Bill would mandate home efficiency disclosure

A bill that would require homeowners to disclose the efficiency of their homes to prospective buyers will likely see debate in the Senate Finance Committee this week.

S.143 squeaked out of the Senate Committee on Natural Resources and Energy on a 3-2 vote Friday. The finance committee should decide on it by the end of the week.

The bill mandates that, upon request, a home seller must disclose information such as the house’s age, when it was last insulated, when windows were last replaced and other information that shows the home’s energy efficiency. A state program would rate homes and a database would allow buyers to compare homes. Appraisers could use the database as well.

Committee chair, Sen. Ginny Lyons, said the bill will help identify which homes in the state need to tighten up their thermal efficiency and demonstrate the value of efficiency in real estate prices.

“This bill is absolutely critical for us if we’re going to start moving away from inefficient over-utilization of fossil fuels in heating our homes and businesses,” Lyons said.

Homeowners would submit information and a computer program would calculate the home’s efficiency score. In theory, this efficiency rating would help determine the property’s cost since it would indicate the home’s energy costs.

George Twigg, co-chair of the state’s Building Energy Disclosure Working Group, said disclosing a building’s efficiency puts a dollar value on efficiency. The working group proposed the idea to the Legislature.

Twigg, who is deputy policy director for the Vermont Energy Investment Corp., said the disclosure is like a miles-per-gallon sticker for a home. Having that information will help consumers determine which home is the best value.

“The basic concept in why we’ve been involved in supporting this proposition is that energy efficiency unlike other attributes in a home like a granite countertop or a remodeled bathroom is that it’s largely invisible in the marketplace,” Twigg said.

Putting some sort of objective value on efficiency may encourage homeowners to invest in efficiency measures because, theoretically, they will be able to recoup those costs when they sell.

Sen. Randy Brock, one of the two members of the committee to vote against the bill, is not convinced. He said it’s not a good use of taxpayer money. Developing a system to compile and organize all the information would cost the state an estimated $100,000.

Given the small number of houses sold in the state each year, Brock said, Vermont would not be able to obtain enough information to have an accurate picture of enough homes in the market to be useful.

According to the Vermont Association of Realtors, there are around 5,000 homes sold annually in the state out of about 314,000 total. If half of those sold used an energy audit, it would still constitute less than 1 percent of the housing stock.

Brock said at that rate it would take more than 100 years to compile data for all the homes in the state.

“The whole idea is for people valuing houses to have a basis for which to compare them,” Brock said. “It’s a small number, used sporadically but made mandatory. It’s not a wise use of tax money or a wise expenditure in general.”

Brock said he was also disturbed by the error rate in determining the efficiency of a home. It’s likely to be off by around 30 percent on either end.

Dennis Brown, president of the Vermont Association of Realtors, said his group is opposed to the bill so far as it makes the disclosure mandatory.

Brown said requiring the disclosure could taint older properties.

“About 30 percent of the housing stock in Vermont is pre-1940s,” Brown said. “We’re afraid an energy audit, especially on older properties may stigmatize properties and make them stay on the market longer. That’s exactly what we don’t need especially in this marketplace.”

Brown said the Vermont real estate market continues in a trend of decreased number of sales and decreased average price for the homes that do sell.

The bill as passed out of the Senate committee would also double the gross receipts tax to 1 percent of the retail sale of heating fuels to fund low-income weatherization.

Lyons said the increase will help replace federal funds that will run out this year. With funding from the American Recovery and Reinvestment Act, the state has been able to ramp up its weatherization program.

With the dip in federal funding, the state would have to pull back on the program without an additional funding source.

“All these people are ready to go to work, but there’s no money for weatherization,” Lyons said.

Matt Cota, executive director of the Vermont Fuel Dealers Association, said the increase in the tax will mean consumers could pay five cents a gallon in tax for fuels like heating oil with the petroleum cleanup fee included.

“For people who are just making ends meet, five cents a gallon is a lot,” Cota said.

He said it’s also a hidden tax since fuel dealers are not allowed to itemize it on customers bills.

