Tax Credits & Green Building

First National Bank of Weatherford
Airdate: 
August 19, 2008

My guests today are Ronnie & Suz Godfrey with R Godfrey Homes and Jean Gibson with Gibson Home Builders, Inc.

Site Management & Waste Recycling
Green Built North Texas homes incorporate efficient site management and waste recycling practices on the jobsite in order to help reduce the environmental impact of the home while under construction. For instance, site design principles such as tree preservation and protection, recycling measures, and storm water permitting procedures established by the Texas Commission on Environmental Quality (TCEQ) are processes used in the construction of all Green Built North Texas homes.

For Green Built North Texas homes, site management is also about minimizing job-site waste; in fact, the average single-family home in the United States estimated to generate more than 6,000 lbs. of construction waste. Green Built North Texas builders develop waste management plans in order to reduce the burden on increasingly scarce landfill space.
Water Efficiency
The average indoor daily water use in today’s homes is estimated to be slightly over 64 gallons. Implementing water conservation measures can significantly reduce this amount and help conserve this vital resource. For this reason, Green Built North Texas homes are especially welcomed in North Central Texas, and may help extend current water resources.

The importance of water resources is becoming increasingly recognized in our area. Competing demand between sending water to growing urban areas and making water available for irrigation highlight the issues surrounding the scarcity of this valuable resource.

Green Built North Texas homes are designed to conserve water both indoors and out. More efficient water delivery systems indoors such as low-flow plumbing fixtures, combined with rainwater harvesters or native and drought-tolerant landscaping choices outdoors can help prevent unnecessary waste of our water.
Indoor Air Quality
Healthy indoor environments attract many people to “green built” homes. After energy efficiency, the quality of a home’s indoor air is often cited as the most important feature of a green home. This is important in North Central Texas where high levels of allergens and pollen are not uncommon.

Reported diagnosis of allergies and respiratory ailments has increased, and more people are aware of their sensitivities to chemicals that can off-gas from construction and home furnishing materials. These factors have contributed to a heightened awareness of the air we breathe inside our homes.

Even though there is no authoritative definition of healthy indoor air, Green Build North Texas homes incorporate measures that can mitigate the effects of potential contaminants by controlling the source, diluting the source, and capturing the source through filtration.
Energy Efficiency
Energy consumption is of paramount concern to today’s homebuyers due to financial and far-reaching environmental impacts, which range from the mining of fossil-fuel energy sources to environmental emissions from burning non-renewable energy sources. In addition, each home consumes energy year after year, meaning that the environmental impacts associated with that use accrue over time. Therefore, energy conservation is an integral part of all Green Built North Texas homes.

On average, a home built between 1990 and 2001 consumed about 12,800 kWh per year for space and water heating, cooling, and lights and appliances. In an effort to lower energy consumption and reduce the homeowner’s annual utility expenses, all Green Built North Texas homes are, at a minimum, built to the EPA’s Energy Star® performance standard, which means that they are at least 15% more energy efficient than homes built to the latest International Energy Conservation Code (IECC) requirements.

To meet this performance standard, Green Built North Texas homes can include a variety of energy-efficient features such as effective insulation, high performance windows, tight building envelopes and duct work, efficient heating and cooling equipment, and Energy Star® qualified lighting and appliances. These features contribute to improved home quality and homeowner comfort, lower energy demand, and ultimately, reduced air pollution.
Materials
Green Built North Texas homes start with the consideration of the environment at the design phase when material selection occurs. Creating efficient designs that maximize function while optimizing the use of natural resources can conserve building materials, most notably, wood. For instance, Green Built North Texas homes using engineered lumber products are used to the maximum extent possible. These products can help optimize resources by using materials in which more than 50% more of the log is converted into structural lumber than conventional dimensional lumber.

Green Built North Texas homes are also built with sustainability in mind. Positive moisture drainage away from the home helps to mitigate moisture intrusion into building materials while durable cladding materials seek to minimize the effects of degradation and weathering, enhance the life expectancy of the home, and lessen maintenance needs.
Homeowner Education
Inadequate maintenance can defeat the designer’s and builder’s best efforts to create a healthy, resource-efficient home, which is why homeowner education is arguably the most important aspect of Green Built North Texas.

Homeowners play a big role in the house performance and, therefore, should take the utmost care to operate their Green Built North Texas home as it was intended. As an example, homeowners often forget to change air filters regularly or neglect to keep doors and windows closed while the HVAC system is operating, which, in short order, will eliminate much, if not all, of the energy savings and indoor air quality improvements offered by Green Built North Texas homes.

Following the old common sense adage, “If you’re not using it, turn it off,” will go a long way towards making the most of the efficient features of your Green Built North Texas home. With sprinkler systems, you can add the phrase, “If you are using it, use it effectively,” since drought tolerant and native landscapes not only survive, but thrive in hot Texas summers and therefore require much less water. In fact, over-watering oftentimes is very detrimental to these landscapes, and to homeowners in the form of unnecessary and costly water usage.

In addition, proper maintenance of the home’s systems will help ensure that a Green Built North Texas home will operate at peak performance throughout its lifetime. Green Built North Texas builders will walk the homeowner through the basic operations of the home’s systems and also provide the homeowner with information and resources on their proper maintenance.

Green Built North Texas Named Best in Nation by NAHB

In less than two years since its public introduction, the Green Built North Texas (GBNT) program earned the prestigious National Green Building Program of the Year Award from the National Association of Home Builders (NAHB). This award was presented at this month’s 10th Annual National Green Building Conference. GBNT bested 17 other green building programs from around the nation who were honored for their excellence in green home building. GBNT homes are verified by independent third party companies for compliance with the program’s climate-specific construction requirements that address six categories of construction including jobsite management, water efficiency, indoor air quality, energy efficiency, material usage and homeowner education.

