Daniel: Say that I’ve got a certain length wall. I can’t get the length of timber for that wall normally off the shelf. So I’ll have to cut a bit off of it and then I’ll chuck that in the skip.

Host: I see. It’s the efficiency of things coming in these sorts of sizes and you’re trying to fit it into your building, thus you’ve got this much loss.

Daniel: Yeah, and in New Zealand, we don’t do anything modular. We do everything as sort of like a special or a unique item a lot of the time.

Host: It doesn’t sound very efficient.

Daniel: No.

Host: What’s going on there?

Daniel: I think we’ve just had it too good for too long, and we’ve held on to these archaic ways of doing things where everything is from the land of plenty, so it isn’t worth anything. Whereas now stuff is worth things, and it’s quite expensive to do that.

Host: The cost of building seems to just be going up and up. We were just having a look at a report internally that a few percent is going up in the next three months. All these constant rises. So the efficiency of use of material must be quite large, or the efficiency of how you design the shape of the house versus what the materials look like. Is there much to be saved in that?

Daniel: Hugely. The basic design of the house, that being the shape and size, confers the largest cost and also the amount of performance from it as well—the basic geometry there, and then also what’s used within the smaller details of the house too. But even to a more focused extent, I get quite upset when we waste materials on site, because I’m the one that then has to validate that to the client. And also for the bottom line, too. It’s like, well, that’s just less money that we’re making as a company because we’ve wasted that, and that’s not the client’s fault.

Host: It feels there that there is actually a nice collaboration between quantity surveying and design, to make sure that you go, ‘Sure, if you’re going to use those materials, just so you know, they come in this length, so maybe you need to think about how you use it.’ And then they go and redesign it, and then you discover, ‘Oh, we’re now using 7% less because we’ve been more clever at using that material.’ Do you find there’s a bit of that?

Daniel: Definitely. However, that’s not the industry standard. Normally the quantity surveyor works with the on-site subcontractor, builder, those end-of-process people. The design aspect that takes place obviously happens before anything happens on site normally, and it can be an ongoing process, but that actual design of the house… typically quantity surveyors aren’t as involved as you’d like them to be. So it’s left more to the designer, architects, whoever’s done your plans, to have some knowledge of knowing that this timber only comes in six-metre lengths or other aspects around that. To a large extent, they’re just not aware of certain practical issues with various things.

Host: That’s quite interesting because it raises the question of the unique way that Energy Efficient Homes works. You’re in a room—the designers are right there, you’re right there, the person who runs the company is just over there, the client pops in, and the guy who runs the building just walks in. He’s right there. So you’ve got this great loop. It comes to the next question, which is: at what point do you normally get involved in the process, and is this normal or abnormal?

Daniel: Certainly in the industry, I would say it’s more abnormal than it is normal. I can’t speak to how anyone else works, obviously, but certainly with what we do, I interfere quite a lot with everyone else.

Host: It’s a nice word.

Daniel: They probably sometimes wish that it would be a little less harassment from me. However, I’ve always got the thought that if my mum was building the house, what would I think is good value for her money? And so with the clients, I’m like, ‘Well, let’s not do that because that’s expensive and kind of stupid, and also it’s going to take a long time.’ All of which, at the end of the day, adds dollars to the bills. Even if something takes longer, a client’s paying for that with rent or mortgage payments. There is a cost to being efficient with everything, to a large extent.

But no, from the initial concept, I’m fairly involved, right through to pricing with details on-site with the project manager. I have quite a lot of input in trying to be like, ‘Hey, let’s look at this as what we can do affordably. Do we really need that? Or rather, is that even going to be a good solution going forward?’ Just because it’s the cheapest price on the ticket doesn’t mean it’s the cheapest price 10, 15, 20 years down the track.

Host: That’s a good point. What about this as an idea? Say you have you coming in earlier than average, and then you have somebody coming in much later, and they’re, say, a disconnected consultant from the design process. The design, the architecture, all that has happened with the customer, and then they’re off to go and get building quotes. Quantity surveying, I assume, is normally at that point as well. So at that point, there’s really no going backwards; there’s no collaboration. What do you feel is the amount of loss of opportunity of doing better for not being involved earlier like you are?

