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Posts Tagged ‘cost’

Highly-Insulating (R-5) Windows and Low-e Storm Windows Volume Purchase Program

Tuesday, July 20th, 2010
Written by Marcus de la fleur

Here is another incentive that may help us with the replacement window decision. This time it’s not a tax credit but a program by the Department of Energy (DOE) called the “Highly-Insulating (R-5) Windows and Low-e Storm Windows Volume Purchase Program”. I stumbled across it in a GreenBuildingAdvisor blog post.

“The aim of this volume purchase initiative is to work with industry and potential buyers to make highly insulated windows more affordable.”

… states the DOE web site. Hey, great! This is right up my alley. Anything that could make this big investment less hurtful on our pocketbook is welcome!

So, how does this program work? There are 30-plus vendors that qualified for the DOE volume purchasing program – vendors that sell “high performance windows” with U-value of 0.22 or less.

The windows volume purchase web page allows the user to browse through different window types for new construction, retrofit windows, patio doors and low-E storm windows. I can select my window size range (listed in unit inches [UI]) and get access to a list of participating vendors.

This program can be a real big time saver. Rather than going from vendor to vendor to find out if they have high performance windows, I have a preselected list right at my fingertips. The program is also an excellent resource to quickly find local vendors of high performance windows.

I began to call around to see how much savings I could expect from the program. This is where it got interesting. It was officially launched on May 27, 2010 and some participants are organized, others are not.

With some vendors, I communicated with a sales person who was designated to just deal with the DOE program sales, while others had no clue what I was talking about. I literally had to point them to the web site so they could see their name in the participating vendor list. Some had to get in touch with their corporate headquarters to investigate what this was all about.

This made it rather difficult to get my hands on the pricing information. I had to be very explicit and persistent that I was only interested in the DOE volume purchase initiative pricing structure, the same structure that had been submitted to and approved by the DOE.

Despite all the confusion I caused with my inquiries, I eventually got some pricing that appeared to be in line with the DOE program.

Because we are about to replace the basement windows, I used their size range (up to 70 UI) for my inquiry and got a price spread of $138.00 to $328.00.

I am not sure, but my gut tells me that some of the prices are not that different from the regular sales prices, which puts into question the objective of “making highly insulated windows more affordable”.

But so what? I still can get a 70 UI high performance window for under $200, right?

Well – you have to look out for the air leakage (AL) rate. Like I contemplated earlier, the insulation value of a window can be negated by a high AL rate. If we would like to keep the AL below 0.05 cfm/sf, we are looking at more than $200.00 per window.

As helpful as the DOE program is, it is important to remember that there are windows that are even more efficient than those included in the program. That is why I kept the Uniframe double hung by Great Lakes Windows in my list.

The question now is if the price delta to the next runner up (the Serious Windows product) can be justified by additional energy savings.

Tags: cost, energy, window
Posted in research | No Comments »

Tax credit folly?

Sunday, July 18th, 2010
Written by Marcus de la fleur

We stepped deep into window research, but we still have to make a decision on what windows to use. Because they will be a very big investment, any type of rebates, financial incentives or tax credits will influence this decision.

Federal Tax Credits for Consumer Energy Efficiency

… or, more commonly known as the $1,500 tax credit that expires on December 31, 2010.

The total of $1,500 can be applied across a range of energy efficient upgrades, such as furnaces, water heaters, insulation, doors and – yes – windows. This made us very happy as we were convinced that we could claim the $1,500 in a heartbeat on our new windows … until I looked at the fine print.

Qualifying windows must have a U-value of 0.30 [LINK] and Solar Heat Gain Coefficient (SHGC) of 0.30 (see also ‘The world of windows’ post).

This is a federal tax credit, available nationwide, from Alaska to Florida and Southern California to Maine, intended to stimulate the economy and improve the energy efficiency of existing homes.

Now, wait a minute, how can that energy efficiency thing work with this one requirement (U-value of 0.30 and SHGC of 0.30) across a number of different climate zones? Down south, a very low SHGC is probably of interest while the U-value would not matter that greatly. It would be the reverse up north, where the insulation value (U-value) counts and passive solar heat gain (high SHGC) may actually be desirable.

