In New Orleans, Net-Zero Energy Homes Go on the Market

After Hurricane Katrina hit New Orleans more than five years ago, the nonprofit Global Green USA started working to help the city build back in a greener way. In 2006, the organization held an open design competition, asking designers to come up with a single-family home that used net-zero energy. The hope was the design contest, along with an initiative to educate homeowners on sustainably building, would help promote green building practices in New Orleans. But the group also built five houses based on the winning design in the Holy Cross neighborhood and the hard-hit Lower Ninth Ward, with the idea of providing affordable housing to a few displaced families.

By 2009, the houses were finished and ready to go on the market. But financing complications delayed, over and over again, the moment when families could move in. Now, the project is finally completing its first stage. Four of the houses went on the market a week ago. Global Green has already received the first offer on one of them.

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“It took a heck of a lot longer than we thought it should,” says Global Green president Matt Petersen. “There are still people who want to get back and haven't. It's not as front of mind to everyone outside the community, but there are still people who want to get back,” including, he says, people who have been following the Global Green project and waiting for the moment when these houses become available.

As a model of green building, the houses succeeded admirably: They earned the LEED Platinum status that Global Green had been aiming for. But finding the right way to sell the houses, so that they fulfilled the other goals the group had set for them, provided more difficult.

Originally, Global Green intended to sell the houses for $175,000, with discounts benefiting lower-income families. The group wanted to attach what’s called a soft second mortgage to each house. These mortgages acts as forgivable loans; they drop the initial price of a house for lower-income buyers, require no monthly payments, and eventually disappear entirely. But they also prevent buyers from purchasing a house and quickly reselling it. If a buyer sells the house within a certain period of time, they have to pay off both their conventional mortgage and the soft second subsidy.

After failing to find a local lender who could offer this sort of mortgage, Global Green turned to Chase, only to find that the big bank wouldn’t be able to put together this sort of loan, either. In the end, the group put the houses on the market at a lower price point, affordable for the lower-income families even without the subsidized second mortgages. The one-story homes are priced at $110,000 and the two-story homes at $130,000.

“We’re hoping to have them sold and occupied by the end of the summer,” Petersen says.

The single-family homes are only phase one of the sustainable building project Global Green started more than six years ago. The fifth house they built is currently serving as a visitors’ center and a model green home. But after receiving long-promised stimulus funding, the group is starting construction this summer on Phase Two of the project, a climate action center that will host the visitors’ center, a corner store, and office space for Global Green. It’s going to be named after Pam Dashiell, who was president of the Holy Cross Neighborhood Association in the years after Katrina and who pushed to rebuild her neighborhood in an environmentally friendly way. That building should be finished in the beginning of 2013.

“Every piece has been a challenge, but it's always had good outcomes,” says Petersen. “Every good idea takes a lot longer than you think it's going to. But you’ve got to be ambitious and keep your eye on the goal.”

Photo courtesy of Global Green USA.