Daniel: There’s kind of two very simple binary cases there. If you’re someone with pots of money and you can just throw more money at the problem, it’s not a concern. Generally speaking, that’s a group of no one, because even if you do have pots of money, chances are the way you got there wasn’t by just willy-nilly spending it and throwing it away.

So, to some extent, everyone’s concerned about getting within budget, value for their money, something to that tune. Doing it as an afterthought then means that while you may be getting what you want, perhaps there was a more affordable or better way to go about it from the start.

We have a more circular process where we will do an initial concept, then we’ll price that and get some feedback from the client. ‘Great, within budget.’ Then we’ll further develop it and price it again. ‘Great, we’re within.’ We work it forward in these iterations while checking in with the client, rather than designing everyone’s hopes and dreams, presenting it to them, saying, ‘Isn’t this lovely?’ and then handing them a bill which they can’t afford, having to tear their dreams away, right? And then pull it all apart and go, ‘Okay, well, how do we make this actually real?’ You can imagine that no one enjoys that at all.

Host: No one—the client, anyone else—no one enjoys that. Let’s say that the client has a budget in mind and they say, ‘Sure, let’s work within this budget.’ What are you able to do to make sure that they get the sort of house they want and it works within the budget from an early stage?

Daniel: Initially, the budget needs to be realistic because, unfortunately, there are quite a lot of people who aren’t aware of how expensive houses are for a start. The state of the industry in New Zealand is that it is quite expensive to build. In someone’s life, it’s going to be the most expensive thing they likely do, and they’ll spend goodness—10, 20, however many years paying it off as well. So that initial aspect of ‘what is your budget’ is very important. Then we can design generally within that, and hopefully the client’s expectations and what we can provide for them have parity, which unfortunately isn’t always the case. That is just the way it goes.

However, within what a client is looking for, we’d sit them down: how many bedrooms, how many living spaces, what size garage do you want, what size house, where is it located? Broad information about the project, but just trying to keep things simple is generally better. The complexity is normally… or rather, a complex solution to a problem is normally more expensive than a simple one. It often times performs worse as well because you are having to compromise things to make it work. I like to say that it’s easier to make it more expensive later, rather than strip things away. You can always make it more expensive; it’s quite hard to make it more affordable.

Host: Is that almost with the client having two briefs? One is: okay, what does this house just need to be at a basic level? And then: what are the bells and whistles, and let’s get it right basic, then see what bells and whistles we might add? This is versus what sometimes happens, I think, with design and build, which is: ‘What’s your dream? Let’s put all that together. No, of course you can’t afford it. Now let’s ruin it, and let’s build something that’s a shadow of a dream.’

Daniel: That’s the point of doing the early pricing. It’s like, ‘Hey, here are the components that are going to make a difference to your lived experience in the house.’ You’re more comfortable, you’re healthier, hopefully you’ve got lower energy bills. For some people, that is just getting a roof over their head at a basic level. Then let’s send you on shopping trips to visit our suppliers to add these nice things, because at the end, everyone wants to come home and have nice things. There’s no one that wants a completely basic existence or rather a bare-bones existence.

But it is much easier to start with a fairly standard allotment and say, ‘Okay, this is what we are shooting for with the ventilation in the house.’ We know that the solution that we’re proposing meets the standard for what we would call adequate or good ventilation. Same with the insulation, same with the air tightness. So we have all those components in a rather simple design of a house. Then from there, we will infer what the client wants on top of that and provide different solutions for the look or aesthetic that they’re hoping to reach. Because it is remarkable how two products that you’re stood 10 or 20 metres away from can have very different costs as well, and a lot of people don’t realise that.

Host: I guess that is also because a unique thing with what you guys are doing is that it’s in the name of the company—it’s an Energy Efficient Home. It’s a house that has higher performance than average. So for a client, partly what they’re looking for is the aesthetics, of course, of like, ‘Do I want to hang around this object, this house?’ But the other piece is sometimes what you can’t really see, which is: is this house going to perform? Are my bills going to be lower? Am I going to be healthier? Is it going to retain value over time as the building code changes? And this becomes, let’s call it, a more normal house in the future, and other houses fade away. So how do you navigate that with a client where some of these energy-efficient pieces might be quite large-ticket items, but it’s relevant in the long term?

