Energy Logic co-founder and CEO Steve Byers joins Green Builder Media CEO Sara Gutterman to explain why price per square foot is a broken way to value a home, and how energy, water and resilience data could push the market toward total cost of ownership.
00:00:05:15 - 00:00:40:19
Sara Gutterman: Welcome to The Valuation Metric, a podcast about risks, rewards, roadblocks and revelations reshaping the way that we measure work. I'm your host, Sara Gutman, CEO of Green Builder Media, North America's leading media company focused on green building and sustainable living. In this podcast, we've established that across our economy and our culture, we're really measuring the wrong things. We have this economy that really values a zero sum game and scarcity over abundance, and that's really caused our affordability crisis.
00:00:40:23 - 00:01:21:17
Sara Gutterman: In a world driven by speed and scale and quarterly returns, the metrics that we rely on capture price, but not necessarily purpose efficiency, but not necessarily resilience footprint, but not necessarily well-being. Today, we're speaking with someone who has spent more than two decades helping the building industry rethink what we count, how we measure, and what we value. Steve Byers is the co-founder and CEO of Energy Logic, a firm that is at the forefront of energy rating building performance and the push towards efficient, healthy and resilient homes.
00:01:21:20 - 00:01:38:00
Sara Gutterman: Under Steve's leadership, Energy Logic has worked on tens of thousands of projects and partners with builders, raiders and policymakers to elevate the standards of what good housing actually means. Steve, welcome to the show.
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Steve Byers: I'm so glad to be here. So nice to see you.
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Sara Gutterman: Absolutely lovely to see you as well. Steve, you started your career in the Air Force, went into building science and ultimately co-founded Energy Logic in 2006. Can you talk a little bit about that journey, and what first drew you to the idea that the way we measure energy and buildings actually matters?
00:02:01:22 - 00:02:26:19
Steve Byers: Yeah. Well, sort of, in its rooted in my experience in the Air Force and having been in Desert Storm and seeing really, really firsthand the connection between conflict and energy dependance. And while that was about all and it's still about all in a different context, you know, we're making choices every day about what we want to be dependent on.
00:02:26:21 - 00:02:53:21
Steve Byers: We want to be dependent on fossil fuels, but they're hidden external costs. Or do we want to be have a thoughtful mix of fossils where we need them and renewables where possible, and the buildings and the built environment. And getting them right means we have to do less and invest less in energy capacity. And of course, there's all the other things that we get from building, right, better health for the people who live in the buildings.
00:02:53:22 - 00:02:59:04
Steve Byers: Right. More resilience, you know, the hope of housing goodness.
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Sara Gutterman: So what did you see as the main white space? We'll call it early on during that revelation in the Air Force that helped you understand that the industry was missing something foundational.
00:03:13:03 - 00:03:27:24
Steve Byers: Yeah. Well, that kind of course I didn't know. You know, I was flying an airplane, so I didn't really know anything about this industry. And it took me a while to stumble my way, frankly, into it. And then, you know, I just feel super lucky that, you know, I did. You know, I just had no idea it existed.
00:03:27:24 - 00:03:55:24
Steve Byers: And, you know, frankly, after I stopped flying airplanes, I had no idea what the hell I was going to do with my life. And I just kind of stumbled into South Space Institute. I was it was Southeast Energy and back then and and really found my found my people, you know, and had some great mentors there. Dennis Creech, Jeff Tiller, you know, just icons of the industry who taught me so much from how they run blower door literally, you know, to, you know, how to think about the company.
00:03:55:25 - 00:04:14:27
Steve Byers: And I was on a lot. And in that journey there took me from South Face to Colorado, you know, coming here, you know, because my wife wanted to get back to family, which was great and really glad that happened, you know, and then, you know, the establishment of a company which was sort of like not something I ever really intended to do.
00:04:14:27 - 00:04:44:03
Steve Byers: But here I am. And that's been a really long, strange trip to. And so then, you know, in that context then like starting to see, oh, you know, you know, as readers, you know, we're seeing what we do, you know, is not really being, you know, what we do and what we do for builders is not being valued in a very rational way, is seeing that the works that builders are doing to be better than the average bear is just it's not being valued at all in most cases.
00:04:44:04 - 00:05:19:16
Steve Byers: And and it's really kind of exponentially more true for the builders that go even further and try, really try hard to do it. Right. So they're in a sense because it's invisible to the market. They're penalized, frankly, you know, for for doing the right thing. You know. So most of the after, you know, the that we do and that these are fantastic builder partners do is just getting lost in the noise of a trans I the transaction and the entrenched systems and measures that that we use today to signal value to buyers that are just not getting the whole picture.
