Taylor Watkins, Certified Residential Green Appraiser

As an editor and writer I generally spend a lot of time researching, or more aptly put, in solitary confinement. Perhaps that was why I suppressed a desire to loudly whine when my Editor-in-chief decided to sponsor me in an intensive, three-day Certified Green Residential Appraiser course that would require a 35 mile commute to Tigard, Oregon. My issue was not a lack of interest, but rush hour. I anticipated it would take at least an hour and a half.  In fact, I was wrong. It required from an hour (7:00 a.m. Saturday morning) to three hours (4:30 p.m. after a two-car accident closed two traffic lanes) to complete the one-way trek across the Portland/Vancouver metropolitan area. Today, however, I thank her again. It was so worth it.

Incidentally, the course – sponsored by Earth Advantage Institute and Watkins & Associates - is the only national certification program currently available and all three days contain absolutely no fluff. Those who have attended the cutting-edge CRGA course, and passed the exam to earn the Certified Residential Green Appraiser designation, number under 20 nationally.

Taylor Watkins not only understands appraising and green building (he has other credentials in this area), he walks the talk, having been an early pioneer in net-zero construction. I had interviewed him previously and been impressed, but I completely under-estimated his course. My hidden prejudice was that I would listen to a three-day pitch for green building with the accompanying data to support it.  Actually, that was the result I wanted. Was I ever wrong.

In business, profitability is the linchpin and pursuing sustainability goals doesn’t always fit neatly into the business profits equation. This makes it imperative, in my opinion, for sustainability advocates to find a way to marry and balance profit-motives with sustainability. I was sure this class would equip me to come back and tell you all that any kind of green building would give you a payback beyond your wildest dreams. Okay, so I’m an optimist and that wasn’t exactly what happened.

Earth Advantage Institute: Green Patio Materials

In fact, Appraiser/Instructor Watkins taught us how to value green properties synergistically through a symphony of ideas, research, data, knowledge, concepts, practical methodologies, team consensus and workshop techniques - and the result was an almost perfect symmetry. Just not what I had expected. Whenever he brought us back to the table, we were all miraculously on the same page. A room full of people who are paid for their esteemed opinions, and every single one of us reached the same conclusions. Here’s a hint: Most people won’t pay much more than retail.

I won’t spoil the fun by telling you how Watkins got us there, but no matter how carefully we attempted to analyze, calculate, contemplate, investigate and arrive at that mysterious green value, an almost exact premium was evident over and over again. Before the class I had valued that premium at the high end. My experienced classmates had differing opinions, although they were obviously there for the same reason I was: to learn more about green building and answer one big question. We all agreed that everybody likes green building in principle, but what would the market actually pay for it?

Watkins obviously enjoys the classroom and is enthusiastic about the challenges of appraising while fully cognizant of the weight of his industry’s societal importance and its financial impact on the rest of us. He is also somewhat professorial (in a good way) and a charming and tolerant instructor. I know this because my enthusiasm remained so high throughout the course, I impulsively interrupted him with a stream of off-the-wall questions.  (Luckily he didn’t employ duck tape or give me detention, although he may not allow another journalist to take the course any time soon.)

Earth Advantage Institute: Sample range of CFLs

In my defense, you would have asked questions too. After all, if appraisers don’t assign a value to green improvements, no matter how wonderful they are, nobody finances them.  Appraisers and how they think really do matter.  Appraisers also get paid regardless of whether their final value is the one anybody wants and (impressively) they still survive.  So there we were with a real live, highly-credentialed appraiser in a non-combative situation and there were so many things I wanted to know. Here’s a taste of what I learned:

Pending Green Legislation That Affects Appraisers

The Green Resources for Energy Efficient Neighborhoods Act of 2009 (GREEN Act of 2009, HB 2336) was approved by the House Financial Services Committee on Earth Day, April 22, 2010 and it will hopefully pass through the full House and the Senate one of these days. The act includes a provision that will define any property with energy efficient features or improvements as a ‘complex’ appraisal assignment.

This is important to the sustainability and green building community, and supported by the Appraisal Institute, as it will require green appraising to be performed by a ‘certified’ appraiser. As noted above, there are currently under 20 CGRAs nationwide, but as Congress is not noted for its lightening speed, the market will surely stay ahead of any final legislation.

House bill 2454, a Cap & Trade piece of legislation, passed the House in July of 2009 but is languishing in the Senate halls. It would require an appraisal sub-committee to establish standards, education and licensing requirements for green appraisers. This bill may not pass, or a different version may replace it, but it certainly telegraphs that green appraisal education will soon become mandatory.

The Unique Green Appraiser Knowledge Base

Building materials and costs valuation sources like Marshall & Swift (a standard building cost manual) are still useful tools for green appraisers, but they require additional supplementation and greatly expanded appraiser knowledge.  Green appraisers will need to develop and rely on new data resources in order for all aspects of green building, energy efficiences and water management to be effectively valued on a cost or replacement basis.  There are so many new green building materials – spontaneously reaching the market with the help of the Internet – that a printed manual may never be 100% up-to-date based on sheer mechanics. Additionally, green appraisers will be expected to understand the effects of sun, wind and shade and become experts on things like sustainable fenestration principles. Energy efficiencies are also a dynamic area that require a green appraiser to know almost as much about mechanical systems as some ASHRAE engineers.

In green building the integrated design approach is the preferred method for incorporating sustainability features into initial planning.  This method reduces the need or desire for later change orders and is intended to lower unforeseen expense.  By the way, Watkins didn’t make the class easy and we never had a chance to get bored.  He challenged us to try to determine two things: (1) if there is a premium that some are willing to pay, could it be supported by market sales and  (2) If not, would it create the appraiser’s dilemma, when ‘comparable sales’ reflect none to perhaps a partial acceptance of value, in spite of the additional cost of construction?

Blown in foam insulation for new housing

In order to value improvements – such as xeriscaping or green roofs – green appraisers will need a deeper knowledge of building science including water runoff, reduction, retention and reuse strategies.  Of course, additional knowledge of green building materials such as cost, manufacturing or extraction methods, how they affect and improve the building envelope along with efficient building methods are just a fraction of the new information a green appraiser will be expected to know.  Appraisers will also be asked to evaluate solar hot water systems, tankless units, countertops, cabinetry, VOC emissions, solar photovoltaic arrays, HVACs. composting toilets and even indoor air quality.

Of course, buildings do not function by themselves. How we live and work in them affects energy and water use. If more than just a few of us become willing to turn the thermostat down and learn to vote with our pocketbooks for better green building standards, America’s appraisers may have time to party. Maybe they’ll invite me if I show them my new Earth Advantage Institute continuing education certificates.

Taylor Watkins can be reached through his website at Watkins and Associates.  For up-coming classes at Earth Advantage Institute, visit their website.

(Part II of this review will be posted tomorrow.)

Other Articles of Interest:

• Green Appraisals: An Art Form, Part II
• Taylor Waktins Tells (Almost) All
• Are Green Appraisals Possible?
• What Happens in Las Vegas No Longer Stays There