Building with Vision

Conservationist Arnie Katz is an expert on incorporating healthy, energy-efficient design into the building community. The designs he promotes may not be sexy, but their genius is in the details.
Writer: 
August 1, 2002

Long before the energy price shock of 2000, even before the oil embargo of the 1970s, Arnie Katz was committed to energy efficiency. He stuck with it through the profligate years of the 1990s, when energy prices bottomed out and people bought gas-guzzling SUVs and mega-mansions without a care for the political or environmental repercussions. He shrugs his shoulders at the latest renewal in energy awareness, spawned by the September 11 terrorist attacks and the realization that as long as we are dependent on the Middle East for oil, we will be intertwined with the oft-despised political leadership of those countries. "To me, energy efficiency has always made common sense," he says. "Why would you want to do anything else?"

Katz '68 is director of the Healthy Buildings Resource Center, a program of the Advanced Energy Corporation, a Raleigh-based nonprofit focusing on energy efficiency in buildings and industrial processes. Katz's expertise lies in how to get the latest knowledge about healthy, energy-efficient design incorporated into the building community. The designs he promotes are not sexy--no solar collectors or wind generators, although those could be part of the package. The genius is in the details of home construction and in the process that ensures that they are followed. Katz and his colleagues are so convinced of their system that they are willing to guarantee the energy bills of any home that uses it--bills as low as $18 a month for some three-bedroom houses.

That guarantee, and the modest price they offer it for, has brought utility companies and home builders from all over the country banging on their door. And it has attracted a host of other Duke alumni to join his crusade.

Nationwide, residential and commercial buildings consume more than one-third of total U.S. energy, at an annual cost of $240 billion. Buildings contribute one-third of our urban air pollution and roughly one-third of carbon emissions. Unless conservation measures are taken or greater efficiencies achieved, energy consumption will grow proportionately with our population. That's reason enough to take up the conservation banner. But for Katz, the motivation goes deeper than the numbers.

He traces his energy awareness back to his childhood in Scranton, Pennsylvania. Widowed with six children during the Great Depression and living with the family, Katz's grandmother used to follow him around the house turning off lights. In the late Fifties, the family lost their retail clothing business when the local steel mill shut down. Katz says that far from being traumatic, the experience taught him that even a drastic reduction in income and in the ability to accumulate "stuff" had little effect on his happiness or well-being. The seeds of a lifestyle based on frugality and independence from material possessions were sown.

As an undergraduate at Duke in the late Sixties, Katz was an eager participant in the back-to-the-land movement that had many students living in former tobacco barns, renovating old farmhouses, and building crude housing. Together with several other students, he attempted to build a log cabin from scratch on land owned by the family of Bill Boyarsky '69, along New Hope Creek near Duke Forest.

"We spent a whole day chopping down one oak tree before giving up on the idea," Katz says. "We were totally clueless."

After graduation, Katz joined the National Teacher Corps in the western North Carolina mountains. There he discovered that he loved to teach, but didn't like schools. After several years in Florida and Virginia, he and his wife, Svea Oster '68, moved back to Durham, where he joined with Steve Hoffius '71 to edit and publish Carologue, a cross between The Whole Earth Catalogue and Mother Earth News.

Still harboring the fantasy of building his own house, Katz decided to learn some building skills. He went to work for Kelly Morris '68, framing houses in Durham and Chapel Hill. Later, he took a job with Durham homebuilder Richard Harkrader, whose contemporary solar homes and apartments dot the neighborhoods around West Campus. Katz was sold on Harkrader's energy-efficient designs and planned to build one for himself "someday."

In 1979, Katz and his wife bought into a land cooperative called Lockridge Community, bordering Duke Forest. They had hoped to build a modest house in which to raise their then-one-year-old son Sol Katz '00, but money was short. They bought a used mobile home instead and moved it onto the land. The trailer lacked central heat, air- conditioning, and even running water. "The family joke was that Sol was housebroken before he was toilet-trained," Katz says.

