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energy center

Program Evaluation
Report Summary
182-1
210-1

The Affordable New Home Project


Life-Cycle Energy Costs and
Analysis of Construction Costs and Energy
Greenhouse Gas Emissions
Performance
for
Gas Turbine Power
April
April,1999
2002

ENERGY CENTER
OF WISCONSIN
Program Evaluation
182-1

The Affordable New Home Project


Analysis of Construction Costs and Energy Performance

April 1999

Prepared by
XENERGY, Inc. Energy analysis by
2001 W. Beltline Hwy #200 Scott Pigg
Madison, WI 53713-2339 Project Manager
(608) 277-9696 Energy Center of Wisconsin

Prepared for

595 Science Drive


Madison, WI 53711-1076
Phone: (608) 238-4601
Fax: (608) 238-8733
Email: ecw@ecw.org
WWW.ECW.ORG
Copyright © 1999 Energy Center of Wisconsin
All rights reserved

This report was prepared as an account of work sponsored by the Energy Center of Wisconsin (ECW). Neither ECW,
participants in ECW, the organization(s) listed herein, nor any person on behalf of any of the organizations
mentioned herein:

(a) makes any warranty, expressed or implied, with respect to the use of any information, apparatus, method, or
process disclosed in this report or that such use may not infringe privately owned rights; or

(b) assumes any liability with respect to the use of, or damages resulting from the use of, any information,
apparatus, method, or process disclosed in this report.

Project Manager
Scott Pigg
Energy Center of Wisconsin
Contents
Abstract ..........................................................................................................................................................................i

Report Summary...........................................................................................................................................................iii

Introduction ...................................................................................................................................................................1

Method
Process Review of Panel Development and Construction of Affordable New Home ...............................................3
Assessment of Affordability of Panelized Home Construction .................................................................................4
Results & Discussion
Background to the Project..........................................................................................................................................5
Initial Work Leading to the Project ......................................................................................................................5
Proposal of the Project to the Center ....................................................................................................................5
Findings of Process Review of Panel Development and Construction of Affordable New Home............................6
Different Goals Among Project Participants ........................................................................................................6
Unusual Construction Oversight...........................................................................................................................9
Problematic Development of Panel ......................................................................................................................9
Unsatisfactory Interior Finish of Panel ...............................................................................................................10
Construction Costs Exceed Affordability ...........................................................................................................11
Administrative Complexity Due to Purchase of In-fill Lots...............................................................................12
Numerous Inputs to Design of Prototype Home.................................................................................................13
Confusion and Costs from Subsoil Contamination.............................................................................................14
Loan Closure Delays...........................................................................................................................................14
Uncertain Liability for Sewer and Water Lateral Costs......................................................................................14
Incomplete Project Documentation.....................................................................................................................15
Findings of Assessment of Affordability of Panelized Home Construction ............................................................15
Prototype Home Costs ........................................................................................................................................15
The Prototype Home and Affordability ..............................................................................................................16
The Production Home.........................................................................................................................................22
Savings Potential from Integrated Panelization .......................................................................................................23
Recommendations....................................................................................................................................................25
Addendum: Analysis of Energy Use and Indoor Air Quality
Key Findings............................................................................................................................................................27
Description of the Site .............................................................................................................................................27
Monitoring Objectives .............................................................................................................................................27
Method .....................................................................................................................................................................28
Results......................................................................................................................................................................29
Energy Rating .....................................................................................................................................................29
Infiltration ...........................................................................................................................................................29
Heating Energy Use ............................................................................................................................................30
Indoor Air Quality and Comfort .........................................................................................................................30
Energy Use Due to the HRV...............................................................................................................................33
Heating System Size ...........................................................................................................................................33
Conclusions..............................................................................................................................................................33
References ...................................................................................................................................................................35

Appendix A: Timeline ...............................................................................................................................................A-1

Appendix B: Diagram of Relations Among Parties...................................................................................................B-1

Appendix C: Merrill Park Initiative—Construction Detail and Costs.......................................................................C-1

Appendix D: History of General Contractor’s Invoices ............................................................................................D-1

Appendix E: Initial Cost Estimate of 1300-ft2 Prototype .......................................................................................... E-1

Appendix F: Costs of 1800-ft2 Prototype .................................................................................................................. F-1

Appendix G: Estimating Annual Heating Energy .....................................................................................................G-1

Appendix H: Energy Use Data ............................................................................................................ follows page G-4


Tables and Figures
Table 1 List of interviewees in planned order of interview ....................................................................................4
Table 2 Prototype home construction costs...........................................................................................................16
Table 3 CityHomes construction details, costs, and pricing .................................................................................18
Table 4 Merrill Park construction details, costs, and pricing................................................................................18
Table 5 FISCHERSIPS Construction details, costs, and pricing ..........................................................................20
Table 6 Cascadia construction details and costs ...................................................................................................21
Table 7 Summary of construction details, costs, and pricing................................................................................21
Table 8 Whole-house framing comparison from Framing the American Dream .................................................24
Table 9 Wall framing comparison from Framing the American Dream...............................................................24
Table 10 Monthly average temperature, humidity, and CO2, with and without HRV operation ............................31

Figure 1 Prototype house..........................................................................................................................................1


Figure 2 Average CO2 concentration profile with and without the HRV in operation...........................................32
Abstract
A prototype energy efficient home affordable to low- to moderate-income residents was constructed in Milwaukee
as a result of a collaboration among 10 interested parties. The prototype featured structural insulated panels and
various energy efficient components. The Energy Center’s goal of the project was to demonstrate future
affordability and energy efficiency through innovative design and construction practices. This report evaluates how
well the project met these goals. Construction costs were higher than expected, at $84 per square foot. This was
largely due to the inability to implement an innovative finish coating that had been expected to save considerable
construction costs, the fact that the home was site built instead of using panelization or prefabrication, and
conflicting goals among project participants. As a result of these factors the project could not adequately
demonstrate affordability beyond the prototype stage. Analysis of energy consumption by the home’s occupants
indicate the home is about 20 percent more energy efficient per square foot than typical new construction in the
Milwaukee area.

i
Report Summary
This report reviews the history and issues of the Affordable New Home Project up to January 1997, shortly after the
home was occupied. It examines the construction costs of the prototype home built for the project and compares
them to costs of other homes. It also examines the energy consumption characteristics of the prototype home in
1997 and 1998.

The goal for the project was to demonstrate an innovative structural insulated panel (SIP) house in Milwaukee as a
prototype for possible future affordable housing. Adjustments in the building plans and in the materials used—as
well as the multiple goals of project participants—affected the project’s outcome.

Major Findings
• The project resulted in the construction of an 1800-square-foot SIP house (originally planned for 1400 ft2), but
the specific technological feature to be demonstrated did not work out as planned. The innovative SIP was to
have been manufactured with interior and exterior finished surfaces. The exterior finish was abandoned due to
concern about potential moisture problems, and the delivered interior finish needed more work than had been
anticipated.
• The prototype house cost just over $150,000 to build, or approximately $84 per square foot. This was beyond the
range of first-cost affordability of low- to moderate-income households in the Milwaukee area. Keeping in mind
that prototypes will be more expensive than commercial-ready units, a unit construction cost of $50 per square
foot is a more reasonable target for first-cost affordability based on other affordable housing initiatives in
Milwaukee. Literature indicates that site-built homes using SIP technology can be built at the same or slightly
higher cost as conventional homes.
• The ability of the project to demonstrate the potential for affordable housing using SIP construction in the
Milwaukee area was limited because:
• The exterior finish concept did not work out as planned.
• The house was a custom-built prototype constructed on site—panels manufactured to fit standardized plans
would reduce costs.
• The general contractor was not experienced with SIP or with residential construction.
• The prototype house does not preclude the possibility of building affordable housing using SIP technology
because such housing has been demonstrated in other parts of the country. Although the prototype house
demonstrated the use of SIP technology in a residential setting, the circumstances and nature of the project
prevented a good demonstration of the SIPs in the context of affordable housing.

Affordability of SIP Construction


Prototypes can demonstrate the future technical and economic feasibility of an idea. But the prototypes themselves,
because they are neither mass produced nor designed in advance, are generally not economical. This construction
project was no exception, as the “affordable” prototype home itself was not particularly affordable. Other factors

iii
Affordable New Home Project

(listed above), however, affected this project’s ability to demonstrate affordability beyond the prototype stage. In
addition, not all participants in the project viewed affordability as a goal.

Although the project’s application of site-built SIP construction does not demonstrate low- to moderate-income
affordability, this experience does not foreclose the potential for site-built SIP. Panels that are manufactured to
integrate easily with standardized plans that minimize on-site fabrication costs, for example, could still lead to more
affordable models.

Energy Performance and Comfort


An analysis of energy use indicated that the prototype was about 20 percent more energy efficient than a compa-
rable typical home in Milwaukee. Indoor testing revealed that humidity and CO2 levels stayed within acceptable
ranges, and that the house was not exceptionally “tight.” The heat recovery ventilator could have been eliminated
for this house and the furnace turned out to be larger than needed, thus adding some unnecessary construction cost.

iv
Introduction

Process Review of Panel Development and Construction


The goal of the Affordable New Home Project was to demonstrate the use of an innovative SIP and its potential to
reduce home construction costs and subsequent energy consumption. To that end a prototype home was built for a
selected home buyer in central city Milwaukee on an in-fill lot bought from the city for one dollar. The prototype
home (Figure 1) used SIPs in the exterior walls as opposed to conventional wall construction. Its energy con-
sumption since completion has been monitored by the Energy Center of Wisconsin. The project required the
development of the innovative SIP, land acquisition, financing approval, home design, and construction. This
process review of the project describes issues surrounding these requirements.

The project sought to examine the reduced costs of innovative SIP wall construction in addition to its energy
consumption impacts. A SIP exterior wall provides a more homogenous thermal barrier and can be erected in fewer
pieces and more quickly than a conventionally built wall. The innovation envisioned for the project was a SIP
fabricated complete with exterior and interior finishes. With manufactured finishes, on-site labor is reduced since
neither exterior siding nor interior gypsum board need to be applied. The exterior and interior of the walls then
require only finish work at the seams.

1
Affordable New Home Project

Figure 1: Prototype house

Assessment of Affordability of Panelized Home Construction


In addition to the demonstration of first cost savings potential from use of an innovative SIP, the project sought to
construct the prototype home to be affordable to low and moderate income families. Although affordability depends
on the home’s first and operating costs relative to annual income, this assessment focuses primarily on the home’s
first cost (see the addendum on page 27 for an energy performance analysis). Standard mortgage lending practices
determine the maximum mortgage amount that a family’s income level can support, and that amount determines an
affordable first cost for that income level.

2
Method

Process Review of Panel Development and Construction of Affordable New


Home
The process review used information gathered from interviews with 14 individuals involved with the project and
from documentation they provided. The Center identified these individuals and notified them in advance that
XENERGY would contact them. In addition, XENERGY interviewed two building contractors not involved with
the project but experienced with SIP construction. Wisconsin EPS, the manufacturer of the SIP used in the pro-
totype home, identified these contractors.

Table 1 shows the interviewees and the planned order of interview. The order started with participants involved
with most aspects of the project so that a complete picture of the project appeared more quickly. Due to scheduling
difficulties with the interviewees, however, the interviews proceeded in a different order from that shown.
XENERGY decided to not interview the electrical contractor after learning from the general contractor that the SIP
construction created no additional electrical construction costs. Videotape of construction shows that the electrical
subcontractor did have some difficulty running wires in the panels, however. XENERGY also did not interview the
deputy commissioner of the Milwaukee Department of Building Inspection after Milwaukee Department of City
Development (DCD) representatives provided the needed information.

Before interviews XENERGY prepared interview guides on topics with which the interviewees were expected to be
familiar. As earlier interviews illuminated project issues, the guides evolved for subsequent interviews to further
explore these issues. All but three of the interviews were in-person. Several individuals provided additional
information in second interviews in person or over the phone. Three of the interviewees displayed extensive
documentation of their involvement with the project. Of these only the homeowner offered to lend these records for
review.

XENERGY identified a number of project issues from interview responses and the contents of documentation. This
same information contributed to an historical project timeline (Appendix A). The timeline allowed observation of
the sequence of project issue onset, development, and resolution. Most of the issues were matters identified by
several interviewees, but they also include underlying difficulties observable in retrospect from an impartial
viewpoint. XENERGY classified the issues as either major or minor based on their relative importance to
interviewees or their estimated disturbance to project continuity.

3
Affordable New Home Project

Table 1: List of interviewees in planned order of interview

Title Organization

Project coordinator Carpenters Home Improvement Program (CHIP)

Master carpenter Carpenters Home Improvement Program

Project committee member Energy Center of Wisconsin

Project manager Energy Center of Wisconsin

Architect E3 Design / Efficient Building Systems

Director of Housing and Milwaukee Department of City Development (DCD)


Neighborhood Development

Home buyer

General contractor B&D Builders

SIP manufacturer Wisconsin EPS

SIP manufacturer Wisconsin EPS

Deputy Commissioner Milwaukee Department of Building Inspection

HVAC subcontractor Illingworth Corp.

Electrical subcontractor Roman Electrical Contractors

Administrative specialist, senior Milwaukee Department of City Development

Lender North Shore Bank

Representative Wisconsin Gas Co.

