We celebrated a very peaceful and quiet candle-lit Earth Hour last night. We used our Sense Energy Monitor to watch consumption drop as we went around and turned off lights and appliances. We went so far as to turn off the fridge and the ERV (normally we would never turn these off, but we wanted to see how much energy they were actually using). We got as low as 83W of baseline load, which we attribute to the small plug loads made up of things like the modem and router, alarm clock, tv and receiver (plugged in but off). Our normal baseline is about 200-250W, which includes the ERV running 24/7.
We've had our new Sense Energy Monitor installed for nearly a month now, so I thought I'd share some first impressions.
First, a bit about the monitor we chose. Sense is a new product that has only been on the market for a few months, and isn't currently available in Canada (we ordered ours to Ogdensburg and drove down to pick it up). The purpose of the product is to monitor and track our electricity usage — and since our home is all-electric, it in fact tracks our total energy usage. The monitor installs with two clamps on the electrical mains leading in to the panel. While the install was quick and straightforward, I had the assistance of my electrician since the mains are always live (and if you're thinking of getting one, I'd recommend you do the same!). This type of electricity meter installed on the mains is fairly common, but what Sense claims to be able to do is to recognize different signatures and break out the electricity usage for each individual appliance in the house.
After install, the monitor takes several weeks or months before it learns everything in the house (for more information on how and why check out their website), but it will give you immediate feedback on total consumption. After nearly a month, it has learned our espresso machine, oven, and fridge and freezer lights. Even though this doesn't seem like much, it's been very interesting to look at the energy usage chart and figure out usage trends by deduction!
I'm hopeful the Sense Monitor will continue to add more devices soon, but in the meantime check out this chart showing from midnight to midnight last Friday. I've indicated some of the big spikes and what we figure they were.
24 hours of monitoring from March 17th
When designing a Passive House, we use the Passive House Planning Package (PHPP) to model the energy performance of the project. The PHPP considers two different design days: clear/cold and overcast/mild. Ottawa winter days follow these patterns very consistently. Yesterday was a prime example of a clear/cold day. As I mentioned in the last post, our heater shut off for 11.5 hrs during the day, even though the temperature outside never got above -12˚C.
Here is the chart of yesterday's temperatures. There are 2 indoor temperatures being monitored: the Book Nook is on the east side of the house outside of the master bedroom, and the Loft is on the top floor of the house. You can see that the temperature in the loft starts to rise noticeably as the sun gets around to the West, and starts to come in through the large lift-and-slide door in the loft.
And here is the electricity consumption (downloaded hourly from Hydro Ottawa's website). You can see the drop at 9am and the ride at about 9pm — this is the 4kW heater turning off then back on. It's interesting to notice how, even as the heater shuts off at 9am, the temperature in the house climbs steadily from 7am through to about 4pm!
Our brief flirt with spring weather has ended (for now). This morning we woke up to -18 on the thermometer, and it's been below -14C all day (it's 2pm as I right this).
Our "furnace" (the 4kW duct heater that heats our home) turned itself off at 9am, and has been off ever since. That's 5 hours at -14C or colder without any heat on! What's more, the temperature has been slowly climbing all day thanks to the sunny weather—it was 20C when the heater stopped, and its 22C now.
I'll comment later to let you know what time tonight the heater comes back on.
When Mark and I decided to move forward with the build of our home, we decided to take on the heavy task of acting as general contractors, together. We knew it would be a sacrifice, with extra hours into our evenings and weekends, but fingers-crossed, it would be a short-lived one. Since we had two toddlers already, we weren’t giving up any kind of social life to speak of. And we were both self-employed, with a good deal of control over our schedules (minus the toddlers factor). Shortly before breaking ground, however, an exciting full-time job opportunity came my way, as they do when you least suspect them, and I took it. Leaving Mark to handle the build almost entirely solo, with me acting as the annoying backseat driver, into our evenings and weekends.
