News from the front desk, issue 460: With so much bad and shady news around, it’s pretty good being on the side of an editorial desk that gets a steady stream of fabulous stories about heroes, innovators and pioneers to highlight to our readers.
First this week came Willow’s story on an amazing builder at Wodonga who wonders what all the fuss is about in delivering highly sustainable houses.
In one development, where about 100 home owners have added solar, the energy bills are zero. In the others, the quality of the houses is so good that the energy bills are just $2.50 a day so this lot of owners have decided they don’t need solar.
This builder, Brendon Collins of Lightwood Constructions, who’s won an Order of Australia for his work, has taken 10 houses to 10 star ratings under the Victorian government’s Residential Efficiency Scorecard, and he thinks he’s probably the first builder in the state to do so.
What’s more interesting though is that he says it wasn’t all that hard to achieve 10 stars because he was already working to a high standard.
Collins has been tweaking the product for a long time, paying attention to high quality walls and windows and more recently he’s been blower door testing.
He thinks he can push further, especially with air tightness. Done correctly, he reckons it could halve the energy use in Australia.
“It’s not complicated… it’s just a matter of how you educate everybody,” he says.
Down further south at Castlemaine, about an hour and a half north west of Melbourne, former Victorian premier Steve Bracks has promised to next Thursday launch the first stage of another fantastic development.
This is a fully fledged eco village called The Paddock and it’s being developed by two people who’ve never done such a thing before. The closest Neil Barrett, a former former economist and educational film maker and his wife Heather, have come to development is to commission a house for themselves.
Yet here they are, about to enjoy the pleasure of officially launching the now fully sold first stage of seven houses of this project with another three stages to go, taking the total to 27 houses.
Part of the package is community building, half a hectare of gardens, an orchard, a chook pen, tanks for each house to deal with the arid environment and a commitment to use vast quantities of recycled materials.
To top it all off they’re trying to get the whole thing certified by the Living Building Challenge standard. Probably the toughest sustainability gig in town.
You know this because there are just a few handful of such LBC buildings in Australia. One is at the University of Wollongong, another underway at Frasers Brickworks site at Burwood in Melbourne and there’s a house in Toorak designed by architect John Wardle and another nearby in Castlemaine.
But though there are undoubted stories of getting the sustainability to work, educating the builders the getting the various consultants to pitch into what must be new for many of them, we were more interested in the financial side of this story.
What were the banks like? How did the market respond and what were the prices achieved?
We caught up with Barrett while he was on a bike ride in Melbourne and he generously interrupted his ride to share the story.
He sounded a tad tired and we’re not sure that was all due to the peddling.
Dealing with the banks was probably the toughest part of this ambitious project, it seems.
The first bank the couple dealt with, the one that they’d been with for years and with which they’d had an excellent record, simply failed them.
“The ended up leading us on for six month while we were spending $100,000 to $200,000 a month, and then said they were not going to fund it,” Barrett said. We’re not going to tell you which bank that was.
Barrett warns anyone contemplating a similar move to beware of the banks.
“Don’t take your bank for granted. We had a great record with a bank for years and years and they totally let us down despite our good track record.”
The next bank, NAB, was better.
NAB was “just more enlightened to deal with”.
The first bank had “no prior experience of sustainability. They took a long time. We started spending money in 2018 and we got funding at the start of 2019 and by that time we’d spent $1 million.”
Here’s the harsh reality: that’s the kind of money it takes before you even get to construction stage.
To pay for “all the preparations to get council permits, including preliminary works, building a road, the cost of bringing down 100 big trees we’d planted years before –you don’t do a development like this without some environmental cost; we’re now planting more trees than we’ve taken down.”
All up there were about 20 consultants: so much money to spend before you can get anywhere near building your first house.
And no, there was no help from the banks for that first expenditure. “The banks don’t fund that; they don’t pay for a project manager and they don’t pay for consultants.
They only fund construction, something they can “sell if it all falls over.”
Now, with the first stage sold and its owners already moved in, there’s a chance the bank might look more kindly on the next three stages because they’ll have more confidence in the project, Barrett says. “They can see what’s been achieved.”
Will the couple make a profit?
Well, the banks insist that they do.
“We haven’t done it to make money but to get bank approval you have to show you can earn a healthy return on investment.”
So that’s the plan. But costs have escalated beyond what Barrett expected. He won’t go into detail but they involve consultants fees, some changes to the plans, a mistake or two.
To counter this, he says, you can fine-tune things, perhaps put prices up a bit or make some of the houses, bigger or smaller.
The banks were tough, he says, because they wanted sales off the plan before committing to funding the project.
“If you can fund them yourself outside of the banks, then do so.”
NAB at the start wanted to see “everything sold before funding it.
“Now we’re entering into negotiations with them for the next stage, we have a lot more credibility. We’ve got a former premier launching the project.”
Buyers are flaky
Another tough element was the flakiness of buyers and good intentions.
The couple had “over 650 expressions of interest on our website since 2017”, Barrett says.
But when it came time to put a hand in the pocket those good intentions seemed to evaporate.
“I’m amazed at how so many people say they have a nine out of 10 or 10 out of 10 interest, but it doesn’t last long. It’s just modern life, really.”
A local advising agent warned it was “pretty pointless” trying to secure a sale until there is a contract to put in the hands of people. Barrett agrees now the agent is right.
“It’s very hard to get real commitment until you have a contract in front of the buyer.”
So are the prices above normal?
That’s pretty much impossible to say, Barrett says, when you take account of what buyers get: a share of a community building, a half hectare of vegetable gardens, chook pens, an orchard and wicking beds.
Not to mention a ready made community.
“People place different values on that.
“We hope that will eventually make some sort of conventional return – that’s what we hope.”
So far prices achieved are in the high $500s depending on the number of bedrooms, but the second stage will probably achieve 15 per cent higher than the first.
A couple of factors are driving the higher prices. First because the couple were unsure of market acceptance in stage one so kept them low. Next is that costs have escalated, “well beyond what I thought”, Barrett says.
He expects stage two will sell for between the “high $600s for the three bedroom houses to mid to high $700s for the four bedrooms”.
The project started from an idealistic perspective. The couple had moved to the site 25 years ago and always planned to develop surplus land, in the meantime becoming strongly involved in sustainability and renewable energy.
“My wife was involved in setting up the first sustainability group in regional in Castlemaine and we’re also been involved in a lot of bulk solar work.”
The project he says was to demonstrate people could live well in a “very low emissions lifestyle”.
And the houses work.
During the recent heatwave when the temperatures were 35 degrees Centigrade it was 24-25 inside the 8 star NatHERS homes.
Key components of that include “lots of recycled bricks, double brick walls between the houses, double glazed windows, double glazing and insulation underfloor and in walls, as well as ceilings.
External cladding is cypress pine. “The insulation is really very strong and it’s a good design for airflow”.
For the builder there were a lot of “tricky things”. Among them, the exclusion of a wide range of commonly used but toxic materials and chemicals, and “very high” recycled content.
“We used the local salvage place a lot and all the floors came from a secondary college in Frankston.”
The builder studied the concept before getting involved and attended a workshop in the US.
In 12 months, when the LBC checks out the project to see if it meets its criteria, Barrett and his wife – and the entire team, to be fair – will know whether all this additional effort was not only worth it, but recognised in one of the most difficult and ambitious sustainability standards in the world.