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  • His addressing of the need to involve appraisers and lenders in recognizing the value of energy-saving features is on the money. Good presentation. I'm forwarding it to our state home builders association.
    Chris Moline, LEED AP
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  1. 1. AFFORDABLE + GREEN: THE CRITICAL COMBO BigBuilder Virtual Conference October 2010
  2. 2. LBA at a Glance <ul><li>Washington, DC based trade association established in 2009 </li></ul><ul><li>Represents the largest public and private homebuilding companies operating in the United States </li></ul><ul><li>Members closed more than 100,000 homes in 2009 </li></ul><ul><li>Generate 300,000 jobs annually </li></ul><ul><li>$425 billion in revenue since 2004 </li></ul><ul><li> </li></ul>
  3. 3. Member Companies <ul><li>Ashton Woods Beazer Homes </li></ul><ul><li>D. R. Horton Drees Companies </li></ul><ul><li>Hovnanian Companies KB Home </li></ul><ul><li>PulteGroup Lennar Corporation </li></ul><ul><li>M/I Homes M.D.C. Holdings </li></ul><ul><li>Meritage Homes Perry Homes </li></ul><ul><li>Ryland Group Shea Homes </li></ul><ul><li>Taylor-Morrison Toll Brothers </li></ul><ul><li>David Weekley Homes Weyerhaeuser Real Estate Co. </li></ul>
  4. 4. Energy Efficiency: A Convergence of Market Forces <ul><li>Consumers want it </li></ul><ul><li>Technology enables it </li></ul><ul><li>Regulators demand it </li></ul>
  5. 5. Energy Efficiency Consumers Want It and Regulators Demand It <ul><li>Virtually every major piece of energy legislation in Congress include mandates that start at 30% over code </li></ul><ul><li>The code development process also appears to be headed toward adopting similar mandates </li></ul><ul><li>Let’s find an affordable way to get there </li></ul>
  6. 6. An Opportunity to Make a Big Difference <ul><li>LBA formed energy working group chaired </li></ul><ul><li>by Meritage CEO Steve Hilton </li></ul><ul><li>Goal: Identify solutions that will make energy efficient homebuilding affordable for consumers and cost neutral for builders </li></ul>
  7. 7. Leading Builders of America Cost-Benefit Analysis Climate Zone 4 (Metro, D.C.) *Added Cost of 30 year fixed Mortgage , Taxes, Insurance assumes 10% down payment, 7.22% rate (20 year average), 45 basis pts for PMI. 2200 Square foot home 2006 Building Code as Baseline (IECC) % Energy Efficient Mandates Annual
  8. 8. <ul><li>Consumers resistant to trade-offs </li></ul><ul><li>Mortgage underwriting guidelines don’t allow energy savings to be leveraged </li></ul><ul><li>Appraisal process does not consistently or accurately value energy saving features </li></ul>Impediments to Progress
  9. 9. Energy Policy Strategy <ul><li>Focus on mortgage & appraisal reforms </li></ul><ul><li>Link reforms to efficiency mandates </li></ul><ul><li>Educate policymakers & stakeholders </li></ul><ul><li>Partner with efficiency advocates </li></ul><ul><li>Alliance to Save Energy ● North American Insulation Manufacturers ● Institute for Market Transformation ●Natural Resources Defense Council </li></ul>
  10. 10. Work Product: The SAVE Act Being crafted by Senator Mike Bennet (D-CO) <ul><li>Requires energy to be included in cost of ownership test – PITI+ E </li></ul><ul><li>Requires present value of energy savings to be factored into appraisals </li></ul><ul><li>Applies to all federally insured mortgages </li></ul><ul><li>Implemented three years after date of enactment </li></ul>
  11. 11. Anticipated Benefits <ul><li>New homes could be 30% more energy efficient within five years </li></ul><ul><li>No impact on affordability </li></ul><ul><li>Accuracy of mortgage underwriting improved </li></ul><ul><li>Additional incentive to retrofit existing homes </li></ul>
  12. 12. Next Steps <ul><li>Legislation to be introduced this session </li></ul><ul><li>SAVE Act has bi-partisan support </li></ul><ul><li>Education process already underway </li></ul><ul><li>Seeking co-sponsors and endorsements </li></ul><ul><li>Could be included in energy legislation next year </li></ul>
  13. 13. Questions, Comments or to Get Involved Clayton Traylor (972) 955-2500 [email_address]