Investors working to ‘green’ houses
Duo buys Phoenix homes near light rail to remodel
by J. Craig Anderson – Sept. 6, 2009 12:00 AM
The Arizona Republic .

Ernesto Fonseca and Philip Beere see the economically ravaged Metro light-rail corridor of west-central Phoenix as the perfect laboratory for their green experiment.

The hypothesis Fonseca and Beere are out to test is that older homes in foreclosure-heavy neighborhoods along the rail line could be converted into energy-efficient and environmentally low-impact “green” homes without adding much cost.

The two real-estate investors and green-home advocates recently purchased about two dozen foreclosed homes at trustee’s sale auctions and are hard at work replacing floors, windows, landscaping, faucets and air-conditioning systems with versions that consume far less energy and water.
All of the homes are within a quarter-mile radius of a Metro light-rail stop, they said, which will allow the occupants to save more money and consume less energy.

In a housing market already overrun with investment properties for sale or lease, Fonseca and Beere said they hope to distinguish their portfolio from the thousands of typical buy-and-flip properties while improving residents’ quality of life.

“The goal is to create a healthier environment and a healthier community,” said Fonseca, a designer and architect at Arizona State University’s Stardust Center for Affordable Homes and the Family.

Secondly, the investment partners said they will be able to reduce occupants’ energy and water consumption by at least 50 percent, helping them save money while reducing their environmental footprint.

The economic downturn has set back the green-home building industry considerably, but some advocates for environmentally conscious construction say green building is a practical means for home builders and investors to survive.

As the public becomes more aware of the cost-savings and environmental benefits, they say, developers and real-estate investors who fail to see the green writing on the wall will suffer lower returns and sales volume.

If nothing else, enviro-conscious investors have something to talk about other than “buy low, sell high.”

Though Fonseca is acting on his own as an investor in the light rail-corridor project, he said it is consistent with the Stardust center’s goal of boosting the availability of affordable, environmentally friendly urban living spaces.

Beere, an entrepreneur who met Fonseca while pursuing his master’s degree in real-estate development at ASU, has tried his hand at other green businesses over the years, including a health-food restaurant in Portland and a Phoenix dry-cleaning service that uses non-toxic products and processes.

He now runs Scottsdale-based Green Street Development, a business he kicked off in 2008 with an ambitious green home-conversion project in an upscale neighborhood in central Phoenix.

Beere succeeded at obtaining the U.S. Green Building Council’s Leadership in Energy and Environmental Design, or LEED, Gold Certification for the home, but he failed to convince anyone to pay its $900,000 list price at a time when home values were shrinking faster than the Himalayan glaciers.

Green Street now uses it to showcase the company’s home-remodeling services, Beere said.

“Just because it’s green doesn’t change the market,” Beere said, adding that the homes he and Fonseca are renovating would be far more modestly priced.

“Green can be affordable,” Fonseca said, “And affordable can be green.”

LEED design consultant Charles Popeck said green builders, like all builders, have been struggling to survive the Valley’s worst real-estate slump in decades.

Popeck said he is acquainted with Fonseca and Beere through ASU, where he teaches classes on LEED and sustainable development.

Popeck is also president of Phoenix-based consulting firm Green Ideas, which has been the consultant on all four of Arizona’s LEED Platinum-certified buildings.

While Popeck’s firm primarily works on commercial-building projects, recently it helped design Optima Camelview Village, a sprawling, multi-tiered condominium project north of Fashion Square Mall distinguished by its garden roofs.

Still, Popeck said right now projects like Optima are the exception, while retrofitting projects are keeping the green-building industry afloat.

“There’s a lot more existing buildings out there,” he said. “It’s about 80 times the market for new builds.”

Reach the reporter at craig .anderson@arizonarepublic .com or 602-444-8681.

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