House Fix It Blog

( There’s a New Kid in Town)

Fuel cells. Well over a century old, fuel cells have been an intriguing scientific anomaly to turn chemicals into electricity without combustion. In the past, the problem with fuel cells was the small amount of electricity generated for the size of the cell, the use of expensive platinum as a catalyst, and the reliance on hydrogen gas to react with oxygen in the air. And until fairly recently fossil fuels have been abundant and cheap, so the economic incentives to produce commercially viable fuel cells were not there. True, there are some busses in European cities that are powered by hydrogen fuel cells, but these are very expensive government subsidized vehicles.

Now all the problems that previously challenged commercial fuel cells appear to have changed. A startup company in Silicon Valley California has patented a new generation fuel cell that uses sand to create the wafer sandwich, surrounded by an anode and cathode, and either natural gas or methane from the local landfill to initiate the chemical reaction. The company, Bloom Energy, www.bloomenergy.com has taken their product past the test tube stage and has built working prototypes. Bloom Boxes, as they are dubbed, are now powering buildings at Wal Mart, EBay, Federal Express, Staples, Bank of America and Google. One box (about the size of a large refrigerator carton) generates about 100 kw, enough to power an average office building or 100 homes. Capital costs are recaptured in about seven years.

While fuel cells and solar energy share the common feature that they are both self-contained and hence do not require a transmission grid, there are many advantages of fuel cells over solar. Solar requires more space. Solar panels are generally placed on south or west facing roof surfaces, and due to space limitations, the typical solar installation provides about 25% to 30% of a homes’ electrical demand. A commercial building or an apartment, which have a higher ratio of occupied space to roof area, can only generate using solar a much smaller fraction of electrical demand. And of course, the sun has to be shining to produce solar electricity, so nights and cloudy days make the user dependent upon the conventional power grid. Fuel cells operate 24/7, and can supply 100% of a home’s electrical needs. True, the Bloom Energy fuel cells require either ethanol, natural gas or landfill methane to operate, but here is an ample supply of these alternatives in the USA and Canada.

K.R. Shridhar, the CEO of Bloom Energy, envisions a future where houses and commercial buildings have their own power supply in the back yard or campus. Centralized distribution of electrical power will become a thing of the past. It’s like having your own well for water.

My former neighbor is a genius. Two years ago, he sold his Bay Area house for a very fat profit, and for the first time in 20 years, he and his wife became renters. His profit for owning the house for three years was tax-free, and was probably equal to the 35% that the house subsequently declined in value. This definitely fits the old expression of “having your cake and eating it.”

But wait a minute. There’s much more to the renting versus buying debate than money—particularly now since we are no long in the era of “Your house is your ATM”. Homeownership has reverted back to the warm and fuzzy “this is my castle” mentality. Conversely, a rental house (or apartment) is owned by someone else, and you as a renter, are given the limited rights of tenancy. True, someone else has to mow the lawn, fix the leaky roof, and apply paint to the peeling siding. Whether this gets done or not usually depends upon the motivation of the landlord.

Often when you drive through a neighborhood, you can spot the rental homes. They are the ones with the unkempt landscaping, cars in various states of repair in the driveway, and a few shingles missing from the roof. Persons who own their own homes tend to maintain them, while a renter has little motivation to do so. For many, renting is a short term proposition until they save enough for a down payment to buy a house. For others, it’s a lifelong perceived escape from home maintenance.

However, proper and routine home maintenance doesn’t have to fall somewhere between having a root canal and a 24/7 migraine. The key is to know what to do, and when to do it (or have it done by experts). When I wrote The National Home Maintenance Manual, I had the homeowner in mind who would rather play golf, go fishing or attend a concert. Everything in the book is laid out according to the components of the house, and the maintenance chart tells you when to do it and how difficult it is to do. And if that’s not enough, our website www.HouseFixIt.com has a free, downloadable 10 year schedule of home maintenance tasks. This enables you, as a homeowner, to plan your time and create a budget so you don’t get hit with unpleasant surprises down the road.

One of the great strengths of America has been that the middle class has been able to afford home ownership. The decline in property values over the past 24 months can be viewed as a positive adjustment to affordability.

Homeowners Education Association is pleased to announce that we are now a reseller of the highly regarded Code Check™ series of books. The Code Check™ books are written for inspectors, design professionals, contractors as well as do-it-yourselfers.

