Two big stories in town this week... first off was a rather scathing opinion piece detailing our local version of the Energy Efficient Appliances programs - similar to the federal one. The point of the article was that since the program started, our electricity has gone up from 7.7 cents to 12.5 cents - nearing 'doubled' status, and therefore hasnt really saved anyone anything. There is much more to the article, but I was interested in a comment I read this morning by a reader.
She went rabid, talking about how much more those people would be paying now if they had NOT bought energy efficient furnaces, washer/dryers, etc. Well let's think of some math first... hmmm... the furnaces I saw that were approved for the program were $4000 to $6000 a piece. The washer dryer sets are around $1500 on the cheaper end, $2200 for the approved brands... and windows are extortionately high. It's 2 grand for one big living room window if you are lucky. So let's say someone decided to go all out and purchase 10 grand in energy efficient appliances and additions - and now they are 'saving' 20 bucks a month on electricity because of it. Okay - so how long will it take until they break even for what they paid in the first place (including the few hundred dollars refund from the municipal and fed govt)....By my calculations it would take 500 months, or 41+ years, to break even at saving $20/month and adding up to 10 grand. So in 41 years they will start their real savings (if electricity stays at 12.5 cents but it's actually supposed to go up even more). Wooo that's quite a deal! OR if they had chosen NOT to join this program and did NOT spend 10 grand on appliances, they would only be paying $20 a month extra so it would take 41+ years for them to finally be able to say they were wasting money by not joining that program 'way back when'. But wait - a furnace lifetime is 20-30 years by recommendation so all the people that bought a new one in order to save 20 bucks a month on their bill will have to buy another new one before they truly reap the benefits...wow that's awesome!
Did the woman writing the comment stop to think of that for even one minute? Those people are not saving a dime - and what if they bought their items on credit card or finance plan? they are paying the bill for that every month still and I guarantee you it's more than $20. So what are people thinking?
If you want to buy energy efficient stuff - go right ahead. But if you dropped a few grand (or several) in order to do it, don't dupe yourself into thinking that you are saving any money at all. I know that my house sucks and I would love to fix the windows and put in new insulation in one wall that is realllly crappy - but after I added up $8000 for windows and $1200 for the wall re-do, I realized I would not be saving any real money for a very very long time and we are not going to live in this house long enough to reap the benefits at all. So what's the point? I am smart enough to figure that out in mere minutes, so why can't anyone else?
The other story surrounds the lower income houses that I have talked about in the past. To backtrack, a housing company came here around 2005 and started building 2 and 3 bedroom attached/terraced homes that were selling for only $95,000 to $100,000 each. It was all over the papers that year - Own Your Own Home for Less Than Rent! weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee. However - with the housing market spiking around that same time, within a couple of years, those same homes were selling for over $200,000. Wow - is that affordable or what? Anyway so yeah a whole bunch of people still bought them though they had literally doubled+ in price.
And whoops - it is now coming out that the workmanship on them is so bad, real estate agents are starting to not even want to list them! One building even has it's entire foundation slab separating and 'floating', which is causing structural damage to the entire row of homes. And the people are stuck. They have only been paying the mortgage for a few years and cannot sell them for the 'new' value of $150,000 because they cannot afford to do that when they purchased for $220,000... and also because no one is going to want to buy a house that is going to fall down on top of the other ones or has mould problems, etc etc. Whoops.
But I might sound really harsh here in saying that I do not feel sorry for the people that are stuck. well okay, I do, because I am human and I care. However in the grand scheme of things, they bought homes that were supposed to be affordable housing units for almost a quarter of a million dollars and jumped on the bandwagon of owning these cutesy little homes just because all the hype said it was 'stupid to rent when you can own'. Own what? A piece of crap set on a wasteland that 20 years ago was deemed SWAMP and UNINHABITABLE???? Hello? homes that only 2 years before they bought were selling for less than a hundred grand brand spanking new? I don't get it. They did not do their homework on the most important and biggest priced item they would ever buy in their entire lives - and now they are upset and complaining about it.
My friend and I looked at those homes and my friend even went to a meeting to learn about them when they first went up, and she came back saying 'holy crap, I wouldnt buy one of those EVER'. She is just a normal person doing a normal job with no college education and she figured out that it was a bad idea all by herself. Why did so many others fall for this? We said right from the start that they are going to be pieces of crap that will fall apart in 10 years. They started to fall apart in only 6 so wow - but whatever. I dont want people to be homeless but I also do not want to bail out those who fell for the sales pitch and signed on the dotted lines willingly.