00:05:19:19 - 00:05:49:27
Sara Gutterman: So, Steve, you basically outlined the whole premise of this podcast in terms of the fact that one builders get penalized for building high performance, healthy, resilient homes in this model of price per square foot valuation because it's a broken model. Just very quickly, for our listeners who don't know, South Face, it was one of the odds of green building coming up with one of the first green building programs in the Atlanta area, and it's still today a wonderful organization.
00:05:49:29 - 00:06:17:27
Sara Gutterman: But, Steve, I want to go back to the circuitous journey of starting a business because I can relate. Founding Green Builder Media 21 years ago I remember way back then we could talk about energy efficiency and building science and cost savings from energy efficiency and building science. If anyone really would listen to us. Fast forward to today. Fortunately, we're now able to have a much more robust discussion about things like value per square foot and decarbonization.
00:06:17:29 - 00:06:46:20
Sara Gutterman: But still, I think that, you know, energy efficiency, building science and cost savings from those two things is a core tenet of this conversation that is not only foundational and incredibly important, but is still the hook to get many builders and related stakeholders engaged in this discussion. But over the decades, energy logic has helped not just create systems for energy rating, but a culture of performance measurement.
00:06:46:20 - 00:07:10:03
Sara Gutterman: And I think that that's been not only vanguard in our industry, but incredibly important in shaping the narrative. So now a little bit about what those early days looked like when you were trying to convince builders and Herz raters and others to care about energy performance, and then that's forward to today and compare it with your opportunities as well as your struggles?
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Steve Byers: Yeah.
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Sara Gutterman: Now.
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Steve Byers: Yeah. So out there, you know, literally knocking on doors and, you know, begging people to to entertain the idea of this new thing that, you know, there was no incentive for. There was no there was this program, the program existed. Yes, we could do an energy rating, but it's brand new and nobody knew what it was. And so, you know, we're pretty quickly realized that we really had to pitch it around quality assurance and quality control, you know, and that's, you know, that's still true.
00:07:46:06 - 00:08:08:14
Steve Byers: You know that. And there's nothing wrong with that. You know, the I think one thing that people, you know, the layperson misses a little bit about what we do is that, you know, builders build houses and and, you know, that's what they do and what they want to do. And, you know, code inspectors inspect like, you know, life safety and, and structure and things like that.
00:08:08:14 - 00:08:38:21
Steve Byers: And that's really important. And then what we do is that is missing, you know, by and large, you know, inspecting for performance, for comfort, for energy, all the stuff that's both in the front and in the, in the, in the background of doing energy ratings, you know, so, so really that hasn't changed. You know, gosh. Yeah. There's been ebbs and flows of programs and incentives and and you know, you know that's just a that's a little bit the nature of building.
00:08:38:22 - 00:09:03:28
Steve Byers: Right. You know it's not quite the boom bust that, you know, the industry is, but you know, it's it is, you know, it's got subs and downs and we're certainly in a down at the moment. But you know, all of it. You know what really matters to the entire history of it. And it's funny you just you mentioned like tens of thousands and just last week realized, oh we've done 100,100.
00:09:03:29 - 00:09:17:18
Steve Byers: We touched 100,000 homes, 100,000 ratings because some of those are code, you know, code inspections. But yeah, we just crossed 100,000 thresholds. Kind of cool.
00:09:17:20 - 00:09:44:26
Steve Byers: Thank you. Yeah, pretty pretty cool. Our 20 year anniversary and 100,000 units tested. So you know, but all of that means that the the score matters. And what's behind the score has to be defensible and be trusted. You know. And that's what, you know, doing the right thing as a companies or a company. That's why that matters. You know, it all points back to doing quality work and making sure the builder is doing quality work.
00:09:44:26 - 00:09:56:14
Steve Byers: And then we're confirming, you know, that's our job. Confirm it, quantify it. And, you know, as we always like to say, because this thing for people to really get, you know, putting that miles per gallon stick around the home.
00:09:56:18 - 00:10:07:02
Sara Gutterman: So to that end, in your view, what is the industry gotten right and where has it missed the mark in terms of how we're measuring and valuing buildings?
00:10:07:04 - 00:10:33:00
Steve Byers: Well, you know, I think I think we've gotten it right most of the way. And I think it's got to be taken in context in any given moment. You're talking about a brand new industry effectively 20, 20, 25 years ago it was brand new. And so there were yeah. Were there mistakes made sure. Were there things to learn along the way about the right way to do things and what was not necessarily the right way?
