This episode of the A.CRE Audio Series features Jacob Deva Racusin, a real estate professional and co-founder of New Frameworks. New Frameworks is a worker-owned cooperative focused on climate solutions for the built environment, namely through construction methods. In addition to publishing numerous articles, Jacob has also authored two books on natural building and integrative design. An active member of the carbon leadership forum, Jacob is engaged in code and policy development, professional training, and other initiatives supporting a more sustainable industry.
In this episode, Spencer, Michael, and Sam speak with Jacob about what he’s worked on throughout his career, alternative building materials for real estate, their new way of doing construction in real estate, and more. Watch, listen, or read this episode below:
The Forefront of Climate Solutions for The Built Environment with Jacob Deva Racusin
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Welcome to the adventures in CRE Audio Series, join Michael Belasco and Spencer Burton as they pull back the curtain on everything commercial real estate, and introduce you to some of the top minds in the industry. If you want to take your skills to the next level and be part of a growing community of CRE professionals across the world, this is for you.
Sam Carlson (00:26):
Welcome back to another Adventures in CRE podcast. We’ve got a really cool one. We talk with a lot of people who are in the trenches doing different things. And today we’ve got a really cool guest, which I’m going to let Michael introduce because they’ve got a longstanding relationship and this whole idea of how to best build and develop building our world, but environmentally safe and conscious. This is a big initiative that’s going on right now. Okay. And today we’ve got a guest that’s talking about his role, what they’re doing in their company, and before I muck anything up, Michael, can I just turn it over to you to kind of give us a nice intro and really set the frame of what we’re going to be talking about today?
Michael Belasco (01:10):
Sure. Yeah. I am very excited to have Jacob Racusin on. I’ve known Jacob, I call him Deva, so he was kind enough to throw his middle name there, so I may refer to him as both, but I’m extremely excited to have Deva on here. I’ve known Deva for 13 years and in a lot of ways, he’s set me off on my trajectory to where I am today. Although I’ve come a long way from where we are, what Deva embodies, not only in his work, but in who he is, it’s just truly incredible, it’s something I’m very excited to share with our audience… There’s a saying, it’s “doing well by doing good.” Somebody had said that to me recently. I know it’s a saying that’s been around forever and I feel like Deva and his work embody that. They do well and they do well for themselves by doing good for the whole.
Michael Belasco (02:03):
And so what we’re going to talk about today is really focused on the construction industry, which Deva has embraced and embodied – his whole body of work is involved in how to improve and lessen our impact on the environment and create truly healthy buildings, not only for people, but for the environment as a whole. So we can preserve this planet in perpetuity, is kind of how I look Deva in a holistic way. So I always keep in touch with Deva. He’s just been an incredible mentor to me. And again, I’m really excited to have him on, so let me kick this off. I’m going to do the traditional bio of Deva, and then we’ll let him talk to you guys about where he’s been, and then we’ll get into this idea of building and construction and development and some of the ideas that Deva’s been cultivating, along with the whole cohort of colleagues and professionals in this world. I think it’s going to be a really great podcast. So let me do the bio and then we’ll get underway here.
Michael Belasco (03:08):
All right. So Jacob Deva Racusin is Director of Building Science and Sustainability with New Framework’s natural design build, offering services in renovation, new construction, consultation, and education. As a builder consultant designer and educator, Jacob is able to merge his passions for ecological stewardship, relationship to place, and social justice. Jacob has authored two books, both of which are available on Amazon. The first book is called “The Natural Building Companion: A Comprehensive Guide to Integrative Design and Construction,” and one that I could say I’m very proud- I was a research assistant on that back in my early days, but you could pick that one up on Amazon. And then the other is called “Essential Building Science: Understanding Energy and Moisture in High-Performance House Design.” Deva has also authored numerous articles and regularly instructs on topics of building science and climate impact. An active member of the carbon leadership forum, Jacob is engaged in code and policy development, professional training, and other initiatives supporting the transition to a more just industry.
Michael Belasco (04:15):
All right. So Mr. Racusin, with that, I’d love to start off with your journey. And I know your journey is deep and it’s profound, there’s a lot there, but I would say, just get into it, tell us where you’ve been, where you are today, and anything you might want to add that I might have missed out on. If you want to kick off that way, but I’d love to just turn it over to you and let us get familiar with you a little more.
