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Continued: Minneapolis confronts the economics of green homes

  • Article by: MAYA RAO
  • Last update: March 21, 2014 - 12:44 PM

“This house in south Minneapolis would be 40 percent higher [in price],” Smith said.

The city kicked in nearly $100,000 for each of the homes by Peyser, which was the first to finish what it was contracted to build.

Without those funds, “the economics just don’t work. … I saw it as an opportunity to design and provide a new house on a vacant property in north Minneapolis that otherwise couldn’t be done,” said Jay Isenberg of Peyser.

A green home would cost the same to build anywhere, but it could sell in Eagan for $300,000 while it would go for only $160,000 in north Minneapolis, requiring government involvement, said Chris Wilson, real estate director of Project for Pride in Living.

The nonprofit has six green homes under construction after being delayed by a contractor last year.

He said some banks are appraising homes in the area for less than buyers will pay for them, causing Project for Pride in Living to lower prices further in some cases.

Wilson called the city “forward thinking” for its approach to building green homes in low-income neighborhoods. “It is probably a little more expensive, but I think if you want to really start thinking about our long-term future … it is a good approach,” he said.

Still, Shoquist said the city must lower the “development gap” — what the city subsidizes builders to offset a sales price lower than the construction cost — to sustain the program.

Net zero home

The home that has attracted the most attention is on the 400 block of 31st Avenue N., where University of Minnesota professors collaborated with their students and Habitat for Humanity to design the net zero house.

The house has more than twice the insulation required by standard codes, with 8 inches of extruded polystyrene foam on the exterior frame. The windows were built with triple pane glass, so that someone can sit right next to them in the winter and not feel cold air whistling through. Heating and cooling can be adjusted on thermostats on separate floors to save energy.

And though solar panels gleam on the garage roof, “that’s actually the more bling piece of it,” said Lucas Alm, an adjunct assistant professor of architecture at the U. “The real innovations are under the skin.”

Olson, Mohamed and their 6-year-old twins moved from Lauderdale into the house this year without a down payment, instead volunteering with Habitat and helping build the house. Olson is a stay-at-home mother studying to be a dental assistant, while her husband, Mohamed, works in the mortgage division of Wells Fargo.

The other homes that Habitat for Humanity is building for Green Homes North are not expected to be net zero, and Alm said the verdict is still out on whether they can make such work affordable.

He acknowledged that building green is a trade-off.

“In terms of affordability, there’s this idea that you need to make construction costs initially very cheap and inexpensive,” Alm said. “But in the long term, if you build a green home, your utility costs and overall upkeep and durability are much more affordable.”

Maya Rao • 612-673-4210

  • related content

  • The city requires developers to equip the homes with solar panels, but U Prof. Lucas Alm said, “that’s actually the more bling piece of it.”

  • Sarah Olson and her family moved into this net zero house in north Minneapolis after helping Habitat for Humanity build the home. It was designed by students and staff of the University of Minnesota to generate as much power as it uses.

  • Sarah Olson pointed out the solar drain back tank in a closet of her net zero house in Minneapolis, which has extra thick insulation in the walls and triple-pane glass windows. Thermostats on separate floors also help save energy.

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