The Unintended Consequences of the Not so ‘Simple’ Home Energy Label

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By Annie Blatz, 2016 President, Massachusetts Association of Realtors®

Unless we contact our legislators within the next few weeks, state government could require all homes to be inspected and scored on energy efficiency before they could be sold here. Unlike Miles Per Gallon (MPG) and Energy Star ratings, which only appear on new cars and appliances, there is a proposal before the legislature that would require government testing and labeling on all homes before they are sold. The program could stigmatize entire neighborhoods and communities of older housing stock in Massachusetts.

These potential mandatory energy inspections and scoring provisions are only a small part of S.2400, An Act to promote energy diversity, which is now in House-Senate Conference Committee.  These provisions requiring a home inspection and rating before selling a home would be extremely harmful to the Massachusetts housing market and would disproportionately hurt home values for low- and moderate-income homeowners and possibly entire neighborhoods.

Proponents like to compare home energy labels to MPG ratings of new cars or Energy Star scores on new appliances. But older cars and appliances are not rated and neither should older homes. Following New York and Rhode Island, our state has the third oldest median house age at 57 years, according to the latest data from the U.S. Census Bureau, American Community Survey. If passed, these requirements would be like putting a new MPG requirement on a 50-plus-year-old car; it doesn’t make sense.

According to the American Council for Energy-Efficient Economy (ACEEE) State Energy Efficiency Scorecard, Massachusetts has been the number one most energy efficient state in the country since 2011. While improved energy efficiency is an important goal for all of us, a blanket “MPG” requirement on all homes would have significant and very real unintended consequences. A labeling system not only would have negative impacts on older homes, but would significantly impact low- and moderate-income communities where homeowners cannot afford to make upgrades. Essentially a state statute could result in depressed home values, especially in our older neighborhoods.

In addition to disproportionally hurting low and moderate-income homeowners, the requirement of an energy audit prior to listing a home for sale would complicate and delay an already complicated process of buying and selling a home. Currently the number of homes for sale is critically low and this would make it even more difficult for potential sellers to list their home for sale. This is not how you encourage a healthy real estate market and a strong economy.

What we need is a common sense approach to energy efficiency and alternatives already exist. We need to continue to work with our utility providers to promote the strictly-voluntary Mass Save program to all homeowners. This program provides an incentive-based approach to energy efficiency rather than a punitive home inspection/label mandate. We should remind buyers to consider a Mass Save audit shortly after purchase or as part of their home inspection process.   We should also make it easier to build new homes that set the standard for energy efficiency.

This all starts with the Conference Committee understanding that requiring energy inspections and home energy labeling before you can sell a house in Massachusetts provides no energy efficiency, but is merely another government mandate. We urge the Conference Committee to reject the energy auditing and labeling provisions contained in the Senate version of this bill.

REALTOR® Day on Beacon Hill Briefing: Energy & Environment Issues | The Wednesday Word

12802814_10154557034337506_7894024781621756710_nThe 21st Annual REALTOR Day on Beacon Hill is just three weeks away! To help you prepare to attend REALTOR® Day on Beacon Hill at the Massachusetts State House on Tuesday, June 21, we continue with Wednesday Word blog posts that discuss the 2015-2016 Legislative Issues.

This is the second post in the series and reviews our positions on the following issues: Mandatory Energy Scoring and Wetland Disclosure:

Oppose Mandatory Energy Scoring

S.1761 An Act relative to home energy efficiency

Status: Referred to the Joint Committee on Telecommunications, Utilities & Energy including an extension until July 1.

Why MAR Opposes S.1761: This bill seeks to require sellers or their agents to perform a Mass Save energy audit prior to listing a home for sale and disclose to any prospective buyer the information in the energy audit at the time of the listing. Additionally, the bill commissions the design and implementation of an energy scoring and labeling system. Over and above having an enormous impact on an individual’s right to freely transfer land, such requirements would negatively affect the real estate industry in the Commonwealth. Massachusetts is home to some of the oldest housing stocks in the country and mandatory energy scoring of such older homes would significantly stigmatize and potentially devalue an individual’s largest investment.

Oppose Wetland Disclosure Legislation

H.150 An Act relative to to the disclosure of wetlands on property

Status: Reported favorably by Joint Committee on Consumer Protection & Professional Licensure

Why MAR Opposes H.150: If passed, the proposed legislation would require real estate licensees to disclose to prospective buyers that a property to be sold is in its entirety or in part a wetland. Requiring brokers to investigate and report to buyers on the various wetland restrictions overlay maps, and provisions in each community would exceed the practice of brokerage as defined in Chapter 112.

As with any other condition affecting real property for sale, buyers are free to ask questions of the seller about wetlands on the property, create contingencies in purchase agreements that allow for an inspection for wetland areas, and research information through public records.  The Massachusetts Association of REALTORS believes that these methods of acquiring relevant information are far superior to legislatively mandating that brokers perform services beyond their areas of expertise and training.  For the foregoing reasons, MAR believes H.150 should not advance.

Please be sure to visit the MAR Government Affairs page and Day on the Hill Facebook event for additional information.

2016 MAR President Annie Blatz invites you to REALTOR® Day on Beacon Hill, where REALTORS® will have a chance to network and learn about the key legislative issues that will affect the real estate industry and private property in 2016. Attend the REALTOR® Day on the Hill and make an impact on the legislative process.

REALTOR® Day on Beacon Hill is scheduled for:
Tuesday, June 21st, 2016
10:00 to 11:00AM
Massachusetts State House, Great Hall

We look forward to seeing you there!

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; Justin Davidson, Legislative & Regulatory Counsel; and Christine Howe, Public Policy and Finance Coordinator)

The Wednesday Word: Oppose Mandatory Energy Scoring

REALTOR® Day on Beacon Hill is only 3 weeks away so be sure to catch up on all the “Wednesday Word” Day on the Hill Briefings. Remember to check out the Day on the Hill Facebook event page and visit the Government Affairs page for all your DOH updates. Finally, don’t forget to check out MAR President Corinne Fitzgerald’s Day on the Hill video so you can get the inside scoop on the 30th Annual REALTOR® Day on Beacon Hill!

This week we review Mandatory Energy Scoring and why REALTORS® oppose this bill.

Oppose Mandatory Energy Scoring

ISSUE: Mandatory energy audits at or prior to the transfer of property can disrupt sales and therefore have a negative impact on the Massachusetts housing economy. Additionally, requiring energy efficiency scoring on homes in Massachusetts will stigmatize older homes causing a substantial decline in value.

The Legislation: S.1761 An Act relative to home energy efficiency
Sponsor: Senator Benjamin Downing (D-Pittsfield)
Legislative Action to Date: Referred to the Joint Committee on Telecommunications, Utilities and Energy

What the Bill Does:
This bill seeks to require sellers or their agents to perform a Mass Save energy audit prior to listing a home for sale and disclose to any prospective buyer the information in the energy audit at the time of the listing. Additionally, the bill commissions the design and implementation of an energy scoring and labeling system.

Action Needed: Ask your legislator to oppose this legislation.

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For more information on Day on the Hill:

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; and Justin Davidson, Legislative & Regulatory Counsel. Edited by Christine Howe, Legal Affairs & Finance Administrative Assistant).