Builder (builder using Wisconsin EPS panel)

Builder Great Northern Construction (builder using Wisconsin EPS panel)

Assessment of Affordability of Panelized Home Construction


The analysis of affordability focused on the first-cost difference between the prototype home and equivalent homes
of conventional-wall construction, panelized conventional-wall construction, and panelized SIP construction. It did
not examine income levels nor detailed modifications to the prototype’s design that would reduce its first cost.

The cost data for the prototype home was not sufficiently disaggregated to determine which costs were influenced
by the SIP construction. As a result, a comparison of costs relied instead upon available data for SIP and
conventional construction. Additional information on the potential for cost reductions from SIP construction was
taken from three case studies of SIP and conventional construction.

4
Results & Discussion

Background to the Project

Initial Work Leading to the Project


The impetus of the Affordable New Home Project originated in 1990 with exploration by the architect into
structural insulated panels (SIP) made from recycled materials. The architect hired consultants from the Milwaukee
School of Engineering to research SIP technologies and markets. They found that a stressed-skin panel was the most
feasible SIP to fabricate. The architect established a start-up company, Efficient Building Systems (EBS), with the
idea to produce a SIP having both exterior and interior finishes. The next phase of the architect’s plan was to
establish a low-tech manufacturing plant in central city Milwaukee producing SIPs for construction of low-cost
homes in that community. The first SIP to be produced were to be used to build a prototype home to foster market
acceptance of the SIP.

Because funding was not available to build a prototype home, the architect sought a buyer for it in advance. The
architect knew the home buyer from past experience with the building trades organization where the home buyer
worked. The architect inquired about an interest in home ownership, and after some discussion the home buyer was
convinced of a desire to own a new house. The architect initially designed a ranch style home and worked with a
Milwaukee building contractor to estimate construction costs. The architect obtained a list of home sites that the
DCD would sell for as little as one dollar. While viewing the listed sites, the home buyer selected the two adjacent
lots where the prototype home now stands.

In June 1994, the architect and home buyer met with a representative of the DCD to obtain approval for the
purchase of and construction on the chosen lots. The home buyer requested to purchase both lots, giving a total of
one hundred feet of lot frontage. Documents suggest that at the time the frontage width was not an issue, although
several other cost issues were recognized. These were the removal of subsoil debris and old foundations, the
extension of sewer and water laterals to the property line, and the need to replace two existing curb cuts with a
single one. Two days after the meeting, the architect wrote to the DCD expressing expectations that the DCD would
provide a clean site with proper curb cuts and sewer and water laterals since the home buyer would not be able to
accept these liabilities. The architect and home buyer met again with the DCD in December 1994, but it was not
until 1995 that the Center became involved.

Proposal of the Project to the Center


While working with Wisconsin Demand-Side Demonstrations, the project coordinator learned of the goal to bring
energy efficiency to affordable homes from a Center annual report. The coordinator saw this as an opportunity to
enhance energy efficiency measures on buildings the Carpenters’ Home Improvement Program (CHIP) was
rehabilitating in Milwaukee. When the coordinator raised the idea to a superior, the head of the Carpenters’ Union,
that person suggested an alliance with the architect. On January 6, 1995, the coordinator, architect, and the
architect’s chosen general contractor submitted their proposal for the project to the Center.

5
Affordable New Home Project

Findings of Process Review of Panel Development and Construction of


Affordable New Home
Below we discuss findings and related issues identified from interview responses and the contents of documen-
tation. Most of the issues were identified by several interviewees, but they include issues observable primarily in
retrospect from an impartial viewpoint.

Different Goals Among Project Participants


The project was unable to demonstrate the potential for affordable housing using SIP construction in the Milwaukee
area in part because project participants had different (and sometimes conflicting) goals. As a result, the prototype
house was not carefully optimized for affordability and turned out differently from what would be expected for a
production-built affordable home. Furthermore, not as much could be learned about the potential of SIP technology
to reduce residential construction costs.

The key participants in the project were the home buyer, the home’s architect, the local carpenter’s union and its
educational program, two city of Milwaukee development agencies, minority building contractors, and the Center
and its advisory committee. The Center suspended its standard of a single contract for a project in part due to the
hesitance among these key participants to assume responsibility for the project as a whole.

The project participants had varied interests in the project. Although not strictly conflicting, these interests were
often not complementary and so diffused the focus of the project. The extent to which the project’s achievements
reflect particular participant’s interests is based in part on the extent to which these interests were pursued by the
participant. Below the interests of several key participants are described and contrasted with their other interests and
those of other participants.

The Architect//Efficient Building Systems


The architect began what became the project by investigating how low-cost recycled materials and low-tech
fabrication methods could be used to produce inexpensive building components for urban housing. The next goal
was to establish a SIP manufacturing plant in central city Milwaukee. This facility was the architect’s underlying
interest, but there was insufficient funding to proceed. The Center shared an interest in urban housing and the
innovation of SIPs, but was reluctant to fund the architect’s plan to first develop manufacturing capacity and then
develop a market for the product. In their January 1995 proposal to the Center, the architect, project coordinator,
and the architect’s chosen general contractor describe the SIP manufacturing facility simply as a possible future
component of the project.

For the project with the Center, the architect turned attention away from the manufacturing facility and toward the
more immediate need for development of the innovative SIP. The architect was optimistic that EBS could develop
and manufacture this SIP with the desired interior and exterior finishes. As described below, however, EBS was
unable to develop the SIP to meet the construction schedule. When an alternative supplier of an innovative SIP was
found in December 1995, the architect’s responsibility in the project changed once again.

The architect now had only to attend to typical architectural services to the home buyer who had been brought into
the project only as a result of the architect’s initial work. These included production of a builder’s set of
construction drawings with which a building permit could be had, and provision of construction observation

6
Results & Discussion

services for the home buyer. These typical services did not include dealing with the many complexities introduced
by the purchase of in-fill lots from the city, with the securing of financing, or project management. These matters
fell largely into the hands of the project coordinator.

It was while providing observation services to the home buyer that an issue about the inclusion of central air
conditioning arose. The architect considered that it was to be included, but was rebuffed by the project coordinator
who had taken the responsibility to contain construction costs. The architect did not play a key role in the project
after that. The architect last received a check from the Center in early August 1995 and did not respond to later
requests from the Center to provide further contracted services to the project.

The Project Coordinator/CHIP


The project coordinator’s initial idea for a project had been to improve the energy efficiency of the housing
rehabilitation projects in central city Milwaukee on which the coordinator worked for CHIP. When the proposal was
submitted to the Center, it described much of the project’s value as an educational opportunity to expose energy
efficient design and techniques to minority contractors and residents of central city Milwaukee. This benefit would
have made good use of the CHIP program that provides on-the-job education and training to new carpenters as they
refurbish existing homes. The coordinator’s interest combined job training with energy efficiency.

The coordinator did not have an opportunity to develop the project into an educational tool for new carpenters and
local contractors. Instead the coordinator performed much of what was personally thought that the architect should
have been doing. The site selection, home buyer, use of SIP construction, and manufacturing plant had all entered
into the project because of the adoption of the architect’s earlier work. This earlier work included many
unreconciled issues about the purchase of the lots, the condition of the site, the development of the SIP, and the
design of the home. The coordinator’s interest turned from educational aspects to the timely completion of a quality
home without exceeding the home buyer’s ability to pay.

The Center
The Center’s interests in the project included energy efficiency, innovation, and affordable urban housing. SIP
construction clearly satisfies the first two interests, but not necessarily the last. SIP construction is unconventional
largely because the material costs are more expensive than conventional construction. The savings available from
SIP construction is in reduced labor relative to conventional construction, but it cannot be had with inexperienced
SIP installers. Neither the architect nor the general contractor had any SIP construction experience. In addition, the
design had almost twice the floor area considered in the housing industry for affordable homes, and greater area
requires greater cost.

SIP construction itself could not meet the interest in innovation since it has been in existence for several decades. It
was the proposed interior and exterior finishes that provided innovation. As the project proceeded, it became
apparent that such finishes could not easily be developed. Rather than acquiesce by applying a thin gypsum board to
the interior surface, the Center maintained an interest in innovation. The project participants continued their search,
and when Wisconsin EPS announced it had successfully tested a SIP with a new interior finish, the project
embraced the product. Although the finish never met expectations, it was truly an innovation. What would have
been a reasonable interest in expediency did not upset the Center’s interest in innovation.

7
Affordable New Home Project

The Department of Community Development/Redevelopment Authority of the City of Milwaukee


The interests of the DCD and Redevelopment Authority of the City of Milwaukee (RACM) were to encourage new
home construction on empty lots in low and moderate income areas. These agencies did not have an interest in
affordability per se, but in encouraging reliable home buyers to build quality homes for themselves. Their guidelines
for the sale of properties included criteria for proof of financial dependability and for evidence of careful home
design. The sale of lots for just one dollar could alone be said to promote affordability.

The prototype home’s design was subject to scrutiny by the agencies because the lot was offered at a low cost to
serve the public interest in community development. In addition, due to its proximity to an historic district, the
design had to adhere to features particular to that district. The city asked for front window shutters, steeper roof
pitches, longer roof overhangs, several taller windows, and an exposed, decorative block foundation. While these
home design features increased costs and thus decreased affordability, they were in the interest of maintaining
architectural consistency, a community feature which itself encourages development.

The Home Buyer


The home buyer had an interest in having a quality home that was affordable and built soon, not in SIP construction
or SIP innovation. The home buyer realized that there was, in fact, some risk in buying a prototype SIP home. The
home buyer made choices in the face of conflicting interests of affordability, quality, and availability. For example,
the home buyer decided to forego the cost of a new garage to be able to afford a basement instead. Likewise the
framing-in of a future walk-in closet and lavatory off the master bedroom was withdrawn from the plans because of
excessive cost. The increase in planned floor area from 1300 to 1820 square feet may have led to these other
choices, but that increase itself was a choice in which the home buyer had some part. Because of a strictly held limit
on the mortgage amount, however, cost overruns were not cause for concern for the home buyer unless they delayed
completion of construction.

The home buyer took an opportunity for a significantly reduced mortgage rate although it pushed back the start of
construction and the date of occupancy. The home buyer also chose to buy two rather than one lot, and so to have an
extra wide lot. The additional up front cost was only one dollar. The choice of two lots was made and clung to even
though over the course of the project the additional width consumed a large number of negotiating hours and added
to landscaping and soil excavation costs.

Wisconsin EPS
The interest of Wisconsin EPS in the project was as an opportunity to create sales. They knew of the project’s future
interest in building a Milwaukee SIP manufacturing facility. Yet they viewed it not as a competitive threat so much
as a potential licensee of their SIP process or as a purchaser of their foam cores. They never received an overview of
the project but did feel as though they were a partner in the project. They did not recall discussion of affordability,
but understood only that the project sought energy efficiency and innovation.

Combined Participants
The interest in affordability associated with the project seemed to fade as the project progressed. The prototype was
not extravagant, but neither was it strictly modest considering it was built for a moderate income family. It was a
home customized for the sake of a specific home buyer. Many project participants may have had an interest in the
home’s being more than the humble structure one expects of an “affordable” home. A beautiful, big new home

8
Results & Discussion

promotes neighborhood development which is good for the DCD and for the home buyer. Likewise it builds the
reputations of the architect, CHIP, and the general contractor, B&D Contractors. But as the home plan changed
from its initially planned 1300 square feet to its existing 1820 square feet, costs increased. The home became less
affordable to low and moderate income families in central city Milwaukee. The Center, meanwhile, carried much of
the additional costs. It should be noted here that B&D Contractors, by not invoicing for labor and materials
estimated between $15,000 to $20,000, also carried an amount of the extra costs of the home.

Unusual Construction Oversight


The different goals of the project participants and the extent to which they could pursue them were influenced in
part by the oversight of the construction aspects of the project. The chain of command of the construction aspects
were nonstandard. The architect received no payment from the home buyer but nevertheless acted at times as the
buyer’s representative to city agencies. The architect addressed some but not all of the administrative issues with the
city that are typically duties of the general contractor. Since the general contractor did commercial work primarily
and not residential work, this aspect of the architect’s activity may have been advantageous to the project. The
general contractor also was accustomed to receiving plan sets that specified materials, not the plan sets provided by
the architect that specified material performance. The commercial contractor therefore became responsible for
selection of specific materials for the residential construction.

The general contractor was not directly accountable to the home buyer as is the norm, but answered to the project
coordinator instead. The project coordinator in this way insulated the home buyer from problems that arose during
construction, but also removed some decision making power from the home buyer and architect. This at times may
have had the beneficial effect of expediting construction when the project coordinator could respond more quickly
to problems than could the home buyer or the home buyer in consultation with the architect.

The Center suspended its standard of a single contract for a project. Appendix B shows a diagram of the project’s
relationships. Not only was there more than one contract, but the architect’s project activity was executed without
signed contract. The architect was concerned about ownership of the home design which the Center’s contract
assigned to the Center. Contract negotiations with the project coordinator and the architect continued after the
project’s initiation.

