Smaller and Smarter for First-Time Home Buyers in Omaha, NE

I went to Omaha recently to meet with Scott Kinkaid, Vice President of Innovation, HearthStone Homes who is blazing a trail in home building and leaving some of the bigger, national builders in the dust.

Instead of following the pack and going from building starter homes to luxury homes, they decided to build smaller, energy efficient homes geared to first- time home buyers.  They chose to go in this direction right before the cash crunch, which really paid off considering the introduction of the tax credit for first-time-home buyers.  But they also wanted to insure home sales would continue at their brisk pace when the rebate ends later this year.

As part of his energy efficient home plan, Scott wants to guarantee the home buyer that the energy costs of these homes would not exceed $20/month.  He determined this would be a three-pronged approach:  Look at the building envelope for efficiency, evaluate the technology and educate the home buyer.  On the first issue, he talked to his insulation contractor who wasn’t certain what it would take to achieve these low monthly energy bills. The contractor, who purchased construction materials from several manufacturers, made a request to all of them to discuss this issue.  Only CertainTeed accepted.

I love a challenge, so I went out to Omaha to meet with Scott (By the way, if you go to Omaha during the College World Series, book your hotel room early!).  Within 24 hours, we had performed some computer simulations and while we didn’t hit the $20 target, we were able to suggest changes to their building models that would provide a builder-guaranteed “good” efficiency rate of $32/month, a “better” efficiency of $29/month, and a “best efficiency” rate of $22/month for heating/cooling.  My suggestions included increasing the insulation package, upgrading mechanical systems, adding cool roofing products, and tightening up the duct work.  Having these simulations and suggestions enabled him to look at what it would cost to make the adjustments and make a sound business decision to make it happen.

They were thrilled.  Now HearthStone will improve the energy efficiency for these homes by adjusting issues in the building envelope, increase Energy Star ratings through added technology in the home and will be able to pass savings onto new home buyers, providing the home buyers will learn to use the home efficiently to get the maximum utility savings.  Bottom line, this was a win-win for all parties.

HearthStone wanted to stand out in the marketplace and has done so quite nicely.  They are building about 800 ultra-energy efficient homes a year and is outpacing the big, national guys who usually lead the pack in middle America.

Lucas Hamilton is the Manager of Building Science Applications at CertainTeed Corporation

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  • c19:

    Lucas,

    Quick question, why did they select a $20 target if they are unable to achieve it? Also, if they now target, say $30, how much more expensive will the home be to build…thus allowing one to conduct the life cycle costing?

    Best.

    • I believe the $20 / mo target was set based upon goals set by similar international programs and because it is an ambitious target to hit. HearthStone has started by addressing the issues over which they have control; home designs based upon sound building science and quality construction. Since as much as 3/5 of the energy consumed in a home is not related to the building envelope, there remains a great deal of home owner education to be done to get to such ambitiously low targets.
      –Lucas

  • c19:

    Thank you Lucas. It seems that the cost/month would vary by the moderation of the climate location.

    Also, the 3/5 concept related to energy consumption is eye opening as one would think that utilizing higher quality insulation in the wall cavities and possibly insulated siding would be beneficial in reducing overall consumption.

    • The cost / month challenge does change based upon the climate. A temperate climate does not offer the same challenges as a more severe one.

      The 60 / 40 rule for energy consumption in the average existing home stock is fairly well agreed upon. Adding wall insulation and insulated siding products can have a significant impact on the 40% consumption. The “bang-for-the-buck” from insulated sidings is tremendous because it also insulates the framing and floor lines which are not insulated otherwise.

      Lucas

  • Thank you Bill. There are a lot of great stories out there of builders really trying to make a difference when it comes to building smarter. It’s great to be involved as well, both personally and in my work with CertainTeed.

    Keep reading! We have a lot of good stuff coming up!

    Lucas

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    Thanks
    Shree Ram Rockwool

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