Green Goes Modular

In the late 1800s, a small blue-collar neighborhood known as Hampden sprang up just a few miles northwest of what is now Baltimore’s inner harbor. Within walking distance of the textile mills, Hampden became home to a generation of honest, hard-working Americans that lived on modest incomes and boatloads of pride.

The sturdy brick rowhomes that lined the quiet streets and cul-de-sacs in Hampden were adorned with meticulously kept lawns and vibrant gardens. Residents could do all their shopping without ever having to leave the neighborhood. And local bars and restaurants provided inexpensive escapes from a daily grind that most today wouldn’t be able to endure for more than one day.

Of course, over the years, the neighborhood changed. And by the 1970s, much like most of the city, Hampden found itself in the midst of record unemployment, a drastic increase in crime and an infrastructure crumbling under the weight of neglect spurred by a mass exodus to the suburbs.

Needless to say, it didn’t take long for the real estate market to go bust. And all of the sudden, you could get a pretty decent two-bedroom home, in a relatively safe area for practically nothing!

And this lasted for awhile.

In fact, in 1996 I bought one of these beauties for about $60,000. Two-bedroom, two-bath, backyard garden, the whole nine yards.

By 2004, houses on this very block were going for $200,000!!!

Now, don’t get me wrong. As an investor, of course you’d be happy to see the value of your home increase well over 200% in eight years.

But if you were looking for a place to live – for $200,000 you could do a lot better. Especially when you take into account today’s crippling energy costs.

Because let’s face it – these old homes, and even many of today’s modern homes, are energy-sucking vortexes that can certainly put a hurting on your wallet.

Though it’s for this very reason that new trends in green building are now gaining serious momentum. And not just on the commercial side either.

Green Goes Modular

Years ago, when many of us first started learning about residential green building, we saw oddly-shaped homes made from old tires and beer cans in the middle of the desert. They were built by the wealthy and eccentric. They boasted gigantic solar panels and homemade windmills. They were energy efficient, quite creative – and completely impractical for most people.

But that’s all changing!

Thanks to massive hikes in utility costs, more and more consumers are now actively seeking energy-efficient appliances, building materials and renewable energy applications to help ease this economic burden.

There are also a number of well-established developers now integrating green-building practices within their residential and commercial projects. In fact, just a few days ago, Xantrex Technology, Inc. (XTX.TO) was selected to supply solar power to a 450-unit housing development in Roseville, California.

There are even modular ‘green’ homes you can get for about $180,000 a pop.

I’m serious.

Listen, I wasn’t kidding when I told you this stuff is going mainstream. And it isn’t costing a fortune either.

A small, two-bedroom, two-bath modular ‘green’ home recently went for approximately $178,000. And this does not take into account the energy savings!

Michelle Kaufman Designs (MKD), a group of ‘green’ architects and designers have taken the lead in modular ‘green’ homes by integrating the low-cost of a modular home with green building standards…like energy efficiency, recycled building materials, healthier levels of indoor air quality and water reduction.

They call their modular ‘green’ homes, Glidehouses – and these aren’t the doublewides that are often found in the punch line of a “You know you’re a redneck if…” joke. These are next-generation homes with all the benefits of green building applications – but at a fraction of the cost.

And for Green Chip investors, this represents a potential trend in green building that could easily translate into even more opportunities for the ‘green’ companies we’re already profiting from.

Because while MKD is not a publicly-traded company, some of the companies utilized in the construction, operation and maintenance of these homes are.

You see, we’re not just talking about wood and nails here. We’re talking about the whole ‘green’ shebang!

With the Glidehouse…

• The house can be positioned on its site to minimize solar loss in the winter and solar gain in the summer.
• The roof is sloped to receive solar panels and create a clerestory window that brings in natural light and minimizes the need for artificial lighting.
• Windows are placed to maximize solar benefits and natural ventilation.
• Wood-to-wood wall joints are precisely caulked to make the house airtight, minimizing the vulnerability to mold and lower heating and cooling loads.
• Kitchen cabinets are free of formaldehyde.
• Kitchen appliances are energy-smart.
• Bathroom fixtures, such as the toilet and tankless water heater, save water and are energy efficient.
• Walls are finished with non-toxic paints.
• Energy-efficient fluorescent lighting is used throughout the house.

All of this represents further opportunities for solar firms, energy-efficient appliance companies, non-toxic building materials and paints companies and even water-reduction and recycling companies – somewhat similar to Zenon Environmental, Inc., (ZEN.TO), a water recycling and treatment firm which was recently acquired by General Electric (GE:NYSE). (The stock shot up 53% the day that deal went through!!!)

There are a number of profitable, publicly-traded companies currently being tapped by green builders. To find out more about these companies, visit Green Chip Stocks .

Until next time…

Jeff Siegel

Managing Editor, Green Chip Stocks