Green Building and Energy Audits for Homes: The Carrot or Stick Approach?
NAR Government Affairs Directors Institute
Jackson Hole, Wyoming
July 25, 2008
Julie P. Hawkins REALTOR®, LEED® AP D&R International On behalf of the U.S. Department of Energy
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Presentation Outline
• The Big Picture • Green Certifications
– New construction – Existing homes
• Energy Audits 101 • State and Local Activity • Impacts On Our Industry
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The Big Picture
Why Do Green Building/EE Programs Exist? • Consumer demand
– Has green reached the magic tipping point?
• Builders’ desire to find niche • U.S. Green Building Council led the way • Federal, state, municipal agencies seeking creative solutions to energy challenges
– Residential energy accounts for 21% of the nation’s expenditure – Existing homes represent the biggest opportunity for energy savings
Building Sector: Energy Profile
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What REALTORS® Said in Membership Survey
As pec t of G reen B uilding G etting Mos t C lient Interes t
100 80 60 40 20 0 87% E nerg y E fficiency 39% Health 25% E nvironmental 10% None 7% O ther
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Green Certifications
• New construction
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What’s the Difference?
• • • • • LEED requires significant verification and paperwork, most success in commercial bldg. NAHB comparatively straightforward, but not as credible to “hard core greens” ENERGY STAR not focused on “green” materials; just energy savings EarthCraft regional All generally follow ENERGY STAR standards for efficiency
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Existing Homes Programs
(i.e. Energy efficient or green remodeling)
• EarthCraft House (certification) • USGBC REGREEN (not cert.) • Home Performance with ENERGY STAR (cert.)
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Home Performance with ENERGY STAR
1. 2. 3. 4. 5. The Energy Audit Improvements Quality Assurance Each Program Different Financing Usually Part of Program
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Home Performance with ENERGY STAR Program Activity
Seattle
Minnesota: Minneapolis Wisconsin
Vermont New York
Maine
Home Performance with ENERGY STAR
Oregon: Portland Northern & Central California Southern Idaho Northeast Wyoming Western Pennsylvania Massachusetts Southern Wyoming Iowa: Cedar Rapids Kansas: Kansas City
Chicago
(suburbs) Ohio: Cleveland Illinois: Peoria
Rhode Island New Jersey Maryland
Reno
Colorado: Ft. Collins, Boulder, Denver, Colorado Springs
Sacramento Anaheim
Northern Virginia
Kentucky
Missouri: Kansas City, Columbia, St. Louis
Arizona: Phoenix Southern California
Georgia: Atlanta
Raleigh
Dallas
Texas: Austin
Mississippi
Existing Program Launching Programs Exploring Programs Potential National Pilots
Houston
Louisiana
Florida: Gainesville
Jacksonville Tampa
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So, what is an energy audit, anyway?
• Basic definition = A survey that shows how much energy you use in your house or apartment. It will help you find ways to use less energy. • Many different levels • Can involve a short report, long report, and/or a score
So, what is an energy audit, anyway?
• Performed by an energy auditor or HERS rater • Cost ~ $300 (+/- based on the auditor, square footage, age of home, etc.) • Results can be used:
– To make improvements that save $$ – As a selling point (if results are positive) – As a bargaining chip to negotiate a lower asking price (if results less than stellar) – To compare homes on the market
Energy Audit: What’s In A Name?
RESNET defines three categories of assessment: • Energy Survey (On-Line and In-Home) • Diagnostic Survey • Comprehensive Energy Audit
Issues That Can Affect Our Industry
• More consumers asking about “green” homes • Energy prices sky-rocketing, consumer confidence down
Issues That Can Affect Our Industry
• States, cities scrambling to find solutions to residents’ energy costs and climate change challenges • Time of Sale
– More states mandating an energy disclosure at time of sale
• Mandated changes affect buyers, sellers, and our industry
What “Mandated Changes” You Talkin’ ‘Bout, Willis?
• Legislation or policy concerning energy assessments, improvements, or disclosures at time of sale:
– – – – – – Texas – passed Kansas – passed Nevada – passed Missouri - pending California – pending Massachusetts – pending
General Examples…
• Requiring an energy audit prior to closing • Requiring seller to share last 12 months of utility bills • Requiring seller to provide information about energy audits to potential buyers
Specific Examples…
• Nevada (passed)
– 2012 Implementation – Opt-out for buyers
• Maryland (proposed)
– Using ENERGY STAR rating system for new homes, sellers must disclose 5 days before closing
• Montgomery County, MD (passed)
– Last 12 months of utility info – Provide info on energy audits to potential buyers – Exploring more stringent mandate
What GADS Need to Know
• Often changes are not just political, but driven by need of electric utilities to curb demand • The availability of an adequate supply of auditors has an impact on implementation • REALTORS often brought in to the discussion too late or not at all • Energy agencies or legislators may see REALTORS as a hurdle rather than as partners
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What GADS Need to Know
• Audits are generally perceived as less troublesome than ratings • Timing of the energy disclosure makes a difference • REALTORS more likely to accept changes if terms are kept optional for buyers and sellers to negotiate in the contract (i.e. who pays)
How Do We Respond?
• Help legislators understand issues to make policy more constructive • Help members build relationships with (and refer their clients to) knowledgeable green building and energy professionals • Encourage MLS to add green and energy data fields as a voluntary measure
– Data – Market infrastructure
How Do We Respond?
• Educate members • Invite energy auditors to speak at events • Liaison with state, local energy offices and utilities • Create tools that facilitate consumer and agent education without need for agents to be experts
Some Other Ideas
• Associations can:
– Add content to Web sites to help members find information (DOE has a template) – Publish educational articles in monthly print or email newsletters
• Use disclaimers • Fact check
• Members can:
– Help buyers by explaining that utility costs can make up a large portion of the cost of owning a home (transportation costs, too) – Help sellers who have made improvements or already own an efficient or green home to market those features effectively
Resources
• Eere.energy.gov • Energystar.gov • Energysavers.gov • Pathnet.org • Resnet.org • Bpi.org
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Real Estate Initiative Contact Info
Julie Hawkins, REALTOR® D&R International 301-588-9387 JPHawkins@DRINTL.com Lani MacRae U.S. Department of Energy 202-586-9193 Lani.Macrae@ee.doe.gov