first_imgStudy: Green Building Codes Don’t Save EnergyThe Jevons Paradox Freakonomics Podcast: How Efficient Is Energy Efficiency? Steven Nadel is the executive director of the American Council for an Energy-Efficient Economy. This post originally appeared on the ACEEE blog. GBA posted a news story about the original study in January.ACEEE is a strong supporter of analyzing energy efficiency programs in order to see what they have accomplished and to learn lessons so we can do even better. It was thus with interest that we reviewed How Much Energy Do Building Energy Codes Really Save? Evidence from California by Arik Levinson.In this paper Levinson conducts several analyses and concludes that “there is no evidence that homes constructed since California instituted its building energy codes use less electricity today than homes built before the codes came into effect.”On the surface his conclusions about the efficacy of building codes are very different from other recent analyses, so we took a deeper look.Building energy codes in the United Sates primarily address energy used for space heating and air conditioning, with some impact on water heating energy use. In addition, commercial building codes also address lighting in a substantial way. Therefore, any analysis of the effect of codes needs to look at energy consumption for these end uses. Study should focus on natural gasA good analysis of the impact of California’s building codes should focus on natural gas use. Levinson does do one analysis of natural gas use, finding that homes built since California’s building energy code began use less natural gas than earlier homes.However he then dismisses this finding since the trend started before the building codes took effect. He presents no evidence that prior trends would have continued, and therefore his claim that building codes had no effect is speculation.Finally, if the objective is to examine all building codes and not just some codes, then it’s also important to look at commercial buildings. According to an analysis by Pacific Northwest National Laboratory, nationwide about 69 percent of building code savings in 2012 were in the commercial sector and only 31 percent in the residential sector.More than 80 percent of the commercial savings were in electricity.Bottom line: Levinson is on the wrong path if he’s trying to see the impacts of building codes. If he wants to see the forest — the impacts of codes or their absence — he needs to understand the trees. He needs to look where the impacts are supposed to be, and in California this means residential natural gas and commercial building electricity use. California’s mild climate is a factorThe fact is, though, that California has a mild climate, and, according to a recent analysis by the Energy Information Administration (EIA), only 4 percent of California home energy use is for air conditioning. Using EIA figures we can go on to calculate that air conditioning represents about 10 percent of home electricity (as opposed to energy) use. If we make a ballpark estimate that codes reduce air conditioning electricity use by 30 percent, Levinson is looking for 3 percent savings in the data.Furthermore, a majority of the savings in air conditioning energy use is probably due to air conditioner efficiency standards that also apply to replacement equipment in existing homes. Since Levinson is comparing new and existing homes, of the 3 percent savings mentioned above, perhaps 2 percent are also being achieved in his comparison group of existing homes.Thus, he’s looking for a 1 percent savings effect in new homes. It’s very difficult to find such a small effect in a statistical analysis; with an effect that small, it would be more surprising to see such savings show up in a statistical analysis than if the savings did not show up.In addition, it should be noted that the rising saturation of electronic gadgets in U.S. homes may be affecting new home energy use, a factor Levinson does not examine but that perhaps explains some of the increasing energy use he found in new homes.center_img Energy use in CaliforniaLevinson is examining California, so we should start by looking at how California heats and cools its buildings and water. The California Energy Commission had a consultant prepare a report looking at residential appliance saturations in 2009. They found that 93 percent of California homes are heated with gas and only 5 percent are heated with electricity. Likewise they found that 87 percent of homes have gas water heating and only 7 percent use electricity for water heating. Central air conditioners are used in 49 percent of homes, with an additional 15 percent using room air conditioners.California added a limited lighting provision to its 2008 residential code, but the savings are too recent and too small to show up in a long-term analysis.Based on this information, an analysis of California residential building codes should concentrate on natural gas use and only secondarily on electricity. Unfortunately, this is the opposite of what Levinson does. Most of his analysis is on electricity use, and he generally excludes homes with electric space or water heat. He does so because the saturation of electric space heat has been changing over time, and according to Levinson, therefore doesn’t fit well into his time series analysis. Thus his analysis looks for the effect of building codes on air conditioning energy use. RELATED ARTICLES last_img read more