Full disclaimer: who am I kidding? I had/have no business acting as a GC anyhow, but I was ready and willing to learn. In any case, I resigned to understanding that I was contributing to the house in other ways. Making a steady paycheque and putting food on the table. Still, not quite what we planned for.
Mark has done exceptionally well, all things considered. There have been ups and downs in our learnings, from budgets extended to pigeons roosting. With the delays incurred due to the floors, and standing on site, seeing the state of things, I was starting to see our move-in date slip further and further away. I wasn’t about to let that happen. It’s crunch time. Our older daughter is going to school in September. Come hell or highwater, we need to be in the house in August. So we sat down together one night and project managed the shit out of our house.
If you remember from our previous project management post, our binder is in a state of disarray and our Gant charts have fallen behind (ie. pretty much non-existant). So for starters, we downloaded all the information that was in Mark’s head to a free tool/app called Trello. We’ve both had some experience with project management methods like Agile and GSD (get shit done, as my office calls it), so we borrowed some of these methods on our house. The list is a mile long, but we are getting through it, one task at a time. It will be done. Oh yes, it will. Every night we check in with eachother to see how we’re doing, what tasks need to be shifted or altered, and we’re getting shit done. We’re pulling together, in our race to the finish line.
Need more convincing? Check out BLEUnest's website. The writing is pretty hilarious. And with great PassiveHouse information, in layman terms. Who doesn't love a good infographic? (Answer: no one). I particularly enjoyed this recent post. http://www.bleunest.com/make-average-your-enemy
All this good news and excitement came with a side of serious boooooooooooo. In order to receive our permit, we had to pay a hefty city development fee. I don’t want to be a Debbie downer here (no offence to my mother-in-law, Debbie), but I need to vent.
Building is not for the faint of heart. Mark and I are determined to build our house, and I hope this blog will inspire others to do the same. But make no mistake: it ain’t cheap and unless you’ve got money to burn, you’ve got to be incredibly resourceful. No matter how resourceful we are and how many strings we pull, however, we won’t have any control over the fees or taxes — those effing soft costs.
Here’s an interesting/depressing infographic from gohba. It shows that 23% of the cost to build a house in Ottawa goes to fees and taxes. These stats are for a developer home, where the assembly-line style of building keeps actual construction costs considerably lower then a custom home. You can easily double those construction costs for a custom house build. Then you’ll get a sense of what project costs are like. Rather discouraging isn’t it?
When we submitted our permit last fall, our development fees were tallied up at just over $16,000. Over the course of 10 months, our development fees have skyrocketed to over $22,000 (not to mention the school-board fees which have brought our total to $25,275). That’s a jump of 37.5% in less than a year. The only thought I can muster is WTF? They claim to have raised them to help cover the costs of light rail expansion (an Ottawa project that has suffered a couple decades of viability studies and false starts). Fine. But how is a jump of this magnitude justifiable? It’s terribly prohibitive. And isn’t/shouldn’t a city be trying to encourage development and growth? Especially good development? For crying out loud, our house is going to require a mere fraction of the resources a typical house would need, and depend far much less on the city’s infrastructure. We spoke with our ward councillor Jeff Leiper briefly about this months ago. He seemed to sympathize, but acknowledged there’s nothing we can do in the short term. If we wanted to build our home, we would have to suck it up and pay, in so many words.
And so we paid. Zing.
Enough complaining. Let’s build a home.
How it all works
A construction mortgage differs from your traditional mortgage in that nothing exists yet. Most traditional mortgages involve a down payment. So, for ease of calculation, let’s say you have a 500,000 mortgage that requires 10% down, that means you have to front $50,000 and the remainder is what the bank actually issues as your mortgage — $450,000.
