Going Green, Bleeding Red, Fading to Black
It’s going to take more than green to get home builders the leash they need to work through the dark before the dawn of residential construction’s worst era since the 1930s.
Within the past couple of weeks, we’ve witnessed the financial failure of Louisville, Colo.-based green home building pioneer McStain Neighborhoods and, now, a Eugene, Ore.-based green builder fades to black amid a mountain of debt.
Here’s why McStain capitulated in what may be the fourth or fifth inning of housing’s downturn, per a note from principal Carolyn Hoyt.
We were hit by a couple of last minute “roadside bombs” which really knocked us for a loop. We plan to finish out and sell everything in the pipeline before we close down (probably) for good.
According to “the state of the homebuilding industry” blog, McStain’s major creditors line up as follows:
McStain’s largest unsecured creditors include Scheer’s Inc. of Illinois (which is owed $10.85 million), Key Bank ($3 million), CRE400 Centennial LLC-Crestone ($2 million) and William and Associates of Boulder ($1.54 million), according to the bankruptcy filing.
Other unsecured creditors include First National Bank, GE Capital, Namaste Solar Electric Inc., Guy’s Floor Service Inc. and the City and County of Denver (sales tax).
In Oregon, the story takes place on a smaller, but no less wrenching, scale. It concerns a second-generation “master builder” Chad Ruhoff, who started working on his dad’s houses and developments in the 1980s, and ended up working for Home Depot in Portland after his mini-empire collapsed in the past two years.
Ruhoff’s showcase project was his last, a 41-unit subdivision on the old Wylie family homestead at the intersection of Garden Way and Martin Luther King Jr. Boulevard. Ruhoff paid $3.3 million for the property in June 2007.
Ruhoff not only saved the 1901 farmhouse, he sought to amplify the rural theme throughout the subdivision. He hired architect Jean Rehkam Larson of Minnesota, who literally wrote the book on the iconic American farm house design to draw up the plans for his “front porch” community.
The houses were to be his greenest yet with high-performance toilets, solar hot water heating, LED lights. He was reaching for top-rung Earth Advantage certification, said Aaron Solbeck, who was construction manager for Ruhoff for 7 1/2 years. “We were basically trying to make a super, super tight house that was eco-friendly.”
Ruhoff hired Eugene marketing firm View Design, which built a sophisticated Web site for Wylie Creek. In July 2008, Ruhoff featured Wylie Creek in the Tour of Homes.
And then sales stopped.
Green may be where home building is going, but it’s not proving to be a way to get there.
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[...] See original here: Going Green, Bleeding Red, Fading to Black | Housing Crisis [...]
[...] By jmcmanus Within the past couple of weeks, we've witnessed the financial failure = of Louisville, Colo.-based green home building pioneer McStai= n Neighborhoods and, now, a Eugene, Ore.-based green builder fades t= o black amid a mountain of debt. Posted from Housing Crisis – http://www.housingcrisis.com/ [...]
There are still things builders can do that are affordable and green. Take geothermal heating and cooling for example. The price is higher but there are tax incentives available that offset the costs.