Problematic Development of Panel


The development of the innovative SIP did not meet the construction schedule of the prototype home. To meet that
schedule an alternative SIP was selected from an existing manufacturer that had just introduced an innovative SIP
product. This product did not include the desired prefinished exterior but it did have a fire-resistant interior finish.
The interior finish failed to meet expectations, however, and resulted in additional construction costs and delays.

The project hinged on the development of an innovative SIP, one with both interior and exterior finishes. By
eliminating the applications of exterior siding and interior gypsum board, it would provide additional labor savings
over an ordinary SIP. When the project began, no such SIP was available on the market. The architect believed a
start-up company could have the SIP ready within several months, but this was not to be the case. The failed effort
to develop the panel consumed a great deal of the participants’ time as it led to a search for and selection of a SIP
from an existing manufacturer.

The architect believed it possible to have interior and exterior finishes on a SIP, and through EBS worked with
several chemists to develop the finishes. They considered a polymer finish for the exterior and a fire retardant finish

9
Affordable New Home Project

for the interior, finishes to be applied to the OSB that sandwiched a foam core. In March 1995, EBS planned a
tentative delivery date of the SIP with both finishes for mid-August 1995. Representatives of the Forest Products
Laboratory (FPL) and the Center convinced the architect to abandon the exterior finish due to its potential to retain
moisture and damage the OSB. By December 1995, EBS had not successfully developed an interior finish, creating
some anxiety among project participants.

In December 1995, after the Center’s project committee had stipulated the need for an interior finish, Wisconsin
EPS announced that they had an interior finish that had passed the requisite fire tests. The architect knew of
Wisconsin EPS from earlier investigation of SIP technology and had visited their plant in June 1995. Wisconsin
EPS had been awaiting their own fire test results before announcing their new finish called “Blazeguard” (now
called “Firefinish”). It was actually not Wisconsin EPS, but the company from whom it licensed the product, that
developed the new finish. Wisconsin EPS would produce its very first Firefinish SIP for the project.

The news of an interior finish was welcome, and due in part to construction deadlines, it made Wisconsin EPS the
first choice as supplier. The architect produced a drawing of the house using panels for both the walls and the
ceiling, and Wisconsin EPS developed bids from that. The bid with the exterior walls only was selected. The SIP
had to be delivered by the start of construction, however, and this put a lot of pressure on Wisconsin EPS to produce
a product they had never manufactured before.

Wisconsin EPS did deliver the innovative SIP in time for construction, but the roughness of the interior finish was a
disappointment to project participants. The absence of an exterior finish had also significantly reduced the SIP’s
labor savings potential. Meanwhile, because an interior finish could also trap moisture in the OSB, installation of an
air-to-air heat exchanger became more important. The heat exchanger installation added a $2000 cost.

Unsatisfactory Interior Finish of Panel


By the start of construction, the project had located a SIP with a fire-tested interior surface. When delivered,
however, the innovative SIP did not have the smooth finish that project participants had anticipated. This led to
repeated consultations between the project coordinator and B&D Contractors on how to proceed to finish the
panels. Eventually a thick coating of wall compound was used to smooth the wall surfaces to match the interior
walls. Such a finish is not unlike what Wisconsin EPS recommends for their fire-tested interior surface, but this was
not clear to project participants.

Project participants welcomed the new Wisconsin EPS product when samples of it were displayed by the manu-
facturer’s representative at a project meeting. The samples had very smooth finishes with consistent coloration, so
that finish is what project participants expected to see delivered to the site. The samples, however, had not come
from Wisconsin EPS but from the AFM Company in Minneapolis, from whom Wisconsin EPS licensed the SIP
process. The samples did not have the rough and irregularly colored bare Firefinish surfaces like the SIPs delivered
to the construction site. The samples had a Firefinish surface coated with a “knock-down” finish frequently used to
texture bare gypsum board. Such a finish is sprayed on walls or ceilings and a trowel is then used to knock down
high spots as desired. The need to apply that finish on-site to the SIP after its installation was not clear at that
meeting.

When the SIP were delivered to the building site, the finish problem was immediately apparent. The color was
inconsistent and the surface was rough, so painting alone could not match the SIP surface with that of the interior
gypsum board walls. Gypsum board, though a simple solution, could not be installed as it would have invalidated

10
Results & Discussion

the innovative difference of the SIPs. CHIP consulted with B&D contractors and other trades people on what finish
could be used before settling on a troweled-on finish.

The problem with the interior finish created some conflict between B&D Contractors, the project coordinator, and
Wisconsin EPS. B&D requested compensation from Wisconsin EPS in the form of a reduced cost, and eventually
received a $2000 refund. From interviews with project participants it appears that the conflicts have been largely
resolved.

Construction Costs Exceed Affordability


The project was based on the premise that exterior wall construction using an innovative SIP could cost less than
conventional framing. In addition, the project’s intent was to build a house affordable to individuals of low to
moderate incomes. When construction began, not all participants had a strong commitment to affordability,
however, and the home’s final cost was not only unaffordable to low and moderate income families but also on the
higher end of cost of similar homes of conventional construction.

The project began with the understanding that a new building technique could potentially reduce residential
construction costs. The technique, panelization, was not new, but the component to be used was. SIPs are relatively
new but seldom used in low-cost construction. They are more frequently found in higher cost, market-rate homes.
Custom homes of post and beam construction are a market niche well-suited for SIPs.

The architect, the representative of Wisconsin EPS, and two residential contractors (referred by Wisconsin EPS)
that use SIP all believed that panelized construction using SIPs yields at best a small cost reduction over conven-
tional walls. Butch Johnson of Perma R Products, a SIP manufacturer in Johnson City, Tennessee, used a general
rule that materials and labor were two percent less expensive for SIPs than stick-built exterior walls, but only for
eight- and 10-foot wall heights. For nine foot walls, SIPs were nine percent more expensive. One of the residential
contractors said that SIPs can yield a net savings even though SIP materials cost more than conventional materials
even when lumber prices are high. The contractor estimated that when an experienced crew installs SIPs more
quickly than a conventional wall, at best the SIP wall costs might be 80 percent of the conventional wall cost. The
Structural Insulated Panel Association (SIPA, www.natraweb.com/keeper/sipa), the SIP trade association located in
Washington, D.C., does not even make such a claim. Instead they state that SIPs will cost from $0.25 to a dollar
more per square foot in materials and labor than conventional, stick-built construction. This cost difference is for a
standard SIP without a fire-resistant interior treatment like the innovative SIP, and so excludes the savings potential
of avoided gypsum board material and installation costs. SIPA has helped to reduce the first costs of an affordable
housing project for Habitat for Humanity, but did so by donating SIPs.

Apart from whether or not SIPs reduce exterior wall system total costs, other areas besides exterior wall systems
must be addressed to achieve a level of savings in housing construction costs that will allow for affordability to low-
and moderate-income families. Exterior wall system costs alone are simply too small a fraction of total home
construction costs to provide significant first-cost savings. The 1997 National Construction Estimator guide (Kiley,
1996) provides a detailed cost breakdown of the various components of residential construction based on a 1600-
square-foot single-family home. It allows for adjustments regarding the size of home, number of stories, finishes,
etc. The material and labor breakdowns allow calculation of the fraction of total construction costs associated with
the exterior wall systems. The guide includes a conventional exterior wall system roughly equivalent to that used in
the prototype home. It has 2" x 6" stud walls including drywall interior, wood siding exterior, and R-19 insulation.
The costs of this exterior wall system adjusted for Milwaukee labor and material rates are given as:

11
Affordable New Home Project

• $ 4.20 per square foot, or


• $ 33.50 per running foot of eight foot high wall.

The 1800-square-foot prototype home has 144 running feet of eight foot high wall per floor for a total of 288
running feet. The exterior wall system cost estimate is thus $9648. Based on an adjusted residential construction
cost per square foot for Milwaukee of $58.28, the estimated total construction cost of this home is $104,902. The
exterior wall system’s fraction of the total cost is thus only nine percent. Applying the residential contractor’s earlier
estimate of the best possible SIP exterior wall cost being 80 percent of conventional, the savings on exterior walls
amounts to just a two-percent savings in the total construction cost. Such a small construction cost savings makes a
house only very slightly more affordable

The architect had not built a house using panelization with SIPs before, but wanted to employ an innovation in the
SIP. Panelization is a multifaceted technique with a long history of reducing construction costs. Here it was used
only on the exterior walls although it can be used for floors and ceilings too. It does not require SIPs, but may use
the exact same materials as conventional, stick-built construction. The difference between conventional construction
and panelization is that the latter uses materials prefabricated off-site. In this project, panelization was limited to the
simple substitution of a SIP for a conventionally built exterior wall. This minimal use of panelization reduced the
potential for cost savings.

The first cost estimate for a 1300-square-foot prototype home was $60,430, excluding the cost of the SIPs and their
installation (see Appendix E for cost breakdown). This estimate is believed to have been based on a one-story,
ranch-style home. The actual SIP materials cost was $9658 ($7658 when $2000 refund to contractor is subtracted),
but their installation labor cost is not known. While details of the floor plan for this first cost estimate are not well
known, it is a cost that would be affordable for moderate income families. The other cost estimate totaled $126,935
once adjusted to reflect some actual costs (see Appendix F for cost breakdown). The second estimate includes costs
for special energy efficient features besides the panels. The project proceeded under this second estimate and
exceeded it by less than 20 percent. The final cost was over $152,000 (see Table 2). The finished product is
attractive and of high quality, but it is clearly not affordable to low and moderate incomes.

Administrative Complexity Due to Purchase of In-fill Lots


Conflicts concerning the home buyer’s purchase of two adjacent lots and unexpected requirements of city agencies
responsible for the disposition of the lots delayed the design and construction of the home. While the conflicts
required a great deal of administrative time to pursue and resolve, they nevertheless provided a valuable lesson in
dealing with in-fill lots generally and Milwaukee city agencies in particular.

The home buyer originally had made an offer to the DCD for a pair of adjoining, in-fill lots without any indication
that the site might create a problem or that public scrutiny would be required. The lots were available from DCD for
a nominal cost of one dollar. As the process of sale progressed, however, the selected lots generated numerous
administrative problems largely due to an overlapping jurisdiction between DCD and RACM.

The pair of lots created a site wider than most in the neighborhood, and this became a contentious point with a
neighbor and the DCD. Because the lots were administered not simply by DCD but also by RACM, it was necessary
to demonstrate some public good resulting from the sale. The public hearing required by the RACM process before
final approval of sale brought an adjacent neighbor who had circulated a petition hoping to add some of the lot area
to their own property. Had the lots been administered only by DCD, the hearing would not have been necessary.

12
Results & Discussion

Miscommunications regarding the lot size and associated details such as sewer laterals and curb cuts led to an
exchange of letters and faxes between the DCD and project participants. This created some friction with repre-
sentatives of DCD. Before the RACM hearing, the DCD established a position in favor of sale of a single lot. The
DCD believed that the single lot was more appropriate for affordable housing and that it left the adjacent lot
available for a similar structure. The single lot sale also made use of the existing curb cuts.

The reduced site size proved unacceptable to project participants. Accompanied by several other key project
participants, the home buyer attended the public hearing. Despite the DCD staff’s recommendation, a compromise
was reached that allowed the neighbor one quarter of the full width of the two lots; and the home buyer, the
remaining three quarters. This was a compromise position promulgated by the DCD staff.

Numerous Inputs to Design of Prototype Home


The design of the prototype home was not strictly the domain of the architect and home buyer. The city agency’s
design requirements had to be honored. Likewise, because the Center provided construction funding, the Center’s
design requirements had to be considered. Other parties to the project also had inputs. As these contributions were
integrated into the design they demanded more design time of the architect and increased construction costs.

Compliance with City Requirements


The nominal lot cost charged by the DCD carries with it an obligation to adhere to city design requirements. The
city’s design guidelines might have suggested to the architect what would be expected, but these apparently were
not clear to the architect at the outset. It is possible the DCD guidelines were not standardized when the architect
began the design since the single page of guidelines that we obtained, entitled “Infill Guideline and General Design
Criteria for 1 & 2 Family Residential Houses,” was dated May 5, 1997.

The first design, before the Center became involved with the project, was for a ranch style house. This changed to a
two-story with a smaller footprint as is recommended by the DCD guidelines. Additional features that had to be
integrated into the design included more exposure of a decorative block foundation, a greater setback from the
sidewalk, longer roof overhangs, steeper roof pitches, and a rotation of the house plan. Had the site not been close
to an historic district, there may have been a far more relaxed design requirement. These requirements added design
time and an unknown additional material cost to the construction.

Inputs from Other Project Participants


When the initial two-story design was presented at a project meeting, several participants had inputs. Among these
was a call for larger bedrooms and the addition of a foyer. These increased the total floor area of the house. The
earliest known floor area was 1300 square feet and the final area was 1820 square feet. The foyer provided some
energy benefits, as did the thicker exterior walls, an air-to-air heat exchanger, and more ceiling insulation. After
work began, more south-facing windows also were suggested. While none of these were unreasonable or
extravagant inputs, all added to the cost of the house.

Confusion and Costs from Subsoil Contamination


When excavation began on the site in spring 1996, demolition debris and foundations from the previous two homes
were found underground. This rubble could not be left in the ground, nor could it be disposed of without costly and
time-consuming hand sorting. The problem delayed the start of construction and, due to a misunderstanding about

13
Affordable New Home Project

the liability for the cost of removing the debris, led to repeated communication between key project participants and
the DCD.