Take our house in Chicago. I ran a quick window analysis for the 1st and 2nd floor with the RESFEN model. The only variable in the analysis was the SHGC.

Scenario 1: SHGC north 0.25, east 0.25, south 0.25, west 0.25
Scenario 2: SHGC north 0.51, east 0.51, south 0.51, west 0.25

Allowing for passive solar heat gain (high SHGC) through the windows on the east and south side could bring the annual heating load down as much as 10%, even though our building has a north-south orientation. The more a building has access to passive solar, i.e. lots of windows in the south elevation, the greater the potential to lower the annual heating load.

That said, any window slated for passive solar heat gain (high SHGC) would need proper summer shading or otherwise the winter heating savings may be lost in summer cooling needs.

Even the Energy Star program recognized the importance of the different climate zones and has structured the qualifying criteria for windows, doors and skylights accordingly.

Why the federal tax credit for consumer energy efficiency did not take the same approach is a mystery to me. I guess the intent is good but the execution is poor.

As for the $1,500 – we may not claim it on the windows alone, because we would like to benefit from passive solar heat gain. But we have the boiler, insulation and doors that will help us to claim the full amount.

Tags: cost, energy, insulation, window
Posted in financing | No Comments »

The world of windows

Thursday, July 8th, 2010
Written by Marcus de la fleur

Out of all items I have researched, looking into windows has taken by far the most time. And I am not talking about hours. I have spent days on figuring out what to do.

Why? Windows are a critical component in the energy efficient building envelope we would like to create. The objective is to have the window efficiency somewhat correspond to the R-value of the walls, which would make each investment worthwhile. To get there, we have to look at triple pane windows.

But they are a very big, if not the biggest, investment component in the building shell. Initial prices ranged from $400 to $1,300 for a 100 UI window. I suspected that the $450 must be a “too good to be true” case, while a commitment to the $1,300 window requires a level of obsession that I am lacking.

UI = unit inches (window width + window height = unit inches)

Looking at the energy performance helped me to narrow the field and get products organized. Four performance metrics of the NFRC ratings (National Fenestration Rating Council) help in that process.

U-value

The U-value is an expression of the heat transfer coefficient (or insulation value) and is determined according to the NFRC 100 test.

I initially used a U-value of 0.25 for the energy model, but hope to get it below 0.20, which would correspond to an R-value of 5 or greater. A window with a U-value of 0.20 or less would feel comfortable even during a cold winter day, as long as it is air tight (see also below).

Solar heat gain coefficient (SHGC)

SHGC reflects the heat gain in a space through a window and is determined according to the NFRC 200 test.

Solar gain can be a double sided sword. It could be desired in the wintertime for passive solar heat gain, but not so during summer. We would prefer passive solar heat gain through the east and south windows (SHGC of around 0.5), which we can shade during the summer months to prevent overheating. All westward facing windows should have a low SHGC, such as 0.25 or less.

Visible transmittance (VT)

VT is the amount of visible light that passes through the window and is determined according to the NFRC 200 test.

Some light will be blocked by the window frame and by various glass coatings. We would like to keep the VT at or above 0.4 to allow enough daylight into the building.

Air leakage (AL)

AL is a measure of air infiltration through and around a window (in cubic feet per minute per square foot [cfm/sf]) and is determined according to the AAMA/WDMA/CSA test.

Air infiltration is often overlooked but is rather critical to the window performance. What is the point of having a window with good U-value (say 0.20) if plenty of cold (or hot) air constantly leaks through the window.

The Efficient Window Collaborative recommends windows with an AL of 0.3 cfm/sf or less. That said, I have heard a number of times that 0.3 cfm/sf can feel uncomfortably drafty on a cold winter day. We would prefer an AL less than 0.05 cfm/sf.

Questions About Replacement Windows & Energy?

Styles and materials

I learned that different styles of windows have different energy performance characteristics, although it really comes down to air leakage.

Double hung windows, the most common style, and sliders typically have a greater air leakage when compared to single hung, casement, awning and picture windows.

Because double hung and slider windows have two operable sections, outside wind pressure may push air in between the two sashes. Casement and awning windows are pressed into the jamb gasket when subjected to outside wind pressure, resulting in an even tighter seal.

