Monthly Archives: June 2010

Deconstructing A Nightmare

As a not-so-small homebuilder with a considerable stake in the matter, it’s a little weird to see housing so often headlined as a major economic indicator. It’s hard not to self-reference and feel personally involved, if not responsible. This long recession, which was caused by financial shenanigans in the housing sector, is still greatly measured and forecast on the basis of the erratic, distressed metrics coming out of our stumbling industry.

As the news of the past four or five months has bounced back and forth, so have I, making me variously the potential victim, victor, villain or beneficiary, whichever way the previous month’s housing report suggested. News about the economy is lockstep connected to housing news,which I knee jerk into a news forecast about my business, which affects my attitude for the day and plans for the future. Like I say, it’s weird. I know it’s not rational.

And so, I had a bad morning last week. I woke up feeling pretty good, grabbed a cup of coffee and got online to check the headlines. Immediately, I had a deep, sinking feeling. It’s not that I expect to find good news on the front page, but this one looked like the doomsday report for housing, for my business. Real bad. Yes, it was about me.

Here’s the headline and the first two paragraphs. You don’t need to read further into the article to get the point. In three short sentences, it would be hard to string together more negative modifiers and phrases. The highlights are mine.

U.S. New Home Sales Drop 33% in May

The new housing market has never been this bad, at least not since the government started tracking such things in 1963.

Outdoing even the pessimists’ expectations, sales of new homes declined by a record amount in May to a new low. The dismal data, released by the Census Bureau on Wednesday, followed a disappointing report on sales of existing homes earlier in the week and added to growing concerns about the strength of the economic recovery.

It sounded like the end of the recession and the beginning of depression. Emotional, economic; the whole deal. Woe unto us! Woe is me!

But wait. Let me wake up from that nightmare and unwind the rationale of the connections between the person, the business, the industry and the economy. Does any of it make sense?

First, as much as I often take my work pretty seriously, I do know that I am not my business. My life has more dimensions than my professional occupation. There are many people in my life (including associates, colleagues, clients and friends from my business connections) who are far more important than the achievements and challenges of our building company. I’m lucky enough to love my work, but at the end of the day it doesn’t define me and I don’t define it.

Good. That’s one easy disconnect. With one big counterclockwise turn of the screw, depression of the emotional kind can be avoided. No success at work doesn’t also mean no satisfaction, health or happiness.

Next, our business is not a mirror of–or a cog in–the homebuilding industry. Its ups and downs aren’t automatically ours. We alone are in charge of our fortune or failure. We are not in the thrall of trends, data and forecasts beyond those that we create and directly affect.

I’ve been in business over 35 years and have learned that the landscape we work within is constantly changing. Constant innovation and creative adaptation is the key to our survival and success, not leaping onto the bandwagon when the going is good or acceding to the collective retrenchment when times are difficult.

Things will rarely be as good or bad as they seem because both are tempered by our own vision of a company that ought to be just as sustainable as our buildings. Like our buildings, we need to be as strong in the wind and rain as we are in the calm sunshine. Like our buildings, we may be built in good weather, but it’s critical to be designed in consideration of the worst possibilities.

We are of course buffeted by what happens in our industry and with the economy, but our fate is not completely foreordained by the rank stupidity and overreaching that has caused so much trouble “out there” in the past few years. From our self-determined perspective, we’re certain our values and sense of mission and purpose can always help us create a destiny of our own.

So that’s the second big, healthy disconnect. It may be comforting to be a part of an extended industry, but industries have no brain or soul and are not usually a great thing to hitch one’s wagon to. If we see ourselves as neither victim nor beneficiary of the homebuilding industry’s gloomy or good situation, we are free to set our sights as we wish.

Finally, and most important, the homebuilding industry should not be seen as a bellwether of the economy. Among the good things that may come out of this recession, one of the best would be a realization that homebuilding’s metrics shouldn’t be seen as a singular driver or restraint for the economy at large. Its significance really ought to be knocked down enough notches so that its impact isn’t too significant to allow for ebbs in a natural cycle.

The opposite viewpoint is what got us into this mess. On the excuse that more new homes and more homeownership is the key to a robust economy, a Pandora’s Box called “No Constraints” was opened. Common sense, honesty, integrity and all good intentions were trampled by the stampede looking for action and opportunity, all for the sake of the supposed virtue associated with growing the economy.

The free-for-all arising out of the delusion that more homes is always a better thing not only created the sub-prime mortgage Kool-Aid, it also caused tens of thousands of inferior homes to be constructed. Homeowners over-committed for homes that were overpriced and under-built.

The truth is that the homebuilding industry has a limited capacity to build good quality homes. In truth, good homes can’t be built by uncaring, untrained labor. In truth, many of the industry participants who have disappeared in this recession leave it healthier for their absence. The obvious truth is that no industry is good for people or the economy if it over-extends its capabilities to the point of becoming not good at what it does.

At the height of the boom-building years, our industry tried to build almost two million homes a year. We have nowhere near the ability or the infrastructure to accomplish that without extreme compromise. Junk was built. We are on track now to build about one third that amount, depending on many factors over the next two quarters. That’s not very many, but from what I’m seeing the quality is good. Homeowners are being more sensible about what they want and builders are applying their best skills and most creative efficiency. Quality is up, cost is down.