Daniel: That’s the initial proposal. We are obviously presenting the health benefits to this type of building: the comfort that you get from having the whole home be warm, pleasant, with fresh air coming in all the time, and then lower energy costs. That initial sell, to a large extent, is why they’ve come to us, because they’ve looked at New Zealand homes or they have at least some vague notion that something’s wrong here, or rather maybe it could be better.

Some clients aren’t aware of that, and it’s their first exposure when they meet us to the concept. But it’s not a hard sell once you start even dipping your toe in the water to see that this is a substantial increase in your quality of life—moving into a home that is properly ventilated, that is warm throughout, that is not draughty. It’s not a hard sell to a large extent.

In regard to what clients want, this is where my personal feelings kind of differ to a large extent. For me, not that I dislike it, but when I see a great big schist facade on a house and some elaborate structure, I think to myself, ‘Why are you doing that for your neighbours?’ Because they’re the ones looking at your house. While it’s nice to be like, ‘Oh, look at all this lovely schist I put on the front of the house with timber and very expensive front features,’ you live inside your house. You spend most of your time that you are inside your house asleep, because in the day, you’ll be outside.

So the actual health benefits of the house are what it’s providing to you for the majority of your use of it. To think that, again, pulling into the driveway for those five minutes a day that you pull in, you pull out, and looking at the house being like, ‘Isn’t it beautiful?’ Great. But to me, I would much rather a client spend money inside their home where they’re actually going to be, rather than on the outside. But at the end of the day, as I said before, everyone likes nice things, of course.

Host: Yeah, they’ll have their personal preferences on that. Some of it’s the aesthetics, some of it is the, ‘Look what I’ve created.’ But I guess you would then have a balance where they go, ‘I could cover the house in this sort of schist stone, whatever, something expensive, or I could make the house perform a lot better.’ What happens in the long term? In the long term, some people think, ‘I have a nice house,’ or, ‘I am extremely healthy, and my power bills are much smaller, and life’s good.’ So there is a balance there. But I guess some clients just have even more money and they get both.

Daniel: Wouldn’t it be nice if we could have everything? But unfortunately for most people, they are having to pick and choose between their darlings.

Host: So it comes to a question now. How do you recommend homeowners approach the design and build process?

Daniel: I know how I would approach it. I would try and anchor to the more affordable end until I have more certainty of the total cost for the project. That’s obviously very vague. However, we price all sorts of different homes: homes on the hill, two-storey homes, 400-square-metre homes, 70-square-metre homes—there’s a very large variety. So to say to a client, ‘Oh, well, everyone can fit in a 100-square-metre house,’ that’s just not going to be true for a lot of people. And also, it could be quite a bit of room for one person living on their own, so it’s not necessary.

But if you start with ‘what do I actually need,’ and then design the budget to the strict necessities with some things I don’t want to compromise on. For some people that might be… you know, it’s very common these days to have an ensuite and a pantry, but for others it’s like, ‘I want a more elaborate kitchen, I want a second lounge, I want a nice internal feature ceiling with a raking aspect and that sort of thing,’ which, again, there are multiple ways to achieve the same look that are vastly different in price.

But if you start at that lower end—needs plus non-negotiables—and then hopefully have room in your budget so that when the pricing comes back, I would love to say to a client, ‘Hey, it’s coming $20,000 under. If you’ve got money burning a hole in your pocket, now go and spend it.’ That’s nice.

Host: Instead of, ‘It’s coming in $65,000 over, what do we get rid of?’

Daniel: Yeah.

Host: There’s also an interesting aspect about how an Energy Efficient Home is physically designed in terms of its shape so that it can be more cost-effective. There’s a bit of a misunderstanding that an Energy Efficient Home or a performance home needs to cost more to build, just period. Whereas the design, the shape, everything else can dramatically change that to the point that you end up with a house that costs relatively the same as a non-performance house, and it’s just the way it’s been put together.

Daniel: A lot of people say, ‘Oh, how much does it cost? How much extra is it?’ And we say, ‘Well, we can offset the cost with…’ and they’ll sort of cut us short. You say, ‘Yeah, but if I take this house and I strip away all the energy-efficient parts of it—like to make it, I guess, a bare minimum to meet the building code so that it passes—what would it cost?’ Obviously, there’s a figure on that that does range, from a small house being less and a bigger house being more.