Jacob Deva Racusin (04:46):
That sounds good. I’ll try to give the cliffs notes version and poke in the story as you see fit, jump on in. So my journey and to where I am today, I would say from a professional standpoint, started when I was around 19. I started my family very early and was really inspired and motivated to learn how to develop safe, healthy shelter for my family. It was certainly born of necessity, but also I had been into the sustainable and organic agricultural world prior to that. And my relationship with my food source was really important and something that I found really inspiring and hopeful, and the next challenge was shelter. And so I kind of entered into this world as an owner-builder. I took some classes at the Yestermorrow Design/Build School in Vermont, which is where I ended up teaching the program that, where Mike, you and I connected. And I’m going to call you probably, Mike more than Michael.
Michael Belasco (05:52):
That’s fine. We’ll share pictures. I was going to say we’ll be sure to put some pictures of us back in the-
Jacob Deva Racusin (05:57):
Absolutely. Oh, actually you mentioned The Natural Building Companion, there was a DVD that was associated with that book, a companion DVD that documented the project that we built that summer. So, you may well have some cameos in that DVD, if you really want to get into the archives, get some deep cuts on the internet there.
Jacob Deva Racusin (06:16):
Anyway. So I started as an underbuilder who did some initial classes. I’ll be honest, I was super intimidated to jump into a construction site. I was a total performing arts nerd as a kid. I was definitely not the-I did not fit the conventional archetype of a rugged, super machismo construction guy. And I just found that whole world really intimidating. And so I got into the world of natural building from a few different angles. One of which was the materials seemed really accessible and DIY scale, which at that time, sort of the late ’90s, it very much was still a predominantly DIY world that a lot of these natural alternative materials lived in.
Jacob Deva Racusin (07:02):
Also, the ecological benefits that was a driver for me. And then the indoor air quality and toxicity elements was really important. My wife is very chemically sensitive. And so there was very little on the market that we could afford that checked all those boxes. And I had a deep passion to trying to understand how to provide sustainable shelter and so that led me on the path of being an owner-builder. About halfway through the building process, I realized I actually enjoyed it, particularly when I got into working with straw and clay and working with timber as well, and fell into a path of initially as a sole proprietor, jumping with other folks working with similar timber framing, natural plastering, clay line plastering, straw construction, earth and construction teams in our region. And then within a few years that really consolidated focus. I joined with Ace McArleton at New Frameworks, which where I am today. That was maybe the mid-2000s or so. We were working alongside and around each other and then joined formally very shortly thereafter Ace’s initial business partner left. So from that point forward, we built up New Frameworks, initially doing custom single family, detached residential new construction using deeply sustainable materials under very high craft natural building approaches. So, high-end single-family residential green building.
Jacob Deva Racusin (08:35):
And then a couple things happened at the same time. We were starting to realize that while we were hitting a lot of our ecological goals in terms of the materials we’re using and the quality of the environment we’re creating in these homes, our impact is quite limited because there’s only so many of those a year that you can build; a lot of our social equity goals were not being met because it was a very narrow realm of clients that could afford our services. We weren’t able to afford our own buildings or build for our peers and in our own communities.
Jacob Deva Racusin (09:06):
And then the recession hit. And so we took that opportunity to pivot a little bit, and I got trained up as a BPI contractor doing energy retrofits and weatherization and that whole work. And that was a huge move forward in aligning our ecological and social goals in a single body of work. And I’m still a huge, huge, huge proponent of retrofits and weatherization and working with existing infrastructure and improving existing infrastructure. That’s actually still, I’d say, if it’s not the predominance of our work, it’s certainly a huge chunk of the work that we do, both on smaller and larger scale. And, I was a little, not surprised, but I realized pretty quickly that, “Oh, wow, it’s not a bastion of super visionary progressives in that world it’s contractors in another field, like any other field.”
Jacob Deva Racusin (10:05):
And so clearly, there’s still a lot of work to do around not just raising the bar of the quality of the work that we do, but a lot of it for me, and this translates through all of the work, has been increasing the vision that we have around what’s potential in our work. And I see that so much in the trades and coming out of the recession, seeing how deeply undervalued and gutted the trades have been. And it’s been a real- to the point where it’s an absolute trades crisis now. Trying to find a good trades folk in either urban or rural environments has hit a crisis point because we have completely undervalued that path towards professionalism, as well as within the trades. We don’t have a whole lot of vision around the power that we hold to be able to take agency in improving the quality and the potential of the built environment. And so that, I think exists across the industry, but I entered into it from the trade side of things.
Jacob Deva Racusin (11:04):
I’d say, jump ahead another four or five years and I migrated more firmly to the design side of things. We became a full design/build firm. We realized we just couldn’t execute the things we wanted to execute under the leadership of other designers. And we really need to be able to control the whole project to be able to hit just the basic building science performance goals, let alone, again, some of the potential different materials or different design outcomes. So we became a full design/build firm about a decade ago, and I lived more in that realm.
