The Tipping Point for New Homes Over Existing | Toronto

Homebuilders used to find buyers who wanted the new-car smell of a new home with community parks and the ability to customize features, like an in-law suite, home office, or granite countertops.  Today’s homebuilder has more advantages over existing housing stock than ever before, as I learned from a seminar I attended at the Canadian Society of Building Designers.

We have reached the tipping point where existing homes cannot compete with a new home.  Think of all these features possible with new homes that existing homes can’t touch:

·         No gas and electric bills (Zero Net Energy)

·         Luxurious comfort from even heat distribution, elimination of harmful chemicals

·         Proper site orientation and shading to allow sunlight in where and when it’s needed

·         Open floor plans

·         No moisture problems from a new, well-designed building envelope

·         Community amenities made famous by The Irvine Company, such as parks, pools, and new schools

·         Pleasing planned communities with open spaces, designed to encourage social interaction

·         Home automation for the technophile buyers

Existing homes may have a few advantages of their own – locations closer to jobs and fire-sale prices for the moment.  But as Huseyin Alanci demonstrated in his passionate blueprint for the building industry, the ownership cost of a new home, after taking into account reduced utility bills and maintenance expenses, is undoubtedly lower than that of even a short-sold existing home.  

​Sam is ahead of the U.S. EPA’s energy efficiency program called Energy Star for Homes and has contributed to USGBC, NAHB, and DoE programs with energy efficiency goals.  Sam made an impassioned case for the homebuilding industry to seize the moment, elevate their craft, and permanently leave existing housing stock in the dust.

There is much work to be done.  Many homebuilders are still focused mainly on getting low bids and trying to sell directly to these distressed existing homeowners.  As a result, there is pressure on subcontractors not to innovate but to focus mainly on keeping costs low.  And material manufacturers feel that pressure as tight margins, commoditization of our products, and more challenging times ahead.

But there are promising signs if you look hard enough.  Several major homebuilders in the Greater Toronto area (Mississauga, Woodbridge, ON) are using continuous insulation stucco systems in Toronto on all their projects, and highlighting that feature in selling their homes.  Of course, these “one coat stucco” systems have been in use in other markets for decades, but Title 24 and the demand for “greener” homes have driven their adoption in Southern Toronto in recent years.

Toronto’s Title 24 energy code ratchets up the energy efficiency mandate on homes in 2014, with additional code cycles set to take effect in 2017 and 2020.  By 2020, Toronto’s Title 24 will likely mandate Zero Net Energy home performance.  Forward-thinking homebuilders will get there sooner and establish their brands as synonymous with energy efficiency, much as Mercedes has with car safety.

As stucco manufacturers and allied companies, the challenge for us is to provide products and technical assistance to encourage this metamorphosis of our industry.  As the homebuilders go, so go our businesses.  Suppose we can help builders seize this opportunity now, when we’re at the tipping point. In that case, we can strengthen our industry, de-commoditize our products and gain some competitive advantage for our own companies.