Loan Star
Apropos of my realization that if I bought a new furnace on credit, rather than waiting to save up the cash, I'd have saved a bundle of money over the last 5 years, here's something I've been meaning to write about for months: a Vancouver developer that came up with a smart financing scheme to build a super-efficient condo complex.
All things being equal, I imagine that most real estate developers don't care one way or the other if their buildings are energy efficient. If they can make some money by building green -- or at least recoup their costs -- they'll do it. If they can't, they'll cut corners. I suppose that a few virtuous souls forgo some profits, say, by installing efficiency features that they can't quite recoup on sale. But for the most part, the developers are going to follow the profit motive: if the costs of a super-efficient heating system are higher than home-buyers are willing to pay, the developer is going to skimp.
That'd be fine, if consumers were rational about energy purchases. But we're not. In fact, most people's decisions about energy efficiency -- well, mine at least -- are really dopey. In my case, I was too worried about taking on new debt to realize that utility bill savings would have more than paid for the financing cost of a new furnace. I could have saved money from day one. Only myopia prevented me from seeing that.
For a condo-buyer, the problem is similar. Most prospective buyers are looking for the cheapest possible mortgage -- which means that they undervalue long-term savings on utility bills. So they're not willing to take on a bigger mortgage for a more efficient heating system -- even if it saves them money in the long run. (Or, really, even in the short run.)
So what makes this Vancouver developer, reSource Rethinking Building, and their Verdant development, so clever is that they figured out how to get around all that. They used some innovative financing to make energy efficiency profitable for everyone -- from day one.