Jacob Deva Racusin (11:39):
And along that path, my specialty really began to focus as the climate crisis has been escalating dramatically over the last decade. My focus has really been trying to understand how to intervene in that space. And it started initially with high-performance construction and low-energy, low building. So really good construction detailing, really good design detailing, how to get these very, very low energy and low operating emission buildings using these beneficial materials and not having to throw a bunch of toxic chemistry at the situation to get good outcomes. So that was where that journey started, all the way knowing that the materials that we’re using were way more beneficial too. It did not take a lot of research to look at the difference between buying an organic straw bale from a neighboring farm versus buying a highly toxic, heavily processed fossil fuel-based petrochemical product from across the country or across the globe and see which is going to be better for the environment. You don’t have to do too much number crunching to get a general sense of smell. So we always knew there was this basis of value in the materials that we had been working with.
Jacob Deva Racusin (12:48):
And then with the real escalation of the climate crisis, we started- and combined with a much greater body of data available around the climate impact of materials, those two things conspired together for us to actually be able to start quantifying and putting some real metrics and values to climate impact to building materials. And then that research has really dominated my focus for that I’d say the last 5, 6, 7 years, or even realizing, “Oh my God, it’s actually within the next 20 or 30 years in new construction, there is easily as much if not significantly more emissions coming from the materials than from operations,” which is like a really significant sort of shift in our understanding and thinking about, what do we need to manage? What do we need to invest in? What do we need to control? How do we get these better outcomes? Where are the potentials of, again, what’s the vision for what are potential of these buildings could be?
Jacob Deva Racusin (13:40):
And so, zooming up to the current moment, I’m bypassing a whole bunch of stuff, but I’m just going to kind of cut to the chase here, cause I’ve been talking for a minute… So New Frameworks is now, we’ve grown to a full worker-owned cooperative, which is really a part of identity and a critical part of the actual content of our work, is sort of democratically organizing how we conduct the work and the workers having an ownership stake in their work. We have a build team that focuses primarily on larger projects, new construction or deep, deep retrofit work. We have a building performance team that focuses on the weatherization, energy improvements, warranty-type stuff. We have our design team, full design studio that I’m sitting in right now. We have a team that’s building high-performance entry doors and closure doors.
Jacob Deva Racusin (14:35):
And the thing I’m the most excited about because it ties so much of this stuff together and it’s been a passion piece of this last little stretch, cause last year we formally launched out to the world Gryphon Panels, which is our pre-fabricated structural straw insulated panel product. So we are recognizing there’s an inherent limitation in custom onsite construction using straw. It’s just, there’s not enough skilled labor and you can’t afford enough of that onsite skill investment to be able to scale this technology out sufficiently, so we started prefabricating these panels. So yeah, those different nodes of the company all work quasi-independently but relate to each other very closely. The business model for us is a rhizome. So there’s a central stock of administration and marketing, and I live there with my building science and sustainability oversight and education and training throughline for all the different nodes, but then each node has its own different products that are producing designs, they’re producing building products, so on and so forth. So, I’ll come up for air there. Jump on-
Spencer Burton (15:41):
Yeah. First off, Jacob, it’s really nice to have you and I love meeting people that are so passionate and you clearly are, and I’ve shared, or I’ve felt that passion through Michael. In fact, I think the first time Michael and I ever spoke, he was living in Peru, I was living in Panama, we’d both been accepted at Cornell waiting our time, and all he wanted to talk about was straw bale construction, and I would sense that some or all of that comes from your passion.
Spencer Burton (16:13):
So let me put my myself in the shoes of a developer. And I think all of us can acknowledge that many developers- I’ll use a derogatory term, let’s call them mercenaries, and they have a singular goal and the easiest path to that goal is how they pursue things. And there’s a lot of areas here, but let’s start with materials, right? A developer, through their contractor is going to use the materials that are most affordable and easiest to get. Help us understand. So straw is one material that is called eco-friendly, my understanding, at least in certain parts of the country, readily available. Help us understand how straw works relative to calling the more mainstream materials, and then are there other materials outside of straw that you use that you think merit some consideration beyond the traditional materials?
Jacob Deva Racusin (17:23):
Yeah. Great question. You’re right. I call out straw partially because it brackets one edge of the potential of a hero material that can do so much and holds so much benefit and has some totally legit liabilities in terms of familiarity in the marketplace, code adoption, it’s adopted in the residential code but not to the scale of commercial development as a built into the code defacto, a lot of those- there have been plenty of commercial scale projects that involve straw, but there’s an extra step in permitting and depending on your code and regulatory environment, it’s going to be nontrivial. And so the newness of it, as well as the relatively low R per inch, compared to other insulation materials, if you’re looking for straws as an insulation material, definitely liability. So I feel very strongly about not evangelizing for any one given technology, it’s always about finding the right thing.