00:10:33:02 - 00:10:59:22
Steve Byers: Absolutely. You know, you know, where we are as a today is not a place we could have led builders to in the past as well. You know, this was Raiders and others going along and sustainability, other sustainability folk moving in this arc to better and better performance and builders obviously going along with this leading in some cases and in some cases maybe being led, you know, to to where we are today.
00:10:59:23 - 00:11:23:08
Steve Byers: You know, it wasn't like we could have just, you know, beamed ourselves into, you know, from, you know, 2000 to, you know, beamed ourselves into 20, 26. You know, that's not the way things work. So, you know what? I think we've all known this been missing, you know, in a sense. And frustrating has been, you know, this a single valence metric, you know, just energy.
00:11:23:08 - 00:11:40:25
Steve Byers: And I'll just like said, the quality behind it. Yeah. But you know, we have all this other stuff now that we didn't necessarily have that we we have energy. Yes, of course. And it's always going to be something we lead with. But we can talk, you know, intelligently and quantifiable about indoor air. We can do that about water.
00:11:40:25 - 00:12:12:25
Steve Byers: We can do it about sustainability. We can do in some sense about resilience. You know, we've we've got the programs to assess all those things and independently. Yes. But you know, with some overlap, which is fine. You know, that. You know, it puts a burden of figuring it out, though, right now, kind of on the home buyer with the builder trying to convey the value of bunch of labels to a buyer who's almost certainly overwhelmed at the moment of thinking about a gigantic purchase like home.
00:12:12:26 - 00:12:35:07
Steve Byers: So, you know, I think I think that's, you know, that's where I, you know, I think we've made we've done well along, made mistakes, learn from our mistakes, moved on, you know. And that goes for readers, rating companies, ResNet, EPA, Doe, everybody. No, no, it's taken it's taken a village of the people that get us from there to here.
00:12:35:07 - 00:13:25:11
Sara Gutterman: So I think moving forward, one of our biggest opportunities is to do a better job of relaying those messages that you mention, whether that's around value or indoor air quality, health and wellness. Certainly resiliency, which is becoming more and more important to homeowners of all kinds in all types of housing types and units. With that said, I don't know that we collectively have done a great job of relaying the connection between what a house should actually provide to a home buyer and a homeowner just beyond the lowest price per square foot.
00:13:25:14 - 00:13:59:08
Sara Gutterman: But as we know, when we shift to measuring and valuing different things, whether it is energy, performance or health and wellness or resiliency, we we end up with a totally different value proposition for homeowners and home buyers. So in your opinion, Steve, how do we do a better job of engaging the home owners and home buyers about what they should even be asking, what they should expect, and the fact that a house is the cheapest per square foot, meaning just barely legal to code.
00:13:59:09 - 00:14:11:28
Sara Gutterman: It's actually not something that's going to benefit them from any of the performance aspects we mentioned, or even in terms of long term generational wealth creation.
00:14:12:00 - 00:14:43:09
Steve Byers: Yeah. So I mean, obviously, you know, some of these answers and questions are continuations from the ones before, but, you know, the entire, you know, economic ecosystem for home buying is, you know, is wholly, maniacally focused, as you know, on first cost. Right. And kind of understandably, because that's what's easy. Right? And it's, it's easy to say, well, this many feet, this many dollars.
00:14:43:10 - 00:15:12:01
Steve Byers: It's easy and dare I say, possibly lazy. You know, we don't buy almost anything else that way. You know, besides the commodities, right? Gold and aluminum and steel are bought that way. That makes sense. That's not even really true for for steel and aluminum, but you know. But. You know, this is a house we're talking about and a home is really it's not a commodity.
00:15:12:02 - 00:15:27:11
Steve Byers: Right. At least I don't think so. And I don't think most people, you know, see it that way. So if it's not a commodity, then what are the things should we be evaluating that purchase on. You know, what are their metrics. Right. You know, some things are right here, right now. Like you said. You know, the Herz index.
00:15:27:11 - 00:15:58:25
Steve Byers: It's it's right there. It's successful to everybody who builds a home. Right. And we've got the tools to to relay the value information on indoor air. And what a huge driver of occupant health is. You know, as far as water, we have the water sense program. And, you know, a lot of places, as you and I talked about in the past, like we're at least where I live here, water can dwarf, you know, the cost of energy, you know, in a given in a home.