Subsoil debris were not entirely unexpected. As early as June 1994, the architect and home buyer knew of the
potential for subsoil contamination on the chosen site. At that time the architect wrote to the DCD for clarification
on their ability to deliver an “environmentally clean site.” Over a year later, and almost ten months before
excavation began, a letter from DCD to the home buyer explicitly stated that responsibility for all excavation
expense was the home buyer’s. The letter also noted that most of the city’s in-fill lots have old foundations on them.

The administrative problem of cost liability took months to resolve. The project coordinator believed the city would
compensate the project up to $3000 for additional site development costs due to subsoil debris. That figure may
have been taken from an April 1995 letter to the home buyer from the general contractor initially chosen by the
architect. The letter had a cost item limit for site development of $3000. It is not clear how that figure was reached,
but DCD policy allows the property buyer to recover only as much as the purchase price of the site up to a $3000
limit. Since the site cost only one dollar, that was as much as the city would pay for site development.

Loan Closure Delays


The increase in the estimated construction cost led to a delay of several months in loan closure. That delay put off
the start of construction into the spring of 1996, slowed the project as a whole, and created additional administrative
work for the project coordinator. The hiatus was not wasted, however, as it allowed Wisconsin EPS time to produce
the innovative SIP for delivery.

The home buyer was eligible for a mortgage amount of approximately half the estimated construction cost, so the
lender required evidence of additional funding before closing the mortgage. Similarly, the DCD required proof of
financing before final sale of the land. The lender did not provide proof until an agreement was made that the Center
would first spend funds equal to the difference between the estimated construction cost and the mortgage amount.
An additional delay in loan closure resulted as the home buyer awaited a substantial reduction in the lender’s
mortgage rate. The reduction came when funds were made available to the lender from the settlement of a class
action suit over insurance redlining.

Uncertain Liability for Sewer and Water Lateral Costs


The issue of liability for the costs to run city sewer and water laterals to the property line consumed much
administrative effort in the project. The exact costs for this work are not known as no invoice was found that
addressed them specifically. This issue remained outstanding even after final submission of invoices in December
1996 from CHIP to the Center.

As early as June 1994, the architect and home buyer knew that sewer and utility laterals, curb cuts, and sidewalks
would increase costs at the chosen site. The architect wrote to the DCD for clarification on the DCD’s ability to
deliver the site with these features prepared so as to be economically usable. Specifically, the architect’s drawings
showed that the city would remove two existing curb cuts and their sidewalks, replace these with a single curb cut,
cap an old water pit on the property, and run new sewer and water laterals from the mains to the property line. The
city does not typically provide this sort of site preparation for in-fill lots, but under certain conditions might
subsidize it.

14
Results & Discussion

In a June 1995 meeting, the DCD said that the costs for sewer laterals and curb cuts might be met if the project
applied to RACM for funds from the Community Block Grant Administration. Sites under RACM jurisdiction are
eligible for block grant funds. In early July 1995, a letter from the DCD stated that RACM would apply for grant
funds but only for replacement of existing curb cuts with a curb, not for a new curb cut. The letter also stated that
laterals were the home buyer’s responsibility. Less than two weeks later, a fax from DCD said that the city had no
funds even to replace the existing curb cut. The application for grant funds had not been made as of late October
1995, and it is not known whether it ever was made.

Incomplete Project Documentation


An evaluation of the project was difficult because of poor documentation, especially since more detailed con-
struction cost data were lost in a major flood. No single, complete repository of documentation existed, but project
participants kept individual documents related to their activities. Important information to the project, such as the
minutes of meetings of key project participants and construction cost estimates, was not well kept.

Findings of Assessment of Affordability of Panelized Home Construction

Prototype Home Costs


We examined the available project documentation with the intent to develop a total construction cost estimate for
the prototype home when built at production scales. Such an estimate would account for labor savings from faster
construction by crews as they became both proficient with SIP techniques and accustomed to the design of the
prototype home. Unfortunately, detailed cost data were lost in a major flood in Milwaukee that effected the general
contractor’s offices, and what cost data were available were not sufficiently disaggregated. As a result, estimation
based on the prototype costs was very difficult and of questionable value. We instead used available data
disaggregated by labor and material costs associated with panelized construction techniques. A comparison of these
costs with similar costs for conventional construction produced a more useful estimate of savings potential due to
panelized construction.

A review of the available project documentation allows for a rough estimate of the “hard” costs associated with the
construction of the prototype home, namely the costs of construction materials and labor. This estimate is rough for
two reasons. First, it is not certain that all of the costs associated with the prototype home have been identified. The
cost analysis is based largely on the invoice records available from the performing general contractor. These records
give limited description of the cost items covered in invoices submitted to CHIP, and no description at all in
invoices to North Shore Bank. Second, there are only undocumented estimates of “donated” costs, i.e., costs
incurred by the general contractor exceeding the amount invoiced, and costs associated with volunteer labor and
material contributions. The general contractor provided estimates for some of these costs including installation of
gypsum board and interior painting. Costs from contractor invoices and estimates of “donations” are shown in Table
2.

The total in Table 2 does not include certain “soft” costs. These include predevelopment costs associated with land
acquisition and regulatory approvals, architectural fees, management fees paid to CHIP, a special fee paid to the
homeowner, and other expenses that may have been associated with the project. These added costs are substantial.
Available records indicate that CHIP received from the Center at least $20,000 to manage the project; the architect,
nearly $10,000 for services not limited to architectural design; and the home buyer, $3000 to allow for

15
Affordable New Home Project

postconstruction energy monitoring and other investigations. Most of these soft costs are not expected to be
associated with production home construction, however, and may be viewed as costs necessary to a demonstration
project. Any downsizing of the home to make it more affordable would require additional architectural design work.

Table 2: Prototype home construction costs

Invoiced by general contractor to CHIP and the lender (see Appendix D for a history of general $134,952
contractor’s invoices).

General contractor’s conservative estimate of uninvoiced costs associated with the construction $15,000
of the prototype home. Contractor believes that this amount may have been as much as $20,000.
The amount represents expenses beyond the contracted construction costs.

Gypsum board installation on interior walls. The contractor provided this estimate for labor and $1600
materials donated by minority tradesmen.

Painting interior surface of SIPs. No estimate of the value of this work was available. $500
XENERGY believes this estimate is reasonable.

Total $152,552

In addition to the problem of incomplete accounting of total costs, there is very little documentation of disag-
gregated construction costs. In neither the invoices to CHIP nor invoice records to the lender did the general
contractor give a thorough breakdown of materials, labor, and other costs. While useful to know the final cost of
construction, it is critical to have a breakdown that identifies materials, labor, and other expenses separately. Such a
breakdown allows a determination of the areas of the largest costs, and so what areas might contribute the most to
cost reductions. The breakdown is also essential to a measure of the labor costs for construction of the exterior walls
using the SIPs. More detailed cost information also allows a more meaningful comparison of the costs associated
with the prototype home and other panelized homes. This comparison could determine the relative efficiency of the
erection process and whether the pricing of materials was competitive.

To build an affordable home that employs the latest innovations in panelization, the first cost must be substantially
less than the $150,000 cost of the prototype. Even at $75,000 a subsidy would be needed to reduce the first cost to
an affordable range of $60,000 to $50,000. The following section on the cost of a production unit continues the
discussion of how the cost of the prototype home compares to similar homes being built today.

The Prototype Home and Affordability


A key objective of the project was the use of an innovative SIP that would reduce construction costs and make a
home more affordable for inner-city households. How “affordable” is the prototype home? The home’s $150,000-
plus price tag is well beyond affordability for the typical inner-city family. One way to get a better handle on the
affordability of the prototype and, more importantly, to understand how much more affordable it will need to be to
meet the demand of the intended market, is to compare the prototype’s cost to that of other “affordable” homes.
There are two Milwaukee developments, CityHomes and the Merrill Park Initiative, and an affordable housing
development in Louisville, Kentucky, that can serve as comparisons. Another point of reference is a SIP house
designed and developed by the University of Oregon’s School of Architecture and Allied Arts and nonprofit
housing groups.

16
Results & Discussion

CityHomes
This inner-city subdivision consists of 43 two-story homes developed by the City of Milwaukee. Since construction
of two model homes in late 1995, all but two of these homes have been sold. This development was designed as
affordable “market-rate” housing for middle-income families. Home pricing was to start in the low $70,000 range.
This subdivision development represents the first development of its kind in the inner-city since the development of
the Halyard Park subdivision in the Harambee neighborhood in the 1970’s. The architectural details incorporated in
CityHomes are similar to those required by the city in the prototype home, including two-story construction, raised
foundation, porch, full basement and other details that make these homes compatible with existing homes in the
neighborhood. No information was available on the operating costs of these homes or on their energy efficiency.
The homes in the CityHomes development were site-built using conventional construction, but were not built to be
especially energy efficient like the prototype. Nonetheless, the construction cost associated with these units and the
subsequent selling price (between $75,000 and $80,000) provide a context for discussing the affordability of the
prototype home.

The typical costs associated with the construction of a CityHomes unit are described in Table 3. The total costs of
the A and B models are more than $30,000 less than that of the prototype home. By another measure, the unit cost
per square foot of the CityHomes models are $70 and $68 compared to the approximate $84 cost of the prototype
home.

Why is the prototype home more costly than a comparable size home built with conventionally framed exterior wall
panels? One reason may have something to do with the fact that the CityHomes builder is an experienced residential
developer, while the prototype’s general contractor is a commercial building contractor with little experience in
residential construction and no experience in the use of SIPs. Additionally, there were 43 homes built in the
CityHomes development with similar and, in some cases, identical floor plans, compared to the single, customized
prototype home. Finally, the city acted as developer in the CityHomes project and so had greater control over
certain site improvement costs.

It is important to note that the CityHomes development still required a significant subsidy to make these homes
affordable to the targeted middle-income market. As indicated in Table 3, the typical home in the CityHomes
development cost over $100,000 to build. The city felt that these homes would need to be priced from $75,000 and
$80,000, however, to attract middle income families to an otherwise low and moderate income neighborhood. The
difference between the cost to construct these units and the selling price was made up by the formation of a Tax
Incremental Financing District and a foundation grant. Whether the developer/builder suffered a loss or lower than
usual profits on this project is not known.

17
Affordable New Home Project

Table 3: CityHomes construction details, costs, and pricing

Detail Model
A B
Unit size sq. ft. (includes 3 bedrooms, 1.5 bath) 1750 1650

Base construction cost $100,000 $97,000

Walks and garages $10,000 $10,000

Other costs (assumed by the city)

Sewer and water to property line $3500 $3500

Hauling excavated soil $1500 $1500

Sub-surface condition $500 $500

Landscaping $1800 $1800

Surveys $500 $500

Building permits $1200 $1200

Total costs $119,000 $116,000

Unit cost per square foot $68 $70

Asking price $80,000 $75,000

Merrill Park New Home Initiative


The Merrill Park initiative of the Milwaukee Housing Assistance Corporation, an experienced nonprofit developer
of inner-city properties, involves the redevelopment of a city block including four two-story, single-family homes
on raised foundations and full basements. Two of the four units planned have been built. The units have 1848
square feet of floor space. Their construction includes exterior wall panels fabricated off-site in a plant. These
panels use conventional framing techniques rather than SIPs as used in the prototype home. The construction costs
associated with these homes are outlined in Table 4. A more detailed breakdown of the costs associated with the
construction of these units is provided in Appendix C.

Table 4: Merrill Park construction details, costs, and pricing

Unit size sq. ft. 1848


Unit construction cost $65,881
Footings, foundation, basement floor $9270
Site work $13,613
Parking slab for future garage $2016
Total costs $90,780
Unit cost per square foot $49
Asking price $74,900

18
Results & Discussion

The Merrill Park homes cost less to build than both the prototype home and the homes of the CityHomes devel-
opment. The Merrill Park homes compare quite closely with the prototype home in respects to unit size and design.
In addition, the developer’s asking price for a Merrill Park home ($74,900) is very close to what the home buyer
paid for the prototype ($70,000). The low construction cost achieved in this development, like in CityHomes, may
be attributed in part to a more experienced residential developer, less customization for individual home buyers, and
simpler floor plans. Once again, the construction of more than one unit allowed for some overall economy.
Additionally, it appears that the use of manufactured, exterior wall panels in this development may have allowed for
some savings in labor and construction time. The Merrill Park project has not been evaluated to determine such
savings, but if simply compared to CityHomes units the savings could be as much as $10,000 to $15,000 per unit.

Overall, the Merrill Park homes most strongly resemble the prototype home. A close comparison of the specific
costs associated with these homes would be instructive, but this requires a detailed breakdown of the costs asso-
ciated with the prototype home. The Merrill Park Initiative home does demonstrate, however, that an 1800-square-
foot home using factory-built panels can be built at a cost far less than that of the prototype home.