In the coming years, Katz organized numerous tours of solar homes in Lockridge and the surrounding area. Solar energy was the rage of the late 1970s and early 1980s, and homes popped up all over the Triangle area sporting roof-mounted solar collectors and large, south-facing windows. Builders gave a nod to energy efficiency by adding extra insulation to the walls and floors, but the focus was always on the solar aspects.

In 1984, Katz joined the North Carolina Alternative Energy Corporation, a private, nonprofit company set up by the state to research and promote alternatives to conventionally generated electricity. At the time of the AEC's creation in 1980, electricity prices were soaring and citizens were protesting the economical, environmental, and safety concerns around nuclear power. The AEC's mission was to reduce the reliance on this form of power and, in most people's minds, this would be accomplished by blanketing the state with solar, wind, and hydroelectric generators.

But by the late Eighties, the promise of alternative energy failed to materialize. Active solar systems (those employing roof-mounted collectors and pumps) were expensive and prone to breakage, and passive solar systems (those relying on large south-facing windows and heat-storing masonry floors) were never widely adopted by the building community, whose priorities were price and appearance. Wind speeds were marginal in North Carolina and most of the good hydroelectric sites had already been developed. Increasingly, the AEC turned its focus to energy-efficient design--making buildings tighter so that they would use less energy.

Field testing: Katz, left, and Dastur check for energy leaks in new construction
Field testing: Katz, left, and Dastur check for energy leaks in new construction
photo:Les Todd

That was hardly as trendy as building solar collectors, and many of the energy activists of the day turned to other pursuits. But not Katz. "Logic always suggested that we deal with efficiency first, and then focus on alternative means of production, but somehow efficiency always got the short shrift," he says. "It turns out there was a lot more to efficiency than we realized."

Up to the 1990s, builders and architects assumed that energy efficiency was primarily achieved by stuffing more insulation in walls, floors, and ceilings. Mathematical models suggested this would greatly reduce heat loss, but actual energy consumption was often much higher than predicted. Using innovative tools like infrared cameras that see through walls and blower doors that pressurize houses to exaggerate air exchange, a handful of researchers discovered sources of energy loss in heretofore unsuspected places. Duct systems were a major problem. As much as 25 percent of the conditioned air carried by a typical duct system was found to leak out into the crawl space and attic. Recessed lighting fixtures, beloved in contemporary homes for their unobtrusiveness, turned out to act as chimneys, siphoning conditioned air from the living space. And insulation, as installed by the typical contractor, was found to have numerous gaps and tears that allowed rivers of heat to pass through.

While building scientists recognized the need to eliminate these sources of air and heat leakage, two problems loomed large in the field. The first involved indoor air quality. As buildings were made tighter in the Eighties and Nineties, occupants began to experience health problems--asthma attacks, headaches, and nausea, collectively referred to as "sick-building syndrome." These typically resulted from indoor growth of mold and mildew, a byproduct of excessive moisture in the house, or exposure to toxic fumes generated by improperly vented combustion appliances or by building products themselves.

Eliminating these sources of moisture and toxic fumes became a science in itself--one in which Katz and other members of the AEC steeped themselves. The company changed its name to Advanced Energy and marketed its expertise in healthy building design. "Our approach now is that while we want energy efficiency, our first priority is health," Katz says.

A second problem was actually getting contractors on the job to attend to the details that enabled a building to function properly. During the building boom of the last two decades, homes were thrown up as fast as contractors could build them. Workers were often untrained or unsupervised and many of the crucial details involved in sealing the building frame were ignored.

Along with a number of practitioners around the country, Katz began to understand that a systems approach was needed to ensure that buildings worked as they were intended. All the components--the building shell, the mechanical systems, and the people--had to work together as an independent whole.

