Flip this Province

We all have our favourite TV shows, except for the smart people who don’t watch television at all.  What seems to be the rage this year is the “Flip this house” or “that house” phenomenon.  It’s where a person buys a rundown house for less than it’s real value, spends perhaps 5 or 10% of the value of the home on repair of cosmetic problems and then sells the house for a big profit.  Where there’s a quick profit to be made, many people will be attracted – even those have no experience in building.

I first started watching shows like “This old house” because I love seeing the transformation of a deteriorated structure and the use of new technologies to improve an older home and make it energy efficient.   Later, other programs diverged from that formula, becoming reality shows, where people ham it up for the camera, making good decisions and foolish ones.  The sense of greed in us all is attracted to the idea of quick money.

Most of these programs are filmed in the US where a booming housing market seems to make it possible for even a poor flipper to succeed.  The rapid inflation in housing prices over the past years covers many mistakes.  “Flipping” is now a commonplace activity, like going to the gym.  But like everything else, there is a cycle to flipping and it appears to be post-peak.   The collapse of housing market in the US and the economy will, no doubt, shake out a good many of the non-professional entrants to the sport.

There is a darker side to this activity and all is not what it seems. Trademark Properties and Richard Davis, one of the first developers featured, is suing A&E network.  Some of the second year successors on A&E are being sued for fraud or foreclosed due to financial problems.  Clearly, the blemishes of flipping and the failures of certain projects are not being shown.

Beyond the Hollywood paintbrush, it is ripe with conspicuous consumption – granite countertops, stainless steel appliances, and hardwood floors being the requirement.  Rip out what’s there and throw it in the dumpster.  The cost of the finished property may be very high but that’s OK, it seems.   It’s a scene in the continual marketing of our disposable society, which consumes enormous quantities of everything. Young couples learn what they should want – that dream house in the suburbs and become house poor.  We take one step further away from sustainable housing that our society needs to have.

Those flippers aren’t the models of energy efficiency in their choice of lighting or insulation.  They seem to be mostly interested in the money.

Here in New Brunswick, we have a different group of flippers.  Their role is to dramatically transform homes in New Brunswick from energy hogs to energy savers.  The group is called Efficiency New Brunswick and their budget is $26M according to a recent article in this paper.   They loan money to homeowners at a zero interest rate or provide a grant of up to $2000 (20%) for items recognized by an audit provided by the agency.  To date “700 grants @$1,600 have been handed out and 400 loans have been issued at an average of $8,700 each”.   1100 people have taken advantage of the program.  In the two years of the agency’s life, 6300 audits have been done.  Vice-President Lesley Rogers indicates that they are hoping for a take-up rate of 80%.  Supposing we have 5000 audits per year and 4000 upgrades proceed, is that enough?  There are 300,000 homes in the province with half built before 1980.  It could be 35 years before the upgrading required is complete.

The organization is new, roughly two years old.  It is progressing but there is little information on its web site – still very basic.  In contrast, efficiencyvermont.com has a great deal of information that is useful and directs the customer with frequently asked questions.

Lesley tells me New Brunswick has the highest per capita program participation in Canada.  A number of unique services are available – multi-unit upgrade program, a T8 subsidy program and others.  How about posting some of the good news on the site until a full annual report is published? Perhaps a graph showing the increasing numbers of audits or homes upgraded would be interesting.

The era of cheap oil is over.  The era of super expensive oil is coming.  George W Bush was in Saudi Arabia last week to plead with King Abdullah to turn on the oil tap a little more.  The Saudis refused, saying “that the market was well supplied.” They are the only country with any spare capacity (perhaps 1.5% of world total), but it won’t last long with depletion and increasing world demand.  Perhaps they couldn’t export more.  Jeff Rubin of CIBC World Markets predicts that oil will hit $150 a barrel by 2012.  It could be a lot sooner.  The effect of high oil prices will affect natural gas, electricity and wood to a lesser extent.  This crisis will be like no other in our memory and those who are not prepared can expect to pay considerably higher heating bills

There is a board of directors for the agency.  Perhaps they will do a little strategic planning.  Setting targets for the number of upgrades per year, insisting that the agency get the message out to the public.  It’s still relatively unknown and a poor web site doesn’t help.  Perhaps they could ask why we are promoting oil heat when we have an excellent supply of wood in the province?  Are the targets for energy efficiency of new homes adequate?  Houses are built to last for over a century.  The cost of furnace oil will be roughly $4 a litre in the next five to ten years.  Costs of this magnitude change all of our assumptions on insulation levels and design.  And this is not taking the cost of carbon into the equation.

We all support the work of Efficiency New Brunswick.  We are impatient to see it make progress – Especially those of us who realize what a cold, bleak future awaits us if we do not act agressively to curb energy wastage in housing and business.