FISCHERSIPS Rent-To-Own Program


FISCHERSIPS (www.fischersips.com), a panel manufacturer and construction firm based in Louisville, Kentucky,
developed a program to provide affordable housing to low and moderate income families that want to purchase a
home in Louisville’s inner-city area. The firm has built twenty homes over the past year or so and plans to build
thirty more units beginning later in 1997 when construction of a new modular housing plant is complete. Modular
housing uses off-site fabrication to produce three-dimensional components for on-site assembly. The twenty homes
built thus far are not modular but include exterior walls and ceiling areas that are constructed of SIPs similar to
those used in the prototype home. These panels are manufactured by FISCHERSIPS and each home is constructed
by the firm. The homes have 1152 square feet of floor area. This is significantly smaller than the prototype home
and does not include a basement. Basement floor costs were about $3000 for the prototype home and the Merrill
Park homes. The limited information available on the construction cost of these units is provided in Table 5. The
firm also offers a larger home with four bedrooms that sells for $69,000. The moderate climate of Kentucky might
account for some cost difference relative to Milwaukee. For example, it is not clear that these homes use double-
glazed windows or a less expensive single-pane window. The particular SIPs used may not be as thick as those in
the prototype although FISCHERSIPS does make a 71/2 inch thick SIP.

The FISCHERSIPS units are the most affordable of the four projects examined here. In fact, this is the one project
that offers homes that could be made affordable to low and moderate income families with a limited subsidy. The
thirty additional homes yet to be built will be modular homes with panelized exterior wall systems using SIPs.
Combining modular construction and SIPs may allow for still more affordable homes.

The affordability that this program offers can be attributed to the experience of the FISCHERSIPS firm, both in the
production of SIPs and the construction of homes using these panels. The number of units being built also
contributes to the affordability of the homes. It is significant to note that the FISCHERSIPS program goes beyond
reducing construction costs to provide affordability. They include a rent-to-own option that allows low income
families that would otherwise have little chance of qualifying for home ownership to eventually own a home. The
rent-to-own option is one that should be considered in any inner-city Milwaukee program, especially when available
subsidies are limited or do not exist.

19
Affordable New Home Project

Table 5: FISCHERSIPS Construction details, costs, and pricing

Unit size sq. ft.(includes 3 bedrooms, 1.5 bath, no basement, no garage) 1152

Total Construction Costs not available

Asking Price $59,000

Unit cost per square foot (based on asking price) $51

University of Oregon’s Cascadia Home


The Center for Housing Innovation in the University of Oregon’s School of Architecture has developed a low-cost
home that uses SIPs in the exterior walls and roof. The design is a very simple three-bedroom home with 1040
square feet of living space. A prime target market for the home is the growing nonprofit housing industry. The
design is small, simple, and conservative because consultation with nonprofit housing groups suggested that was the
product they wanted. At the same time there are a number of options for interior floor plans and for exterior façades
so that a development need not have look-alike units.

The rectangular, two-story design employs passive solar features such as a slab-on-grade first floor for thermal mass
and low-E windows situated for daylighting and winter heat gain. Two plans were created specifically to
accommodate solar access on north-south and east-west oriented building lots. All plans use exterior walls of 6”
thick SIP with an R-value of 23 and a vaulted second floor ceiling with a roof of 10” thick SIP with an R-value of
40. According to the Energy Studies in Buildings Laboratory at the University of Oregon, the design is 46 percent
more energy efficient than standards set by the Model Energy Code.

The SIP lengths are kept shorter than what would be expected for production housing to take advantage of one of
the nonprofit housing industry’s biggest resources: volunteer labor. Short lengths can be moved and installed by
hand instead of by expensive cranes. Volunteer labor can also complete more of the building since SIP construction
requires less skilled labor than stick-built.

The preference for manual labor does not mean that production time is unimportant in the nonprofit housing
industry. One of the SIP benefits described in the Cascadia documentation is its quicker construction compared to
stick-built homes. Processes already slowed by a lack of machinery may benefit the most from SIP construction.

The Cascadia was developed to minimize construction costs and does so in part due to its conservative amount of
floor area. The cost per square foot is $53. Table 6 lists the construction costs as provided by Energy Studies in
Buildings Laboratory at the University of Oregon. These costs include labor, materials, overhead, and approx-
imately a 10-percent profit. The labor and material costs are based on current rates in Eugene, Oregon, and so do not
reflect costs in Wisconsin.

20
Results & Discussion

Table 6: Cascadia construction details and costs

Unit size sq. ft. 1040

Foundation $4092

SIP panels $17,206

Other exterior $4276

Interior $17,095

Porches $350

Plumbing $5052

Electrical $6240

Miscellaneous $800

Total costs $55,111

Affordability Summary
Table 7 features selected information from earlier tables and includes an “Ideal” Affordable Home category that
represents a new affordable home idealized with respect to first costs. The parameters established in this category
are based on the information provided by the three projects examined and what is known about affordable inner-city
housing demand. For example, Table 7 shows that the FISCHERSIPS units are the most affordable and would
require little if any subsidy when the rent-to-own option is offered. The size of the FISCHERSIPS units, however, is
quite small and a more desirable unit would be one that offered at least 1400 square feet as indicated in the Ideal
Affordable Home category. The costs associated with the Ideal Affordable Home are similar to those of the
FISCHERSIPS units, but the asking price is lower to account for what is affordable to low and moderate income
inner-city Milwaukee households. This points to the existing reality that a subsidy would be required to make even
an Ideal Affordable Home genuinely affordable to a low income Milwaukee household.

Table 7: Summary of construction details, costs, and pricing

Home Prototype CityHomes A CityHomes B Merrill Park FISCHERSIPS “Ideal”


Affordable Home

Unit size (ft2) 1852 1750 1650 1848 1152 1400

Total identifiable costs $152,00 $119,000 $116,000 $90,780 not available $60,000

Unit cost per ft2 $84 $68 $70 $49 $51 (based on $43
asking price)

Asking price $70,000 $80,000 $75,000 $74,500 $59,000 $50,000

21
Affordable New Home Project

A comparison of the unit size, total costs, and asking prices of the three housing projects described above and of the
Ideal Affordable Home with those of the prototype yields some idea of the extent to which various aspects of the
prototype home might need to be adjusted to achieve greater affordability. A comparison of the Ideal Affordable
Home and the prototype home suggests that the prototype home has a long way to go to achieve affordability. If this
SIP home is to be affordable to low and moderate income families in Milwaukee, unit size and construction costs
would need to be reduced. The asking price would need to be reduced by about a third.

Beyond the numbers in Table 7, the projects examined suggest that reducing the costs of the prototype home will
require refinements in the construction process as well. The following section on the cost of a production home
continues the discussion of how the cost of the prototype home may be reduced further.

The Production Home


To determine whether the use of SIPs for exterior walls can allow for significant reduction in construction costs
requires consideration of general experience with the technology. Looking first at this project, when initiated its
innovative SIP to provide affordability did not even exist. It was being developed by a start-up company with
availability expected in a matter of months. The innovative SIP would not require exterior siding nor interior
finishing apart from taping common to gypsum board walls. As mentioned earlier, that SIP was not developed
within the time frame of the project. More importantly, to date it has not been fully developed for production
anywhere. The U.S. Gypsum Corporation is building a facility to produce a SIP that will have an interior gypsum
board finish needing only taping, but will still require exterior siding. The development and production of this
product and the plant will take about two years. FISCHERSIPS is also currently working with a new SIP with a
drywall interior finish. The “Fiberbond” panels would be made in lengths up to 24 feet using a fiber-reinforced
gypsum board. However, according to Butch Johnson of Perma R Products the reinforced gypsum board currently
costs 15 percent more than OSB laminated with standard gypsum board.

We interviewed two residential contractors referred by Wisconsin EPS that build with Wisconsin EPS SIPs. Their
homes were generally premium, custom designs. Neither used the Firefinish fire-retardant finish but instead applied
drywall to the interior surface of a standard SIP. One of the contractors did plan to use the Firefinish for ceiling
panels where overhead gypsum board application is more time consuming than for vertical surfaces. It is important
to note here too that there may not be much cost difference between application of gypsum board to the standard
SIP, as these two contractors do, and use of the more expensive Firefinish SIP product. A 3/8 inch sheet of gypsum
board costs around 20¢ per square foot, while Firefinish adds from 55 to 60¢ per square foot to a SIP. The gypsum
board adds labor for attachment to the SIP, but like the Firefinish it also needs taping. After taping, Firefinish
requires a finish such as a knock-down but the gypsum board might be left untextured. Wisconsin EPS now offers
two Firefinish products with different degrees of smoothness, but the smoother one still requires a knock-down
finish to be as smooth as gypsum board. For future projects, these different approaches might be further investigated
and the costs and expected performance of each analyzed. In addition, the earlier comparison of the construction
costs of the prototype home and the Merrill Park development suggests that conventional panelized wall systems
built off-site may in some cases be less costly than the use of SIPs.

Both contractors indicated that, in general, they did not realize any significant savings over conventional stick-built
construction by using SIPs. In fact, they suggested that under some circumstances the SIP construction may be more
costly, as for example when lumber prices are low. When the price of dimensional lumber is high, however, SIP
materials are more competitive. One contractor estimated that SIP construction yielded a labor cost savings over
conventional wall systems of 15 to 20 percent, but that these savings were offset by the higher material cost of SIPs.

22
Results & Discussion

Likewise both contractors indicated that they used the panels primarily due to ease of use, allowing for time and
labor savings. And although they did not typically build large developments, their crews did use the SIP products
regularly. Both contractors emphasized the importance of experienced workers. The contractor that estimated a 15
to 20 percent labor savings noted that while labor and material costs were a “wash” for him, most other contractors
experienced greater costs with the use of SIPs because of a lack of training and experience with them.

The experiences of these two contractors is consistent with builders and developers in other parts of the country.
SIPs are not viewed primarily as a means of substantially reducing housing costs, but as a way to expedite
construction. Until recently, SIPs were considerably more costly than conventional framing materials. The major
breakthrough in recent years is that the cost of SIPs is coming into line with that of conventional walls. The real
advantage to SIP construction is two-fold: it requires less skilled labor and a shorter construction time, and it offers
significant energy savings. With regard to affordable housing specifically, an area currently under investigation for
use of SIPs is in factory-built as opposed to site-built housing. FISCHERSIPS plans to use SIPs in affordable
modular homes for inner-city families.

Savings Potential from Integrated Panelization


Savings in site-built homes have been shown where panelization technologies and “engineered wood products” are
compared directly with stick-built construction. The Wood Truss Council of America and the Building Systems
Council of the National Association of Home Builders (NAHB) provided an example in their demonstration entitled
“Framing the American Dream.” Two identical, 2600-square-foot homes were built at NAHB’s 1995 annual
convention in Houston: one was entirely stick-built, and the other used panel technology. The panelized home used
panels and trusses fabricated off-site, not SIPs. The panelized home saved 16 percent in framing costs for the whole
house.

The 16 percent savings in the NAHB demonstration resulted from a wholly integrated use of panelization tech-
nology throughout the home, including factory-built wood trusses for roofs and floors as well as panels for walls
and ceilings. The prototype home did use prefabricated wood trusses in the roof framing, so some of the savings
potential associated with panelization was captured there. But because the prototype home limited panelization to
the exterior walls and roof trusses, it substantially diminished the potential to realize a 16-percent cost savings.

In comparing the prototype home to the NAHB demonstration, it is important to note that the NAHB homes were
built by tradesmen skilled and experienced in panelization. The prototype home, on the other hand, was built by
tradesman not experienced in panelization techniques and not regularly involved in residential construction. It must
be emphasized too that the savings in framing reported in the Framing the American Dream demonstration involved
a good deal more of the home’s structure than the exterior wall systems.

The NAHB demonstration provided a breakdown of labor and lumber savings associated with the home as a whole
and with wall framing alone. These savings are summarized in Table 8 and Table 9 respectively. The savings
breakdown for the walls includes interior walls, but because it does not include the entire framing system with floor
and roof components, it is a better figure for comparison to the prototype. The results indicate a savings of 66.5
labor hours when trusses and panels were used. If Milwaukee labor cost adjustments from the NCE guide are used,
then the labor costs of $24.05 per hour would yield a labor savings of $1599. Using the NCE figure of $58.28 per
square foot, the 2600-square-foot panelized home in Milwaukee would cost $151,528 to build. After reducing the
labor savings by $500 to account for the rental cost of a crane to lift the panels and trusses, the savings from

23
Affordable New Home Project

panelized wall systems, both exterior and interior, is less than one percent of the total construction cost. So small a
savings has little influence on affordability.

Table 8: Whole-house framing comparison from Framing the American Dream

Detail Stick Frame Panelized Savings

Total labor hours to construct 401 148 253

Total labor costs for framing crew with average cost of $20 per hour $8020 $3460 $4560

Total board feet of dimensional lumber (no difference in sheathing) 20,400 15,100 5300

Total lumber cost (average $450 per thousand board feet and $3748 total for $12,928 $14,457 ($1529)
sheathing)

Total scrap panel and lumber generated 17 4 13

Total scrap removal cost at $15 per yard, 1/2 labor hour to pick up $425 $100 $325

Total costs $21,373 $18,017 $3356

Source: Framing the American Dream, Wood Truss Council of American and National Association of Home Builders, 1996.

Table 9: Wall framing comparison from Framing the American Dream

Detail Stick Frame Panelized Savings

Labor hours to frame 93 Hours 26.5 Hours 66.5 Hours

Quantity of lumber 4598 bd. ft. 4598 bd. Ft. 0 bd. ft.