However, it’s an interesting notion to say, ‘Oh, I’m going to remove these things,’ because you wouldn’t say, ‘Oh, I’m going to remove the roof,’ or, ‘I’m going to remove the wall cladding,’ because you’re like, ‘No, those are essential for the house.’ We have this notion that we don’t need ventilation inside the home or we don’t need to manage humidity inside the home. With the Energy Efficient Home, the concept that we have is: ‘Well, this is the package, because this stuff is essential.’

What we’re doing then with the design is we’re able to design you a home that further improves the performance of the home, but as a happy coincidence, also makes it more affordable as well because, again. It’s that ‘simpler is better’ sort of notion to a large extent. Obviously, there’s a cost to installing a ventilation system if it wasn’t there. But that would be like saying, ‘Your car costs money. Are you going to walk to work?’ You have to do something.

Host: Something has to be done. I think part of it is that idea that a higher-performance house is often a simpler shape because the less outdoor surface area you’ve got, the easier it is to heat and retain heat and everything else. Would that be true?

Daniel: As a basic principle, it is surface area to volume. With a large shape, it will generally have a lesser surface area relative to its volume. A very small shape, as a proportion, has more external surface area to its interior volume. The common example would be like a mouse versus an elephant. An elephant has a huge volume but, comparative to the mouse, a relatively small amount of surface area. That’s why it has these great big ears to get rid of heat, whereas the mouse doesn’t need that.

So with the house, if you start adding all these wacky corners and extended aspects, elongating and narrowing the house, and so on and so forth, you change that ratio as well. Not to mention you’re adding junctions and complexity where you’ve got timber where you can’t add insulation, and all types of roof framing that are more expensive to put up and take time as well. But fundamentally, this ratio of the perimeter to the area of the house, just in a two-dimensional aspect, gets worse. The ideal shape would be a square. Realistically, a square is not going to be suitable for most sections. You can add some sort of garages and things on the outside to change the shape, or a veranda. However, a sort of two-to-one sided rectangle is what we shoot for as a realistic interpretation.

Host: If you had a look at two houses side by side, you’ve got this energy-efficient one over here that looks a bit more like, say, a shoebox, right? And then you’ve got this other one over here which looks like a collection of boxes all sprung out in different angles. You go, ‘Oh, well, that’s kind of interesting.’ And you go, ‘Yeah, sure.’ So, you may have got slightly more floor space, but all your expense is in the complexity of the shape that you guys are creating. You haven’t been able to afford any of the energy efficiency features. So you’ve now got a low-performing, slightly larger, complex house over here that costs the same as this one over here that might be slightly smaller, has all the energy efficiency, and costs you a lot less to run for the next decade or 20 years. Then you go, ‘Well, which way would you like to go?’

Daniel: On that notion that I mentioned before of designing your house for your neighbours, your neighbours will look at that house and go, ‘Oh, that’s nice. It’s very interesting. It’s got a lot of shape.’ And you might look at the square house and go, ‘Oh, it’s a box. It’s a…’ The rather uncharitable term for it would be, ‘It’s a coffin,’ and all things that get laden at the houses.

However, I would say that most rooms you walk into are box-shaped, and you don’t tend to notice once you’re inside the room. Really, what it is is that designers struggle to design a home with a good utility of space in a simple overall envelope. Because if you just add rooms on and then let the walls fall wherever they are, that’s very easy. ‘I walk into this room, oh, I walk into that room,’ and it just flows and follows. That’s great, and then you look at the abomination of a house shape you’ve got at the end of it.

Whereas designing a simple outside envelope and then trying to fill the middle and unite the different areas is somewhat of a challenge. I think that’s more where it comes from. The other thing is that not only are you bleeding heat from all this additional wall area that you’ve got, you’re also paying for a lot of extra wall that you don’t necessarily need as well. So, it’s more expensive and it performs worse. It’ll be less airtight as well because there’s more surface area and more complex junctions where air can escape. Aside from impressing yourself, the neighbours, or anyone else with the shape, there’s not a lot of benefits to it.

Host: That makes sense. I would say a good designer can do anything with anything. But depending on what the goal is… good designers ask, ‘Well, what are we designing for?’ If you’re designing for great flow, energy efficiency, and the least amount of use of materials, you can end up with some great products.