Homes should be built to improve the quality of lives, not to stimulate the economy. By focusing on attributes to enhance living and building quality, the environment and the economy will have better long term benefits, but we have to stop using housing and our economic issues as if they exist for the same temporal considerations. Juicing the economy in the next quarter has nothing to do with homes that should be built to be a benefit to its inhabitants, to its community and to our society as a whole for many, many generations.

Now the whole thing is unwound. Let’s read the headline again:

U.S. New Home Sales Drop 33% in May

That’s not so bad. It’s not about me, not about my company, and it just might be suggesting that an industry is being decoupled from the economy, allowing greater focus on our mission to build affordable homes that really contribute to our becoming a better civilization.

The Greenest Home in America?

A friend sent me a link to a story about “The Greenest Home in America.” Naturally, I was interested. But the second sentence assured me it wasn’t true: “The home, which is being constructed in Portola Valley, CA will be over 5,600 square feet...”I read on and was impressed with the owner’s commitment, but he fell off “The Greenest” pedestal by first deciding to build so much living space for so few people.

People who can afford it will almost always build larger homes than they really need. Too much money leads to too much building, which then makes it much harder to also create a home that is the paragon of green and sustainable. You can’t buy your way into the green pantheon because it’s more about absence than existence. You don’t buy the absence of space, things and amenities; it’s a free choice that’s about priorities and appropriate values. You can’t buy green without being green. You can, however, be more green by being less wealthy, thereby replacing free choice with no choice.

LEED home constructionIt would be possible to make a Hummer a hybrid, but it would never be “The Greenest Car in America.” The very Hummer idea is too wrong to everbe turned into an environmental virtue. A 5600 square foot home may be a nice thing to have, and I certainly applaud the effort to make it greener and more sustainable, but the greenest home in America? I don’t think so.

Our UnityHouse was an effort to build a home that was as green and as energy-efficient as we could manage with our resources. It earned a LEED Platinum rating and proved our intended Net-Zero performance. It’s a very good prototype for green, sustainable building, but we didn’t have the chutzpah, the arrogance, or the ignorance to make wild claims about it. In fact, one of our goals was to make a prototype of a type of building that ought to become standard. We wanted it to ultimately be unremarkable.

At about 1900 square feet, Unity House is nearly a third the size of the Portola Valley home. We achieved this even though, as the on-campus home for the Unity College president, it expands weekly to become a 30 student classroom, and several times a year it morphs into the meeting area for the college board of directors. We devised movable and demountable partitions to allow the building to flex instead of requiring it to grow.

Unity House has essentially the same type of green strategies, materials and energy efficient lighting as Portola Valley, but it has less of everything, which adds up to much less embodied energy in the building and much less energy demand from the building. Less begets less.

To provide heating and cooling (mainly cooling) for the Portola Valley home, they used a geothermal heatpump system and had to drill down 250 feet for the closed-loop water supply. The big building needed big geothermal cooling/heating capacity. That’s a lot better than resorting to a fossil fuel solution, but it’s very expensive to install and requires extra energy to propel the pumps and multiple circulators needed to keep the water flowing in and out of the ground. Geothermal heating and cooling is a good alternative, especially when the loads are relatively high, but its initial cost and on-going energy consumption are significant issues.

Because the Unity House is so much smaller, as well as being highly insulated and well sealed, we were able to use an air source heat pump system. Air source heat pumps are less than a third the cost of geothermal systems and use much less energy to operate because they don’t require big pumps and multiple zone circulators. Unity House heating and cooling loads were small enough to make a simpler, less expensive, and less energy-intensive air source system possible.

Even to the wealthy owners, the accounting of the energy loads on the Portola Valley building must have been a little bit shocking. To keep it powered by the sun instead of grid electricity, they installed a 21 kilowatt photovoltaic system. That’s an industrial sized solar array. It would typically have an installed cost of around $170K – $200K. We’ve built entire houses for less.

In comparison, Unity House needed a 5.2 kilowatt system, which was actually a little disappointing. We had originally estimated that 4 kilowatt system would suffice, but later calculations caused us to increase the size to ensure that our energy needs could be supplied by the sun, not the grid. We did make it to Net-Zero; therefore producing more energy than we used in the first year, but the margin wasn’t excessive. We needed 5.2 kilowatts.

While I’m proud about our accomplishment, I’m even more determined to do better the next time. I’m sure we can. But compared to the “Greenest Home in America,” we did great. Unity House is one third the size of Portola Valley, yet uses one quarter the amount of energy anticipated by the Portola owner–stats made even more impressive given that Unity House is in the grey, cold interior of Maine and the Portola Valley house is in the sunny, balmy, San Francisco Bay area of California.

So does this make Unity House “The Greenest Home in America?” I don’t think so.

This is a subject about which we should all be humble.

Most of humanity doesn’t choose the absence of dwelling space, modern amenities and stuff; they live without all of that by dint of the fickle hand of fate. Their stalwart accommodation to their rude conditions makes our attempts to be green and sustainable laughable in comparison. You want green? How about a home built from the mud over there and the branches and leaves from the trees overhead? You want energy efficient? How about zero fossil fuels ever used for heating, cooling and cooking?

If we want to engage in a green contest, we’ll find it pretty difficult to compete with those who don’t need, don’t desire and don’t expect. Everythingthey build is LEED Platinum and Net-Zero. And we’re now coming to that game burdened with our considerable lifestyle-expectation deficits. We can’t win, but for the sake of all that is right, we must keep at it with dogged determination…and humility.