The original Code Check™ was designed by a building inspector, Redwood Kardon, for inspectors to carry with them while on the job site. They are a condensed guide to the most commonly cited code violations encountered by those in the field. Soon after its publication, it became a standard for contractors, do-it-yourselfers, home inspectors and anyone involved in the safe construction of residences. The books are designed to be an easy reference in deciphering the complex and sometimes tedious world of codes. Designed in flip-chart format they are laminated, spiral bound and use illustrations and tables to explain the new codes. They are durable and will stand up to weather conditions so you can count on them surviving from job to job or until the next generation of code changes come around.

The Code Check California 5^th Edition is a must have for contractors, inspectors and homeowners. The convenient flip-chart format guides you easily to the relevant sections to explain the new codes. Code Check California provides you with the most up to date changes in the California code. Presented in clear, straightforward language, reinforced by user-friendly illustrations. It’s a great way to make sure every detail is right the first time, saving you time, money and the frustration of redoing completed work. The 2007 California codes will be in effect until 2011 and this book includes relevant information on building, plumbing, energy, mechanical and electrical codes in California. The book includes California amendments to the model codes. Significant code changes are tracked through the book and summarized in a special two-page section at the end.

The 2007 California Building Code (CBC) is unique. Most states use the International Residential Code (IRC) as a model, with the exception of California which has a residential code based on the 2006 International Building Code. Users of the California Codes must wade through over 1,600 pages of material to find the residential provisions. Even then, Californians must purchase costly additional standards referenced (but not printed) in the California Codes. Fortunately, Code Check has created an inexpensive guide that cuts to the heart of these issues. Code Check Building for California provides a quick-reference summary of the California Building Code, and includes a 4-page table that summarizes the changes and compares the new codes to the previous (2001) CBC. There are many significant changes in the new code, particularly in areas such as exiting, stairs, building setbacks, siding, and fire separation. Unique illustrations help to clarify these changes and bring you up to date. The significant portions of ASTM and ACI standards are summarized in Code Check, saving the expense of several hundred dollars worth of additional codes and standards.

Redwood Kardon, who devised and wrote the first Code Check, is a former electrician and inspector for the City of Oakland, California. Code Check Electrical 5^th Edition is a field guide to the common issues in residential electrical installations. It is based on both the 2008 National Electrical Code, the most widely use electrical code in the United States and the International Residential Code. It is illustrated by Paddy Morrissey with some great diagrams, charts and checklists and a sprinkling of Ben Franklin throughout the book.

Code Check 5^th Edition is for code questions outside of California. The primary reference document for this guide is the 2006 edition of the International Residential Code for One to Two-Family Dwellings, published by the International Code Council.

You can order four of the Code Check book series online through our www.Housefixit.com web store. We are happy to bring the Code Check series to those interested in building better homes and buildings.

As the old saying goes “perception is reality”. When it comes to the perception of money or perceived wealth, this old saying couldn’t be more appropriate. Even if you are jobless or homeless, or both, your “perception” of money has likely undergone a change over the past two years. The urge to spend is gone, and the urge to save is here. We know that buying goods and services is beneficial to our society, but we just can’t take that leap of faith right now.

To better understand our relationship to money, consider a dollar that is obtained in one of five ways, and how we value that dollar. Ranking the following five categories from most important in perceived value to least important, consider:
Wage Earnings. This dollar was earned by your sweat, your labor, and you know what you will have to go through to get more dollars by this method. This dollar is perceived as most valuable.
Investment Income. Although you didn’t earn it, you nevertheless made a wise decision some time ago to obtain this dollar. You congratulate yourself and look for similar opportunities.
Inheritance. Now we’re beginning to straddle the fence between perpetuating the family legacy versus “found money”. In a few cases the inheritor will use the new capital base successfully to build greater wealth. However, in most cases the inheritor was not part of the wealth generating process and the estate proceeds will eventually be squandered on bad investments, and material goods. Such actions have given rise to the expression, “How to make a small fortune? Answer: start with a large one”.
Ill-Gotten Gains. To acquire money through dishonest or criminal activity is not a strategy for wealth building, but rather it is a thrill seeking behavior pattern to see if “I can get away with it”. It would be the exceptional embezzler who wants to enhance his 401-K with his bounty. Laundering money is always a challenge for the most successful crooks. This dollar wasn’t earned, it wasn’t investment income and it wasn’t inherited; consequently, it is not very high in perceived value. It is reminiscent of a Woody Allen movie with dollar bills flying out of the back of the convertible.
TARP Funds. A TARP dollar is everybody’s dollar, but yet it is nobody’s dollar. When you own the printing press, as most central governments do, printing money is the sovereign right of the nation. A little ink, some paper, and how many trillion would you like today? The gold standard has been gone for nearly 80 years, so there is nothing backing up this endless supply of paper. This dollar is considered least valuable, because it is so easy to make another one.

