of 20% below 2005 levels by 2020.  Long term, President Obama has a stated goal of an 83% reduction in GHG emissions by 2050.  These long-term goals have been incorporated into pending climate change legislation by targeting 30% below 2005 levels by 2025 and to 42% below 2005 levels by 2030 (the same year that the Department of Energy is targeting affordable zero energy homes for all Americans).

In addition to President Obama, several top White House officials and cabinet members are also expected to attend the Copenhagen conference, including Energy Secretary Steven Chu.  For the first time in history, the United States will establish a Center at the conference where top U.S. officials will deliver keynote speeches on energy efficiency and climate change.  In a sign of the times, the U.S. Department of State has established a “COP-15″ Facebook page and website to track the event.

See the White House press release, the COP-15 Web site, and COP-15 Facebook Page.

In a parallel move, the day after the White House announced U.S. GHG targets, China announced a reduction of the “carbon intensity” of its emissions by 40%-45% by 2020.  This measure of emissions, which differs from the U.S.’s emission measurements focuses on the amount of CO2 emissions per unit of GDP.  China’s measurement would mean that total GHG emissions in China would actually increase from today’s levels, but would result in far less GHG emissions than the expected increases associated with the rapid growth of the economy in China.  To achieve these binding goals, China will focus on research, development and commercialization of energy efficiency and renewable energy technologies and encourage low-carbon lifestyles.  In addition, China’s Premier will attend the Copenhagen conference.

Populus is a full service sustainable design consulting firm that focuses on high performance, net-zero and near-net-zero custom residential and multi-family projects.  Populus guides architects and builders through the requirements of mandatory green building codes and optional green home certification programs, providing HERS rating, LEED for Homes Green Rater services and municipal energy code consulting.  In addition, Populus offers an Energy Code Workshop for architects and municipalities, as well as LEED for Homes training.  Visit Populus at www.popboulder.com.

A recent American Institute of Architects (”AIA”) study highlights the national trend toward green building programs since 2007.  According to an AIA survery, more than one in five U.S. cities (with populations of more than 50,000) report having programs in place that promote green building.  This number represents a 50% increase in municipal green building programs over the last two years.  The Western and Mountain regions lead the nation in the number of green building programs per state.  Given the size of the cities with green building programs, the impact of these sustainability programs reach about 53 million people.

To find out more about these sustainability and green building initiatives throughout the nation, see the AIA’s new report,Green Building Policy in a Changing Economic Environment, which also contains policies and recommendations to assist policymakers in advancing sustainability and green building.  You’ll also find case studies that highlight the green building programs in several cities, including Boston, Philadelphia, LA and Grand Rapids.

In light of the economic downturn during the last two years, AIA Executive Vice President / CEO, Christine McEntee, finds the results of the AIA’s survey encouraging and a sign “that cities are recognizing the economic benefits of energy-efficient buildings.”  The AIA is a prominent adopter of the 2030 Challenge and has committed to a goal of carbon neutral (zero energy) buildings by 2030, in addition to its goal that “all design projects will be sustainable as a matter of course.”

Populus is a full service sustainable design consulting firm that focuses on high performance, net-zero and near-net-zero custom residential and multi-family projects.  Populus guides architects and builders through the requirements of mandatory green building codes and optional green home certification programs, providing HERS rating, LEED for Homes Green Rater services and municipal energy code consulting.  In addition, Populus offers an Energy Code Workshop for architects and municipalities, as well as LEED for Homes training.  Visit Populus at www.popboulder.com.

As you can see on the map, while many states have adopted the 2003 or 2006 International Energy Conservation Code (or the “IECC”), there are many states that still lack state-wide energy codes.  You can also see from that map that of all the states that have adopted the 2003 IECC or better, Colorado and Tennessee are the only two states where jurisdictions within the state have set above-code requirements for home energy performance.  In addition, Texas, which has state-wide implementation of the 2001 IECC, also has some jurisdictions that require more aggressive levels of home energy performance.

Keep an eye on the Department of Energy’s energy code map!  In the near future we’re sure to see more and more states adopting the 2009 IECC and many jurisdictions setting more progressive above-code standards for home energy performance.

As residential energy codes become more and more mainstream, adequate education and training is essential to ensure proper implementation.  Oftentimes, additional training is needed so that building code officials, municipal staff, local governments, contractors and architects understand the building science behind high-performance homes.  For example, as homes become less leaky and “tighter,” it’s important that contractors understand the importance of indoor moisture control measures and proper ventilation.  Home energy performance can be quantified with the Home Energy Rating System (or “HERS”) – for many architects and developers, the HERS system can be a “black box,” as it’s not readily apparent how changes in building design and specifications will change the energy score of a home.  An experienced HERS Rater should be able to explain the “behind-the-scenes” operation of energy modeling software and give architects and contractors the information that they need to understand how changes in home design, insulation and mechanical systems will impact the overall energy performance of the building.

Populus Sustainable Design Consulting, a Boulder-based residential energy consulting firm, has worked with municipalities nationally to aid in the implementation of performance-based energy codes, particularly those that target above-code levels of energy performance.  Populus offers an Energy Code Workshop targeted to municipal staff, code officials, county commissioners, city council and/or local building trade organizations.  In addition, Populus offers an Energy Design Workshop which gives architects and builders hands-on, real world experience working with an energy rater to design buildings that achieve above-code home energy performance within a budget.