In Ontario: energy savings to bump up house prices as new homes must meet efficiency code: estimates in $5,900 to $12,000 range
Ontario has just announced stringent energy efficiency targets for new homes leading to quite a reaction from the construction industry. Interesting that consumers are not surveyed as to whether they see value in energy efficiency and are willing to pay. All indications are that a significant proportion of home buyers seek higher standards of building performance and will pay more. More from the Toronto Star below:
New homes will be increasingly expensive with the provincial government's newly unveiled energy efficiency standards, Ontario developers warn.
The cost to build the average home could climb by $12,000 when the program is fully implemented by the beginning of 2012, causing an affordability crunch for consumers, while at the same time causing a major upheaval in the industry as builders scramble to meet the new standards, the organization representing home builders in the province says.
"That's quite a chunk of money for the average home buyer," Ontario Home Builders' Association president Victor Fiume said in an interview yesterday.
"It represents a fundamental shift for the industry."
Yesterday, Ontario unveiled the country's toughest energy efficiency standards for a building code, meaning new dwellings must be 35 per cent more efficient by the start of 2012.
"I am very excited about this and I am confident that the building industry will rise to the challenge and be able to meet these standards," Municipal Affairs and Housing Minister John Gerretsen said in an interview.
"Ultimately this is not just good for the consumer in terms of energy savings, but it is good for the future of the province as well."
But builders say the legislation comes at a difficult time for the industry, which is fighting a labour shortage and surging construction costs as the price of commodities rises dramatically.
Meanwhile, higher interest rates further threaten to dampen affordability.
"While we're excited at the opportunity to move the yardstick in terms of conservation, we also don't want to kill the shining star of the Ontario economy," Fiume said.
The new regulations mean that at a time when home building is going ull tilt, most of the trades will have to be re-trained on the new standards.
"This is going to take a lot of work and co-ordination," Fiume said. "This is like telling the automotive industry to become 35 per cent more fuel efficient in six years."
Under the new regulations, which have more than 700 changes, ceiling insulation levels will be increased by 29 per cent, basement insulation by 50 per cent and windows will be 67 per cent more efficient. Gas and propane furnaces must also be 90 per cent efficient, up from the 78 per cent requirement.
One large issue for builders is in the provincial estimates of building costs.
In yesterday's statement, the province said it will take anywhere from $5,900 to $6,600 to make a home 35 per cent more efficient and up to EnerGuide 80 standards by January 2012.
The industry said it will cost up to double that, anywhere from $10,000 to $15,000, with the average home coming in at $12,000.
"We basically think these guys don't know what they're talking about," said David Henderson, director of industry relations for the builders' group.
Building a home to EnerGuide 80 standards is roughly equivalent to building an R-2000 home, the Cadillac of energy standards, Henderson said.
Of 75,000 homes built in Ontario last year, fewer than 70 were R-2000 built because of the work involved, Henderson said. "We're nervous, because we don't know if we can build this on a mass scale."
Gerretsen said he feels that builders can meet the 2012 deadline.
"I understand we have to be fair to the building industry, and it is one of our most important industries, so we will certainly be supporting them in any way we can," he said.
Fiume, who is the general manager of Durham Homes, is currently building 20 houses in Oshawa based on EnerGuide standards, but which are below the rigorous rules of the 2012 building code.
Those houses currently cost about $4,500 more to build.