Picture windows are non-operable and as such should not have an air leakage issue, unless they have a shoddy frame.

An item that influences the pricing of windows is the frame material. Vinyl is the most common and least expensive, but has an unfavorable environmental footprint and suffers from expansion and contraction with temperature change.

Aluminum frames need a really good thermal break to prevent heat loss or gain. Another option is a wood frame with aluminum cladding on the outside. These are very nice looking windows in my humble opinion.

Composite material frames (mixture of wood and plastics) are another higher end option and are sold as being virtually maintenance free. So are fiberglass frames, which have the reputation to last a long time.

Who sells high efficiency windows?

Good question. There are European models and a number of Canadian manufactures. I searched a lot for more local manufactures, with limited success. I did build a small product list, bit by bit, through recommendations, web searches and the reading of other green blogs.

Triple pane windows with a U-value of 0.20 or less seem a rarity in the U.S. market. The ones I found (U.S and Canada) were available with vinyl or fiberglass frames.

Return on investment (ROI)

I needed help to put the price of a window into the context of its energy efficiency and probable energy savings. The Efficient Window Collaborative has a very helpful web site that explains the basics and provides a window selection tool.

http://www.efficientwindows.org/selection.cfm

I found additional help in a simple to use energy model called RESFEN. It allowed me to input the performance metrics of the windows around the building and calculated the estimated energy costs or savings.

I now have accumulated a pretty good knowledge base, have a number of products, have an idea about the potential ROI, but still have to make a decision.

Tags: cost, energy, insulation, window
Posted in research | 3 Comments »

The water service problem

Sunday, April 11th, 2010
Written by Marcus de la fleur

I got freaked out pretty badly in the open plan review meeting over the code-required water service upgrade from 1 inch to 1 ½ inch, mainly because of the additional $10k to $15k price tag.

Once I got over the initial shock, I asked the plumbing reviewer what options I would have if I didn’t want to upgrade. Asking doesn’t hurt, right? To my surprise, I was presented with the following option (I paraphrase):

“If you can get a code variance letter from the commissioner of the Department of Water Management (DWM) saying that they are OK with the existing 1 inch water service, then we will be OK with it.”

I felt much better already, even though I had no clue to what my chances were to actually get that code variance.

The next logical step was to get on the phone with the plumbing inspectors at the DWM to present my case. I explained that we have applied for a green permit, that we are rehabilitating a three unit building and that we have plans for exceptional water management with all the low flow fixtures.

I was delighted to notice that the inspector was actually willing to evaluate if the 1 inch service line would suffice for the project. He asked for the plans and product information on all fixtures, which I e-mailed him right away.

Based on this information, the plumbing inspector added up all fixtures and developed a worst-case scenario. It is basically a calculation of how many gallons per minute (gpm) are needed at peak use and whether the existing 1 inch water service can deliver that amount.

More good news! It appears that the existing 1 inch service must do the job, because I was asked to submit a formal letter in which I applied for the variance. My case was presented to the commissioner and I received the variance approval shortly thereafter.

I took the letter back into another open plan review meeting, in which I received the missing final sign-off for the plumbing. All plans and documents went back to our green permit project manager who issued the permit a couple of days later. It was time to celebrate – and we did!

The water service issue added another two week delay to the green permit process and made me jump through a few more hoops (thank God I am somewhat fit!). It also saved us $10k to $15k, which we had not included in the budget. Plus, the green permit means we had no permit fees. Not such a bad deal after all!

Tags: budget, city of chicago, cost, green rehab, permit, utilities, water
Posted in permitting | No Comments »

Insulation – which material cuts it?

Monday, October 26th, 2009
Written by Marcus de la fleur

If you have followed the previous posts about the insulation conflicts and moisture management issues, you may ask why not go simple – skip insulation altogether and just have brick wall exposed on the inside. A very tempting thought, isn’t it? It would look pretty good and we could avoid all these problems.

But we also would create a big problem. A three wythe (or 12”) thick brick wall may have a R-4 value. The air film on the wall would give me another R-1, totaling R-5. That is if the brick is dry. If it is wet, these values will drop. A decent window may have a better R-value than the brick wall! We need good insulation, if we want to have a decent shot at our zero-energy goals.