first_imgBy Carol ChurchIn part 1 of this 2-part series, we went over VA loan eligibility, the process to apply, and what the loans can be used for. In this second part, we’ll review the pros and potential cons of VA loans.What are the Advantages of a VA Loan?The advantages of a VA loan are numerous. Most civilians can only dream of having such ideal lending terms available to them when shopping for a mortgage.No down payment requiredIn almost all cases, no down payment is required on a VA loan. One can become a homeowner under this program with far less cash in hand than is necessary for non-VA loans. However, it may still be financially wise to put down a payment.No private mortgage insuranceBecause VA loans are backed by the government, there isn’t a need for the borrower to pay private mortgage insurance (PMI), which can easily result in savings of thousands of dollars over the life of the loan.Competitive ratesMortgage rates on VA loans are highly competitive and may often be lower than those found on other types of loans.Easier to qualifyIt may often be easier to get a VA loan, because the government guarantees some of the mortgage, meaning the bank is at less risk. Borrower’s credit scores may not have to be as high. Borrowers do still need to qualify based on credit and income, however.No prepayment penaltyUnder the legal terms of VA loans, borrowers cannot be penalized for paying off their mortgages early. This is a great benefit for anyone who would like to concentrate on early retirement with a fully paid-for house (for instance).Assistance with avoiding foreclosureIf at some point a VA borrower begins to have difficulty paying his or her mortgage, the VA has special staff dedicated to helping these borrowers make their payments. However, due to the process used to ensure that borrowers have enough funds, VA loans actually have a very low default rate.Closing costs are limitedThe VA limits closing costs for these home sales. Sellers may also help with these expenses. In many cases, no money will be due at closing.What are the Disadvantages of a VA Loan?One-time funding fee One expense all VA borrowers should know about is the one-time funding fee that accompanies every loan. This fee is somewhat variable, but is typically about 2-3% of the loan, and is used to ensure the stability of the VA loan program for the future. Some borrowers with service-related disabilities are exempt. This fee can be “rolled into” the overall loan so that it is included in monthly payments.If a borrower has enough money to put down a down payment and therefore does not need the benefits of not having to pay PMI or put money down, the cost of this funding fee may be reason to skip a VA loan.Can only be used for a primary residenceVA loans are intended to help people become homeowners, so they can’t be used to buy vacation or investment properties. However, if a borrower already has a VA loan, he or she can typically buy another home with a VA loan and keep the first one as a rental, if they’ve lived in it for some time already. This makes sense for military members who may need to move due to a PCS.Some perceive the loans negativelySome sellers and agents may be less eager to sell when a VA loan is involved due to the incorrect perception that these loans are more complex or take more time to deal with. It may also be the case that inspection requirements are stricter.MonkeyBusiness Images/PhotospinWhat Else Is There to Know?Typically, borrowers are approved to borrow amounts of up to $424,000 with no down payment, and can borrow even more with a down payment. Of course, this doesn’t mean borrowers have to borrow this much, but they can. In some counties, the maximum no-down-payment loan is higher due to a higher cost of real estate in that area.Borrowers can get a VA loan more than once, and the benefit is good for life. If a borrower has paid off their first VA loan, they can get another VA loan—it is not a “one-time” benefit. (However, the funding fee is higher when used a subsequent time.) And the benefit does not expire. It can be used at any time.Service members must have been honorably discharged to qualify for a VA loan.Those serving overseas can still get a VA loan if their spouse will be in the home or if they will return within a year.VA loans are fully assumable by any qualified borrower.On average, it takes no more time to close on a VA loan than on a non-VA loan.Being empowered with knowledge about the VA loan program is key for all service members and veterans. For more, visit the resources below.More Information:US Department of Veterans Affairs—Home LoansMilitary.com: VA LoansSummary of VA Home Loan BenefitsReferences:Birk, C. (2015). VA Loan Pros and Cons. Retrieved from https://www.veteransunited.com/valoans/va-loan-pros-and-cons/Tapman, T. (2016). The 13 Biggest VA Loan Myths BUSTED! Retrieved from https://blog.swbc.com/personalhub/the-13-biggest-va-loan-myths-bustedUS Department of Veterans Affairs. (2012). Summary of VA home loan guaranty benefits. Retrieved from http://www.benefits.va.gov/BENEFITS/benefits-summary/SummaryofVAHomeLoanGuarantyBenefits.pdfVeterans Administration. (2017). Home loan guaranty: VA guaranteed loan. Retrieved from http://www.benefits.va.gov/BENEFITS/factsheets/homeloans/VA_Guaranteed_Home_Loans.pdfVeterans United. Your Complete Guide to the VA Home Loan. Retrieved from https://www.veteransunited.com/va-loans/last_img read more