Beazer Homes Bet on Green Homes

• Beazer Homes builds “net-zero energy” homes that are environmentally friendly, although they are more expensive.
• CEO Allan Merrill said the initial investment will pay off in the long term.
• Issues include higher costs, market education and green home appraisal practices.

A new community of 19 single-family homes north of Baltimore is at the forefront of the green building movement.

Solar panels are installed on the roofs. There are charging points for electric vehicles in the garages. Energy-efficient appliances have been installed, including electric heat pumps and induction cookers. Sealed insulation prevents leaks that result in energy loss. Supply ventilation systems keep indoor air clean. Homes use so little energy that solar energy could offset most or all of the energy costs.

The project was developed by Beazer Homes, one of the largest residential developers in the United States. Several years ago, the company set a goal that by 2025 all of its new homes would meet the U.S. Department of Energy’s “Net Zero Energy Readiness” requirements. certification. Its CEO Allan Merrill said Bizer is close to achieving the goal.

There was a price to pay for these efforts; Merrill said green features can add $10,000 to $30,000 to a home’s construction and that the market for such homes is still in its infancy. It’s also an uncertain time, as many Americans struggle to afford a home and Donald Trump’s re-election threatens to roll back many environmental regulations. But there are also tailwinds, including state laws that require industries like utilities and real estate to decarbonize, as well as a record number of renewable energy projects in the US.

Merrill believes the initial investment will pay off over the long term, even if shareholders have not yet rewarded Bieser. Prioritizing sustainability is helping the company attract top talent at a time when homeowners are increasingly concerned about rising utility costs, he said. It is now up to Bieser to educate clients and the wider real estate market about the value of green homes.

“Leadership requires investment,” Merrill said. “We made a conscious decision to make less money on all these houses. Now it’s about talking to more customers, delivering value more effectively and getting paid for it.”

Merrill added that Beazer is in the middle of that journey. 19 single-family homes in Parkville, Maryland are priced at least $700,000, more than double the area’s average September sale price of $300,000.

Merrill said the value of net-zero energy homes comes from lower utility bills, healthier air quality, quieter living spaces and a reduced environmental impact. Bieser estimates that owners of new homes in Parkville will save about $453 per month on energy costs compared to owners of older homes in the city and $311 per month compared to owners of a typical new home. Improved indoor air quality is a benefit for shoppers with asthma or other respiratory conditions. Renewable energy sources and electrical appliances do not emit fossil fuels.

“The challenge is that when people come in, there’s no button that tells you which of these issues they care about,” Merrill said. “It’s a process of discovery. It’s about finding a way to connect what we’ve done with each customer.”

Another problem, he said, is that home appraisals typically don’t take energy efficiency or renewable energy technologies into account.

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Woody Fincham, a home appraiser in Charlottesville, Va., who also teaches courses on sustainable homes for the Appraisal Institute, says few appraisers have that kind of experience. But he argued the problem is broader. Real estate agents need to promote green properties so potential buyers understand their value, and then communicate that information to mortgage lenders who can find qualified appraisers.

However, there is no guarantee that a green home will cost more as the market largely depends on what is for sale nearby.

“If you’re in a community where people place a high value on efficiency – and in some parts of the country they do – the assessment will be able to show that the market is willing to pay more,” Andrew Pizor said, a senior attorney at the National Consumer Law Center. “But if you’re in a community where people don’t care about that sort of thing, the appraiser will compare prices and probably find that no one is willing to pay extra for it.”

Two Democrats in Congress have proposed legislation that would require assessments to account for a home’s energy use compared to that of neighboring properties, as well as whether a home has energy-efficient appliances, solar panels and electric vehicle charging. The bill would also require additional training for appraisers.

But it didn’t go away, and Merrill said Beezer wasn’t waiting.