There is quite a variety of materials to pick from, starting with the very common fiberglass batts, the more expensive rigid foam boards, or materials with high recycled content such as blown-in cellulose or recycled cotton batts.

Understanding the limitations and opportunities that come with our masonry shell, and having distilled two key principles, the choice actually narrows to just one material: blown-in foam insulation.

“A low[…] risk approach to interior masonry retrofits that has been used for several years involves spraying an airtight insulating foam directly to the back of the existing masonry [shell].”

Reference: Building Science Digest 114 (Interior Insulation Retrofits of Load-Bearing Masonry Walls in Cold Climates)

Also known as spray polyurethane foam (or in short: spray foam), it would eliminate air gaps and air leakage if applied across the entire interior shell, including the roof. Basically, it would give us an airtight building envelope and act as a moisture barrier (or vapor retarder) helping with the control of incidental rain penetration.

A Building Science publication (Building Science Digest 114) explains spray foam rationales and choice in detail and is worth while reading.

Because spray foam is semi-permeable (a vapor retarder but not a vapor barrier), it will allow moisture in the masonry shell to diffuse to the outside and in. I have to make sure that the perm rate of the entire interior wall assembly is greater than 1 – and we are all set!

There are two kinds of spray polyurethane foams out there:

Closed Cell

As the name suggests, each little cell (or bubble) encloses an air pocket, forming a monolithic airtight layer at an R-value of around 6.5 per inch. Most closed cell spray foams have a density of about 2 pounds per cubic foot (pcf) and have a low diffusion or perm rate (around 1 to 2 at 1 inch thickness).

Open Cell

This foam is much lighter at a density of 0.5 pcf and forms more of a web structure. It is still considered airtight if applied at a depth of several inches. The R-value for open cell products hovers around 3.5 per inch. Water vapor can diffuse freely through the material.

The one disadvantage of spray polyurethane foam that is often mentioned is cost. And yes, it is much more expensive than your typical fiberglass batts – closed cell more so than open cell, because it requires more material. Plus, it needs to be installed by a trained professional.

6” of fiberglass batts (around R-19): $0.30 to $0.60 per square foot (material only)
6”of open cell spray foam (around R-21): around $2.50 per square foot (material and labor)
6”of closed cell spray foam (around R-39): $5.00 to $6.00 per square foot (material and labor)

We would pay more – and that is fine – because we will get more. With spray foam, we don’t have to worry about air leakage, condensation and potential mold problems, or diminished R-values. Instead, we get the airtight building envelope we need, and lasting R-values. If we would try to accomplish the same results with cheaper insulation materials, we probably would, in the end, pay as much.

A drawback that I still debate is that spray polyurethane foam is a petroleum based product. The good news is that most spray foams are now VOC (volatile organic compounds) free, using water as their blowing agent. Some products are marketed as green because of some soy based oil content. That overall content is, however, relatively small, plus I am not sure if I would accept soybean farming as a sustainable practice.

Another unanswered question that keeps me pondering has to do with the end-of-life use. There is no known recycling option or second use for this material. If the spray foam ever gets torn out, it is likely to end up in a landfill. The only conciliation I have is that it should serve and maintain its performance for several generations.

More info on spray foam:

What is:

Air barrier

Moisture barrier: See references below to vapor barrier and retarder.

Vapor barrier and vapor retarder

Additional resource: Consumer’s Guide to Vapor Barriers at the U.S. Department of Energy

Tags: construction waste management, cost, economics, insulation, recycling, research
Posted in design | No Comments »

Insulation – how it started

Tuesday, October 13th, 2009
Written by Marcus de la fleur

Our two key goals are super-insulation (high R-value) and air-tightness (elimination of leaks and drafts). Simple enough, isn’t it? To my surprise, this issue got me deep into rocket science. There was a very steep learning curve and my ideas and aspirations on insulation options had changed several times over the past year based on emerging facts and realities.

While we were house hunting, we were only considering buildings with a masonry shell for the structural and longevity aspects (see also “Dream home wish list” post). Another idea of mine was to use the masonry building shell as thermal mass by leaving it exposed to the interior and applying the insulation on the outside.