00:15:58:27 - 00:16:15:16
Steve Byers: Right. And before we started, I was saying to Sara, like, here we were in the middle of February and I've got my sprinklers running in Colorado. And this is something that in 30 years I've never done, I've never turned the sprinkler system on in the middle of February because it would freeze. And guess what? It's not freezing now.
00:16:15:18 - 00:16:36:00
Steve Byers: You know, that's a bit of an aside, but we've got all the tools to, to, to do these things. There's more. There's other stuff like we mentioned resilience, you know, resilience to storms and weather events and power outages. And we're seeing, you know, that be a rising concern for people. And how do we measure all those things and relay that value information buyers.
00:16:36:00 - 00:16:52:23
Steve Byers: And it's just it's far from impossible. It's more about the will and the drive to change, you know, even to disrupt the status quo of how we value homes and how we relate or state the value of a home.
00:16:52:26 - 00:17:26:22
Sara Gutterman: And like to go back to something that you said in the beginning of our conversation, which is very poignant, which is, for all practical purposes, builders get penalized for building high performance, healthy, resilient homes because those aren't always necessarily the lowest upfront cost homes. But they certainly when you look at full value of homeownership, total cost of homeownership, monthly utility bills, lower insurance premiums, net net, they end up being better economically for homeowners.
00:17:26:22 - 00:17:51:17
Sara Gutterman: They hold their value. They have a better resale value, the shell faster, all these various benefits. But in that price per square foot silo where shoppers, home buyers who don't really know those questions to ask as we spoke about, are going house to house and saying, oh well, I can get 500ft² more for this home for the same price than this other home, because they don't know.
00:17:51:17 - 00:18:21:05
Sara Gutterman: They don't understand the value proposition. Talk a little bit about that process of penalization and how we how we can move beyond that. And what's the difference between the builders that you work with that are really committed to building those high performance, healthy, resilient homes versus those that are just building to lowest upfront cost? How do you differentiate those?
00:18:21:07 - 00:18:51:03
Steve Byers: Well, it's a great question. And it's really it's really hard. And you know, I can just in some ways I could just relay, you know, the challenges that are happening right now around that, you know, which is a little bit different than the question you're asking. I'll try to get there. But, you know, even our, you know, frankly, even our very most committed builders right now are having to really, you know, do a lot of value engineering around everything, everything they're doing.
00:18:51:03 - 00:19:20:16
Steve Byers: And that unfortunately includes programs that, you know, and that they're, that they've been fully committed to because the programs, you know, they're the programs are are basically free. Yes. But complying with them and doing the things you have to do in a home to make it higher performance. So you know that, you know, you show program compliance and you hit the target for whatever the program is, whether it's Energy Star or, you know, net zero.
00:19:20:19 - 00:19:48:23
Steve Byers: You know, those things don't come free. And and because we, we don't have great tools for showing the value driving that into the market, our builders are compelled to cut these things out in a time like we have right now. And and I truly believe that that's kind of deeply unfortunate and ironic because, you know, the affordable housing affordability crisis has got a lot.
00:19:48:24 - 00:20:09:24
Steve Byers: I mean, that's, you know, that's Pandora's box. And I realize that. But but when you and you said that, you said a piece of it, it's something I really wish people would really focus on more, which is total cost of ownership. You know, again, that's a whole nother piece of the puzzle here. But, you know, when you when you look at housing affordability is a real challenge.
00:20:09:24 - 00:20:32:03
Steve Byers: And the things that are committed builders do to make that actually better from a cost of ownership perspective, have to be pulled out of of homes because people can't see it, they can't value it and they can't see it. But prisoners don't give any credit for this. And, you know, that's not really knock on appraisers so much is the system that they operate inside.
00:20:32:09 - 00:20:57:04
Steve Byers: You know. So you know, that's you know, those are the struggles that that they're having that we're getting called in to talk to them constantly about, you know, we have got to cut amount out of our homes. Where do we go or can we cut, you know, and they're not just saying cut, cut, cut blindly. This is why we're sitting at the table right there saying, how can we what can we cut and keep the height?
00:20:57:05 - 00:21:09:08
Steve Byers: They're balancing cost and performance, and that's completely rational for them to do when they can't get paid for the performance of the home.
00:21:09:11 - 00:22:02:28
Sara Gutterman: So you are really pointing to, I think, the crux of the issue here, which is when builders are forced to assume the burden of solving for the affordability crisis, really the only and best way that they know how to do that is to cut costs for every square foot that they build. However, if we can share that burden and distribute it to other stakeholders, you mentioned appraisers and lenders and insurers and again, other stakeholders who can assume some of that burden, you know, utilities who are providing like where you are in the Front Range in Colorado, Xcel Energy is providing $20,000 for builders to build all electric homes.