Comments

  1. MJ Farmer :
    • This is a recurring myth. There is a tax yes, but it will affect very few people. Please see snopes.com for details

  2. Pam Ladds :

    While I am a big supporter of energy efficiency and try really hard to make my home as “tight” as possible this piece of legislation blows my mind! Or it would if my mind wasn’t so well insulated! I live in house built in 1820 and while I can make it as energy efficient as possible it will never be perfect and nor will most other houses. This seems like a way to slow even further a struggling housing market and to jack up the costs for everyone. It actually feels more like “busy work” something for people to do while they worry about their depreciating home values. It also pre-supposes that the criteria used have any value. Take one small example- the energy efficient thermostat. I’ve used one for years, dutifully believing the party line that it would save me money. Maybe it did. However, when we moved up here we replaced the old dial thermostat with a new program thermostat. Only to find that in the long run it will damage our boiler as it is so efficient it does not allow the temp to drop more than 1 degree. There used to be a variance of 4 degrees – heat up 2 and allow to drop 2 below. The companies no longer make those apparently. So now motors constantly kick on and off, keeping the area where the thermostat resides at the pre-determined temp, but allow the rest of the house to drop. And frying the boiler much sooner. This is energy efficiency! While the goal may be good, please make sure that reality has some value too.

  3. Margo Howland :

    One more thing for Realtors and the real estate bar to worry about. It should be encouraged but not required. Maybe the thing to do is to provide tax incentives for energy audits , not cram it down people’s throats…

  4. Lysander Spooner :

    Wow, this is what we use representatives for? How about this alternative approach? If you are a potential home buyer, can you determine the square footage of the home? Also, are you willing to ask the owner for copies of the energy bills? Will this help you understand the energy per square foot of the home? If so, can you make an informed decision – albeit not perfect – about your purchase?

    If not, hire your elected representative to do the “thinking” for you – he will work out some energy efficiency scheme with the realty lobby and write a bill that will be riddled with slow moving, inaccurate information and will only promote fraud and inefficiency in the marketplace.

  5. Diana Peduzzi :

    I am also an active proponent of energy efficiency and beleive there are still great savings to be achieved by improving the efficiency of our housing stock. However this proposal would never have the desired effect. People shopping for new housing have so many vastly different options to explore, within their price range, and it would be impossible to compare one house to another using this proposed tool, unless the homes were of similar age and construction, and the owners had similar energy use habits. A smart buyer can always ask to have the utility and fuel bills provided by the owner’s vendors, and can look at the condition of the home’s insulation levels, heating system and overall condition and tightness of the envelope. A smart seller will point out favorable conditions, if they exist.
    Already the state has building energy efficiency standards for new construction that are not enforced. Once the state spends $100,000 to set up the process, who will pay for the individual building ratings? That money would be better spent on energy audits. Perhaps the legislature would have the courage to mandate an energy audit prior to a home sale?

  6. Kate Mackenzy :

    I agree with most, all of us as sellers, buyers and realtors can take the annual usage of gallons of fuel and divide it by the sq ft to arrive at knowlede of expected fuel costs. Perhaps time would be better spent mandating that all new-build project have radon extraction as part of the permit process.The method is so simple and costs so low at pre construction stage, yet the risk so high for overlooking it, here is serious issue that needs addressing urgently.

    Also: why not use tax dollars to advise on replacing archaic hot water tanks to “on demand hot water systems”. The fuel and money wasted storing unused hot water is now surely an antiquated approach.

  7. Daniel Golesky :

    No one likes mandates (for the most part, I guess), agreed. But this is actually a well thought out piece of legislation that was arrived at after a significant amount of work, and testimonials from various experts. If you do value building energy efficiency, then we need to find some way of making it valuable in the housing market. Otherwise, the vast majority of buyers simply will not care. A rating only acts akin to a mpg sticker on a car, quantifying its energy performance, and making it visible. Energy audits are great, but they are only part of the solution, and not THE solution, if there is no further impetus to improve bad energy performance.

    • Lysander Spooner :

      “Otherwise, the vast majority of buyers simply will not care.”

      Quite frankly, Mr. Golesky – your comment is a slap in the face of homeowners and renters. Of course we care about energy efficiency, just not in the form your beloved legislators have worked so hard to define it as.

      No, we care about energy efficiency in the form of quality, cost and safety for our Vermont families. Can I keep my family warm? is the first priority, can I do it safely? is the second priority and can I do it for the lowest cost available? being my third priority. If I can do all of those things, then I am being energy efficient. I may insulate, replace windows, appliances and conserve through self regulation, etc. – all aimed at lowering my cost while balancing that value against my first priority objectives.

      Great example of regulation that doesn’t work: low consumption toilets. Guess what people do when they don’t use enough water on the first flush? They flush again, which is completely counter to what the regulations aimed to do which is promote conservation. If anything, the regulation succeeded in one area for sure, raising the cost of the market’s compliance to a regulation. Thanks!

      The same will happen with this for homeowners who already pay too much for regulated products in their home, as soon as you introduce government regulations to the equation you have added cost and also possibly introduced distortions to the market that may conflict with my objectives. Thanks again!

