Green Message Must Be Spelled Out

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A newly formed company thinks the beacon that will attract homebuyers to its patch of dirt in New Lenox isn’t a clubhouse or walking paths, the extras that once drew attention to new subdivisions, but 30-foot-tall vertical-axis wind turbines.

Prairie Ridge Estates, as envisioned by local developers Jim and Phil Regan, could just possibly become the nation’s largest net-zero energy subdivision, filled with homes that produce as much energy as they use during a year.

But selling 132 lots of really green housing also could prove a formidable task for Energy Smart Home Builders, and not just because homebuilding has screeched to a halt.

Another hurdle is the education required for buyers, lenders, appraisers and even village building inspectors to make the project successful. And there is the nearby competition to contend with — traditionally built homes selling for less than $300,000, as well as some 800 other vacant lots in New Lenox waiting for homes.

In short, the buyers who invest in Prairie Ridge’s homes, which will start in the high $400,000s, will need to be energy pioneers.

Jim Regan, Energy Smart’s president, not only acknowledges the challenges but embraces them after doing his own homework.

“This is the way the world should build,” said Regan, sitting near the first of what will be up to 66 wind turbines at the subdivision. “We can build a home that renews itself.”

From the street, the homes will largely look like the other brick-clad homes mandated in New Lenox. To receive the village’s approval, Energy Smart agreed to attach photovoltaic solar panels only to the rear of the home, which means 30 to 40 homes will not have them since they need a south-facing exposure. Those homes will have wind turbines quietly operating in their yards, and other properties will have both energy-producing devices.

Inside each home, a closed loop geothermal heating and cooling system will use the earth’s stable temperature to maintain air comfort. Energy produced by the solar panels and turbines will power the home, including the Energy Star appliances and light-emitting diode lighting. A monitoring station will track energy use. Customers will be credited for excess energy generated but not used, with the idea that it will compensate for times when the home has to rely on traditional power sources.

Potential detractors from the net-zero labeling include optional fireplaces, which draw heat out of a home, and gas stoves rather than electric ones. The homeowner’s commitment to a green philosophy is also a question mark, starting with daily commuting practices: Anyone driving 80 miles round-trip to Chicago in a SUV probably loses the right to claim a green lifestyle.

“It’s hard to say how all those homes are going to turn out because the energy (savings) really depends on the people living in the home,” said Jason LaFleur, project manager at the Alliance for Environmental Sustainability. “They have the capability to be net zero. If they keep the lights on and the computers running, it won’t be net zero.”

Cutting-edge, energy-efficient homes weren’t always the plan for the site. The Regans purchased the parcel five years ago and presold lots to traditional builders. When the housing bust quashed home-construction financing, the Regans were unable to sell the lots. A trip to a building trade show opened their eyes to green building techniques.

“Once the recession hit, it was pretty obvious you weren’t going to survive if you put (up) a normal house,” said Regan, whose firm is based in Palos Heights.

The key to success, according to Regan, is to construct a highly technical home ranging from 2,600 to 6,000 square feet that doesn’t look like it fell out of “The Jetsons,” that takes advantage of federal tax credits for energy efficiency and that can be sold at a competitive price. The company went to 13 product suppliers to negotiate the same sort of bulk discounts that builders arrange for traditionally built projects.

LaFleur, who will help determine the homes’ green Leadership in Energy & Environmental Design certification, is encouraged by the resolve of developers trying to break free of how homes traditionally have been built. “There has been a vacuum in the middle-price tiers,” he said. “Production builders in general have been slow to adopt change to the industry.”

But in a down economy, will consumers be even slower to embrace change? Megan Bhatia, owner of Om Realty Group in Chicago, specializes in green listings but finds most of her clients aren’t very savvy. Those who are run the gamut from consumers who want the “bling” to the idealists. For many, the choices they make are based on what’s in their wallet.

“There’s just so much on the market right now,” she said. “They may look at a foreclosure as better than a green home, not realizing that down the road, the foreclosure may be way more expensive.”

So far, five lots are sold and two others are reserved, including Lot 44 on the subdivision’s southwest corner, chosen by Meg Barrett and Doug Smit because they want to install both solar panels and a turbine. An admitted “addict” of the Planet Green cable channel, Barrett says the most eco-friendly attribute of their 1970s Lincoln Park town home is the light bulbs.

Moving to New Lenox, she doesn’t mind waiting awhile for neighbors in the subdivision so long as the couple achieves a more sustainable lifestyle. “Eventually people are going to move in this direction and people aren’t going to be able to live like they are today, and that will make this home more attractive,” Barrett said. “I would be an ambassador for this type of technology.”

This weekend, the couple was sitting down with a loan officer at Bank of America to start drawing up the papers for an Energy Efficient Mortgage. Lenders are largely unfamiliar with green home lending, and in fact, the sale price of the home may be up to 5 percent lower than its value because of the smaller monthly expenses to operate the home, said Brian Masterson, a Bank of America senior vice president.

“There’s a lot of intricacies here,” he said. “There’s no set definition of what does green mean.”

That’s a growing concern the appraisal industry is struggling to address, both for new construction and resale since there’s not likely to be a nearby comparable home.

“Appraisers have to rethink the building process and then put numbers to it,” said Sandra Adomatis, a Punta Gorda, Fla.-based appraiser who schools other appraisers on green issues. “Buyers are buying those homes on that one big thing, what they can save a month, and appraisers have to look at it from that perspective. That’s what we do as appraisers, measure what the market is doing. Are they paying more for the home to get that payback?”

Howard Makler, president of WePower, the Aliso Viejo, Calif.-firm supplying Prairie Ridge’s wind turbines, believes the financial argument for green homes will win out. “You don’t see as many of them in the Midwest, but I really think that’s going to change.”

This story was first published on August 3, 2010 by the Chicago Tribune.