00:22:03:01 - 00:22:45:25
Sara Gutterman: And, you know, I know that there have been headwinds at a federal level with respect to rebates and incentives for everything from high performance HVAC, heat pump systems, etc. and solar. We've seen the sun setting of those incentives over the course of the past year, but I think that there's enough activity and potential opportunity at the state municipal utility level where if we just get the right stakeholders together and have them, you know, engage in the right conversations, we can shift some of that burden so that we're not just cutting, cutting, cutting first.
00:22:45:26 - 00:22:48:20
Sara Gutterman: Do you agree with that pieces?
00:22:48:22 - 00:23:09:27
Steve Byers: I do, and I also want to say it's like we're not asking for a free lunch. We're just asking to to level the playing field and showing the things that are going to reduce the operational costs and, and give other benefits that are harder to quantify. I recognize that, but energy and water yourself are not hard to quantify, you know?
00:23:09:29 - 00:23:31:24
Steve Byers: So it's like, can we get can we like, put them on a level playing field with dollars per square foot? Again, we know that why that exists. But can we again, we're not asking for freebies and the incentives are great. But ascendance are meant to to push a market. They're meant to, you know, get the first adopters going and, and so that other people will follow in their way.
00:23:31:26 - 00:23:49:07
Steve Byers: That's good. What good program design is. But, you know, I really do believe that if we could do what, you know, you and I are trying to like, you know, cheerlead here that the incentives become so much less important. You know, we just don't even need them in a sense. Right? Yeah.
00:23:49:12 - 00:23:53:02
Sara Gutterman: What are the most important steps in that process?
00:23:53:05 - 00:23:54:22
Steve Byers: I'm sorry. In which process?
00:23:55:00 - 00:24:21:16
Sara Gutterman: Just in shifting this whole evaluation metric, you know, let's say from price square foot to value per square foot and engaging the right stakeholders, who are those stakeholders? What are, in your opinion, what are the top 2 or 3 things that builders need to do or building professionals need to do, and also that consumers need to do in order to pull this this concept through to normalize it.
00:24:21:18 - 00:24:42:07
Steve Byers: Yeah. Well, I'm just to talk to I, you know, the homebuilders themselves, you know, are certainly, you know, the number one stakeholder. And that's not to say like oh they should bear the all the burden there are. That's what they're doing today is bearing all the burden of trying to to make things happen, you know, get the value back from what they're doing.
00:24:42:13 - 00:25:15:28
Steve Byers: But they need to be, you know, they need to be committed to to talking about it. And, you know, I'm not convinced that a lot of builders, salespeople are, you know, thinking about these things. Second, and more importantly, to move past the builders, like, you know, the appraisal community, we really need them to start to, to do what they can do to, to help, you know, to recognize the difference in value between a home that's got, you know, going to spend 20%, 25% even more potentially on utility costs and water costs versus a home.
00:25:15:28 - 00:25:37:27
Steve Byers: It's not, and that's to say nothing of, you know, the impact on, on, on health, occupant health or air, all the other stuff that she's harder to quantify. But we're getting nothing for these things. We're not even getting anything are the things that are super easy to quantify. So appraisers, for sure, you know, realtors are probably part of the discussion then to, you know, realtors salespeople.
00:25:37:27 - 00:26:09:23
Steve Byers: So it depends on the builder and their structure for, you know, you know, who's involved there. I understand that, you know, the jurisdiction is holding, you know, the jurisdictions, authorities, towns, cities, counties, whatever they might be, you know, can certainly be part of the messaging. There's a lot of things that I think can be done, you know, to to incentivize and a really minimal level builders that are doing above and beyond to work.
00:26:09:26 - 00:26:31:01
Steve Byers: And, you know, I'm, you know, I'm kind of making water a little bit of my hobby horse here. But I think there's some real opportunities with water jurisdictions because the, the upfront costs, you know, granted, you know, for each Colorado. So I mean our, our upfront costs for cafes and raw water are eye watering. Just no pun intended.
00:26:31:03 - 00:26:50:04
Steve Byers: Yeah. There's they're huge and and you know, if we can use a program like water Sense and show quantifiable, verifiable, data driven reductions in water use, shouldn't the builders get something for that? You know, in the grand scheme of things. So those are the those are my those are my that's the top of my hit parade.