Source: Framing the American Dream, Wood Truss Council of American and National Association of Home Builders, 1996.

Under the best conditions, panelized exterior wall systems do reduce first costs but alone they have limited potential
to make a house “affordable.” To reduce costs further the prototype could be downsized, have a floor plan that is
more efficient to build, and less detailed appointments. For example, the kitchen could be smaller and the kitchen
cabinet space, which is quite ample, could be reduced. A smaller lot size more typical of affordable housing could
also reduce first costs in land purchase (depending upon purchase arrangements) and landscaping.

Recommendations
Regarding the process of the panel development and the prototype home construction specifically:

24
Results & Discussion

• Projects such as this that explore residential building technologies with a large group of participants and
distributed responsibilities may require special care. The tracking of activities and relevant data needs to be
coordinated. One method might be to maintain a recording system for task identification, assignment, and
completion. Such a system could assure that critical matters are addressed and their important data identified and
gathered. It could also prepare important information for evaluation.
• Regrettably, what detailed cost data the general contractor had kept were lost in a major flood. A demonstration
of the cost saving potential of a residential building technology such as SIPs would need a system to track cost
data disaggregated to the point where “apples-to-apples” comparisons could be made between the conventional
and new technologies. Daily records of labor hours spent on particular construction details could then be
compared with published estimator’s data for the same details. This would eliminate the need to build a “control”
house as NAHB did in Houston in 1995. Material cost records would also be kept. In this way conventional
construction can be directly compared to SIP construction, and the construction crew itself can be compared to
standard industry crews.

Regarding the selection of sites for affordable home construction:

• Before engaging a local governmental agency for purchase of low-cost properties, it is useful to learn the
administrative requirements and abilities of that agency pertaining to the properties. A low purchase price might
be quickly offset by additional costs that arise from the agency’s conditions of sale, including design
requirements in historical districts. Costly property liabilities might be assumed in part by the agency or be
transferred entirely to the buyer. The agency’s assumption of liability may be meaningless if monies are not
available during a particular budget cycle. With that in mind, projects with potential for agency funding might
best be started so they mesh with the start of a budget cycle before all funds have been earmarked. Advance
knowledge of administrative requirements and lead times can make submission to the agency of necessary
documentation both more efficient and without false expectations.
• Before selecting properties to purchase from a government agency, it is important to learn what agencies have
administrative jurisdiction over the properties. Overlapping administrations, as was the case with this project
with DCD and RACM, can make purchase and development of the property especially difficult. This project
required a public hearing for the sale of two in-fill lots due to a RACM affiliation. Apart from the possible
availability of site development funds through block grants, the RACM affiliation simply made land acquisition
more difficult. In a housing project currently underway in Milwaukee, one organization is essentially letting the
city itself select a large number of lots for sale as a package.

Regarding the first-cost affordability of panelized housing:

• The fact that the project was not able to demonstrate a first-cost savings potential of SIP construction is not
sufficient reason to abandon the concept of SIP manufacture and home construction. Substitution of a SIP
product for exterior walls alone in a single, customized home redesigned to fit into a city historical district and
built by an inexperienced SIP crew cannot be expected to yield a significantly lower first cost. Not only can first
costs be lower with more optimal design and construction, but energy costs will most likely be lower given the
higher and more persistent R-values of SIPs over conventional walls.

25
Affordable New Home Project

The Merrill Park New Home Initiative and the FISCHERSIPS project both demonstrate that panelization can
lower costs, albeit the lower unit costs per square foot of these two project’s homes are not strictly the result of
panelization and SIPs. Only the FISCHERSIPS project used SIPs, and the builder was also the SIP manu-
facturer. What served to hold down these projects’ costs were their large numbers of constructed units, use of
builders experienced in panelization, a more complete integration of panelization techniques, and standardization
of floor plans.
Panelization yields scale economies in part from the high-volume purchasing power of the panel manufacturer.
Large manufacturers—like Wick Building Systems in Marshfield, Wisconsin that has manufactured 25,000
panelized homes in thirty years—might have lumber costs less than those of wholesale lumberyard chains.
Whether SIP manufacturer and home builder are the same company or not, scale economies also derive from
high home production rates. This includes volume purchasing power as well as crews experienced with the
techniques, materials, and standardized floor plans. The lower costs of the Merrill Park and FISCHERSIPS
projects suggest that a manufacturer of SIPs have an annual market for at least several dozen homes, and that the
homes be built with a standard design integrating panelization throughout and by construction crews skilled in
panelization.
Milwaukee city agencies were pleased with the prototype home and satisfied with SIP components. The lessons
learned about interaction with Milwaukee community development agencies, about the potential for first cost
savings from a wholly integrated SIP and panelization approach, and about the complexities of home design for
an individual must be integrated with lessons learned about the energy behavior of the prototype house. Together
these lessons will inform the potential for SIPs to provide affordable and energy efficient housing where the
demand is most concentrated in Wisconsin.

Although the viability of local, low-cost manufacture of SIPs was not addressed by this evaluation, several issues
regarding that manufacture became clear over the course of the evaluation. Regarding the local manufacture of SIPs
in Milwaukee:

• The use of gypsum board in place of OSB on the interior surface of the SIP should be avoided until research
yields a feasible manufacturing and delivery method. Several manufacturers are attempting this innovation, but it
may increase SIP costs more than it reduces on-site material and labor costs.
• SIP manufacture requires large capital expenditures on equipment for polystyrene core production. SIP assembly
using OSB and polystyrene cores from existing manufacturers, however, requires considerably less equipment.
As opposed to conventional wood-framed panel manufacture where nailing by hand might replace automatic
nailing, inexpensive labor cannot substitute for the mechanical pressing of OSB onto polystyrene cores in SIP
assembly. The variable cost of assembled SIPs is thus determined largely by the cost of the OSB and polystyrene
components. A viable business plan for local SIP production should consider an assembly plant only and
establish low-cost sources for these two components.

26
Addendum:
Analysis of Energy Use and Indoor Air
Quality
Scott Pigg
Energy Center of Wisconsin

Key Findings
• Heating energy consumption for the prototype home is estimated to be 680 ±50 therms per year at the average
indoor temperature of 73.8 °F maintained by the occupant. At a more typical 70 °F, heating use would be closer
to 570 therms per year. At this level, heating gas use per square foot for this house is about 19 percent below
typical new construction in the Milwaukee area.
• At an estimated 0.22 air changes per hour (ACH) natural infiltration rate, air infiltration for the prototype house
is about 20 percent less than average for Milwaukee new construction (0.28 ACH natural). Although the SIP
wall construction could be expected to be tighter than conventional stud frame construction, SIPs were not used
in the ceiling of the prototype house, and other leakage sites exist.
• Because the house is not exceptionally tight, the heat recovery ventilator (HRV) installed in the house is not
needed to maintain good indoor air quality. While operation of the HRV reduced indoor CO2 and humidity
levels, these were not problematic when the HRV was turned off. Analysis of heating energy use with and
without the HRV in operation suggests about a 30-therm annual heating penalty from operating the HRV, but
this result was not statistically significant. Between the cost of extra gas for heating and the cost of electricity to
run it, the HRV probably adds $40 to $100 to the homeowner’s energy bills annually.
• The 60,000 BTU/hr furnace installed in the house is oversized. A 40,000 BTU/hr furnace would have been
adequate.

Description of the Site


The prototype house is a two-story house with 900 square feet per story and an unconditioned basement. The walls
are constructed of R-23 structural insulated panels (SIPs) that consist of 5-1/2 inches of expanded polystyrene foam
with half-inch OSB bonded on either side. The roof and second floor ceilings are conventional raised heel truss
construction, and are insulated to R-38 with fiberglass batts. The master bedroom has a cathedral ceiling that
protrudes into the attic space. A 60,000 BTU/hr condensing furnace (94% AFUE) provides heat to the house, and a
110-CFM heat recovery ventilator (NewAire model HE-2500) operates on a 24-hour timer to provide fresh air. The
two bathrooms in the house each have a manually operated 50-CFM exhaust fan.

Monitoring Objectives
The main goals for the monitoring portion of the demonstration were:

• To measure the heating energy consumption of the house, and determine how the prototype house compares to
typical new construction; and,

27
Affordable New Home Project

• based on the premise that the prototype house would have less air leakage than a typical house, to assess its
wintertime indoor air quality.

Method
At the time of construction, the house was instrumented with a Synergistics C-180 data logger and sensors that
recorded the following parameters on a 15-minute basis:

• Furnace runtime
• HRV runtime
• Runtime of upstairs and downstairs bathroom exhaust fans
• Outdoor temperature and humidity
• Downstairs temperature and humidity
• Upstairs temperature and humidity
• CO2 concentration (in kitchen)1
• Total house electricity use (15-minute average kW)

Appendix G contains daily averages of the data that were collected.

In addition to the monitoring effort, a home energy rating was performed on the house in December 1996 while
final finish work was being done on the house. At the same time, a visual inspection was made of construction
defects related to energy use. Several defects were uncovered during this inspection (see below), which were
corrected by Wisconsin Gas personnel on February 22, 1997, at which time a second blower door reading was
taken, which formed the basis for the energy rating information reported here. The energy rating software used was
REM/Rate version 8.46, licensed to the state of Wisconsin for its Home Performance program.

Noteworthy construction, operation, and monitoring issues are:

∑ Visual inspection in December 1996 showed that fiberglass batt insulation installed in the attic was not properly
installed in some places, allowing cold attic air to circulate under the insulation. In addition a number of
electrical and ceiling penetrations into the attic were not sealed to prevent air leakage. Flexible heating ducts in
the attic were partially disconnected in several places, and the attic access panel leaked air excessively. These
deficiencies were corrected by Wisconsin Gas Company personnel in February 1997.
∑ The HRV was not wired correctly when it was first installed. It is supposed to run a fixed amount of time each
day on a schedule set by a 24-hour timer. However, from December 1996 through January 1997 the HRV was
wired to simply run whenever the furnace ran. An attempted fix by the manufacturer resulted in the HRV
running according to the pre-set schedule—but also running whenever the furnace ran. This condition persisted
until December 1997. Thereafter the HRV ran about 13 hours and 20 minutes per day, except when it was shut
down as part of the experiment to assess its impact on indoor air quality.

1 Although not usually toxic in its own right, CO is considered to be an indicator of


2
fresh air supply, since combustion and human and animal metabolism produce CO2.

28
Addendum: Performance Analysis

∑ Comparison of daily average outdoor temperatures between the site and weather service data from the
Milwaukee airport (located about eight miles to the south) showed a consistent difference between the two.
Though the two temperatures were highly correlated (R2=0.982), the site sensor consistently read about 6.5 °F
higher. Post monitoring calibration of the sensor showed it to be slightly out of calibration (actual temperature =
1.05 * indicated temperature – 3.05), but most of the difference between the two sites appears to be due to
location effects. Because the airport data provides a basis for extrapolating the metering data, the heating energy
analysis was based on the weather service data. The high correlation between the two temperatures suggests that
the estimate of heating use was not affected by using the airport data. Calibration of the indoor sensors showed
them to be accurate to within a few tenths of a degree.
∑ A problem with the programming of the data logger resulted in data being averaged and recorded over four 13-
minute periods and one 68-minute period every two hours starting in mid-April 1998. These data were
reweighted to give correct daily sums and averages prior to analysis.

To better assess the effect of the HRV on indoor air quality and energy use, a separate timer was installed on the
HRV in the 1997/98 heating season to turn it off every other week. On weeks when the HRV was allowed to run, it
operated on according to the schedule determined by its 24-hour timer.

Daily monitoring data are summarized in Appendix H.

Results

Energy Rating
Overall, the house scores an 85.8 (four-star plus) Home Performance rating. Helping to boost the rating for the
house are the R-23 SIP walls, the R-38 attic insulation, and the high-efficiency furnace. One factor that adversely
affects the rating is several feet of exposed, uninsulated foundation wall required by the City of Milwaukee to
maintain the architectural consistency of the neighborhood.

Infiltration
Blower door tests measured air leakage of about 1100 CFM@50Pa, or about 0.22 ACH (estimated natural), which is
about 20 percent less than is typical of new construction in the Milwaukee area, according to an unpublished study
of 100 new Milwaukee homes conducted by Wisconsin Gas Company (avg. 0.28 ACH). While lower than typical
new construction, the measured leakage rate of the prototype house exceeds what would be considered very tight
construction (generally 0.1 ACH or lower).

Although the SIP construction used in the prototype house should reduce leakage through the walls, SIPs were not
used in the ceilings, nor was special attention paid to sealing leakage sites such as the joint between the rim joist and
foundation wall. In fact, prior to the Home Performance rating and corrective action in the attic area, air leakage was
1290 CFM@50Pa (0.26 ACH natural), which is close to the average for the Wisconsin Gas new construction study.

Heating Energy Use


Analysis of the monitoring data indicates annual heating use of about 680 therms in a typical heating season (see
Appendix G) at the average 73.8 °F temperature maintained by the homeowner. This estimate has an uncertainty

29
Affordable New Home Project

margin of about 50 therms at a 90 percent confidence level, or seven percent. At this temperature, the Home
Performance software predicts a slightly higher heating energy use of 726 therms.