"Everyone who touches a house, from the designer and builder to the occupant and service technician, has an impact on the way a building performs," Katz says. "So a successful system requires a good design, building contractors who are trained to understand the importance of crucial details, and on-site quality control. At the end of the construction process, you need to do performance testing on each house to verify that you've done everything right. If that process is followed, field tests show that buildings consume 30 to 50 percent less energy than homes of comparable size, are much more comfortable to live in, and have much fewer problems."

Katz knew that implementing this systems approach does add to the cost of construction--about $2,500 for a three-bedroom house--but builders would benefit from fewer callbacks, reduced liability, and happier customers. And if people were willing to pay the extra cost, Katz felt he could guarantee the homes' performance. The team at Advanced Energy came upon the idea of a package to include plan review, contractor training, and quality control. Several companies around the country were marketing this approach, primarily to builders of high-end custom houses. Advanced Energy wanted to go after the mainstream, production homebuilders. The marketing hook would be a comfort and energy bill guarantee.

"Build the house under our program," Katz says, "and we'll guarantee both comfort and heating and cooling bills." How can anyone offer a guarantee on something as variable as a homeowner's consumption of energy and sense of comfort? "We know that the human body is only comfortable within a narrow range of temperatures--not more than about 78 degrees in winter and not less than about 68 degrees in summer--so people's thermostat settings are actually fairly predictable," he says. "As long as the building shell is tightly constructed and properly insulated, we can accurately predict how much energy is needed to maintain those temperatures."

But what about all the other energy-consuming appliances in a house--the lights, major appliances, and computers? "We look at the two lowest months of energy consumption--those times when the heating and cooling systems are likely to be shut off--and identify this as the 'base load' of the house. Essentially, we guarantee that portion of the bill above the base load--the heating and cooling portion."

Advanced Energy's first client was Tucson Electric Power Company in 1996. For the past decade, the utility had watched its customers switch from electric to gas heat in the face of rising prices for electricity. In order to stem this drain, Tucson sought to offer a bill guarantee to homeowners who built according to their standards and used electric heat pumps. Tucson hired Advanced Energy to design the program and train the staff and contractors. More than 1,200 homes have now been built under this program, and another 3,000 are under contract.

Louisiana Pacific, one of the nation's largest lumber companies, followed with a program called Engineered for Life, targeted at large production builders. Approximately 4,000 homes have been completed under this program, mostly in Las Vegas, Phoenix, Atlanta, and Orlando. Recently, Advanced Energy entered into a partnership with Masco Company, a Fortune 100 company with a contractor-services division that installs roughly half of the insulation going into buildings around the country. Masco has enrolled three of the nation's largest homebuilders--Pulte, Centex, and Ryland Homes--into a guaranteed performance program, Environments for Living. Advanced Energy develops the construction standards, trains the contractors, conducts a plan review, and monitors the work of quality controllers in the field. Masco expects to build between 15,000 and 20,000 homes under the program this year.

Teacher-san: Crutcher in the center of class
Helping Habitat in Chatham County: one of Advanced Energy's projects with 43 nonprofit builders or developers in 31 North Carolina counties

With the success of their market-based strategy, Katz and his colleagues have turned their sights to the low end of the building market--so-called "affordable housing." Traditionally, the problem with introducing energy-efficient design into this end of the market is that low-income homebuyers cannot afford to pay anything extra. Ironically, a natural disaster has given Advanced Energy a boost.

In September 1999, Hurricane Floyd struck eastern North Carolina, damaging or destroying nearly 50,000 homes, most of them owned or rented by low-income residents. Flooding was the primary agent of destruction. Water damage left many homes still standing, but posed a serious threat of mold and mildew. Advanced Energy offered their services to the agencies involved in the recovery effort, thinking their primary role would be in training people how to repair water-damaged homes. That happened, but as officials made plans to build new government-subsidized housing, they seized on the opportunity to make the homes energy efficient, as well as durable and healthy to live in.

The result was a program called Build Back Better; it involves partnerships with nonprofit builders, including the Metropolitan Housing and Community Development Corporation of Washington, North Carolina. Metropolitan is the developer of a fifty-six-house project in Grifton, North Carolina, intended for victims of the flood.