      • Daniel Golesky :

        I am glad you feel strongly about building energy efficiency, Mr. Spooner, I am really glad you do. But the history of advancing building energy efficiency is littered with hundreds of well meaning programs and initiatives (including in this state) that had very few takers..mostly because people didnt care. Bottom line: we need a market-driven initiative to further building energy efficiency, but if there is no recognition of energy efficiency in the market it isnt gonna happen. Sure, we could have all homeowners like yourself rise up, and demand that we get this done, but I am not holding my breath on it. As far your comments on the low flush toilets go, no, Mr. Spooner, an argument on the rebound effect is no reason to disprove regulation — all you are doing is using the same arguments that opponents of energy efficiency use to discredit EE in general. And finally, believe it or not, keeping Vermont families warm, and heating affordable is in the DNA of the legislation.

        • Lysander Spooner :

          I only feel strongly about individuals determining their needs and the priorities about which they allocate their own resources against those needs. If energy efficiency is of high need for an individual, then it will be so. However, it should not be the mandate of the government that makes it my priority in terms of how my resources are allocated. If I were to do that to an individual, it would be called extortion – when the government does it – it is called compassion.

          Here is the fact, most homeowners are not standing up clamoring for legislation to “get this done.” Despite that very fact, homes are more energy efficient today, then they were in the past and not necessarily due to regulation but due to market demand. Market based solutions that are sold to homeowners at an affordable cost. If you add legislation to those already existing labor and materials, all you are legislating, really, is additional cost through compliance and coercion through lost income in the form of tax dollars.

          If I were to do that to a person, it would be called theft. What do they call it when the government does this?

          You can say that low flush toilets are not an argument to disprove regulation, but the stark reality is that all government regulation around consumer protection does is actually raise costs for the consumer, while simultaneously pulling money out of their pocket for compliance tax and granting companies special privilege. So much for compassion.

    • Arthur Hamlin :

      The impetus to improve bad energy efficiency are high utility bills.

  8. Mike Curtis :

    “replacing archaic hot water tanks to “on demand hot water systems”. The fuel and money wasted storing unused hot water is now surely an antiquated approach.”

    Your electric rates would skyrocket. Here’s why — Your on demand hot water heater uses a TON of electricity when it’s working. Sure, it’s only working for 1/2 hour or less each day … but most of us use hot water all at the same time — shower time in the morning.

    If we all had on demand electric hot water, peak usage — the time that the maximum amount of power is being sucked from the grid — would spike. Between 6&7 am every day, when we are all taking showers, the on demand hot water heaters would all be working at the same time, drawing a crazy amount of current from the grid and forcing our electricity suppliers to increase their max capacity.

    When they increase their max capacity — rates go up dramatically.

    The hot water tanks spread out that ‘maximum usage’ throughout the day. Yes, we’re using more electricity overall … but we’re spreading that usage out over time.

    It’s counter intuitive, I know … but don’t take my word for it … ask Efficiency Vermont. Ask your utility provider.

  9. Pam Ladds :

    On demand hot water requires more ampage than many of us have in our old houses. We are chugging along,saving where we can. It ain’t broke, stop trying to fix it.

  10. Arthur Hamlin :

    It doesn’t matter if the bill was well written. This is bad idea and I have contacted my legislators and asked them to oppose it. Vermont has one of the oldest housing in the country and this mandate will make it impossible for some people to sell their home, trapping them in financial peril if they need the equity to care for themselves or a sick or elderly family member, or move for a job.

    If someone wants to make their home energy efficient there are many ways to do that, and for the low income folks it is usually free – but not for the rest of us. Anyone who wants to ‘green up’ their house to try to sell it or increase its market value can do that. We don’t need a government mandate, and we surely don’t need to double the excise tax on our heating fuel.

    • Daniel Golesky :

      1) Vermont has one of the oldest housing stock in the country– very true– but does that mean we should not try and improve its efficiency, Mr. Hamlin? Would you like to see these buildings continue to burn expensive oil, all of which comes from other countries?
      2) “this mandate will make it impossible for some people to sell their home” Untrue. If a buyer values energy efficiency, all this would do is make the energy performance “visible”. There is nothing in the bill that says to buyers to NOT purchase a particular home, it just helps make better informed choices (rather than getting buyers remorse afterwards) . Its a stretch to say that it traps people in financial peril through an energy rating, when they are more likely to be in financial peril by not being able to afford expensive oil for heating
      3) If it was that easy to value energy efficiency in the marketplace, of course we wouldnt need any legislation. I really wish it were that easy. But thats simply not the reality.

