At this disorienting moment in 2020, as our industry grapples with fallout from the COVID-19 pandemic, it’s hard to believe the dust will settle. But it will. For usually busy Realtors who are looking to fill the disquieting pause, there’s an unusual opportunity right now to get up to speed on emerging aspects of the market.
Take net zero homes for example. A decidedly niche category, when normal life resumes and fuelled by legislative change and changing consumer preferences, this is a space to watch, say industry observers.
“It’s coming. I have no doubt about that,” says Sonja Winkelmann, director of net zero energy housing for the Canadian Home Builders’ Association (CHBA). “PV (photovoltaic solar panel) technology has improved so much and we’re getting so good at building these net zero homes,” she says.
Winkelmann says the Canadian home building industry is in a kind of sweet spot – tech costs have come down, builder capabilities have deepened and pricing will in turn become more attractive to consumers. For interested Realtors, here are five aspects of this emerging sector to explore:
So what exactly qualifies as a net zero home? While they are sometimes equated with being “off the grid”, that’s actually not the case. Not all net zero homes are the same, but they do have basic commonalities. According to the CHBA’s definition, “Net zero homes produce as much clean energy as they consume. They are up to 80 per cent more energy efficient than typical new homes and use renewable energy systems to produce the remaining energy they need.”
You may also hear references to “net zero ready” homes. These are homes built to comply with net zero standards, but that don’t yet have renewable energy systems installed.
Pending regulatory changes:
Announced changes to government legislation and Canada’s building code are a key reason why net zero and net zero ready homes are expected to surge. “We’re going to see things on the legislative front that are changing, so there will be more stock available and it will be more of a common item,” says Dale Rott, a co-founder of Edmonton-based Effect Home Builders, and also a member of the CHBA’s Net Zero Energy Housing Council.
Specifically, Canada’s federal government has indicated it is working with provinces and territories to develop net zero energy ready (NZER) building codes by 2030.
“They’re developing what’s called a tiered or stepped building code,” says Winkelmann. While the building code typically gets an update every five years, this time around, she says, “they’re telling builders they’re going to be developing tiers that go all the way out to 2030 and they’re progressively going to continue to specify more and more higher energy-efficiency targets.”
The value proposition:
On the real estate side, in terms of marketing net zero homes, getting familiar with the full range of benefits is a great start, says Rott.
Beyond sustainability, Rott says, there are multiple other benefits for homeowners. “One is you’re saving money from a home operating costs perspective. Secondly, your indoor environment is more comfortable. It’s hard to quantify, but it’s a ‘feel good’ thing, it literally is. It’s quieter, the heat is distributed much more evenly so you don’t have cold spots.” Add to that superior indoor air filtering and, says Rott, “If you’re concerned about climate change, then you have an environmentally responsible building as well.”
Built to higher standards than conventional new builds, “This boils down to just a better quality product,” says Winkelmann. When a house is built with better insulation, windows and mechanical systems, she says, “your utility bills will be lower and stay lower all year round. The more that energy prices go up, the more this house can buffer you from those prices.” Finally, she says the house will be more durable than conventional homes.
Shifting consumer preferences:
Increasingly, says Winkelmann, today’s home buyers value sustainability features. The CHBA’s annual consumer survey has been confirming the shift. In 2018, for example, Winkelmann says the CHBA’s Home Buyer Preference Study saw “certified by an energy program” make the top 10 list of consumer preferences, along with four other energy-efficient features (including appliances and windows).
When working with buyers, Rott says it’s important not to make assumptions but to really listen for their priorities.
At Effect Home Builders, one of several progressive Edmonton builders who’ve made that city a hotbed for net zero construction, Rott says buyers of net zero homes come with all sorts of motivations. They might have deep environmental concerns, geekiness about mechanical performance and solar panels, or be seeking fine details and luxury construction. “We get the broad spectrum of people.”
Finally, for Realtors, a couple of additional things are set to make serving clients a little easier. First, there’s more net zero housing stock coming. Beyond the luxury sector where larger budgets have typically made it easier to wrap in energy-efficient materials and mechanical systems, Winkelmann says increasing affordability is pushing net-zero towards the mainstream. More builders, she says, are becoming trained and certified. And as a result, more houses today are being renovated to net-zero compliance and more affordable condos and townhome communities are sprouting up.
Winkelmann says CHBA’s Net Zero labelling program – which builds on existing federal programs like R-2000, EnerGuide and ENERGY STAR – supports broader adoption. “A lot of the builders in our industry were familiar with their programs,” she says, noting that through the program, CHBA provides not just building science training, but also sales training so they can articulate the unique features of net-zero homes. This is something she’d like to extend to the real estate industry too.
Speaking to the CHBA’s labelling program, Rott says clear standards make things easier for Realtors too. “The more this is taken on, it should help Realtors and the housing market to be able to know that a house is qualified. And so it would help on the marketing end, from a Realtor perspective, to know that they don’t have to do all the research.”