Says Katz, "We're building the houses to our standards in return for which we'll guarantee that the average monthly heating and cooling bill won't exceed $18 for the three-bedroom homes and $19 for the four-bedroom homes. Not only are these people getting back into new homes, they're getting into homes that are affordable to live in and built to last."

The Grifton project led to a partnership with the North Carolina Community Development Initiative, a Raleigh-based nonprofit that provides financing to affordable housing developers. An additional $2,500 to $3,000 per house covers the plan review, contractor training, on-site quality control, performance testing, and bill guarantees, as well as the construction costs for the required upgrades. The Initiative covers all these costs with a grant, so the price to the buyer doesn't increase. Not only do buyers get a healthier, more comfortable house, the lower energy costs will put a few more dollars in their pockets every month.

Seeing the interest of the housing agencies in eastern North Carolina, Katz approached the North Carolina Housing Finance Agency (NCHFA) about offering the package, dubbed System Vision, to affordable homes statewide. NCHFA was sold on the idea and began offering that option in May 2001.

"The affordability of the package, the idea that Arnie's people will actually test each home and offer a two-year guarantee really sealed it for us," says Bob Dunham, manager of home ownership for NCHFA. "We think homebuyers will be interested not only because they will see lower energy bills, but also an increased value on their homes. Traditionally, appraisers have been unwilling to add value for energy conservation measures, but if you're willing to guarantee lower energy bills, that should be reflected in the appraisal."

Advanced Energy has met with such demand for their program that they have brought on additional staff. One of these is Cyrus Dastur B.S.E. '92. After graduating as an electrical engineer, Dastur took a job with a software firm located in the same building as Advanced Energy. He says he was intrigued by the company name and the electric-powered car they kept in the parking lot. Later, as a staffer with the North Carolina Museum of Life and Science, he read about the company's involvement in energy-efficient construction. Dastur contacted Katz and asked how someone might get into his line of work.

"Arnie said the best thing I could do would be to get some construction experience to see how houses were actually put together in the field," Dastur says. "So I quit my job and did carpentry for a year. I had an absolute ball."

In June 2000, Dastur went back to Katz with calloused hands. Katz hired him to help start up new projects and to conduct plan reviews. Dastur has had all the work he can handle.

"If a company expresses interest in building houses to our standards, we will do a free plan review on one of their models," says Dastur. "We get the drawings and do an energy analysis, find out what would have to be done to meet our standards. If they decide to go ahead with the program, they send us more plans, which we review for a fee."

Within the next five years, Advanced Energy envisions that all houses built in North Carolina with public money will be built to their standards. That will require persuading the various players of the value of System Vision and incorporating changes in the system by which the housing programs are funded. To promote those changes, Advanced Energy has called on the services of another Duke alumnus, Meredith Emmett '82. Emmett is a partner in Third Space Studio, a Durham-based consulting firm that "connects innovative nonprofits with adventurous philanthropists." Emmett also teaches a course in nonprofit management at Duke's Terry Sanford Institute of Public Policy.

"Our role is helping Advanced Energy find the money to train all of the players in the affordable-housing world so that they understand the value of System Vision," Emmett says. "We are also working with the various housing agencies to get them to raise their funding caps to include the additional cost of meeting System Vision standards."

Meanwhile, Katz gets to indulge in one of his favorite activities--teaching--without having to be part of a formal school setting. He travels regularly, both throughout North Carolina and around the U.S., giving seminars and workshops for builders, contractors, architects, engineers, and home inspectors.

Katz finally did get to build his own house. Working in his spare time and with "a lot of help from friends and neighbors," he, Oster, and their two children moved into their hand-made home in 1992. Combining the passive solar design of his early inspiration with the efficiency techniques he advocates today, the three-bedroom, two-bath house has been averaging about $130 a year to heat and cool. With air-conditioning. And indoor plumbing.

--Manuel writes frequently on issues related to energy and the environment. He lives in Durham.