Daniel: Yes. And I think on that notion, it isn’t a failing of the designer—or rather, designers as a cohort, generally speaking—that houses haven’t been designed this way. I think it is a case of incentives. They’re thinking about what the experience is going to be like in the house, how you are going to move through the house. It’s never been: what are the health benefits of the house? How do I get this house to perform so that it benefits the occupants’ health, comfort, and their pocket for running costs?

I think you’re right. I think there are a lot of good designers out there who can design good homes. They just have—and not to make this sound malevolent, but—misaligned incentives. A lot of the time, they’re working to a project brief that certainly we, as a company, don’t feel is what people actually should be getting from their homes. And that’s a product that benefits your health.

Host: Built for health.

Daniel: That’s the one.

Host: If only someone could do a podcast on this.

Daniel: Well, let’s give it a go.

Host: Another thing is helping people who are going to go through the design and build process understand why they should really have the budget in mind from the very beginning. Because I’m sure some people would like to go, ‘I’ll keep that secret because we’ll try and get it as low as we can.’ But if you’re going to work with a design-build company and you don’t tell them what you’d like to spend for as long as possible, hoping that they just come out with this small figure and you’re like, ‘Great, well, that sounds good,’ what are they going to gain by being much more clear and open with the budget?

Daniel: I can understand why people hide the amount of money they have, because there are, unfortunately, people in life that will take you for everything you’ve got. If they think you’ve got a bit more, they’ll take you for that little bit more, as much as they can.

Host: Just a caveat to that is that, say somebody has $700,000 to spend on a build, and somebody has $850,000 to build, and they want to spend all of it. I would say that nobody’s taking all their money when they spend all of it; they’re trying to get the best building for that price. But if they don’t know what the price is, what are you designing to? That’s what I find strange about it.

Daniel: Knowing what a client’s budget is is obviously helpful because that is a hard ceiling. We can’t go past that. It does get a bit funny when you are talking to a client, and it’s like, ‘Oh, we’re over budget.’ ‘Oh, no, that’s okay. We’ve added for the kitchen, we can find it.’ And it’s like, ‘Okay, but I thought you said…’ ‘Oh, yeah, no, that’s fine.’ So that does make things difficult.

But really, we just want happy clients at the end of the day. Whether we know their budget or not, or rather they’re truthful about their budget or not, is less important to a large extent. It’s more that the house that we’re designing meets what their requirements or needs are, and we’re sticking within that idea of budget.

It is really just about getting value for the client at the end of the day. That word ‘value’ is different to every client, dollar for dollar. I can honestly say that every dollar we add on the cost of the house corresponds to something that is adding value to it. We’re not just like, ‘Oh well, put a bit more in there for the Christmas do,’ sort of thing. It really is like we work on a fixed margin. We are only adding costs for things that we think are going to make a difference or that the client wants. The end goal is to have happy clients, so whatever your budget is, we’re trying to get value for you out of it.

Host: That is the point—that you’re trying to make the budget work as well as it can for the thing that they would like at the end. So somebody who’s going to spend $500,000 versus somebody who spends a million, they’re going to end up with a different thing. But if you don’t know that they’ve got the million to spend, you can’t design a million-dollar house for them.

Daniel: Because you go, ‘What do we do about this piece, and what do we do about this size?’ So it makes sense. But also at the same time, if you’ve got a million-dollar budget, but you’re going to be satisfied with a $750,000 house to meet your requirements, we’re perfectly happy building you a $750,000 house. We want to build houses; we don’t want to make houses more expensive than they need to be.

One of the benefits of a design and build process is that you can come with land, or land that we’ve got, and every client can look at the plans we’ve done and be like, ‘Oh, I like that one.’ But we’re able to tweak it and make it work. Because if you’ve got the same section, every person in Christchurch would design a house on that section slightly differently. They tweak it in different ways. Having the ability to work with a client for what they want is obviously very important as well.

Host: It now brings us to something, because you started talking about getting value for money, and it’s a term that I think we spoke about a while ago: what does value engineering really mean, and also, what does it not mean?

Daniel: Yes. This term ‘value engineering’ is something that’s thrown around a lot, much like ‘high performance’ or even ‘energy efficient’ at times, and it loses its meaning when it’s used so frequently.