National Home maintenance expert, Dave MacLellan, outlines the 10 most common mistakes made by homeowners in his book, The National Home Maintenance Manual . The book includes a yearly checklist of maintenance items, as well as a 10 yr checklist and schedule of tasks that should be conducted, so that homeowners can easily keep track of the items they have completed over the years. The checklist is also helpful during the resale process. Just like a car, the next owner can look back through the checklist and see how well the house has been maintained. For instance, has the roof been replaced, has the water heater been maintained, how about the paint job?
Homeowners should avoid the following pitfalls:
Exterior:
1)    Homeowners should never walk a tile roof! Roof tiles are easily broken. It is also a good idea not to walk on shingle roofs because the mineral granules on the shingle surface can become dislodged.
2)    Sprinklers should never spray against the house, especially against stucco walls. Water can pond around the foundation and cause major structural damage or movement.
3)    “Add on Structures” like decks, trellis’, or lanais should never be nailed or bolted directly onto the outside wall of the house. Rainwater could find its way in and cause dry rot. Also, nearly all local governments require a building permit for a trellis or lanai that is attached to the house.
4)    Avoid pouring the concrete patio too high. The patio should be at least two inches below door thresholds to avoid water being drawn up into the stucco. Decay and/or termites are a likely result.
5)    Do not alter the finished grades around the home. Grades are designed to allow rainwater and irrigation water to flow away from the house. Most new homes are delivered to homeowners without walkways, patios, landscaping, drainage systems, or swimming pools, so it is important for after-market contractors to maintain the finished grade. Many cities and counties require that the surrounding lot slope away at a 2% grade.

Interior:
6)     Never disconnect the fans in bathrooms or laundry rooms. The excess humidity in these areas can infiltrate the drywall or electrical outlets and cause mold or mildew. Always turn the vent fans on during use and leave running 15-30 minutes afterwards.
7)    Do not overload upper cabinets in the kitchen. Stacking heavy dishware and glassware in the upper cabinets can result in sagging or even detachment of the cabinet from the wall.
8)    Avoid placing extremely heavy items on the second floor. Try to keep items like pool tables, aquariums, and weightlifting equipment on the first floor to avoid floor deflection.
9)    Never tint the inside of dual pane windows. The heat buildup between the two panes of glass can cause the seals to break, and the windows lose their insulating value. The manufacturer’s warranty is also voided.
10)     Do not store anything on the garage or attic trusses. Trusses are designed to support the weight of the roof and the ceiling. Any additional weight causes a strain and could result in the sagging or actual collapse of the roof.

For more handy tips and information regarding maintenance of the home and our free 10 year home maintenance checklist download visit www.HouseFixIt.com .

“Man is the only animal who can be skinned twice” …Will Rogers

Well, it’s a done deal. The Stimulus Bill has been signed into law and now the waiting game begins to see if it will work as intended. We all hope that it will, for the entire world economy is dependent upon the financial health of the United States. The “talking heads” have marveled at how fast the bill went through Congress, which is reminiscent of how fast George Bush was able to convince Congress to declare war on Iraq. There is a valued old saying, “sin in haste, repent at leisure”. Remember that no one who created the Stimulus Bill was alive during the Great Depression, so we are relying upon textbooks and theories at this point.

Now, the next leg of the recovery plan must be to repair the housing industry. The housing industry lead the down cycle in what typically appeared to be another recession that comes along every 5 years or so. And these recessions generally last from 18 months to 3 years. What went wrong this time? Three major factors come to mind:

• Mortgage Markets Run Amuck. It wasn’t just Fannie and Freddie buying the loans from borrowers who never should have qualified, it was also the jumbo loan servicing companies who knew they could pass along this junk paper to the next “Greater Fool” and Wall Street was ready to assist with this effort by bundling and securitizing mortgages;
• Bankers Behaving Badly. The traditional bank policy of foreclosing on defaulted property has backfired. Because of the sheer volume of foreclosures, the foreclosed asset cannot be resold for any amount resembling the original loan principal. This compounds the banks’ losses, and gives rise to frequent trips to the Treasury for more taxpayer money. Slowly, lenders are realizing that keeping owners in their homes at lower interest rates is a far better business plan than the losses they realize upon foreclosure;
• Unrestrained Consumer Greed. The credit card companies play the enabler role in this scenario too. Too many teaser rate credit card offers, too many “must have” cheap goods from China, and the belief by many homeowners that their house was a perpetual ATM.