“From its inception, Green Built North Texas has enjoyed tremendous support from industry professionals who each share a common commitment to the construction of resource-efficient homes in this market, said GBNT Chairman, Dan Fette, CGB, CGP, who accepted the award along with Home Builders Association (HBA) staff member Phil Crone. “The remarkable increase in the program’s membership and the number of builders constructing homes to our protocol means that the best is yet to come for Green Built North Texas.”

GBNT’s membership now includes over 150 home builders, industry supporters and sponsors across Texas. These builders, which include some of the region’s largest, have registered more than 400 homes with the program since the introduction of its home verification and registration process earlier this year

This verification process has paved the way for one of the program’s most ambitious projects to date. In the coming months, all registered homes will be moved into an enhanced online search engine that will allow consumers to locate GBNT homes that are either completed or under construction by criteria such as builder, subdivision, zip code, and city.

It is anticipated that more than 3,000 verified homes could be registered with GBNT by the end of the year. The emission reductions achieved by these 3,000 homes over a 30-year mortgage is estimated to be the equivalent of taking more than 30,000 cars off of the road. The water usage reduction attributable to 3,000 GBNT homes could save more than a billion gallons of our region’s vital water resources over the same 30-year period, enough to satisfy the lifetime water demand of more than 60,000 people.

“The dedication and expertise of our membership will enable Green Built North Texas to build upon its past accomplishments and continue to further the HBA’s mission of providing the region with quality housing and valuable industry information,” said HBA staff member Phil Crone. “The program they’ve developed and the resources that support it will help the region confront its environmental challenges for years to come.”

GBNT will once again take center stage when the National Green Building Conference comes to North Texas next year. The conference will be held May 8-10 at the Hilton Anatole Hotel in downtown Dallas.

In recent action by the city council of Dallas, a new building standard was adopted for their city. Here, an excerpt from their news release:

City of Dallas News Release Public Information Office
FOR IMMEDIATE RELEASE
Wednesday, April 9, 2008
“Green” Is New Building Standard In Dallas
City Council passes new construction requirement to reduce environmental impact; Dallas becomes one of the first major U.S. cities to pass comprehensive building standard for both residential and commercial construction
DALLAS, TX— The Dallas City Council today unanimously adopted a green construction ordinance which aims to reduce energy and water consumption in all new houses and commercial buildings constructed in the city. This step adds to the City’s record of being an environmental leader.
“We’re at the lead of the major cities in this country. We had industry come in and really embrace it. We crafted it to make sense for everybody,” said Dallas Mayor Tom Leppert.

A Green Building Task Force, comprised of members of the residential and commercial development sectors, was created to develop recommendations for the new standards for all new private development in Dallas. …

Highlights of the ordinance:
The ordinance will be implemented in two phases. The first phase, starting in 2009, requires that homebuilders construct their homes to be 15 percent more efficient than the base energy code and meet four out of six high-efficiency water reduction strategies. In phase 2, beginning in 2011, it requires all homes to be built to either the LEED standard or the Green Built North Texas (GBNT) standard and include points toward a 20 percent water use reduction and a minimum 17.5 percent more efficient than
the base energy code or the performance of an ENERGY STAR for homes with a HERS rating of 83 or less….

I believe that every community should look at developing a plan to help lower utility bills and create a cleaner, healthier environment for its citizens.
Already in place are state mandated energy efficiency requirements; however a move towards a Green Building standard would do more to reduce the cities’ carbon footprint on the planet. I would be willing to serve on a task force to accomplish this.

Prospective first-time home buyers who have been sitting on the fence now have a significant financial incentive to explore the opportunities available in today’s housing market.
H.R. 3221, the Housing and Economic Recovery Act of 2008 — which has just been passed by the Congress and now is on its way to President Bush for his promised signature(as of this writing) — allows first-time home buyers to take a $7,500 tax credit from the purchase of a single-family home.
Here are some of the highlights:
• Any home buyer who has not owned a home during the past three years and is a U.S. citizen who files taxes is eligible to participate in this program.
• To qualify, buyers must actually close on the sale of the home on or after April 9, 2008 and before July 1, 2009.
• The program does have income limits. Single or head-of-household filers can claim the full $7,500 credit if their adjusted gross income (AGI) is less than $75,000. For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit. The same applies to married couples who earn between $150,000 and $170,000.
• The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples with an AGI exceeding $170,000.
• A refundable credit means that if a taxpayer pays less than $7,500 in federal income taxes, the government will write them a check for the difference. For example, if $5,000 in federal taxes is owed, the taxpayer would pay nothing and a $2,500 payment would be received from the IRS. If a qualifying home buyer were owed a $1,000 tax refund, they would receive $8,500.
• Buyers can take the tax credit on their 2008 or 2009 tax return. Those who close in 2008 take the credit on their 2008 return. Buyers in 2009 have the option of taking the credit on their 2008 or 2009 returns.
• The tax-credit program also has payback provisions.
• The credit essentially serves as an interest-free loan to be repaid over 15 years. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. If the home owner sold the home, then the remaining credit would be due from the profit of the home sale.
• If there is insufficient profit, then the remaining credit payback would be forgiven.
Yes, you do have to pay back the money. However, the generous provisions of being interest free and able to pay back from sales proceeds, should you sell, make this quite attractive. Anytime someone wants to loan me money under such terms, I would gladly jump at it. And, you can do anything you wish with the money. For example you could pay down your mortgage on your new home thereby saving even more money. Or maybe you would like to buy some new furniture.

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