00:26:50:11 - 00:26:57:09
Sara Gutterman: That's great. If you could rewrite our national valuation system, what would it look like?
00:26:57:11 - 00:27:15:25
Steve Byers: Well, I start with what I, what I believe to be easy, which is one of the things we've been talking about. I don't and I know I'm not naive, and I know you're not naive, and I don't think we're going to supplant the dollars per square foot thing overnight. Right. But we can start to demand equal airtime for the easy things.
00:27:15:26 - 00:27:43:19
Steve Byers: You know, I would start with total cost of ownership and energy and water. And if we just want to say, you know, add an E to pity, you know, or maybe make it a U. So we're capturing water and we go from pity to pity you or I pity you if you don't start thinking about these things. So you know the I for insurance, you know in that I for insurance.
00:27:43:19 - 00:28:15:23
Steve Byers: We have the mechanism already to work on capturing resilience. You know because the insurance companies that's what they're looking at. Right. It's there. It's happening in real time. Insurance costs are skyrocketing and a lot of its climate driven. And there's other reasons to for sure. And then then to me, once we've altered the discussion, you know, we get our foot in the door with the easy stuff, then we can start, you know, working on the things that to me are more subjective indoor air quality, other facets of resilience and sustainability.
00:28:15:24 - 00:28:19:23
Steve Byers: So that's how I tack it.
00:28:19:25 - 00:28:38:28
Sara Gutterman: You've touched 100,000 homes in the last 20 years. Congratulations again. That's amazing. Are you have you seen any specific examples where this shift in mentality and valuation metric is actually happening?
00:28:39:01 - 00:28:53:23
Steve Byers: I mean, I do think that we've we've moved I think the buying public is far more cognizant. And you of course, would know, you know, that in spades from the work that you do GBM.
00:28:53:25 - 00:29:24:13
Steve Byers: But it's still under the surface. It's still being trumped by dollars per square foot, but it's come way up in consciousness. And I don't think that's just Colorado. I do not believe that. I think it's across the whole country, varying degrees. I will present you. But, you know, I don't. I think if you go to Kansas, you know, if you go to to Missouri, if you go to Alabama, you will find the same higher, much higher level of consciousness about all these things.
00:29:24:15 - 00:29:48:29
Steve Byers: So I do think we've made progress there. The builders have certainly made a ton of progress. You know, some of it's been, you know, self-imposed some of it's been forced, you know, by ever progressing energy codes, you know, and, you know, frankly, a code built home today built to a, you know, today's code, 2124 picture poison is a pretty good home.
00:29:49:00 - 00:30:12:23
Steve Byers: You know, it's far, far superior to the homes that were in, you know, when I was when we were doing home one and two and three, you know, 20 years ago homes, you know, that we're looking at now are considerably better. I mean, there's no question, you know, in almost every way. So, yeah. So we've we've come a ways got a ways to go.
00:30:12:26 - 00:30:34:24
Sara Gutterman: As you know, I do a lot of work with respect to generational marketing, looking at the generations that are influencing and impacting the housing sector and the economy. And I'm talking a lot about now boomers, Xers, millennials and Gen Z, and now even alphas who are emerging into the housing market, they'll start buying homes by 2030. So not so far away.
00:30:34:26 - 00:31:01:25
Sara Gutterman: And in that process, I think a lot about what the housing stock looked like when boomers purchased their first home versus Xers versus millennials versus Zs, what they will look like versus what they will look like when alphas by their first homes, and just the evolution of our understanding about performance and building science and wellness and well-being in homes.
00:31:01:25 - 00:31:36:21
Sara Gutterman: And then, of course, the advancement of enabling technologies, just everything from, you know, heat pump technologies and ERV to these incredible solar plus storage systems that can really enable a home to be energy independent. It's just incredible. So, you know, we've kind of looked back a little bit. Let's look forward. If we successfully make this shift from, say, price per square foot to value per square foot, and that becomes the dominant valuation metric and lens.
00:31:36:28 - 00:31:46:10
Sara Gutterman: What does our housing sector, what is our economy? What is our culture look like? How is that different in the next ten, 15, 20 years?
00:31:46:12 - 00:32:08:17
Steve Byers: Yeah, I think the change left the station on all the things we're talking about, you know, so we're trying to, you know, shovel more coal into the boiler and make this train go faster in terms of consciousness and awareness. Right. But I do think is happening and, and, and and your data shows like, you know, it's across all the demographics.