Spencer Burton (18:23):
So why straw though? Let’s stick with-
Jacob Deva Racusin (18:26):
Let’s stick with straw, fair enough.
Spencer Burton (18:27):
Just for a moment. Yeah. Why straw? So there are definitely drawbacks, but why do you prefer straw over, say, wood frame?
Jacob Deva Racusin (18:36):
Okay. Yeah. Fair enough. So for me, straw holds a couple of really key values. Maybe first and foremost, because of my really strong focus on climate impact, you can store more atmospheric carbon dioxide in a straw bale, unit per unit, than I believe any other building material I’ve looked at. And I don’t say that lightly, because I just was part of a development team for a building carbon emission tool that just got released last week with BEAM tool. So we’ve got hundreds, if not thousands, of different materials in there and straw jumps out as like, if there’s a hero technology that can absorb carbon dioxide out of the atmosphere, store it in a material that doesn’t have all the complexities of force ecosystems to manage, just an ag waste product, that we can just take it from a waste product and put it into a wall, and now this is how we get to carbon storing building. So that’s a big one for me.
Jacob Deva Racusin (19:28):
It’s also incredibly non-toxic all the way on, you can throw formaldehyde chemicals at anything, but it is inherently an incredibly low toxic material, which holds great value relative to lot of its common counterparts. And jumping out a little bit in scale, I get really excited about the opportunities for the AEC industry to be allied with other frontline land use industries like forestry and like agriculture. And I see we have billions of dollars of purchasing power that our industry leverages on an annual basis and to be able to divert some of that towards supporting and promoting regenerative and sustainable agricultural practices is an enormous amplification of the benefit beyond just what the material provides living in the wall.
Spencer Burton (20:14):
Yeah. So, help us understand how it works. I’ve already peppered Michael with these questions, so I know the answer, but I think for our listeners, they’re going, Straw? What, do I just, like, pile it up and then use mud to hold it together?” Like how does it actually work? How does it not fall over like the big bad Wolf blowing over the straw house? How does it hold up? And maybe these are simplistic questions, but help us understand. And then from a fire standpoint, how are fire ratings of straw relative to the alternatives? So kind of talk us through the logistics of building with straw.
Jacob Deva Racusin (20:52):
Yeah, so Straw 101. So I guess the first thing I’ll say is straw is not only about insulation and wall assemblies. That’s maybe where it’s got a lot of its initial enthusiasm and visibility. And that’s where we spend a lot of time with it. They’re making MDF boards out of compressed waste straw. You can buy wall paneling that’s made out of compressed straw. It shows up in an increasing number of different types of products. I’m really psyched about the MDF products that being produced in Northern California. Literally, they’ve developed a manufacturing facility in the rice patties of Northern California to take that waste resource and create MDF. It’s one of the least sexy materials you’re going to put into a building, but it’s freaking awesome when it’s made out of this material and displacing stuff that’s way more intensive to produce and involves formaldehyde-based binders and so on and so forth.
Jacob Deva Racusin (21:42):
So, to answer your question a little more directly around the more commonly known version of straw, as installation and as wall and roof panels. The original formation of straw was back in the late 1800s, early 1900s in the westward migration where they didn’t have saw, they didn’t have timber, they had Prairie grass. It’s what they bailed and stacked up and built as migration shelters as they were moving west. And a lot of those buildings are not a lot, but some of those buildings are still in existence today. And then those are rendered inside and outside with the plaster, basically pre-drywall, and drywall is literally the-fast forward X number of decades and instead of wet plastering, it’s dry preformed plaster panels that get affixed, which is essentially where we’ve jumped to.
Jacob Deva Racusin (22:30):
There’s another step in between there with the modern straw bale movement started in the US in the Southwest, in the late 80s, early 90s that was in response to deforestation pressures. And also looking, again looking at that relationship with the rice growing regions in the West and being able to use that material, a lot of those were structural walls, they were literally stacked up like very large masonry blocks. And we use varying forms of concrete or cement based plastering as part of the structural skin. So it acts like a SIP. You can basically think of it as a site-built SIP panel. So something like a masonry SIP.
