Pull up to the house on a cul-de-sac in one of Raleigh (N.C.)'s dozens of subdivisions, and it's hard to see anything noteworthy about the red-brick farmhouse-style McMansion. Spacious—the house has five bedrooms—with a wide front porch and ample concrete driveway, it blends easily with its neighbors, just one more comfortable upper-middle-class home in a town full of the same.
Incognito is just how the house, and its financial backers, Raleigh investment firm Cherokee Investment Partners, like it. But the house, which Cherokee dubbed the "Mainstream GreenHome," requires 96% less energy to heat hot water than a comparable dwelling—and is predicted to save 80,000 gallons of water per year through smart conservation methods. It was built under the National Association of Home Builders' Model Green Home Building Guidelines and just last month won a Gold Award in the NAHB Research Center's 2008 EnergyValue Housing awards. It also got one of the best scores ever in the Environmental Protection Agency/Energy Dept.'s Energy Star home efficiency rating system. In short, Cherokee claims it's one of the most environmentally friendly homes in the country—and yet it's maybe the only one that looks 100% typical. Boring even. No grass grows on the roof. Good luck spotting a solar panel. All of this is intentional—the point of building the house was to show just how normal an environmentally sensitive home can look.
From Cleaning Up to Building Clean
The house isn't so typical for Cherokee and its CEO, Thomas Darden. In 1993, Darden and a partner launched a predecessor firm that invested in environmentally impaired assets remediating contaminated industrial sites—which then made money from developing that land into a mix of commercial and residential space. Cherokee raised its fourth private equity fund in 2006, pulling in $1.24 billion from investors such as public pension funds that like the firm's strong track record of returns. Typically, Cherokee invests on a much grander scale than a single family home in the North Carolina capitol. The firm has played a major role, for example, in rehabilitating a large swath of the New Jersey Meadowlands. It rarely looks at investments under $100 million.
But a couple of years ago, Darden says, he became convinced that cleaning up the land just wasn't enough. More of the environmental impact over the long term would come from what was built on that land than anything he could do to improve the quality of the soil itself. Back then, few builders wanted to touch the term "green."To them, it seemed like a fringe market.
Cherokee set out to show that green could mean profits as well as sound environmental practices. The house "is very different from what we've done historically," says Darden. "We focused on remediation and land planning. That may be responsible for 20% of Cherokee's carbon footprint. The rest is the buildings being built."
Every Green Amenity
Although the GreenHome isn't ostentatiously eco-friendly—and some might argue that its mere size precludes it from any claim to sustainability—a trained eye wouldn't have too much trouble finding many of the tricks that allow the house to rack up energy and water savings. Its newly planted garden is full of native and drought-resistant species, perfect for this recently rain-free region. Inside the house, the attic and crawl spaces are sealed rather than vented, a big help with the heating bill and air quality. A passive solar thermal hot water system sits beneath solar panels on the back side of the home's roof; the panels themselves are thin enough to be a dead ringer for standard roof tiles. Radiant flooring keeps the cork kitchen floor toasty, and a glass-doored, half-sized refrigerator in the median accommodates the kids' habit of standing with the door open to contemplate the best snack.
Using the grill atop the stove saves on washing pots and pans, and the IceStone countertops glint with recycled glass and other materials.
Sensing that few potential home buyers walk into a house to check out its attic insulation, the GreenHome's builders instead focused on the things they thought a buyer would care about. The floors throughout the main hall, living room, and dining room are made of richly colored reclaimed hardwood flooring. A North Carolina company called Cape Fear Riverwood makes the floors from logs pulled up from the bottom of the Cape Fear River, the watery graveyard of decades past when the river was lined with mill towns. In the living room, pocket doors, molding, and elaborate built-in shelving took great effort to develop to sustainable standards, but seemed mandatory to compete in a market where they are standard to new construction. GreenHome reused discarded glass and wood, and employed materials, including finishes, with low levels of "off gassing." That means the air quality is better from the moment of installation and over the life of the home because there are far fewer VOCs (volatile organic compounds). A closet on the first floor is made from "responsible" hardwood plywood, built especially for the house by a company called Closets by Design, which has since decided to launch it as a whole new business line.
Naturally, all of this costs money. Cherokee has a team of students at the University of North Carolina's business school study the payoff. So far, the residents of the house, one of Darden's staffers, his wife, and their four children, are using 71% less electricity than families in comparable homes, and spending far less on heating and cooling. Those 80,000 gallons of water per year will be saved through conservation methods including using recycled rainwater for flushing toilets and washing machines. When the family doesn't need all the electricity they're making in the house, they can sell the excess to the regional grid.
A Growing Sector
For now, the GreenHome remains at the cutting edge. But forecasts predict that green building in the residential sector will grow from a $7.4 billion business in 2005 to a $38 billion one by 2010. Green home projects in other states have sold for a nice premium—as much as 25% above the local market, while the average construction cost increase of using green materials was just 4%. But, Cherokee chief Darden isn't banking on builders replicating the GreenHome en masse. He thinks corporations and multifamily landlords are more likely to embrace green technologies first since they can more easily focus on the payback in energy savings over the long term. The typical homeowner is more caught up in the monthly mortgage payment than a return that might take 5 to 10 years to materialize.
With the GreenHome, then, Cherokee is "trying to advance the state of the art and stay closely connected to what technologies are available," says Darden. He also aims "to maintain our knowledge about green building issues so we can be articulate" when pushing builders at other sites to use green technologies.