00:32:08:17 - 00:32:28:01
Steve Byers: It's not just like, oh, the young people, they care about it. No, this is you know, it's everybody for different reasons across different demographics. But I've never cared how somebody got there as long as they got there. Right. You know, whether it was stick it to the man or you really care about the planet, I just don't care how you get there.
00:32:28:01 - 00:32:56:17
Steve Byers: As long as you get there. The place where, you know, we demand better and demand war, you know, from our housing stock. So what does it look like? You know, I really do believe, you know, that we're going to see far more renewables. The grid is changing really rapidly. That changes our calculus on the sort of work we do about like, okay, we're going to be thinking, you know, at some point in the system future, we're going to get back to thinking about carbon.
00:32:56:17 - 00:33:12:21
Steve Byers: We can't, you know, talk about it a hell of a lot right now. It's not. And in the middle of a, you know, kind of market situation we're in right now, it's it's tough to do that, but we're going to get back to that. But it's not going to be carbon is not going to be the forefront of things, but it's going to be part of the discussion.
00:33:12:21 - 00:33:49:26
Steve Byers: I believe it's you know, we respond to, you know, the climate situation that we're in. Yeah. So I think that and, you know, well, you and I are primarily involved in new construction. You know, we've got to got to deal with 145 million homes that are out there that, you know, are using, you know, the vast majority of the energy compared to the new homes that, you know, we're going to talk about and think about over the next ten years, that's that's really a big part of solving the problem.
00:33:49:27 - 00:34:08:18
Steve Byers: I know the question you asked, but but retrofitting, you know, older homes is going to be a part of what probably, you know, you and I are going to be involved in some ways as we go forward. But yeah, I think we're going to we're going to see more solar. We're going to see more storage, I think for sure.
00:34:08:20 - 00:34:30:18
Steve Byers: Onsite storage. I think there's huge things, you know, from a, you know, hers and building science perspective. You know, we're not going to I don't see no we're not going to move the needle a whole lot further and envelope, you know, I'm building envelopes. We're not you know, we know what to do with they are there in a lot of ways, and we can't let our foot off the gas.
00:34:30:18 - 00:34:50:11
Steve Byers: But, you know, you know, we built good envelopes now. Tight homes, generally speaking, tight homes, tight breathing, well insulated homes. And that we just need to put renewables on them to get them to zero. And that's kind of the goal from a just straight up energy perspective. And you know, and then we bring along the other things as we go.
00:34:50:17 - 00:35:01:01
Steve Byers: Yeah. Because we get there. Then as much it's much easier discussion to talk about things like indoor air, water that's you know, water just needs to be part of it too, because that's, you know, almost an equal level crisis.
00:35:01:01 - 00:35:34:11
Sara Gutterman: So I think we're at an exciting moment in time because I feel like sustainability is becoming transactional, meaning that it is now a logical business case. It translates into lower operating costs and ongoing cost. And so going back to something that you said a little bit earlier in terms of it really doesn't matter if you want a higher performance, healthier, more resilient home because it's going to keep your family safe or you're going to have lower monthly bills or you want to save the planet.
00:35:34:13 - 00:36:00:09
Sara Gutterman: Just it doesn't. I agree, it doesn't matter. I think as long as we have the, you know, the option and the choice and the understanding of what again, everyone in the value chain, whether they're building professionals or homeowners, home buyers should be asking and that the existing model is broken, you know, which has led to the affordability crisis.
00:36:00:11 - 00:36:11:17
Sara Gutterman: Speaking of building professionals and homeowners and home buyers, what should they be thinking about in their daily lives to support this shift in valuation?
00:36:11:20 - 00:36:38:25
Steve Byers: Well, you know, for those who are thinking about getting this message, you know, they should be, you know, demanding demand the numbers, right? Ask the numbers. They're there. You know, it's not hard. Ask for ask for what's already there in front of you. Ask to the Herz index. Ask for that score. You know, ask what programs are participated.
00:36:38:26 - 00:37:01:01
Steve Byers: Ask well look great, I see, I see the dollars per square. I see the total dollars here. I see, you know, I can I can use a calculator. I can see the dollars for square foot. What's the total cost of ownership for this house? I mean, who would buy a vehicle without knowing they even may ignore it? You know, without knowing, you know how many miles per gallon is going to get.
00:37:01:07 - 00:37:18:12
Steve Byers: You would want it. You would never not want to know that. So why do we not want to know it when we buy a home? Right. So I mean, those are the sort of things and you know, and you know, that's the other, you know, the other stakeholder, you know, in this, you know, it's an important stakeholder, right?