Jacob Deva Racusin (23:07):
When we adopted that more in the East Coast, we were doing a lot more non-structural applications. So a lot of it were SIP replacements around timber frames, where instead of wrapping timber frames with foam, we’d wrap them with these nonstructural bale walls, which helped with snow loading helped with a very wet climate where that straws a bit more vulnerable. And then, again, those were generally sealed with either a clay, or a line-based plaster works a lot better in our cold and wet climate in terms of moisture management, but similar like a plaster render to seal the thing up, and then you can finish it any way you like.
Jacob Deva Racusin (23:45):
Jumping ahead to our contemporary use of it with panels. At that point, all of the structural work is being done by the framing within the panel. And the straw is essentially an insulation infill. It’s not like, you’re familiar with double stud construction, maybe with a cellulose infill, it’s very akin, but we’re basically pre-building those. And then in that case, most of our work, we’ve done some plastered panel jobs, but for the most part they’re dry panels. And so half inch CDX plywood one on the outside for sheer and enclosure, and then an airtight vapor variable membrane on the inside, and then you can fit out with whatever finish you want on either side. And so at that point, the straw’s has been sort of migrated from serving a full structural role to an enclosure and insulation role to now, basically an insulation component within the structural panel.
Spencer Burton (24:34):
Michael Belasco (24:38):
Yeah. And Spencer, as you know, I’ve talked to you- in fact, when I was in my undergrad, Deva, I did my senior project, actually it was at Deva’s house. Is it still out there?
Jacob Deva Racusin (24:49):
Ah, man, I was feeding chickens in there this morning.
Michael Belasco (24:53):
Awesome. I want to go back because your career is- there’s a lot in straw bale building, you guys are doing a lot to bring this into the future. I want to talk more about getting people more familiarized with the larger body of work that you’re doing. You had mentioned that you had developed this, this is somewhat of a carbon measurement tool that you’ve put together and can this be utilized throughout the commercial real estate? Why don’t you give us a little bit of info on that and what that is, how people might be able to utilize that in their buildings and developments today.
Jacob Deva Racusin (25:31):
Yeah, thanks for that question, Mike. Yeah. And so straw for me really, it’s my roots. It’s my heart. I see it as a critical component. It’s a critical tool moving forward in how we develop built infrastructure. It’s just part of a much larger hole. So to speak to that larger hole from the climate standpoint. Yeah, this tool I mentioned, I want to give a big shout-out to Builders For Climate Actions, the team that I worked with to develop the BEAM Tool, B.E.A.M, Building emissions… Should know what the A stands for, and materials. Anyways, so it’s an online tool that one can use to map out what the carbon emissions are, the climate impact is of the buildings, whether you’re looking at just product comparison or whether you’re looking at comparing different assemblies or looking at modeling at whole buildings. And so, yeah. Check out Buildings for Climate Action. Just do a Google search for that or Google BEAM estimator or BEAM tool, it’ll show up.
Jacob Deva Racusin (26:31):
That is one of a suite of different tools that are out there looking at the larger world of embodied carbon, which is, again, looking at the whole life cycle of a building, not just this operational phase and looking what the emissions are. And so this is looking specifically the materials part of that whole life cycle and it’s designed to complement energy modeling tools and life cycle assessment tools and so on and so forth. The reason we develop this tool and are so psyched about is because it’s so useful actively as a design tool that you can use really quickly to make really quick decisions. Because we need actionable information right now and to not be bogged down overly by analysis or have the analysis follow so late in the design process that you can no longer make decisions.
Jacob Deva Racusin (27:10):
So it’s really about quantifying and then communicating impacts and revealing the value proposition behind using some of these materials. And so the work that we’re seeing on the broader scale around us, and this is work that’s being done, I would say, the Carbon Leadership Forum, which you mentioned in my bio, I work a lot with them. There, I’d say, an international organization that is probably, I would consider to be the nerve center of a global movement that goes across real estate development, architecture, engineering, construction, small scale, large scale – they’re helping to facilitate and curate knowledge sharing across the entire global industry around this work. And sometimes that shows up as a straw bale and a very custom thing. Sometimes that shows up as tuning up the chemical formulation of a concrete mix and knocking 15, 20% of the emissions out of the building with zero cost and really, potentially no communication with the developer/owner if they don’t care.
Jacob Deva Racusin (28:09):
And so there was a number of different pathways in here that I would say- and the tool being again, one of a suite of different approaches towards realizing actions and delivering results, the tool gives some ability to quantify impact to make decisions, which can highlight either is there value there around reduced ecological impact that the developer or the developer’s market might appreciate – I do a fair amount of consulting work in with the institutional market, that hold long term tenure and ownership over these buildings and have serious market value in saying that they’re living, walking, or talking their climate action plans and so on and so forth, so great, there’s actual marketable value behind revealing some of the materials or impact decisions you can make using that tool or any other number of design approaches.