      • Lysander Spooner :

        1) Is the solution to importing oil from other countries to regulate housing energy efficiency? I can think of two other ways to stop importing oil from other countries that wouldn’t tax us like this regulation: stop importing oil from other countries and start producing oil locally. If buying local is good for our food, why not our fuel? Of course, I’m referring to North America as local, but you get the point, right?

        2) And if poor families who will get hurt by this additional compliance spending the most as percentage of income can’t afford to upgrade their dismal EE rating, their house become s invisible as well, which hurts their economic mobility even further. Hint: consumer legislation traps people economically because it locks up dollars in gov’t spend! It’s o.k., I’m right!

        3) It is already being self regulated. Please look up oil consumption in the United States. This is due to energy efficiency demands by the public and private organizations over the years, although the cost of oil consumption has drastically shifted towards automobile technology and alternative fuel sources. The reason gas prices are going up is because demand is down in this country. I know you don’t want to hear this but, supply and demand is at play here. It isn’t easy for gov’t bureaucrats to value energy efficiency because efficiency is not something gov’t bureaucrats value – not part of the DNA make up. However, it is very easy for homeowners to value their energy efficiency, they have to pay the bills – so they manage effectively.

  11. Willem post :

    France, Germany and other nations already have such laws.
    France has a seven-level system for housing. Level 1 is the best, 7 the lowest. Most housing is level 4-6.
    Sent from my iPad in France.

  12. William Dods :

    If this is passed the next step will be a Residential Energy Standard for existing homes. I’m sure the Department of Public Service would love to sink their teeth into that one. The only problem this might conceivably solve will be to provide meaningful employment for a large number of overpaid bureaucrats.

  13. Seth Maciejowski :

    Without something like this legislation, there is absolutely no incentive to do basic work like air sealing and insulation with our current system. It’s always easier to justify incrementally purchasing more and more expensive oil (and then complaining about the cost) than making a larger cost outlay upfront. I’ve done extensive work upgrading the insulation of my 1860 home (cutting heating bills by 70% in the process), but none of this is evident to a potential buyer. More information can only help improve the housing stock in general. Perhaps this will encourage people to take advantage of Efficiency Vermont’s grant programs for insulation.

  14. Mike Curtis :

    Of course it will be evident to potential buyers. They will look at your fuel bills and they will compare them with the other homes that they are considering buying.

    They will see that your home costs less to heat than other, similar, homes and this will put you at a competitive advantage.

    In the meantime, you’re saving money on fuel!

    It’s great that you had the foresight and vision to make those improvements, on your own, without the government telling you what to do!

  15. Townsend Peters :

    The comments of the “antis” here miss a key point. You can’t tell how efficient a _home_ is by looking at fuel bills. You can only tell how efficient the _home occupants_ are.

    Vermont spends over $600 million a year burning imported fossil fuel for heat. A simple market-based mechanism is proposed to try to move the market toward valuing building energy efficiency, and people go ballistic.

    Guess y’all would prefer that the state raises taxes to spend on programs that dole out incentives for cost-effective heating efficiency measures, like we do for electric energy efficiency.

  16. Vermont needs to move to zero-energy housing and other buildings.
    Such buildings would have PV solar systems, PV thermal systems, geothermal systems, and battery storage in the building to charge hybrids and EVs.
    Increased energy efficiency should be done first, renewables later, because renewable systems capacity would be much less for zero-energy buildings.
    Vermont State Government buildings; average 107,000 Btu/sq ft/yr. Not much can be done with such buildings other than taking them down to the steel structure and start over.
    http://www.publicassets.org/PAI-IB0806.pdf
    Building energy demand management using smart metering, smart buildings (including increased insulation and sealing, efficient windows and doors, entries with airlocks, variable speed motors, automatic shades on the outside of windows, Hitachi high efficiency absorption chillers, plate heat exchangers, task lighting, passive solar, etc.) were used in the Xerox Headquarters Building, Stamford, CT, designed in 1975 by Syska & Hennessey, a leading US engineering firm.
    Result: The energy consumption is 28,400 Btu/sq ft/yr for heating, cooling and electricity, which compares with 50,000 Btu/sq ft/yr, or greater, for nearby standard headquarters buildings. Source: a study I did in the 80s.
    France and Germany have high-rise office buildings that average less than 10,000 Btu/sq ft/yr. 
    China is building net-zero-energy, high-rise office buildings designed by Skidmore, Owens, Merrill, a leading US architect-engineering firm in Chicago, Illinois. 
    Germany, France, etc have some buildings that use about 10,000 Btu/sq ft/yr
    http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses
    http://theenergycollective.com/willem-post/71771/energy-efficiency-first-renewables-later

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