I would say that value engineering is the process of looking at a suite of different options, assessing the cost and the relative benefits, and then being able to give a recommendation of what is most suitable. I don’t think that that should involve hiding all of the available options. I think that should be presented to a client so they can choose, and that we are giving recommendations on what we would say is best. Rather, we’re not going to stop you from doing anything; we’ll just tell you the consequences of it as well. Some people don’t want to hear those consequences at times, so it’s a very delicate situation.

But fundamentally, if you want to have, let’s say, different claddings on the house, we’re not going to stop you from having a very basic brick, or schist. We’re not going to stop you from having a very basic fibre cement weatherboard, or some sort of charred timber that’s been sourced from Japan. It is client preference, but we would just want to be able to say, ‘Hey, this timber that you’re looking at, we can get the genuine Japanese cedar article, or we can get a local supplier here who we’ve worked with before that sources their hardwood from Australia, and it’s all renewable and these sorts of things.’ So, I would say that’s value engineering: proposing you with solutions which have a known cost, as well as the long-term benefits of the product or negatives, and then the client can make an educated decision.

Host: And how far does that go in terms of the other things that might go into a house? Say, a ventilation system—would you be the one who is saying, ‘Here are the three different ones that could be installed for this type of building, and here are the benefits,’ or is that someone else?

Daniel: As a part of the package that we offer, that’s a fairly fixed constant. We use a mechanical ventilation system that we have confidence in, that is going to deliver the right amount of ventilation to the necessary areas and be able to be installed in a manner that benefits its use.

There are other ventilation solutions. A very low-resolution one is obviously opening the windows and allowing for cross-flow ventilation. A very sophisticated one—sophisticated is more the word, because it is quite simple as a concept—would be a balanced mechanical heat recovery ventilation unit, and some even have a sort of air conditioning aspect to correct for the energy loss to the outside. There are quite elaborate solutions. Not everyone is going to need that. But there’s a certain threshold with which we’re like, ‘This is what we want the product to do. This is the product that we’ve identified that does the things we want for a reasonable price, and so this is our recommended solution.’

However, if a client said, ‘Oh, I would really like to use this brand,’ we’re not going to stop them. We’ll look for ways to implement that. It has helped us in the past for clients to make these recommendations because it’s bettered what we do. We weren’t aware of a certain product, and we were like, ‘Oh, that’s actually quite a good solution, we’ll adopt that now,’ and then offer that to other clients. So, sort of that ‘rising tide lifts all boats’ scenario.

It’s not a zero-sum game at the end of the day. If we can make things better for one client, all clients, the industry in general, we’re not in the interest of hiding that away. It would be nice if everyone could be in healthy homes and you have better, more skilled practitioners, because then one would hope that the cost of doing these things, because it’s proliferated, would also come down. That would be quite nice.

Host: And then what you might see is that the energy-efficient type building actually becomes the more cost-effective over the long term than any other type.

Daniel: I don’t think that you need to wait for that. I think that’s already happened.

Host: It’s already happened? Tell me more about that.

Daniel: When you take into account the running costs of the Energy Efficient Home, as we call it, you are saving week on week enough to offset the initial expenditure. Let’s say you have to have a mortgage, and you have a $500,000 mortgage versus a $550,000 mortgage. So there’s a $50,000 additional cost. If you take that at a fixed interest percentage of about 6%, the cost week to week of your energy savings will almost entirely offset the additional initial mortgage increase.

Host: Basically, weekly mortgage repayments are higher, but my actual energy savings across the month, and therefore week to week, cancel it out.

Daniel: Yeah, you may be paying a couple of dollars more. Although when we did the arithmetic on this, interest rates were very high and energy prices were sadly lower from a few years ago. What has happened is that interest rates in the intervening period have decreased and energy rates have gone up. They will probably continue to go up, regretfully, but that swings it even more in the Energy Efficient Home’s favour.

Now, the other aspect that you are not getting into this equation, because it doesn’t happen week to week, is all the other benefits. You’re waking up without needing a coffee to get rid of your ringing headache. You’re not as sick for as many days in the year—like, you will still get sick, it’s not a panacea, unfortunately. It would be nice if it was. However, it will help you be healthier sooner. It is stopping allergens from getting into the house. I struggle with hay fever; the filters in the mechanical ventilation system largely cut down on the amount of pollen inside the house. So you’re getting back a lot of found time, found comfort, and you’re not as sick. You don’t have as many days off, you can do better work, you can live life fuller inside the house because you’re… again, not a panacea, not proposing it as a cure-all, but I would think that if you’re healthier, you’re probably going to be a little bit happier about some aspects of that as well.