Fast forward. We now own our house with typical Chicago common-brick side elevations and an ornate front elevation. Our dream of exposed interior brick walls radiating warmth appears to materialize. To get there, we will need to super-insulate the building from the outside. I began to research our options, and ran into a brick wall (pun intended).

Do we really want to hide our ornate front elevation behind insulation? Of course not! We would insulate the front from the inside – and would be left with big thermal bridges to the left and right. Not good.

Then there is the dimensional issue. Portions of the west side of our building are almost on the property line. We would encroach into our neighbor’s property if we began to insulate on the outside of these wall sections.

How about insulating portions on the outside and others on the inside? Not only is this getting really complicated, but I end up with a whole bunch of thermal bridges that would defeat our insulation goal.

And, of course, there are code issues to contend with. Chicago common brick has an excellent fire rating. Whatever I would use to cover the outside insulation will have to meet the one-hour fire rating requirement.

Most innovative ideas start with an uphill struggle. If we really pushed it and worked long and hard, we possibly would find a way to make it work. The question is: Is it worth it?

I talked with a lot of friends, contractors and green building professionals and did not receive any encouragement for my idea – absolutely none. Nor did I find any supporting clues in my research. The consensus was that insulating our building from the outside was too resource intensive and expensive to justify any thermal mass benefit in the interior – thermal mass we may not even need with a super-insulated and airtight envelope.

Time to hit the reset button! How about insulating the shell from the interior? But what would be the best material choice? And how can we do this without compromising the integrity of the 100+ year old Chicago common-brick walls?

Tags: cost, economics, house hunting, insulation, research
Posted in design | No Comments »

Design workshop

Sunday, October 11th, 2009
Written by Marcus de la fleur

Saturday 08/22/2009 – the scheduling and preparations are complete and the long anticipated design workshop is finally becoming reality. I have the energy model and an agenda – and most importantly – I have gathered a green team.

We started the day in the house with a quick inventory of the gutted basement and first floor. Because the house offered no comfortable or clean enough room in which to conduct the workshop, I had organized a meeting room one block north at Saint Agatha Catholic Academy.

Corbett Lundsford from the Green Team Group started the workshop session with a summary of the energy model results, providing us the foundation for the following discussions, which we had organized into the broad subject areas insulation, heating system, ventilation, and floor plan layout.

Insulation

The two key principles are super-insulated (high R-value) and airtight (elimination of leaks and drafts). Simple enough, isn’t it? To my surprise, this issue got us deep into rocket science. I will dedicate a post or two just to this subject – so stay tuned!

My research has pointed me to open cell and closed cell spray foam insulation. We discussed alternative materials, environmental impact, the objective of an airtight building envelope, R-value and point of diminishing returns, as well as moisture management in the masonry building shell.

The consensus that emerged was that spray foam insulation may not be the most economic option (ranging from $0.40 to $1.25 per board foot), but would allow us to effectively meet our insulation and air tightness goals in the building shell. Cellulose insulation, with a high recycled content, was suggested as an alternative for the basement and first floor ceiling, providing the needed insulation and sound attenuation.

Because we plan to install a new concrete floor in the basement, we discussed insulation under the new floor slab. With no insulation, the floor slab would provide a nice cooling mass during summer. It would, however, make heating rather inefficient. The final recommendation was to integrate insulation under the concrete slab. It would provide the right conditions for a radiant floor heating system, which leads us to the next topic.

Heating systems

Our preferred energy source for heating and domestic hot water is a solar hot water (SHW) system. The preferred heating method is radiant hot water, such as cast iron baseboard heaters. The green team was quick to educate us about the water temperature demand of hot water radiators (typically ranging from 150 to 180°F) and the capacity of a SHW system (typically ranging from 100 to 120°F). We have a 30 to 80°F temperature difference problem to solve!

Not only that, but the green team recommended a backup option to the SHW for those overcast and cold stretches. I would love to install a biomass furnace. The problem is that the best, cleanest and most efficient models are all European. The green team suggested a high efficiency condensing gas furnace instead. I could always switch to a biomass furnace once a clean and high efficiency model becomes available on the U.S. market.

