Professor Ed Levinson hardly looks like a man who hates lawns. But not having a lawn nearly cost him a mortgage on his new home. The Miami-Dade Community College professor discovered the hard way that banks do not like houses that are different. And that includes houses without lawns.
Levinson, an instructor in architecture, designed his personal home in a grove of trees. He didn't want a lawn. Lawns need lots of sun. Lots of sun means excess heat. Excess heat means big air conditioning bills, he reasoned.
But he didn't count on banks and bank appraisers. Designing a house with no lawn may be great for saving energy, but it makes the house "different," they told Levinson.
"I still remember the bank appraiser asking me, 'Why is the house turned at such a strange angle?'" The "strange angle," Levinson says, was a southeast exposure for the home's major window openings -- the ideal angle to capture maximum breezes in Southeast Florida. "The appraiser apparently had never heard of such a thing," says Levinson, who battled appraisers and banks for almost a year before finally getting his loan.
His experience is not an isolated one.
The Department of Energy hopes to put together a special seminar program by August to educate lenders and appraisers about the new generation of energy-efficient homes. Joe Cade, manager for DOE's Finance and Incentives Program, says "our goal is to train 3,000 appraisers by 1983." Cade is working on the project with Oakridge National Laboratories, the American Bankers Association, U.S. League of Savings Associations, American Society of Real Estate Appraisers and other trade groups.
A major stumbling block to building innovative new homes, Levinson found, "is the reluctance of bank appraisers to consider anything different, out of the ordinary." The home building industry hopes to change lenders' minds in a hurry. In a recently completed survey, the National Association of Home Builders (NAHB) found nearly 80 percent of the consumers they polled wanted energy-saving features. That kind of market response can't be ignored. "We estimate 28 million homes by the year 2,000 will be solar homes, or 30 percent of the housing stock," says Michael Maybaum, branch chief for DOE in Washington, D.C.
Maybaum, who spoke on "builder opportunities is solar construction" at the recent NAHB convention in Las Vegas, said new solar systems can be added to homes for as little as $1 to $5 per square foot. Ryan Homes, a large national manufacturer of package homes, has introduced a new line with passive solar energy designs, he notes. And Mayhill Homes in Gainvesville, Ga., another manufactured housing firm, has created a passive solar greenhouse addition for their models "that will be available on all their homes next year."
Appraisers are getting the message. Harmon H. Garrin, president of the Greater Miami Chapter, Society of Real Estate Appraisers, says: "With utility bills exceeding mortgage payments, in some cases, energy is becoming an important factor." Savings and loans" are most up to date as far as being aware of these things," Garrin adds. Commercial banks and mortgage brokers are learning quickly.
As more energy efficient homes are built, one objection from lenders and appraisers will be eliminated: the lack of comparables. "Appraisers don't make value; they only research what people are buying and what they are paying for it," says AmeriFirst Federal appraiser Lester Jones. New home sales are being analyzed now, he adds.
The American Society of Real Estate Appraisers has started spreading the word on how to evaluate energy efficient home designs. The society's seminar director, Judy Kirkendall, says they hope to answer the frequently heard question: "How do you reach a value estimate on a home that's energy efficient versus one that's not?"
When the idea for the seminar was first raised in 1977, most appraisers questioned the value of the newly emerging energy technology. But now, notes Kirkendall, "market data is beginning to show that those homes with energy-efficient design or devices are more sought after. People are willing to pay more."
That didn't help Levinson last year when his two-story, modern, Spanish-style design was rejected by several lenders in a row. Not only did he get in trouble because he didn't want a lawn and because he faced his home southeast, Levinson also found stubborn opposition to his plan to do without air conditioning for much of the year. To that end, Levinson designed his home with over-sized windows that start six inches from the floor. With 10-foot ceilings, and double-hung windows. Levinson can open his windows to let cool air in at the bottom and exhaust hot air at the top. That's hardly an exotic design innovation, he adds, noting that "400 years ago in the Yucatan, the governor's mansion was built with 15-foot high ceilings, thick walls and courtyards." Levinson used all three techniques in his home design and found appraisers uniformly negative.