With our construction mortgage, the bank financed 100% of the land cost, which meant that at the time of purchase, we did not have to pay anything on the land.* We have only to pay the interest on the land until we start the build. As far as down payments go, at this pre-build stage, it has no one to go to, which is why they financed 100% for us. The bank assumes that we will pay the 10% (downpayment, if you will) towards the construction portion of the mortgage ourselves. So the actual mortgage amount granted has this amount subtracted from it already.
Let’s say the land cost was $200,000 (A) and the build cost was $400,000 (B), for a project total of $600,000 (C) (these numbers are for illustration purposes only). The actual mortgage would then be for $540,000 (C minus 10%). Meaning you think it’s going to cost $400,000 to build, but are hoping to build it for less :p Capeesh? It took me a while to wrap my head around.
|Construction mortgage breakdown (example)|
|Land cost (A)||200,000|
|Build cost (B)||400,000|
|Project cost (C)||600,000|
|Mortgage (C – 10%)||540,000|
|Effective build cost||340,000|
When the build begins
As mentioned, until we start the build, we only pay interest on the land portion of the mortgage (like a line of credit, where you only pay the interest on the portion used). When we’re ready to start the build, we will be allocated a series of disbursements based on percentage of construction completed. CMHC decides what these breakdowns should be, and the bank issues the funds once someone has been out to site to confirm that the work has indeed been done. This means that money will be tight up until our first disbursement is issued (because we’ll have to front the money ourselves, and/or have to negotiate with our subcontractors for flexible payment terms).
|The disbursements used by CMHC||%|
|Damp proofing, drain, back fill||2|
|Frame, sheathing, roof||20|
|Insulation, air vapour barrier||5|
|Kitchen cabinets & bathroom vanities||6|
We are hoping that the above is just a guide and there’s some leniency. Because we’re building a Passive House, we’ll be investing a lot more on the envelope than a traditional build. So our numbers will be skewed towards insulation and windows and less towards HVAC and finishes. We shall see.
We can ask that the bank gives us as many disbursements as we want, but CMHC’s fees have allowed for four. Should we choose to ask for more, there are additional fees — not only from CMHC but also for lawyers and appraisers too. When we are ready, we let them know and they send someone out to confirm that the work we said was done was, in fact, done. We will likely ask for our first disbursement once the excavation is complete and our foundation is poured.
As the disbursements are issued, our interest payments will rise as our mortgage advances. For example, after the foundation is poured, CMHC may deem the construction 15% complete, at which stage we ask for our first disbursement. Using the numbers from earlier, we have $340,000 left from which to build our house. So our first disbursement will be 15% of $340,000, or $51,000. And we’re now paying interest on $251,000 up until our next disbursement/withdraw. See table below for the full story.
At the end of the process, when work is certified 100% complete, we will switch our mortgage over to a traditional mortgage. At which stage we will likely have some options. Do we want to take out a home equity line of credit because our completed house will be appraised at a higher value? Thoughts for later on…
Phew! I did it. And you made it to the end. Hope this helps other curious minds. Many people I've met have expressed interest in building, but aren't really sure how. Understanding the construction mortgage, and the fact that we actually might be able to get one with zero money down (for the land), was what set our wheels in motion. I still scratch my head over the fact that they were willing to give us so much money. But the bank's not stupid. They'll make their money.
|Mortgage disbursement calculations (example)|
|% Complete||x Build cost
(B = $340,000)
- Earlier I stated that we did not have to pay anything on the land when we bought it because it was 100% financed. What the mortgage calculations do not take in to account are the soft costs. I wrote a post earlier about those effing soft costs. When we purchased the land, we had to pay the GST on the purchase, immediately, in cash (bank draft). We used equity from the sale of our house towards this. We also had to pay the city permit application and will soon be paying development fees (upwards of $21,000 or so) once the permit is actually issued. Yep, those soft costs hit hard. Ouch.
- An uninsured construction mortgage will typically require 20% downpayment on the project, and be subject to a holdback of 10% on each disbursement. Something to bear in mind if this is the route you go.