Real Estate

The Atlantic hurricane season hasn’t even begun (it officially starts June 1), but excessive spring flooding has already displaced thousands of residents in Louisiana.  

A freak ice storm in Texas in February took out much of the state’s power grid, plunging nearly 10 million people into a cold, dark catastrophe. More than 150 people died, and at an estimated $200 billion dollars, it was the costliest natural disaster in the state’s history.

And California’s last wildfire season set the record for the largest amount of land burned in modern history, according to the California Department of Forestry and Fire Protection. The fires destroyed over 10,000 structures and cost over $10 billion in property damage.

The growing effects of climate change are no longer seasonal. Increasingly extreme weather from climate change is now a year-round phenomenon. This has homebuilders reconsidering how they design and power new homes, and how to take them off the grid, so they can be more environmentally sustainable, as well as operational when disaster hits. It also has traditional homebuyers thinking more like survivalists.

“More severe storms each year are going to further and further indicate the needs for resilient development,” said Ben Keys, associate professor of real estate at the University of Pennsylvania’s Wharton School.

Keys studies the effects of climate change on real estate, and the growing need for housing that can function off the grid. This goes well beyond solar panels. 

“These houses can be built in much more efficient ways, so not just solar, but they can have their own water filters, other sources of electricity generation and a number of other efficient ways to manage their utilities,” said Keys. 

A growing number of small builders, like California-based Dvele, are now stepping up. 

Dvele Home
Source: Dvele

Power outages spur change

“The whole idea of the self-powered home actually came from the California wildfires where the grids were shutting down,” said Matt Howland, president of Dvele. 

Dvele, founded in 2017, builds its homes in a factory. They are sleek, modern designs with high-end fixtures and finishings. The average size is about 2600 square feet, although it can be larger, and the cost is around $1.2 million. That is about 20% higher than the cost of a comparably-sized luxury home with none of the resilient efficiencies and technologies. 

Dvele homes have solar, battery and other construction and insulation elements, as well as smart technology, that allow them to use far less energy and operate longer off the grid. The home monitors its own energy input and output all the time, then tweaks the systems to save more. If the local power goes out, the home should see no difference. 

“We’re seeing things that we’ve never seen before and that grids simply aren’t made to manage. Since all the events in Texas, the interest in the self-powered concept has really gone off the charts for us,” said Howland. 

Most of Dvele’s projects are on the West Coast, but they are forecasting big expansion of individual homes and whole new communities in other states. The highest risk homes are in California, Texas, Oklahoma, Kansas, Nebraska, along the Mississippi River, and large Gulf and Atlantic coastal stretches, according to CoreLogic’s annual Catastrophe Report. 

Major grid failure or “blackout” events in the U.S., impacting 50,000 or more people, jumped by more than 60% since 2015, according to new research published in the journal Environmental Science & Technology.  

Homeowners have become much more aware of their risk and much more inclined to do something about it. There is more interest now than ever before from consumers seeking new strategies to safeguard themselves and their families from climate events.

Dvele Home
Source: Dvele

Increase in queries

Rise, a home improvement website dedicated specifically to sustainable projects, has seen a sharp increase in off-the-grid queries from its followers.

“It’s homeowner independence in general. A new way of thinking where you’re not relying on others and realizing there are a lot of things they can do,” said Matthew Daigle, CEO of Rise. “Solar is just a piece of the pie. They’re taking a page from rural settings.” 

They may be taking a page, but this isn’t about individuals living in a cabin in the woods, away from society, as off-the-grid has long been considered. 

“It’s not just for extremists. I think you’re going to see more and more people looking for ways in which they can protect themselves as there are increased risk from storms, more utility disruptions, and more need for resiliency,” said Keys. 

Growth in off-the-grid technology is not just expected for individual homes. Dvele is now exploring shared storage on micro-grids for whole communities of its homes. 

“We didn’t anticipate it would go this fast nationally, but we’re excited for the growth,” said Howland.

Biggest hurdles

The biggest hurdle to more expansion of off-the-grid housing is cost. Right now it is expensive, and especially so to retrofit homes. Most of the demand is coming from wealthier homeowners and homebuyers.

“I think the funding is a big challenge because the payoffs to many of these investments don’t pay off right away,” said Keys.

Incremental changes at the high end can filter down, which happens a lot with technology that is in our appliances and in our heating and cooling systems today. The more investment in off-the-grid technology, the cheaper it will become.

“So you need investors, or you need homeowners who have that long view and recognize that these benefits are going to accrue over time,” Keys added.

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