Last December, the Portland City Council unanimously adopted a Home Energy Score mandate.
The requirement, which will go into effect in January 2018, will require anyone who sells a single-family home to obtain a home energy performance report. But the report, which is intended to assess the energy efficiency of the home, has has raised some questions regarding the costs associate with it and its actual usefulness.
Ron "Mac" McDowell, a resident of Southwest Portland, is also a licensed broker who specializes in "green" real estate. He has consulted on sustainability projects with the City, such as Solarize Portland, and has supported the HES mandate since its proposal. He will be teaching seminars to brokers and other real estate professionals on how to best accommodate the new rules.
McDowell recently spoke with the Connection about the mandate and what he believes will be the most important points to consider as it is enacted in the next year. His answers have been edited for length.
Q: Could you give our readers a brief overview of what the Home Energy Score mandate entails?
A: Home Energy Scorecards have been around for several years. Cities have been using them to green up their community's carbon footprint. Indeed, the City of Portland was already using HES for commercial buildings and has also been administering a volunteer HES program for residential.
In today's real estate market, informed buyers often look at sellers' utility bills to get an idea of how much it costs to live in a home's conditioned space. The problem is this data doesn't correlate and has much more to do with behavior and/or requirements of the current occupants than the home itself.
In addition, things like old appliances, heaters, air conditioning and pumps (which all use a lot of energy) and drafty windows and thin insulation (that leak energy) are other contributing factors to how much power a home uses over a given period.
A home energy test will actually test the system performance of a home and score it.
Q: What do you think are some of the main goals for rolling out the HES mandate?
A: The City has high hopes that making HES a requirement will speed up and move the dial in greening up our housing stock, thereby reducing our collective carbon footprint as outlined in the Climate Action Plan. That is the highest goal.
From a homeowner's perspective, the hope/goal is that the investment made in making the home high-performing, or more energy-efficient, is recovered at sale and then some. If they've done the work, conducting an energy audit should provide an objective assessment that will boost the marketability of their property. I've seen studies that show that homes with certifications sell faster and closer to the list price.
From a broker's point of view, it is just another bothersome and needless chore that has to be done prior to selling a house.
Q: What do you see as the biggest misconceptions about the HES score?
A: Misperceptions of HES include the cost associated in doing it. Based upon the City's estimates and the research of other cities doing same, it should cost homeowners somewhere between $150-$200 to accomplish — and that is a drop in the bucket as compared to most of the other costs associated with selling a home. The time it takes to accomplish the inspection will likely be more problematic than the cost.
Q: What do you hear people voicing as concerns?
A: Since people aren't too aware of this program and it won't be required until January 2018, the folks who've complained the most and concentrated on defeating this "mandate" are real estate professionals and some lenders. Since this is the world I live in, I often hear complaints about Portland "overstepping" their authority and making an already complicated real estate transaction even more cumbersome.
My colleagues have a point. This will add another inspection to an ever-expending list, which jeopardizes the transaction.