How Recessions Should Impact Home Ownership

The Seattle Times had an interesting article a week or so ago on how the recession may well change the way that American homes are designed, much like what happened after World War II.  The article, towards the end, acknowledges that sustainable, green housing design (with a variety of associated design criteria) are likely to be adopted for new home construction:

Hudson and McAlester agreed that energy efficiency will be a lasting concern for buyers.

“Homes will be built in a greener and greener manner to reduce long-term utility costs,” McAlester said.

Hudson expects homes to have more energy-monitoring systems and more solar-powered systems to provide electricity and hot water. He expects more use of geothermal heat pumps, which capitalizes on the fact that a few feet below the surface, the ground maintains a stable temperature of 50 to 60 degrees throughout the year.

These heat exchangers use that steady temperature to heat and cool air inside the home. The equipment can cost several times more than an air-to-air heat pump, according to the U.S. Department of Energy, but greater efficiency can mean cheaper energy bills within five to 10 years.

— “Recession May Redesign the American Home“, Elizabeth Razzi, The Seattle Times, January 10, 2009.

Perhaps not shockingly to those who know enough about my background and my beliefs, but my response to this is the following: “Good start, but not good enough.”  There’s a few things I could think of that would help this along:

  • Pass a state law requiring residential construction to meet a minimum standard of energy efficiency. Whether this takes the form of LEED for Home requirements, meeting the 2030 Challenge, require these standards – don’t rely on homebuyers to insist upon them for any reason.  These laws should apply to new construction and remodels, regardless of project size.  There’s nothing particularly odd about considering this for Washington State – we already do this for public buildings.  This is ideally a federal requirement, but this is doubtful.
  • Lock down unintelligent further expansion into undeveloped areas. “How in the world does this help the economy, or, for that matter, provide for new home construction?”, I hear you asking.  The key word here is “unintelligent”.  A recent article in the Seattle Times blasted laws that allow property development in areas designated as floodplains – floodplain development and expansion would certainly cause further issues as the tendency for more severe floods increases.  Increasing population density in city centers, when done properly, can significantly enhance quality of life.  There is no reason why this could not be well-executed.
  • Create incentives for homeowners to purchase existing homes on existing land and renovate using sustainable approaches and lower-impact technology. As I’ve been looking around the real estate market as late, I’ve seen a number of opportunities where homes could be brought up-to-date, lowering their overall upkeep costs.  State or federal incentives to encourage such upgrades, provided that a sufficient number of homeowners are allowed to take advantage of these incentives (my thought would be to not cap the number of participants in any way, shape, or form), could drastically increase the livability of existing properties.
  • Turn the principle of buying a home on its head. It’s not just about a roof over your head, it’s about supporting your health, happiness, and general outlook on life.  One of the best ways to improve these is to invest in environmental changes – including around the home – that make it a friendlier place to live.  Whether this means increasing the amount of daylight coming in to the home, remodeling so that the flow of the space fits your needs, or lowering the cost of energy, utilizing these efficiency gains for both personal happiness and to lower the overhead of home ownerships can be a net benefit.  Shifting the act of home ownership entirely away from assets, credit, and all of the financial burdens that such an act creates and towards supporting one’s own personal goals and endeavors forces a complete rethinking of how we live as a society.

This is a topic I’ve been considering as I think about when I want to consider home ownership, and is doubtlessly a topic that will come up once again.