Host: Therefore, when you look at them side by side, there’s more of an upfront cost. However, actually from the moment you’re in the house, it’s, if anything, giving you money back in different ways, as well as into your bank account. So when you’re looking at net costs over time, you’re actually saving money.

Daniel: Yes. Obviously that continues into the future. The longer you live in it, the more money it saves you. That compounds for your health as well, and the health of all the occupants—so your kids, everyone you care about, the dog. I care about my dog greatly, so it’s very important to me that she’s looked after.

But there is a point where if you improve the performance of the house, that investment doesn’t see the same return. A very, very high-performing home will be very expensive to create. Therefore, the actual cost-to-benefit of doing it isn’t the same as going to a slightly lesser extent with what we would say is necessary: the ventilation, the air tightness, those components, and saying, ‘Right, this is the maximum return on my investment.’ So, I’m going to do that and maybe heat it a little bit more essentially, but all the health benefits, all the comfort… and that’s what the Energy Efficient Home is that we propose.

Host: You’re talking about in comparison to, say, a Passive House Premium certified house that might be quite expensive to build to get to that point. You can get a lot of very similar benefits from a house that is built as an Energy Efficient Home, where all that first-up cost isn’t necessarily there. And that over the long term, you’ll just be saving more and more.

Daniel: I’m going to have to say you’ve said quite a triggering word there.

Host: Was it the word ‘cat’?

Daniel: No, a cat wasn’t in it. Because I’m allergic to cats, and I know you said ‘cat.’ No, it was ‘Passive House.’

A Passive House is a certified product. A Passive House is verified with a thermal model with construction monitoring, and you either achieve the Passive House standard or you don’t, and you get a certificate when you do. Passive House Premium is a secondary qualifier on that where you have to have a solar array or some other type of renewable energy collection on the site that offsets the heating of the house. So not only does this house have a very small footprint in terms of heating demand, being a Passive House, but then you are also generating your own electricity. So the house doesn’t exist as far as energy consumption is concerned; it’s confined to the site.

Now, the thing is with the Energy Efficient House that we do, it is based on the fundamental principles of a Passive House. So we’re taking these ideas which are progressed forward in a Passive House: better insulation, better doors and windows, an air tightness system or value—because every house to some extent is airtight, it just varies in how much—mechanical ventilation with heat recovery, and then a thermal bridge-lessened design, because thermal bridges are unavoidable to some extent. There are always elements of the home that bleed more heat than others.

Host: I’ll just remind the audience what thermal bridging is, because we’re getting highly technical now. Thermal bridging is when you have a piece of material that goes from the inside to the outside of the house and wicks the heat through quicker than your insulated wall normally would, like a stud or a steel beam or something.

Daniel: It’s a highway for heat. One other aspect of it is orientation. Because the sun is your passive, free energy—obviously, it’s a great big ball of fire that’s slowly burning out. With the Energy Efficient Home, we have an air tightness system, we have a mechanical ventilation system, we have improved insulation, we have improved joinery, and we look to lessen thermal bridging as much as we can. We do that up to a point where you are getting the maximum return on dollars spent for it. Much like my roof analogy from earlier, we would say that these things are necessary when building a home. Therefore, the way that we design the home increases the performance and decreases the cost while keeping these things that are necessary for human thriving—to use a sort of modern term—in the home as well.

Host: That ties into this idea: say somebody’s getting their house designed and built somewhere—might be with your company, might be somewhere else. What are the important things for them to make sure that they don’t accidentally strip out because they’re like, ‘Oh, we’ll save money here’? What do they need to just go, ‘Hang on a minute, don’t go too far. You’re going to lose the performance,’ which is the point?

Daniel: With a standard home, the fundamental purpose of the home is to keep people dry and sheltered. It is the structure, durability, and rain deflection of the home. The building code principally doesn’t want houses to fall down, and it doesn’t want the rain to get in, which then can degrade the structure.

The high-performance aspect of the home is all of the health and comfort aspects of the home. The cost to maintain that inside the home is where you get your energy for it. So a high-performing home will cost less because it’s better able to maintain that internal environment.

