Bigger Houses Bring Big and Costly Energy Problems

By Kristen Gerencher
MarketWatch
Saturday, March 25, 2006

SAN FRANCISCO -- Despite higher natural gas, electricity and heating oil prices, consumers continue undaunted in their quest for bigger homes with features such as five bedrooms and three-car garages.

But tradeoffs in energy efficiency from new building materials, practices and technologies offer only limited relief from proportionately higher utility costs, housing analysts said. It's also unclear how widely home builders and contractors incorporate such knowledge in their construction practices.

Research suggests utility costs rank low among home buyers' priorities. But after a winter of bigger bills, some spring buyers may want to consider the additional long-term energy costs they may incur by going big and look for energy-efficient features.

"I don't think the average home buyer is considering that," said Marshall Eames, assistant professor of environmental science at DePaul University in Chicago. "They're more worried about does it have a deck or an island in the kitchen."

Consumers need to weigh the desire for extra space with the limits of energy-efficient materials, said David Goldberg, spokesman for Smart Growth America, a nonprofit advocacy group in Washington.

"You can do a lot with green building, but it often comes back to the sheer amount of space that you have to heat and cool," he said. "That's going to affect the market for these large homes."

Tougher energy codes and more-efficient heating and cooling equipment provide some benefits, said Liza Bowles, general manager of Newport Partners, a housing consulting firm in Davidsonville, Md. "But it's true that the larger the house the more energy it uses."

It's a conundrum that has analysts scratching their heads: The average household size has been steadily declining while the average home has been getting more supersized.

The size of new homes last year leapt to 2,433 square feet on average from 2,349 square feet in 2004, according to the National Association of Home Builders (NAHB). That's up from 2,095 square feet in 1995, 1,905 square feet in 1987 and a mere 1,660 in 1973.

Meanwhile, consumers shelled out an average 13.6 percent more to heat their homes this winter. The typical U.S. household is expected to pay $892 to heat the house this season, up $107 from last year, the Energy Department said recently. Because of a warmer than usual January, the bill is expected to come in $152 less than was projected at the beginning of the season.

The housing market typically rewards square footage in the appraisal price while downplaying features such as energy efficiency, putting the focus on first costs as opposed to lifetime costs, Bowles said.

For example, the price of a 4,000-square-foot house tends to be based on the fact that it's 4,000 square feet vs. a 3,000-square-foot house that's energy efficient, she said.


CONTINUED     1                 >

© 2006 The Washington Post Company