The actual heating use of 680 therms works out to 0.38 therms per square foot of conditioned space, which appears
to be typical of Milwaukee new construction. Wisconsin Gas Company analyzed billing records for 1408 homes
built in 1992, and measured heating energy use at an average of 0.39 therms/square foot.2 If we take 70 °F as a
more typical indoor temperature setting, then the prototype home would be expected to use about 570 therms
annually for heating, or 0.32 therms/ft2. This is about 19 percent less heating energy per square foot than found in
the Wisconsin Gas study.

Indoor Air Quality and Comfort


Because the SIP construction used in the prototype was expected to be much tighter than average, a heat recovery
ventilator was installed to ensure that indoor air quality was not adversely affected. The impact of the HRV on
indoor air quality was assessed by shutting down the HRV every other week during the 1997/98 heating season and
observing changes in the monitored parameters.

Table 10 shows average upstairs and downstairs temperature and humidity as well as kitchen CO2 levels for the
1997/98 heating season, and Figure 2 shows the average daily kitchen CO2 concentration profile. The data indicate
that the HRV did indeed reduce average humidity levels and CO2 concentration during the heating season—but
these levels were not problematic even with the HRV completely turned off. A reasonable threshold for CO2
concentration (as an indicator of inadequate ventilation) is 1000 ppm. Consistent CO2 levels above 1000 ppm
indicate inadequate indoor ventilation. The monitoring data show that this level was exceeded only about three
percent of the time. These results are not surprising, since the blower door tests show that the prototype house,
while tighter than average construction, would not be considered exceptionally tight.

2 Unpublished report from Wisconsin Gas Company, dated August 14, 1995. Estimate based
on billing data analysis showing average heating energy use of 860 therms for houses
that averaged 2159 square feet in size.

30
Addendum: Performance Analysis

Table 10: Monthly average temperature, humidity, and CO2, with and without HRV operation
Downstairs Temperature (F) Upstairs Temperature (F)
no HRV HRV no HRV HRV
Dec 71.8 (0.1) 72.0 (0.2) 73.6 (0.1) 74.6 (0.2)
Jan 71.9 (0.1) 72.9 (0.1) 73.8 (0.1) 74.7 (0.1)
Feb 72.3 (0.1) 73.0 (0.1) 74.3 (0.1) 74.8 (0.1)
Mar 72.0 (0.1) 71.5 (0.1) 73.7 (0.1) 73.1 (0.1)
Apr 73.6 (0.1) 73.8 (0.1) 74.5 (0.1) 75.0 (0.1)
May 76.7 (0.1) 77.0 (0.2) 77.9 (0.1) 77.5 (0.1)
Jun 79.2 (0.2) 77.7 (0.1) 79.5 (0.2) 77.7 (0.1)
Jul 81.9 (0.1) 80.8 (0.1) 81.1 (0.1) 80.5 (0.1)
Aug 81.9 (0.1) 82.4 (0.1) 80.8 (0.1) 81.5 (0.1)
Sep 80.4 (0.1) 79.1 (0.1) 79.6 (0.1) 78.2 (0.1)

Downstairs RH (%) Upstairs RH (%)


no HRV HRV no HRV HRV
Dec 28.9 (0.1) 21.8 (0.1) 27.4 (0.1) 20.8 (0.2)
Jan 28.3 (0.1) 22.2 (0.1) 26.7 (0.1) 20.8 (0.1)
Feb 27.1 (0.1) 27.9 (0.1) 26.5 (0.1) 25.6 (0.1)
Mar 27.8 (0.2) 25.2 (0.3) 26.1 (0.2) 23.8 (0.3)
Apr 34.2 (0.2) 33.0 (0.1) 34.0 (0.2) 31.7 (0.1)
May 44.7 (0.2) 41.7 (0.2) 43.6 (0.2) 39.5 (0.2)
Jun 49.0 (0.2) 53.2 (0.1) 48.3 (0.2) 52.0 (0.2)
Jul 51.7 (0.2) 52.4 (0.2) 51.6 (0.2) 50.8 (0.2)
Aug 56.8 (0.2) 59.2 (0.2) 57.2 (0.2) 59.2 (0.3)
Sep 48.0 (0.2) 52.8 (0.2) 47.3 (0.2) 52.6 (0.3)

Kitchen CO2 (ppm) Total Exhaust Fan Runtime (hrs/day)


no HRV HRV no HRV HRV
Dec 823 (4) 726 (5) 1.52 (0.17) 1.47 (0.27)
Jan 739 (3) 693 (3) 0.75 (0.11) 0.39 (0.08)
Feb 720 (3) 653 (3) 0.63 (0.11) 0.78 (0.13)
Mar 647 (3) 598 (3) 0.56 (0.10) 0.40 (0.07)
Apr 726 (5) 677 (3) 0.99 (0.15) 0.96 (0.11)
May 696 (4) 596 (5) 1.05 (0.13) 1.30 (0.15)
Jun 556 (4) 563 (4) 1.51 (0.16) 1.84 (0.22)
Jul 504 (4) 540 (5) 2.70 (0.27) 1.28 (0.15)
Aug 526 (6) 498 (3) 1.10 (0.17) 2.18 (0.18)
Sep 636 (8) 616 (6) 2.79 (0.26) 1.43 (0.17)

31
Affordable New Home Project

Hours of data for Table 10

no HRV HRV
Dec 264 95.5
Jan 312 240
Feb 240 240
Mar 288 336
Apr 240 408
May 360 312
Jun 408 288
Jul 264 408
Aug 240 456
Sep 360 288

Figure 2: Average CO2 concentration profile with and without the HRV in operation

CO2 Concentration ( ppm)


900

800

No HRV
700

HRV
600

(vertical lines rep resent ±1 stand ard error)


500
midnight 6 am noon 6 pm midnight

Informal interviews with the homeowner revealed only one comfort complaint—the ceiling-mounted heating supply
registers in two of the bedrooms were not adjustable. These tended to overheat the bedrooms at night, prompting a
teenager occupying one of the bedrooms to crack open a window. In December 1997, a Center staff person put a
piece of cardboard in this register to partially block the airflow.

32
Addendum: Performance Analysis

Energy Use Due to the HRV


Operating the HRV causes an increase in heating energy use because the heat exchanger cannot completely transfer
heat from the stale air being removed from the house into the fresh air entering. Analysis of energy use with and
without the HRV operating suggests a heating penalty of about 30 therms per year (an $18 increase in the annual
gas bill), but this result is not statistically significant (see Appendix G). Theoretical calculations using the
manufacturer’s data on heat transfer efficiency (78 percent) and air flow (110 CFM) yield a higher figure of about
100 therms per year, which would add about $60 to the gas bill.

According to manufacturer’s literature, the HRV also draws 120 Watts of electrical power while operating
(confirmed by the monitoring data). Operated year round as configured for the prototype home, this would add
about 580 kWh annually to the homeowner’s electric bill, worth about $44. Operation of the HRV is probably not
necessary during the summer for this house, which lacks air conditioning. Operating it only seven months of the
year during the heating season would reduce the electricity operating costs to about $25 annually.

When combined, the data suggest that the HRV adds somewhere between about $40 and $100 to the homeowner’s
annual energy bills.

Heating System Size


The model used to estimate annual heating energy use (see Appendix G) can also be used to analyze the size of the
furnace that was installed. The results suggest that the 60,000 BTU/hr furnace installed in the house is oversized.
The furnace that was installed runs only 50 to 60 percent of the time at a daily average outdoor temperature of 0 °F,
and the house heating load would only exceed the furnace output capacity when the daily average temperature drops
below –60 °F. The prototype house could easily be heated with a 40,000 BTU/hour furnace. This is consistent with
the furnace size recommended by the Home Performance program.

Conclusions
The prototype home is about 20 percent more energy efficient than the typical new house in the Milwaukee area.
The monitoring data show that the SIP construction did not adversely affect indoor comfort; indoor humidity and
CO2 were within acceptable ranges. The heat recovery ventilator was not needed for this house, which would not be
considered to be exceptionally tight to air infiltration. Had SIPs been used in the ceiling and more attention paid to
sealing infiltration pathways, however, an HRV or other means of mechanical ventilation might have been
necessary. A smaller furnace would have better met the home’s heating load and slightly reduced the overall cost of
the house.

33
References
Kiley, M.D. 1996. 1997 National Construction Estimator (45th Edition). Carlsbad, CA: Craftsman Book Company.

35
Appendix A: Timeline
DATE EVENT
6/14/94 Meeting between architect, home buyer, Milwaukee DCD
6/16 Plan view of site.
12/5 Meeting between architect, home buyer, & DCD
12/5 Original drawing of home buyer house.
1/6/95 Proposal to WCDSR from project coordinator, architect, & architect's chosen general contractor
1/18 Meeting between architect, home buyer, & DCD
1/25 Meeting between architect and project coordinator
1/26 Meeting between architect and project coordinator, Center, DCD, et al
2/1 Meeting between architect, project coordinator, Center, DCD
2/2 First revision to original drawing of home buyer house.
2/9 Second revision to drawing of home buyer house as per DCD
2/17 Meeting between architect and CHIP
3/1 Meeting between architect and home buyer, architect's chosen general contractor
3/2 Meeting at Milwaukee Athletic Club on initiation of project. Includes Center, project coordinator,
architect, DCD.
3/16 Meeting between architect and DCD.
3/17 Project coordinator's presentation to CHIP board for approval to follow through with proposal.
4/18 Plans and specifications for home.
May Site plan drawings original 100 foot frontage.
May Drawing with 1200 square feet final design
5/2 Meeting between architect, project coordinator, Center, et al
5/9 Meeting between architect and project coordinator, et al
5/9 Project coordinator recommends that home buyer withdraw architect's chosen general contractor due to
unrealistic cost estimate.
5/12 Preliminary plans sent to B&D Contractors
June Drawing revisions to 1400 square feet final design
June HVAC plan drawings
June First meeting between architect and Milwaukee Building Inspection Dept.
6/1 Meeting between architect, project coordinator, et al
6/7 Meeting between architect, project coordinator, and B&D Contractors
6/20 Meeting between architect, project coordinator, & DCD
6/27 Meeting between Center, DCD, and RACM discussing involvement of DCD, sewer laterals, curb cuts,
potential soil contamination concerns.
July Colored perspective drawings
7/6 Letter from DCD to home buyer c/o project coordinator stating city will do some but not all curb work,
home buyer must pay for sewer lateral although city will apply for funds for same, home buyer must
pay for all excavation costs.
7/11 Meeting with historic preservation officer. Results include “flipping” of house plan on lot, concern
about overhangs, porch materials, exposure of foundation to 3 courses of block, joints in stucco panels,
& setback.
7/12 Meeting between architect, home buyer, & DCD

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Affordable New Home Project

7/13/95 Public hearing and presentation to the RACM board of project. architect, project coordinator, Center,
DCD, RACM Commissioners, et al
7/19 Fax from DCD to home buyer c/o project coordinator, Center, and architect. Details DCD staff support
of 50' lot width option and that city has no funds to do curb work noted in 7/6/95 letter.
7/21 Letter from project coordinator to DCD regarding discrepancies between 7/6 letter and 7/19 fax from
DCD on curb work, lot size, and sale of remaining frontage.
7/24 Meeting between architect and project coordinator, Center
7/24 Second RACM Meeting - RACM approves sale of 75' lot, will apply for funds for laterals and curb cuts
(not for subsoil excavation)
7/28 Meeting between architect and B&D Contractors
7/31 Meeting between architect, home buyer, DCD, project coordinator, B&D Contractors, Milwaukee
Building Inspection Dept.
7/31 Invoice from architect to Center for $6792.85 of $14,212.85 costs for design, meeting, & technical time,
and reimbursables
7/31 Estimate from architect of $50,310 cost to have architect's start-up company manufacture & deliver
panels, and architect's chosen general contractor erect.
7/31 Invoice from surveying firm to B&D Contractors for plat of survey and construction stakeout.
8/8 Payment to architect of $9578 authorized by Center.
11/21 Plans were approved by DCD
11/21 Initial sale approved by DCD
12/4 American Institute of Architects standard contract between owner and contractor showing B&D
Contractors and with exhibit showing a cost analysis totaling $130,000.
1/22/96 Center memo to RAC/PAC describing change in strategy from building production capacity first,
abandonment of an exterior finish, discovery of SIP manufacturer product testing.
February Expected completion of Wisconsin EPS SIP testing.
3/1 Expected delivery availability of SIP from Wisconsin EPS.
3/7 Proposal and Contract from Wisconsin EPS to B&D Contractors totaling $9657.57.
5/9 Mortgage closed.
5/10 Final draft of contract between CHIP and Center.
June Construction begins.
6/28 Invoice from B&D Contractors to CHIP for $2500 for down payment of $10,000 cost of panels.
7/24 Invoice from B&D Contractors to CHIP for $7500 for balance of $10,000 cost of panels.
7/31 Invoice from B&D Contractors to CHIP for $9600 for footings, foundation, and labor.
7/31 Invoice from B&D Contractors to CHIP for $7141 for survey, permit, excavating, grading and
backfilling.
9/13 Invoice from CHIP to Center for $19,965 of work completed from 8/1 to 8/31.
10/14 Invoice from CHIP to Center for $17,544 for labor and materials for rough carpentry, windows,
roofing, gutters, siding, mechanical, plumbing, masonry work completed from 9/1 to 9/30.
11/29 Home occupied.
December Invoice from CHIP to Center for $4202 for labor and materials for additional coating of panel interiors
completed from 11/1 to 11/30.