Jacob Deva Racusin (29:00):
And then there are the folks that care nothing about it. There is no value proposition to be made around climate or ecological impact, but there’s so much that can be done without any additional cost or sometimes it can even reduce cost that are just- to answer your earlier question, Spencer, if you’re just doing the things that we’ve always been doing, because it’s easiest, I get the business model and that totally works on a quarterly basis, and as we’re watching the West burn and we’re watching a hundred million people within a six-hour radius of Vermont losing their land due to coast elevation, I’m like, “We can do that for like, a minute. And then what?” And so really the developers that are in for this beyond quarterly or maybe five years worth of foresight in their portfolio, if you’re not thinking about this, then cool, you’re going to run out the short game.
Jacob Deva Racusin (29:55):
And I get that. Like I really, truly, I’m not being cynical. I get it. But then I would say, it’s not going to be the developer that’s going to lead that charge. It’s going to have to be some other stakeholder in that team that sees, “Ooh, there’s an opportunity here to change that concrete spec or to swap out this drywall for that drywall.” We could be talking about some super boring moves here that literally add no cost and that aren’t even going to pass through the purview of someone doing a high-level design review, but can change significantly the carbon output of that building. That alone won’t get us there, but that is absolutely an open door to walk through for basically every project team that cares to run eight hours of analysis somewhere in the first phase of design.
Spencer Burton (30:40):
Yeah. That’s fascinating. In essence, it’s a tool to identify alternative ways to do things outside of, call it the status quo, that don’t increase the cost, don’t increase the time, but increase the efficiency, decrease the impact that building has. Who wouldn’t do that? And if they had the tool at there- yeah, and it is probably a matter of the designers, the contractors knowing that those tools exist. And then to your point, having the stakeholders simply ask, “Hey, let’s use this tool, let’s give it a try.”
Spencer Burton (31:21):
Let’s talk a little bit more about, call it barriers, to adoption of things like straw bale. You mentioned one which was building code. Yeah. I think you mentioned it, but I’ll mention it again, which is kind of lending standards, FHA has these standards about how things need to be built and so forth. Would you agree that those are barriers? How are those barriers coming down and then what other barriers would you say are holding back the industry from using some of these alternative, more appropriate building materials?
Jacob Deva Racusin (32:03):
Yeah. Ooh, that’s a deep one. And at the risk of getting pretty meta, I think the biggest- it’s a much larger structural issue that [inaudible 00:32:16]. I get excited about straw. I could take the word straw out and put the word refrigerants in and we could have an entire conversation about why we’re still stuck with r410a refrigerants in all of our heat pump systems, which is the number one biggest source of emissions coming out of the building industries is the incredibly high global warming potential refrigerants in all of these heat pumps. They’re all super excited about it because they’re the answer to all of our low carbon net zero dreams. And it’s totally the structural regulatory environment that is impeding innovation in that realm too.
Jacob Deva Racusin (32:54):
It’s not as simple as that and there’s definitely others that can speak with a little more of a knowledge base inside that realm than I, but the larger structure is very much the same. I had this really interesting conversation with a SIP manufacturer, was talking about straw as I often do. And he was like, “Yeah, it’s great but that’s never going to work in high-rise construction. Codes would never support that. The rest of the infrastructure would never support that.” I’m like, “That’s totally legit, but let’s be super clear, this is not a technological problem,” because straw bale walls, to answer your earlier question, are Class A fire-rated walls, they’ve been rated by STM. There’s not a risk there. But somehow we found a way to say that the only way we could possibly insulate these buildings is by wrapping them with petrochemical fuel. Straight up, legit, the amount of chemicals that have to be added to these foam boards to be able to keep them from combusting, further adding to that learning.
Jacob Deva Racusin (33:44):
But we found a way to make that- it’s not even a question, it’s codified and it’s not just about code, it’s about the fact that the developers of code are representatives in an industry that have billions of dollars to fund folks to sit in those rooms and develop those structures. There’s no sustainable building industry that’s funded to the tune of multi-billion dollars that can help get in there and work the mechanisms of insurance and economy and regulation and lending and finance. So there are structures of scale here that are entirely working against the types of innovation that we’re describing. To reinforce your earlier question, the easy thing to do and the quick money is to just do the thing you’ve been doing, because the entire structure has been set up to reward that. So yes, this is inherently disruptive. I’m not going to beat around the bush around that.