With a temperature problem to solve and a need for a backup furnace, geothermal entered the discussion as an alternative to SHW. It could provide the energy needed for heating and domestic hot water. That said, I was concerned about the electricity demand by the pumps and condensers of a geothermal system, making our zero energy goal more challenging. Geothermal and SHW is something that will require more research and additional expertise.

Ventilation

Ever heard of sick building syndrome? That’s when a building does not get sufficiently ventilated, the air becomes stale and unpleasant and pollutants and toxicants start to accumulate. With our plans for a super-insulated and air tight building envelope, indoor air quality (IAQ) and proper ventilation becomes very important.

I was hoping for passive ventilation option to avoid ventilation duct work in the building. It would be difficult to integrate into the interior architecture without having it look ridiculous. I pressed the green team hard on passive ventilation, but had to concede that some duct work will be needed if we would like to use a heat recovery or energy recovery ventilator (ERV or HRV).

Basically, ERV and HRV are air-to-air heat exchangers, taking the energy from the exhaust air and transferring it to the unconditioned supply air. I now get the fresh air I need for ventilation at minimized energy loss. The tradeoff is that I need to have the supply and exhaust points at opposite ends of each floor. The green team’s recommendation was to consider lowering the ceiling by 6 inches (from 10 feet down to 9 ½ feet) and using the flat, rectangular ducts. Although cylindrical ducts would create less drag on the air flow, we’re making the esthetic choice to trade some flow for the ability to fit the duct work into the ceiling.

Floor plan layout

My idea was that after we had brainstormed and decided on heating and ventilation, we could look at the floor plan to determine what utilities should go where. Well, I had to table this discussion. The problem was that our MEP (Mechanical-Electrical-Plumbing) contact was a no show for the workshop. We had no one who had the engineering expertise to confirm the feasibility of our ideas or where to place and how to route utilities. Instead my research list grew and was to keep me busy for the next few weeks.

A big thank you…

… to our workshop green team:

Howard Allen – Howard Allen Architects
John Edel – Chicago Sustainable Manufacturing Center
Ted Krasnesky – Pepper Construction
David Lemaire – Hammerhead Carpentry, Inc.
Corbett Lundsford – Dream Green Group LLC
Drew Schmidt – student at Waubonsee Community College
Mark Weitekamper – GreenWerks, Inc.
Ryan Wilson – Conservation Design Forum, Inc.

Tags: cost, economics, health, indoor air quality (IAQ), insulation, systems, utilities
Posted in design | No Comments »

A trashy decision

Wednesday, July 29th, 2009
Written by Marcus de la fleur

I have this major battle going between diligently separating my construction and demolition (C&D) waste (see also 07/12/2009 post), or to give in and start comingling it like everybody else does and have it recycled later (see also 07/17/2009 and 07/25/2009 post).

When asking around to why we (in Chicagoland) don’t separate our C&D waste, the predominant opinion is that the contractors don’t want to deal with it. Hello! Any contractor out there who disagrees? I’d like to hear from you!

I do know that contractors on out-of-state projects do separate their materials on site and that it does work well (see also 07/17/2009 post). And think about it. These are smart people who have to schedule, organize and coordinate complex construction operations. This takes a lot of skill and assuming that they can’t handle a simple task such as C&D waste separation seems – let’s say, unreasonable.

So, what do I do with my C&D waste and where do I go from here with all I recently learned? I will stick to my guns and continue with the separation process I started (see also 07/12/2009 post), because the effort is not in vain. I went over the logistics with my waste hauler (Kevin from WasteBox, Inc.) and determined that we create some efficiency after all.

I understand from my conversations with him that I am somewhat an exception. Not all customers are as diligent (or nerdy) with their separating of materials, and so Kevin must sort through the Dumpster loads and recycle in his yard. He has visited and seen my operation (and obsession) and has the confidence that I don’t mix or hide materials in the bottom of a container.

When I have a clean, single material load, such as drywall and plaster only, Kevin can transport the material directly to a transfer station without going sieving through the materials searching for recyclables. A load of “clean” wood that I collected, such as all the wood lath, can go directly to a wood recycling facility, eliminating the double handling of materials and reducing the cost for that Dumpster load.

