July 2014

Times Are Changing for Sustainably Built Homes


Steve Hale


About two months ago, funding for the New Mexico Sustainable Building Tax Credit ran out. Although the program was to be in effect through 2016, the funding had an annual cap to be shared by single-family, multi-family, manufactured housing and commercial construction interests across the state. The incentives worked great, better at helping the building sector than likely any other credit has helped its targeted area—such as the film industry—at an amazing 10 times the annual amount.

Since 2007, this incentive has transformed the home-building industry to make New Mexico a national leader in sustainably built homes. What is meant by “sustainably built”? Homes that are built to be more comfortable, have better indoor air quality, are energy- and water-efficient, and utilize better and fewer materials than their code-minimum brethren. These homes have been built across the state and are mostly in the affordable price range of first-time buyers, those moving up, and even for Habitat for Humanity homes.

So, what now? Housing has not made much of a comeback since the Great Recession. Fewer homes are being permitted this year than last. The surprise is that they are still building green. Maybe they are trying to figure out the next move, but, for now, most builders are still building exceptional homes and having them third-party certified by Build Green New Mexico or LEED for Homes.

One of the biggest issues with building these great homes is the appraisal process. Banks and mortgage lenders take into account the amount of the mortgage payment, including taxes and interest, but when it comes to utility bills, they don’t even consider them. A granite countertop will add value, but a $100-lower monthly utility bill isn’t a factor. This, by the way, has been a major issue of concern for green builders for more than 10 years.

That may be changing. I recently talked with a mortgage broker who will be rolling out a “real” energy-efficient mortgage program that will plow annual energy savings back into reducing the principal of the mortgage. Imagine having the mortgage reduced by $500 per year while living comfortably in a home that you are paying less to operate than most existing homes of the same or even smaller size. That is a winning combination, and it will change the home-valuation process.

Build Green New Mexico is in the process of revising its program, which is based on the National Green Building Standard (ICC 700-2012). We are raising the bar for energy- and water efficiency and making sure that the indoor air quality is correct in these tightly built homes. It’s an interesting and exciting time for green builders and one that will challenge them to not only build great homes but also to tell the sustainability story in their marketing.


Steve Hale, a custom homebuilder and remodeler in the Albuquerque area since 1986, has been program director of Build Green New Mexico since 2009.




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