Jacob Deva Racusin (34:35):
And so some of the other mechanisms that tend to limit that potential for innovation or change, that’s sort of the top down, right? That’s the bigger structure and all the substructures of finance and insurance and regulation, that umbrella how we do our work. I’d say the bottom-up part would largely be around, again, I keep using the word vision. I can’t tell you like how many conversations I’ve had with people that said, “I didn’t even realize that was a thing.” Literally, every single conversation I have with almost everyone, if they’re not already an active client is like, “We didn’t realize that there was an opportunity there.” And we spent our entire first half of our careers, not just capturing but developing a market that literally didn’t exist because people didn’t realize those were options.
Jacob Deva Racusin (35:23):
And so that’s kind of a market side thing and it can be literally coming from the client or from the owner, from the developer, or it can be coming from the designer and what they recognize they have the opportunity to bring to the table in terms of conceptual design or design ideas, certainly from the builder’s realm. I know it works differently depending what scale of construction you’re in, but builders and construction managers have a significant amount of power in procurement and like product selection. And, geez, so much power there that if they had a little bit of inspiration, motivation, market angle, fire in the belly, care about the future-
Michael Belasco (36:00):
Jacob Deva Racusin (36:00):
Spencer Burton (36:01):
Well, it’s interesting. Michael and I were at a conference last week and there was a panel on mass timber. I don’t know your opinion on mass timber, Jacob and [crosstalk 00:36:15] but at least according to the panelists, it’s a more efficient material. And the observations that the panels were having, and there was a GC that was on the panel, there were two developers who were doing mass timber at different scales, these are high rise mass timber, so they’re building 12-story buildings with mass timber, and then there was a designer who is one of the people in the US that’s spearheading mass timber, and a couple big takeaways that I had, which I think relate to this discussion…
Spencer Burton (36:47):
The first is you’re attempting to swim upstream and that’s always difficult. And some of it might be economics that you’re describing. There’s big industries that have an inherent interest in seeing their product continue to have market share. But then you can all the way down to, it really is everyone’s going one direction and trying to push the other direction becomes difficult. And so they were talking about things like getting the city engineer of the cities they’re going into on board, because they essentially need a variance from the standard code in order to use mass timber. And one of the very first things they do in due diligence, which a traditional developer doesn’t have to, is they call the city and they say, is this a material that you’d be willing to consider? And if the answer is no, they move on to the next city.
Spencer Burton (37:41):
Now what they’ve found, though, is there’s a lot of interest and that the interest is growing for these kind of alternative materials. Now speaking to the developers, and I’m a developer, so I might call some developers mercenaries, but at the end of the day, it’s a business that we run and we need to sell a product. But what’s interesting, at least as it relates to mass timber, and I think it applies to some of the stuff you’re doing, Jacob, is it is a differentiator in the market. It’s cool. And in a world where people want something a bit different and this generation that’s growing behind us, not just millennials, but the gen Z behind them, they want something different. They’re tired of the cookie-cutter standard. And if you can deliver to them a product that’s different, there is a profit motive there that just also happens to have the added benefit, which to you I know is incredibly important and to many developers is important, so long as the numbers pencil, of benefiting our planet. And these straw- the mass timber, and I imagine it’s a similar thing for some of the materials you’re using, they’re beautiful buildings. And it takes a little bit more time to build them, but in the end, you have a differentiated product than the marketplace that makes it easier to sell or to lease up.
Jacob Deva Racusin (38:56):
You just nailed it. That speaks that whatever statement I threw in there around if there’s a value proposition there for the material, yes you just named it. And what I get really pumped about with looking at-because there are places to intervene in every single part of the building. I’m psyched to talk about mass timber and structure, but that shows up in finishes. And actually, finishes I get really amped about, in terms of the potential for some of this innovation, some of this disruption, unpacking this stack of co-benefits and values in those materials, because there’s aesthetics in there, exactly to your point in terms of the biophilics of timber or stone or plaster, these materials that are, let’s be honest, way more interesting and attractive than just miles of semigloss in the drywall. So yeah, there’s value there. There’s value in the indoor air quality, which has a host of different benefits, depending on who your tenant is, for educational facilities to medical facilities to residential facilities. There are documented measured values there for occupancy that can help, that’s quantifiable, you could put dollar signs to all of that, there’s a value stack there.
Spencer Burton (40:09):
If you get allergies, you get allergies less, right? It’s that simple.