: filling the Dumpster with clean wood

: filling the Dumpster with clean wood

: filling the Dumpster with clean wood

: filling the Dumpster with clean wood

Why should I throw metals or old electrical cables into the bin, if I can put them into the back of my truck, bring them to a metal scrap yard and even get a few bucks for it? And why on earth should I give up the feel-good factor, all the fun and sense of accomplishment I get from my construction waste management adventures? I’ll keep separating.

Tags: construction waste management, cost, recycling
Posted in deconstruction, project rationales | No Comments »

Interpreting ball park estimates

Saturday, May 16th, 2009
Written by Marcus de la fleur

First, let’s look at some basic project budget principles: The total loan amount cannot exceed the projected appraised value of the property, once the renovations are complete. That appraisal takes into account all of our planned improvements to the house (see also 04/12/2009 post) and came in at $280,000.

If we subtract the purchasing price of $60,000, we are left with $220,000, which is the maximum amount that our bank (ShoreBank) would lend us for the green rehab.

Cathy and I feel that $220,000 for the rehab is more than we want to take on right now. We went through our personal finances with a fine tooth comb, looked at various mortgage scenarios, estimated monthly payments, and decided that we can manage a rehab loan amount of $160,000 right now.

This $160,000 is one piece of the puzzle. I now have to get the other piece – what that $160,000 is actually buying us. We have a number of ball park estimates from contractors and vendors (see also 05/13/2009 post), which are all very conservative, because of the limited information I could provide at the time I requested the information.

How would I know that these estimates are conservative? By talking to friends, industry contacts and other homeowners who actually had, for example, a base board heating system installed. Their project may be different from ours, but the aggregate pricing information gives us the clues.

In short, our project budget (see also: 3141 ball park project budget) is based our interpretation of the conservative estimates we received. It is a product of our combined guesstimates, leaving a lot of questions unanswered, such as how the work we plan to complete ourselves impacts the budget.

We hope to completely rehab the basement and 1st floor for the $160,000. What can we really get for that money? Your guess is as good as ours, and you can witness this unfolding over the next few months on this blog.

Tags: cost, economics, green rehab, mortgage, research
Posted in financing | No Comments »

Cost shock management – developing a budget

Wednesday, May 13th, 2009
Written by Marcus de la fleur

In order to develop a somewhat reliable project budget, we need a real property, which we now have (finally). I mentioned in the 04/12/2009 post our efforts to put a rehab budget together. Let’s look at this process in some more detail.

Fact: Our total loan amount for the sustainable project includes the purchase price of the property plus the money for the green rehab.
To pursue any meaningful budget exercise, we needed a basic plan for our green rehab ideas. Our project principles and rationales provided that framework.
We shared this information with vendors and contractors and arranged for meetings at the property to discuss the project, its various components and the associated work in more detail.
After we shared this basic information with vendors and contractors, we solicited initial ballpark estimates. These estimates became the foundation for our rehab budget.

The tricky part in all this is that we have no final design or engineering. In other words, some of our assumptions may have to change down the road. Those are the same assumptions on which the contractors and vendors based their estimates, which we in turn used to as the foundation for the budget development. Sounds like a house of cards, doesn’t it?

Why would some assumptions change? Well, this is an old house, and we don’t have a full inventory of the building. Electrical, plumbing and heating will most likely need to be completely rebuilt. But we can’t look into the walls to see what other problems, if any, are lurking there waiting to be discovered – such as structural damage (God forbid).

I owe an apology to all vendors and contractors that were kind enough to issue their estimates. I did to them what I do not like having done to myself in my capacity as a landscape architect. And that is to answer the question of “what does the project cost,” based on very little research and very vague parameters. You typically can’t win in these situations, and risk an unhappy client because the budget will change with every piece of new information that rolls in.

The contractors and vendors have my sympathy and my gratitude for working with the limited information I had at the time. The exercise wasn’t fruitless because we got to meet and talk about the project. The vendors and contractors extracted more details on our plans and expectations, while we were able to evaluate a potential working relationship.

I don’t plan to hold the vendors and contractors to their estimates, but use the numbers to the development of the initial project budget – something that I still need to complete.

Tags: budget, cost, economics, green rehab, mortgage, research
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