A-2
Appendix B: Diagram of Relations Among Parties

Wisconsin Gas Energy Center of Wisconsin

Carpenter’s District
Home Buyer Architect CHIP
Council

Milwaukee Dept.
North Shore Bank B&D Contractors Wisconsin EPS
Comm. Development

noncontractual relation
contractual relation

B-1
Appendix C: Merrill Park Initiative—
Construction Detail and Costs
Action Costs ($) Totals ($)
Sitework 13613
Building Prep (Dumpsters/Cleaning) 2500
Excavation/Backfill/Grading 2000
Concrete Paving 1510
Water and Sewer Utility Install 5500
Landscaping 2103
Concrete 9270
Footings & Foundation, Structural Steel 6370
Basement Floor 2900
Carpentry 31889
Rough Carpentry (Package) 19141
Rough Carpentry (Set) 5182
Rough Carpentry (Crane for Set) 800
Finish Carpentry, Stair work & Handrail 2782
Cabinetry 3095
Counter Tops 889
Thermal and Moisture Protection 11050
Insulation 1354
Vinyl Siding, Sheet Metal Flashing and Trim 6496
Gutters and Downspouts 600
Roofing 2500
Caulking and Sealants 100
Finishes 8191
Gypsum Drywall Assemblies, Interior Painting 5076
Resilient Flooring 1016
Carpeting 1699
Exterior Painting 400
Specialties 785
Signage 100
Mailbox 100
Fire Protection Specialties 185
Toilet & Bath Accessories 400
Furnishings 370
Window Treatment 370
Mechanical 9766
Plumbing 5486
HVAC 4280
Electrical 3830
Electrical 2650
Light Fixtures 1180
Alternate #1 - 24'x24' Garage 2,016
Parking slab for future garage 2016

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Affordable New Home Project

Total cost with garage $90,780

C-2
Appendix D: History of General Contractor’s Invoices

Invoices to Project Coordinator

Date Invoice # Description Line Total Invoice Total

6/28/96 5911 Down payment needed for wall panels $2500 $2500
7/24/96 6008 Balance for wall panels $7500 $7500
7/31/96 6018 Labor - Footings & Foundation $6500
7/31/96 6018 Material - Footings & Foundation $3100 $9600
7/31/96 6017 Building survey $475
7/31/96 6017 Permit $500
7/31/96 6017 Excavating-does not include contamination costs $4166
7/31/96 6017 Grading & Backfilling $2000 $7141
9/11/96 6054 Rough Materials $7500
9/11/96 6054 Rough Labor $8500
9/11/96 6054 Windows & Installation $2965
9/11/96 6054 Exterior Trim $1000 $19,965
10/3/96 6064 Remaining Masonry $1300
10/3/96 6064 Cement Floor $3150
10/3/96 6064 Rough Carpentry $1500
10/3/96 6064 Rough Lumber $1127
10/3/96 6064 Roofing & Gutters $3600
10/3/96 6064 Plumbing/Electric $4530 $15,207
10/3/96 6064 General Conditions $1587
10/3/96 6064 Change Order #1 - Windows $750 $2337
11/30/96 6097 Reimbursement $4202 $4202
Subtotal $68,452

Invoices to Lender
10/31/96 6081 Contract Price $43,400 $43,400
12/09/96 6101 Final Draw $23,100 $23,100

Subtotal $66,500

Total $134,952

D-1
Appendix E: Initial Cost Estimate of 1300-ft2 Prototype
Estimate developed by Jordan Construction and dated 3/3/1995.

Item Item Cost ($)

Site Development 3000


Concrete/masonry 6500
Carpentry materials 9000
Carpentry labor 10,000
Windows 2400
Cabinets and countertops 1300
Flooring 3300
Roofing 3600
Drywall 3200
Painting 1000
Dumpsters (3) 1125
Fencing 500
Permits, Silt Fencing 275
Survey & staking 150
Administration 2500
Attic Insulation 780
Subtotal General Construction 48,630
Mechanical 4800
Electrical 4200
Plumbing 2800
Subtotal Mech/Elec. 11,800
Total Construction $60,430

Does not include incremental costs of high efficiency water heater and furnace, or
material and installation cost of SIPs. An additional cost of $2000 to be charged to
supervise erection of SIPs.

E-1
Appendix F: Costs of 1800-ft2 Prototype
All costs from an estimate except where noted. Descriptions and estimated costs taken from B&D Builders’
estimate. Estimate found attached as Exhibit B to unsigned Standard Form of Agreement Between Owner and
Contractor dated 12/4/95.

Item (building) Cost ($) Item (administration/foundation) Cost ($)


Permits 500* Excavate & Backfill 9600*
Silt Fence 500 Masonry Walls 9995
Survey & Stake 475* Landscaping 1500
Sewer Lateral (by City) 0 Sidewalk 250
Panel materials (walls) 7658* Concrete Drive 3400
Exterior Trim materials 800 Remove and Repair Existing Drive 750
Roof Trusses 1500 Administration 1500
Rough Carp. Materials 8627* Coordination/ Arch./ Energy Center/
Interior Finish Materials 1250 Genl. Contractor 8825
Flooring 3300 Allowance 7530
Roofing & Gutters 3600*
Painting 1000
Insulation 1580
Hardware 500
Windows 2700
Carpentry Labor 10,000
Dumpsters 1175
Electrical & Plumbing 4530*
Mechanical 6230
Exterior Panel Finish 9000
Interior Panel Finish 5400
Overhangs 1750
Railings & Steps 800
Insulation from R-30 to R-48 600
Utilities from PL to house 800
Cabinets & Counters 2300
Foundation Insulation 260
Energy Trusses 250
Add for High Eff. Furnace 500
Add for High Eff. Hot Water Heater 150
Air Exchange 2000*
Addition Drywall at Ceiling Trusses 650
Building cost subtotal $83,585 Administration and site/foundation cost subtotal $43,350
Total $126,935

*An actual cost based on invoices or other documentation from program participants.

F-1
Appendix G: Estimating Annual Heating Energy
This appendix describes the procedure used to extrapolate monitoring data to an estimate of typical annual heating
energy use for the prototype house.

1. The 15-minute data were collapsed to daily sums (of furnace runtime) and means (of indoor temperature). Days
with incomplete data were discarded.

2. Using only days with some furnace runtime, a linear model of heating energy use as a function of the difference
between indoor and outdoor temperature was fit to the daily data as follows:

therms = b1*delta + b0 + error


where
therms = daily furnace energy use (therms)3
delta = difference between average daily indoor temperature and average daily Milwaukee airport temperature

The figure below shows the fit of the data.

10

6
Daily gas use
for heating 5
(therms)
4

0
0 10 20 30 40 50 60 70 80 90
Daily Indoor/Outdoor Temperature Difference (F)

3 Furnace runtime was what was actually monitored. This was converted to energy use by
multiplying hours of runtime by the 63,250 BTU/hour obtained from clocking the gas
meter.

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Affordable New Home Project

The box below shows the model output.

Source | SS df MS Number of obs = 315


---------+------------------------------ F( 1, 313) = 2150.26
Model | 536.017074 1 536.017074 Prob > F = 0.0000
Residual | 78.0245317 313 .249279654 R-squared = 0.8729
---------+------------------------------ Adj R-squared = 0.8725
Total | 614.041606 314 1.95554651 Root MSE = .49928
------------------------------------------------------------------------------
therms | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---------+--------------------------------------------------------------------
delta | .1243312 .0026812 46.371 0.000 .1190557 .1296067
_cons | -1.881092 .0930647 -20.213 0.000 -2.064203 -1.69798
------------------------------------------------------------------------------
variance/covariance matrix :
| delta _cons
--------+------------------
delta| 7.2e-06
_cons| -.000238 .008661

Model output using data from 1997/98 when HRV was off:
Source | SS df MS Number of obs = 70
---------+------------------------------ F( 1, 68) = 512.94
Model | 120.474623 1 120.474623 Prob > F = 0.0000
Residual | 15.9713637 68 .234872996 R-squared = 0.8829
---------+------------------------------ Adj R-squared = 0.8812
Total | 136.445987 69 1.97747808 Root MSE = .48464

------------------------------------------------------------------------------
therms | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---------+--------------------------------------------------------------------
delta | .1157881 .0051125 22.648 0.000 .1055863 .1259899
_cons | -1.57452 .180511 -8.723 0.000 -1.934724 -1.214316
variance/covariance matrix :
| delta _cons
--------+------------------
delta| .000026
_cons| -.000874 .032584

Model output using data from 1997/98 when HRV was on:
Source | SS df MS Number of obs = 64
---------+------------------------------ F( 1, 62) = 635.67
Model | 146.794714 1 146.794714 Prob > F = 0.0000
Residual | 14.3177117 62 .230930834 R-squared = 0.9111
---------+------------------------------ Adj R-squared = 0.9097
Total | 161.112426 63 2.5573401 Root MSE = .48055

------------------------------------------------------------------------------
therms | Coef. Std. Err. t P>|t| [95% Conf. Interval]
---------+--------------------------------------------------------------------
delta | .1289188 .0051133 25.212 0.000 .1186975 .1391402
_cons | -1.943052 .1920885 -10.115 0.000 -2.327032 -1.559073
variance/covariance matrix :
| delta _cons
--------+------------------
delta| .000026
_cons| -.000933 .036898

G-2
Appendix G: Heating Energy Analysis

3. The model predicting daily therms as a function of the indoor/outdoor temperature difference was combined
with a 30-year average of annual dwell time (days) of average daily temperature in 1 °F temperature bins for
the Milwaukee airport (see below). Annual heating energy use in each bin is the product of the model estimate
of therms used per day at that temperature difference times the days per year that average temperature typically
occurs. Summation across all bins yields an estimate of total annual heating energy use. This analysis was done
using the actual indoor temperature of the prototype house (73.8 °F ) as well as 68 °F and 70 °F to estimate
heating energy usage at more typical thermostat settings.

Milwaukee 30-year average temperature distribution (days/year)

°F days/yr °F days/yr °F days/yr °F days/yr


-20 0.00 10 1.90 40 5.70 70 6.43
-19 0.00 11 1.53 41 5.33 71 7.13
-18 0.00 12 1.27 42 6.00 72 6.13
-17 0.03 13 1.57 43 5.80 73 5.50
-16 0.13 14 1.90 44 4.73 74 4.87
-15 0.00 15 2.30 45 5.10 75 4.77
-14 0.03 16 2.13 46 4.67 76 4.13
-13 0.07 17 2.13 47 5.30 77 3.87
-12 0.00 18 2.57 48 5.60 78 3.17
-11 0.07 19 2.90 49 4.57 79 2.40
-10 0.10 20 3.37 50 5.47 80 2.17
-9 0.13 21 3.43 51 5.97 81 1.53
-8 0.07 22 2.87 52 5.37 82 1.17
-7 0.27 23 4.17 53 5.00 83 0.93
-6 0.17 24 3.77 54 4.77 84 0.63
-5 0.20 25 4.50 55 5.57 85 0.80
-4 0.40 26 4.93 56 6.30 86 0.27
-3 0.33 27 5.20 57 5.53 87 0.10
-2 0.33 28 5.07 58 5.33 88 0.03
-1 0.57 29 5.03 59 5.37 89 0.10
0 0.40 30 5.93 60 5.13 90 0.03
1 0.70 31 5.77 61 6.17 91 0.07
2 0.70 32 6.50 62 6.37 92 0.00
3 0.53 33 6.70 63 6.03 93 0.03
4 0.90 34 6.20 64 6.73 94 0.00
5 1.03 35 6.60 65 6.13 95 0.00
6 1.07 36 7.10 66 6.43
7 0.93 37 6.13 67 6.70
8 1.37 38 5.70 68 7.10
9 1.47 39 6.50 69 7.07

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Affordable New Home Project

4. The annual heating energy estimates obtained in this way can be considered a weighted sum of predictions from
the usage model (yi), where the weights (wi) are the days of dwell time in each temperature bin. The variance of
this estimate is then calculated as:

n n n n n
Var ( ∑ wi yi ) = Var (bo ) * (∑ wi ) 2 + Var (b1 ) × (∑ wi xi ) 2 + 2Cov (bo , b1 ) × ∑ wi xi × ∑ wi
i =1 i =1 i =1 i =1 i =1

The results for this model yield the following estimates of annual heating energy use for the prototype house:

Indoor temperature (F) Annual Heating Use (therms) Standard error of estimate

68 520 33

70 573 33

73.8 682 32

To assess the impact of the HRV on heating energy use, we repeated the above procedure separately for the 64 days
during 1997/98 heating season when the HRV operated on its normal schedule and the 70 days when it was shut off.
(The distribution of daily average outdoor temperature was very similar for these two subsets of the monitoring
data, ranging from about 15 °F to 65 °F.) The results (estimated at the average indoor temperature of 73.8 °F) are
shown below:

Annual Heating Use (therms) Standard error of estimate

no HRV 679 63

HRV 709 67

G-4