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Forget the Dream House – How Net Zero Building Codes May Place House Ownership Beyond Reach

Contributed by Robert Lyman ©2019.  Robert Lyman is a former public servant and diplomat. His full bio is here.

Forget the Dream House

Summary

According to a recent Abacus poll, the affordability of housing is the largest concern among young adults in Canada. Every quarter, RBC Economic Research publishes its survey of housing trends and affordability. In the report published in March 2019, RBC assessed the percentage of income needed by the average family to cover the costs of owning a home as 52%. So, on average, Canadians pay more than half their income on housing ownership costs.

Cover Image licensed from Shutterstock.

 

LINK TO FULL REPORT: Forget the Dream House FINAL

 

Federal and provincial government policies under the Pan-Canadian Framework on Clean Growth and Climate Change (PCF) will make matters considerably worse over the next decade. One PCF commitment is that federal, provincial and territorial governments will “work to develop and adopt increasingly stringent model building codes, starting in 2020, with the goal that provinces and territories adopt a ‘net-zero energy ready” model building code by 2030.”

 

The incremental costs of these changes will be high. Building an Energy Star home will cost an extra $8,000 to $10,000, an R2000 home costs $30,000-$40,000 and a net zero home $100,000-$150,000. Canadians build roughly 200,000 homes per year. In 2012, around 1400 of those homes were energy star certified. Less than 50 were R2000 certified and about 15 were considered net-zero. Assuming that the cost of household energy use is between $2,000 and $4,000 per year, an Energy Star home would take 10 to 20 years to payback. R2000 would take 15 to 30 years to payback, and net zero 25 to 50 years to payback. Further, most homeowners only plan to live in a house for around five years, and so they will not get to experience the energy savings benefits.

 

Using the low end of the estimated additional cost of a net-zero house of $100,000 per unit and the estimate of 200,000 average new home sales per year, moving to mandate the use of net-zero homes in Canada by 2030 would impose an additional $20 billion per year cost on the Canadian economy.

 

3 Comments

  1. I have compared housing in Sweden with housing in Canada. The situation might not be so bad if we do what the Swedes have done to keep down housing costs.

    1. The average Canadian home is 2,000 square feet, in Sweden, 1,000. If new houses or condos averaged 1/2 the current size they would cost less to build and heat.

    2. The Swedes have far more homes in row housing, while ours are single family dwellings with space in between that emits heat.

    3. Our houses and even condos each have a natural gas furnace/AC unit while the Swedes’ have central heating/AC for a long row of houses or apartments, with biomass fuel (wood pellets, which are classified as renewable).

    The interesting question is whether Canadians are prepared to live with these restrictions, and the resulting decrease in personal space.

    • Robert Francis Lyman

      September 9, 2019 at 8:33 am

      Perhaps the real question is whether Canadians will freely choose to reduce their house size, along with the conveniences that go with that, or whether they will be forced to do so by climate-inspired government policies that either impose regulatory standards and/or raise the costs of housing so much that they will not have a choice. When and if governments attempt to make the choices for citizens, we will have the right to ask whether the alleged environmental benefits at the global level are really worth it. I have written several articles on that subject.

      • A higher carbon tax will put some pressure on single family housing, but to halve the per capita indoor square footage for residences would require abandoning and tearing down most of our detached housing stock. This would destroy property values, the single largest investment of most families. And think of the impact of all those mortgage defaults on financial institutions. Only massive government compensation would help reduce the financial carnage. I see building code changes as having minimal impact by 2030 or even 2050.

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