Who’s to blame?  Forget it.  Putting Bernie Madoff in prison isn’t going to restore investor or consumer confidence in our system. Running the government printing presses to flood the world with paper currency won’t help much either. The real key to recovery is the belief by the consumer that when I wake up tomorrow, I’ll still have my job and a roof over my head. It’s largely psychological because 90% of Americans currently have both. However, “what if” is the Boogie Man gnawing on the human psyche, and that is going to take a long time to repair.

“Civilization ends at the Hudson River”

Notwithstanding the recent notoriety US Airways Captain Schullenberger gave the Hudson River, there is an old saying in Manhattan that “Civilization ends at the east bank of the Hudson River.” Those who espouse this belief add to its arrogance by stating that the Mayor of New York City holds the second most powerful job in the world. So that leaves the rest of us somewhere between Hee Haw and a Saturday night tractor pull.

Enter Wall Street and real estate. For the past 25 years the investment banking community has been trying to treat real estate like a stock or bond. As you know, stocks and bonds represent a “claim” upon the assets of public corporations, and most of these assets are goodwill. In the United States today, with some exceptions such as REIT’s, human capital produces earnings rather than earnings produced from traditional brick and mortar assets. But real estate is “dirt” and as Will Rogers said years ago “Buy land, they ain’t makin’ any more of it.” The loans against real estate are mortgages or trust deeds, and the security for these instruments is the land and improvements on it.

Contrary to what the media has told us over the past 12 months, there has not been a real estate collapse; the land is still there and the improvements are still there. What collapsed was the “House of Cards” created by Wall Street to expand the CDO (Collateralized Debt Obligations) market to an unrealistic level. Derivatives and fractionalized mortgage bundles do not provide any security to the holder as many hedge funds and pension plans have discovered. As a nation, we are paying the price for straying from the basic tenets of making real estate loans.

If Wall Street is the epicenter of world finance, it follows that it is also the epicenter of world confidence. Despite a change of administration in Washington, the folks in the Hinterland have lost their confidence, they are scared, and scared people don’t borrow money or make purchases. Yes, the confidence will return, but not at the same rate that it was lost. “Once burned, twice shy”.

The Era of “Greenwashing” has Begun

As a nation we are becoming more aware of the importance of saving the planet earth. In the course of this paradigm shift, economic opportunities are created, and the “Green” movement is no exception. Green products are typically viewed as an upgrade, like organic food, and hence there is a surcharge connected to them.

Greenwashing is the term given to claims made by manufacturers that their products are environmentally friendly, all natural, non-toxic, and helpful to reduce global warming. Greenwashing is designed to appeal to the “feel good” side of the consumer’s conscience. Green products can range from cleaning supplies to computers, to cars, offices, and houses-a very broad spectrum. With each product claiming to be green, by what standards are they judged? After all, if 100% natural products are “green”, then arsenic, radon, lead and asbestos would be green since all these substances occur in nature and are not man made.

Apart from the Federal Trade Commission (FTC) which has published environmental marketing guidelines on product claims made by manufacturers for the past 16 years, there are other organizations that rate various products according to established environmental standards. The most recognized one is the federal government’s Energy Star Program which covers not only appliances, but just about any device that consumes electricity. Other organizations include: EcoLogo for many household products, Green Seal also household products, EPEAT which covers computers and peripherals, Forest Stewardship Council which certifies wood and paper that come from renewable non-old growth forests, U.S. Green Building Council and Build It Green . These latter two organizations certify buildings as they are being built to give them a green rating according to each organization’s point-by-point checklist.

For a newly constructed residence to achieve an independently recognized green rating, considerable effort must be undertaken by the builder. Under the broad goal of trying to get to zero energy consumed by the house, specific items such as super insulation packages, air-tightness of ducts, photovoltaic collectors and tankless water heaters are considered. Even the percentage of construction waste that is recycled is a factor. Because a point system is used, not all green rated houses will have the same energy saving components.

