Model proves ‘platinum’ homes don’t need to cost much green

Silicon Valley / San Jose Business Journal - by Katherine Conrad

Vicki Thompson

Architect Sal Caruso spent less than $500,000 to renovate a 1920s house and build a two-story duplex to LEED platinum standards.

SANTA CLARA — Tired of trying to persuade homebuilders that “green” design reaps financial rewards as well as environmental ones, architect Sal Caruso decided to prove it.

“The question that always comes up is: How much will it cost me?” Caruso said. “I decided to find out by doing it myself and using my own money. I know it’s a bottom line market.”

So Caruso, principal of Salvatore Caruso Design Corp., built a duplex in Santa Clara in less than six months to the highest standards outlined by the U.S. Green Building Council — the first multifamily platinum project built in California. He calls it a prototype to show the industry that green can be done at a reasonable cost for a reasonable rate of return.

“As the architect, I advise client developers on which way to go,” he said. “Now I have hard evidence.”

How much did it cost?

“Frankly, it’s ridiculously low,” he said. “Every penny you put into green you get back and then some.”

And just as important, the units rented quickly and for a high rate in a market where apartment vacancies are rising and rents are falling — $2,750 a month for each of the two-bedroom, two-bathroom units. Caruso, who owns other rental units, said reaction to the green homes was about 50 percent better than his conventional homes.

“We got a phenomenal response,” he said. “We had dozens of inquiries about the property. We stopped the ads in March and we’re still getting inquiries. If I can do it, anyone can do it.”

Building green is economical

Caruso spent less than $500,000 to renovate a Craftsman-era 1920’s house and build a two-story duplex in back. He bought the property on Lafayette Street in 2001. He estimated that it only cost 2 to 3 percent more to build green compared to conventional construction. Plus, his willingness to build green convinced the city of Santa Clara to allow him to construct a duplex rather than just one unit, effectively doubling his rate of return.

Caruso believes the units are popular because renters are attracted to the promise that energy costs will be reduced by 70 percent and water usage by 90 percent due entirely to the green features that include multiple windows, tankless water heaters and a plush carpet made of plastic soda bottles.

All these features have given him serious bragging rights. It is the first platinum multifamily project in California, and Caruso believes it’s only the fifth in the country.

Will it convince builders? Caruso hopes so.

Mark Robson, president of San Jose’s Robson Homes, has worked with Caruso on past projects and is working with him now on a development in Los Gatos. He agreed that builders must be shown the way.

“He’s told me about the project. If he says it can be done, he’s probably right,” Robson said. “It’s more attainable than you think, and there are tangible benefits that are meaningful. But it’s not necessarily the case in every market segment in Silicon Valley.”

Paul Rosen of North Bay Energy Services Inc., who audited the project for the Green Building Council, said Caruso’s success proves construction of a multi-family project can be done efficiently and easily if you start at the beginning.

“If a home includes lifecycle costs, it’s cheaper to build to this level,” Rosen said. “If you build for the lowest initial costs, you can’t build it green.”

Rosen also noted that Caruso worked to integrate all parts of the construction process in the beginning. “Sal did not work in his own bubble — he brought in other experts to successfully integrate a green building that optimizes comfort and indoor air quality while maximizing energy efficiency,” Rosen said. “Sal drew an elegant yet simple design. The more complex the design, the more energy is wasted. Sal kept it to basics.”

As far as Robson is concerned, Caruso’s project is quite significant as a symbol for developers.

“It’s how we learn and it’s how we get from here to there. One of the steps in the process is that you’ve got to start doing it,” he said. “I can promise you five years from now we’ll be better at it than we are today.”