Now, the essential features of that vary among people in the high-performance type industry, because anyone who is drinking the Passive House Kool-Aid thinks that it is not Passive House being the gold standard, but it is Passive House and failure beneath it. When you consider there are so few certified Passive House projects and buildings in the country, how can you say that’s had a meaningful effect on the quality of life for New Zealand people? Their actual reach isn’t as broad as what it potentially could be in terms of maximum utility, health, and comfort spread to the most number of people. It’s just: ‘These are the number of Passive Houses, and that’s our score sheet.’

If you take it down a notch, you make it far more achievable to people, and we would argue that that’s far more attainable. So, the number of people helped would be far greater by that. Sure, it’s not the Passive House standard. We can build you a Passive House if you want; we have one going through certification at the moment. But in terms of making it a viable alternative for people to consider—that they can actually afford, that is a house that they envisioned in the first place, you know, it’s not some tiny little shoebox, it’s actually similar—that’s why we’ve arrived at the solution we have.

Host: It sounds like common sense. The Passive House principles of how you make your house work better as a performance product, and with the sun and everything. It’s applying common sense to the building practice and just making a product that is what people in New Zealand should have. It seems that, just from my perspective, we had all these people who turned up from Europe a while ago, and they thought, ‘Oh, we’re in the balmy South Pacific, subtropical.’ We’ll just build these little flimsy houses and everything will be great, not really thinking that a lot of the way that the weather runs in this country is very similar to Europe—cold parts of Europe—where they have extreme building practices to make sure that you don’t die. And then here we’ve got loads of these old flimsy houses. So it is good to see that we’re finally moving in the direction of building houses fit for the purpose of where we actually are in the world.

Daniel: One of the travesties of the New Zealand climate is that it’s not cold enough to kill you; it’s cold enough to make you horrifically uncomfortable and persist. And so we’ve all gotten very used to wearing hoodies inside, seeing condensation on our windows, and being persistently sick. Asthma rates here are through the roof, and that’s just a normal lived experience.

Much like if it was always 15° inside your house and someone went, ‘Oh, my home’s nice and warm, it’s 22°,’ you’d walk in and you’d be like, ‘There’s something weird and different here.’ It would be a paradigm shift; it would be so alien to you. With those older homes that they built that were a flimsy structure—I mean, obviously there’s an earthquake risk, so there’s a requirement to be made out of timber—but also they would have great big fireplaces that would overheat the house. You’d have to open the windows to cool the place down in the middle of winter, but the homes were draughtier.

As modern building standards have improved—and they have improved, that’s a key thing, we’re not trying to knock the way things are done because it is incremental improvement, and there are reasons for that, and there are reasons why you can’t just jump to the gold standard—you’ve basically reached an apex where the home is as unhealthy as it can possibly be because things have gotten more airtight. There is no allowance for managing the interior moisture that is produced by just living. You have extracts in your bathrooms and kitchen, but when you turn the extract hood on when you’re cooking a meal, that then can’t pull any air in from the outside because the house is sufficiently airtight. So what ends up happening is, at a certain point in time, there’s no air going through the rangehood anymore. Sure, cooking one meal is not too much of a problem, but for all the other moisture that’s generated inside the home—you’re drying your laundry, you’re breathing, you’re having a shower—and it’s all escaping elsewhere, you’re not managing that.

You can do things better, and that’s fundamentally what we’re offering: there is a better way to do things that seem like common sense when you sit people down. They say, ‘Oh, I never knew that was a problem.’ Of course not, because we don’t agree it’s a problem, we don’t even think it’s a problem, we’re not aware of the problem. So we come along here and we say, ‘It doesn’t have to be this way, come with us to the light.’ Which, again, can seem a bit uncomfortable for a lot of people; it does sound too good to be true at times.

But times will shift, technology will change, and I can guarantee that in the future, we will be building homes differently to how we do now because that’s how we’ve done everything else. Things have improved, and that’s great that things are improving. We’re just saying we can make the future arrive a little bit sooner than what everyone else is doing right now, who are building homes from the past, whereas we’re trying to do things that are going to be for the future.

Host: Fantastic. Let’s leave it there. Thank you, Daniel.

Daniel: You’re welcome.