At this time, a few municipalities have adopted mandatory green building standards as part of the building permit process. Where there is no government mandate, builders are free to follow any green program they like, or follow none. To stay competitive and say they are building a green home, several builders are creating their own green building standards. Since the homes will not be built according to a recognized green building program, the issue of greenwashing comes front and center. Without exhaustive studies or research performed by utility companies, it will be extremely difficult for a builder to approximate to a buyer how much energy their home will save compared to a home without the green features. Predictably, the sales brochure is likely to list the energy saving and green features, and the consumer will have to decide whether this house is greener than the one on the other side of the fence.

Regardless of your favorite media, internet, television, or print, you can’t get by without a daily bombardment of negative news. At the present it’s all about worldwide terrorism or the next sector of the economy that is predicted to fail. Most experts who have been around for 40 years or more as adults, confess they haven’t seen any scenario quite like this one.

However, before you throw in the towel and assume the situation is hopeless, consider:
* At an unemployment rate of 8% (predicted to occur in 2009), 92 % of the people still have jobs;
* The steep decline of the stock market has presented buying opportunities that haven’t existed since the dot.com bust seven years ago, and finally;
* General Motors is not going to go out of business. They may seek a Chapter 11 reorganization, there will still be a model 2010 and 2011 Chevrolet rolling off the assembly line.

What’s this have to do with a cheap 2008 Holiday Season? Much of our wealth is in our heads, not in our wallets. If we think we’re well off we’ll behave differently than if we think we’re hurting. Part of the doom and gloom cast upon us was that Black Friday was going to be a retailer’s disaster. Yet, when the dust settled, overall sales were up 3% over 2007. While one day doesn’t make an entire Holiday Season, consumers are acting in a more responsible way this year, but they’re not staying home. The use of plastic is down and that’s good. A large percentage of consumers are still paying off their balances from Christmas 2007. Many shoppers are actually going to their bank first and withdrawing cash to stay within a budget. That’s also good. A debt riddled nation is an enslaved nation. So while the 2008 Holiday Season is likely to be less in total sales than 2007; consumers will still consume, albeit more moderately, and there will be a whole new school of surviving retailers who have taken a chapter from the Book of Wal Mart.

To assist you with a Cheap 2008 Holiday, we are offering free shipping and handling on any book purchase made before December 31, 2008. This is a minimum saving of $4.95 or possibly more depending upon your purchase amount. You’ll need to order through our website: www.HouseFixIt.com. Have a happy and cheap holiday!

In the throes of an election year, the recent financial collapses in late September and October add additional and unforeseen challenges to the new Washington administration in January. When the year began, the election rhetoric was all about the Iraq war. You hear a lot of talk about Wall Street vs. Main Street, and the change in terminology from “bailout” to “rescue”. The fact is, we’re all in this together, including economies of countries that only recently became interdependent on us and us on them, such as Russia and India.

According to a recent CNN poll, nearly 60% of Americans believe our country is headed for another depression like the 1930’s. Despite the pessimism, a 1930’s type depression is not likely to happen. Here’s why:

1. Bank deposits are insured now up to $250K and in some cases $500K. In the 1930’s there was no insurance for deposits;

2. The foreclosures that were expected to occur in 2009 will be greatly diminished due to forced workouts that lenders will have to apply. We will see interest rate reductions, and even principal reductions. Lenders are finally coming to their senses that helping a homeowner stay in his house makes better economic sense than to take the house back and be forced by the federal banking authorities to sell the property at a loss;

3. Credit markets will loosen up and banks will start to loan to one another again. However consumer credit is likely to remain tough to obtain for the next 12 months;

4. Housing, the segment of the economy that started the downturn, will lead the recovery. The biggest problem that builders face today is the competition with foreclosed homes. Once the foreclosed housing stock is absorbed, building permits will be pulled, and the cycle of new home building will begin, albeit slowly.

However, the real recovery for the long term is to get our snouts out of the trough of foreign oil. Too much of our country’s wealth has already been transferred to the Middle East. Not only is oil harmful to the environment, it is a finite, non-renewable commodity whose price is likely only to go up in future years. Modes of transportation need to change. Unlike other means of automotive propulsion, the electric car offers great promise. The alternatives of hydrogen, fuel cells and liquefied natural gas all require a rebuilding of our infrastructure, but electrical outlets are everywhere. The internal combustion engine may still have applications in aircraft, rail and shipping, but for the rest of us, we’ll be supporting a new, non-polluting industry.