'Ultra-Green' Townhomes Serve As Prism On Market Turmoil
Courtesy of zHomes. hide caption
zHome units are designed to use about one-third the energy of traditional construction. Solar panels provide the remaining electrical energy needed. By Tom Banse. hide caption
ISSAQUAH, Wash. - Since 2008, the nationwide construction slowdown has sunk housing developments of all kinds. Lots of contractors have gone out of business, including ones focused on energy-efficient "green" building. One government-promoted demonstration project has narrowly escaped pitfalls that doomed so many other cancelled developments. This Wednesday, in Issaquah, Washington, civic leaders and green building promoters will celebrate completion of the carbon neutral, zero net energy project. Correspondent Tom Banse reports on the rocky road of zHomes .
It just so happens that I was assigned to cover the ceremonial groundbreaking in 2008 for what was billed as a cutting-edge townhome development. Here's how that story started...
Tom Banse: "At this groundbreaking, the traditional shovel was left untouched and ribbons cut instead. A ribbon around a solar panel... snip. Around a cutaway of super-insulated wall...snip. People even applauded a water-saving toilet... (Applause)"
Turns out, at that same moment the stock market was going down the toilet too. By coincidence that same day, Sept. 29, 2008, the Dow Jones average experienced a 777 point drop. That remains the biggest loss in one day ever.
"Ironically, the day that was supposed to be our day of glory ended up really being the turning point in the marketplace. It was like the gates were shut," says Brad Liljequist, the project manager here.
"We went all the way from multiple banks really wanting to do the construction loan because this is such a great project, high-profile project, to literally the next week, everybody is like, 'Gee, you know, we're not doing anything right now.'"
Liljequist works for the City of Issaquah. The Seattle suburb controlled vacant land that it wanted to use to demonstrate green building concepts with a private partner. Liljequist says the housing slump claimed the first developer the city selected. Then the replacement builder also went belly-up during a long search for private financing.
"You know, if I had to count how many times I've woken up at 4 am for this project... I mean, it's hundreds of times," he says. "It has been a very, very stressful project."
Now there might be a happy ending after all.
Workers are putting the finishing touches on the homes prior to sale. Last year, the second biggest homebuilder in Japan came to the rescue. The company called Ichijo wanted to enter Pacific Northwest market with an "aggressively green" project.
Patti Southard rides the real estate rollercoaster as a manager at King County's green building program. She says conventional builders, green builders, they're all getting whipsawed by this prolonged housing slump.
"It's been an equal opportunity crisis," says Southard. "I do believe the opportunistic builders that have survived have definitely come around to using more green features, particularly around energy resources."
The question now is, are people willing to pay more than they have to in this faltering economy? Can developers make back the extra costs they incur on a deep green project? The net zero energy townhome complex in Issaquah cost five million dollars to build. The units are expected to go on the market for between 400 and 600 hundred thousand dollars. That's easily a $100,000 more than similar sized traditional homes in the same neighborhood. Washington State University real estate expert Glenn Crellin says interested, green-minded people will stand for a 10% premium, but in this case ultra-green costs way more.
"If they're asking the same prices that they would've asked in 2008, then it may be a hopeless task," says Crellin.
One selling point from zHome's boosters is their claim that it's the first multi-family project where every unit is net zero energy. But judging who is first is complicated. Other developers claim the title too, including ones in Portland and the Bay Area.
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