Jacob Deva Racusin (40:13):
Healthy! Protect your children! The thing that I learned from the weatherization world working directly with owners in their homes is that anytime I talk about the energy efficient, and this is actually quite analogous of my approach, which is find whatever angle makes it work to get the material in there and then just try to align it with as many benefits as possible. So when I was doing weatherization work more actively in the field, anytime I was talking- first of all, no one at that point was making purchasing decisions based on climate impact, and to be really clear, still today I would say maybe 10-20% of our clients are actually making real financial decisions based on climate impact, and even those tend to be somewhat gated. So I’m totally with you on that.
Jacob Deva Racusin (40:59):
What we’d find is that if I start talking about the energy benefits folks seem to be interested, but they want to see what the ROI is and they’d be really trying to make sure that there’s the calculus so that it’s worth it. When I start talking about the fact that their buildings are going to rot and that the air is going to be healthier and they’re like, “Oh, my kid has asthma. Oh my God-” no one’s asking what the ROI is on whether or not they are going to be healthy in their homes. And so that’s the leverage point for that client in that market. And there is a leverage point for every market for every client that will very likely align with the decision that will also have a beneficial climate or social equity impact as well. And then that’s where our work is.
Jacob Deva Racusin (41:39):
Or in hiring a consultant or design team that’s literate in that to be like, “cool, the program around this is, this needs to be hip and different and aesthetic, and vibe-y,” awesome if the natural material palette works for that, and it can tell a cool story about, “Oh, this used to be recycled milk jugs and now it’s your wallboard.” I’m not joking, that’s a thing, you can do that. People are like, “Oh, that’s awesome! That’s so 2022!” So like, yeah, cool, let’s do that! And then also recognize that we’re also making that decision and then like, “Oh and by the way, this is better for the planet too.” And they’re like, “Oh great. Yes. And I’m also using bamboo straws and that’s great too.” Wherever we’re at it’s yes and, it’s all in and finding the benefit stack and figuring out what the leverage point within that stack is for who your client is. That’s the firmest hand on the lever that I’ve been able to find at least from my position and working on a project-by-project basis before you scale jump to the regulatory environment or larger market forces.
Spencer Burton (42:37):
Yeah. Well, again, I love that passion, Jacob, I think we could have you on again. It’s so fascinating. Again, Michael and I have had, now going on 10 years of discussions around this and I tend to be the realist in those discussions, which is I’m all for it.
Jacob Deva Racusin (42:55):
I can see that.
Spencer Burton (42:56):
Here’s your roadblocks, how do you get past them? And there’s definitely been progress made over those 10 years, Michael, since you and I have been talking about this, I’d love to have met you, Jacob. Any final word, Michael, as Sam takes us out here?
Michael Belasco (43:12):
Yeah. Jacob, obviously, thank you again. I have a whole list of- we could bring you on again cause-
Jacob Deva Racusin (43:17):
I’d be honored. I’d be honored.
Michael Belasco (43:19):
We could go very deep. Thank you so much. I’m very excited to get this out there and then maybe we’ll have some other supplemental links or something like a link to BEAM on our site, or maybe we’ll do stuff like that. So thank you again for coming on.
Jacob Deva Racusin (43:35):
It was a real honor and a real pleasure, great conversation.
Sam Carlson (43:39):
Yeah. And I’ll put a bow on this real quick. I think the really positive outlook of this is 10, 15 years ago, there was a fraction of people talking about this. I think our last podcast, we talked about somebody who’s, in a way, hitting a very similar thing by adding a new type of efficiency, environmental- there’s changes coming to construction that, again, these conversations were not even spoken of just in the near recent history, just not too long ago. And so again, leading lagging, so the leading behavior, there’s a lot of this stuff happening and lagging into the future. I think ultimately that’s going to cause change and so what Spencer was saying, people saying, “Hey, I want to live in a place like that. Hey, I want that product.”And it’s funny because there then becomes a monetary value exchange and that’s when the free enterprise jumps in and says, “Okay, well, this is how we’re going to monetize our value in the future. And now we have a monetary solution.”
Sam Carlson (44:50):
So, I think that’s the positive side of this. There’s a lot- you could look at all the downsides of what we’re doing right now that is damaging, but with everything that has been done in the past, there’s people looking at solutions. And they’re vetting them and they’re saying, “okay, is this an actual solution or is this a bandaid?” And I think there’s a whole bunch of solutions coming. And I think you’re in on that train.
Sam Carlson (45:17):
So thanks for being here. To the listeners or watchers, thank you for listening to this episode. We’re going to have a lot of really cool show notes on this one. So, head over to the website and we will see you on the next episode.
Thanks for tuning in to this episode of the adventures and CRE Audio Series. For show notes and additional resources, head over to www.adventuresandcre.com/audioseries.
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