00:37:18:13 - 00:37:41:10
Steve Byers: You know, the people who are to buy the homes in terms of ask more, ask, ask demand, demand better, demand more. You know, if that happens, builders will deliver. You know, you know, all the time that I've been doing this, builders deliver what people ask for. If they ask for these things, you know they may not deliver tomorrow, but deliver it soon.
00:37:41:12 - 00:37:44:07
Steve Byers: So true. Yeah, indeed.
00:37:44:10 - 00:37:58:15
Sara Gutterman: All right. Now I'm going to ask you two questions that I ask all of my podcast guests at the end of our conversation. First, what does value per square foot mean to you?
00:37:58:18 - 00:38:21:07
Steve Byers: So yeah. So it's like value per square foot, you know, should should make somebody think of their values like, right. What's valuable to me? What are my values? And does their, you know, not all words work that way, but you can say values equals what's valuable to you and vice versa. It's valuable to use probably equals to your values.
00:38:21:08 - 00:38:44:05
Steve Byers: Right. So, so in thinking about what's value per square foot for me or maybe, you know, for me it's like it should be like it should feel synergistic, right? It should feel it shouldn't be like one plus one plus one equals three. You know, a value metric like that should feel like one plus one plus one equals five.
00:38:44:11 - 00:38:58:06
Steve Byers: You know, I'm getting way more value out of doing all these things and just making it so incredibly transactional and, and whatnot. So I don't know if that gets to the to the question.
00:38:58:10 - 00:39:15:01
Sara Gutterman: It does. And I have a quick follow up before I shift on to my second question, which is in your work, you must pretty regularly see a gap between what is measured. But then what is actually valuable? How do we close that gap?
00:39:15:03 - 00:39:42:28
Steve Byers: Yeah, yeah, it's a really great question. But it gets to I think it's still about, you know, asking questions and demanding more. You know, so we you know, we do a really good job of measuring, you know, the things that are easy to measure. You know, I think, you know, there's this subject and the objective, you know, things that we that we think about and how it's, you know, the energy performance is a is a is a, you know, objective number.
00:39:42:28 - 00:40:05:08
Steve Byers: It's not, you know, it's you know, we can argue about it, but it's like, you know, we're pretty good on this now. Right? We've got to figure it out. Pretty well waters the same. It's easy. So those things are easily measured. The things that aren't easily measured. Resilience, indoor air quality, those things. You know, that's where there's some gap to me.
00:40:05:10 - 00:40:28:08
Steve Byers: And and but that's that's sort of concrete stuff when we think about like from a homeowner perspective, I don't know. Well, I do think that consciousness has come up. I still think there's a gap between people even thinking that, oh, these things are being measured. What do I value? You know, you know, I don't think the dots are being connected for most people in terms of those things.
00:40:28:09 - 00:40:36:28
Steve Byers: And oh, I can, I can, I should ask for more, I should demand more. And that's to me part of the gap.
00:40:37:01 - 00:41:02:08
Sara Gutterman: So my last question is if you could leave our listeners with one tip, something specific that they can grab on to that might change their perspective on value, not just for their homes, but for our economy, for their lives, even. What would that be?
00:41:02:11 - 00:41:21:10
Steve Byers: Homes. Homes built by David's 30 year mortgage. They're going to stand for a lot longer than that, right? And so buy a home. And maybe, like me, you live in it for 30 years because I've lived in my 30 years. But that's not the norm. And I recognize that. But you're going to move on and then you're going to buy another home.
00:41:21:13 - 00:41:46:02
Steve Byers: And these homes are are, you know, they're to me. And maybe it's just my bias in working in the industry, but this is kind of part of the legacy that any body is in the home buying world. And us the, you know, the privilege of being able to buy a home right now, you know, you know, that that's a that's a sort of tangible thing.
00:41:46:05 - 00:42:04:29
Steve Byers: If you buy a home and you feel it's a good home and you know it because you you ask for the things that make it better than other homes, that's something you're passing on, maybe to your children, but to whoever comes and listening at home after you. And that's kind of a strange approach to the question. No.
00:42:05:02 - 00:42:26:16
Sara Gutterman: It's a great response. Thank you Steve. Thank you so much for joining us today, and for bringing a writer's eye and a leader's vision to the question of how we value our built environment. Until next time. I'm Sara Gutman reminding you that what we measure shapes what we build. So let's continue to rethink what we value.
00:42:26:18 - 00:42:37:21
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