Realtors® Say Mandatory Energy Labeling Would Hurt Homeowners

State Senate-House Conference Committee will decide by July 31st

WALTHAM, Mass. – July 18, 2016 – (RealEstateRama) — The 22,000-member Massachusetts Association of Realtors® (MAR) formally oppose several sections of Senate Bill S.2400, An Act to promote energy diversity, that is currently before the House-Senate Conference Committee. While MAR continues to support energy efficiency programs, Realtors say that several provisions of the bill would be harmful to the Massachusetts housing market and would disproportionately hurt low- and moderate-income homeowners. The Conference Committee must report its reconciled bill to both houses for up and down votes by July 31st.

“Realtors® support energy efficiency and voluntary home improvement programs like Mass Save, which we already pay for through our utility bills. But if these mandatory energy inspections become law, the bill causes more harm than good,” said 2016 MAR President Annie Blatz, branch executive at Kinlin Grover Real Estate on Cape Cod. “This comes down to the unintended consequences of trying to mandate a one-size-fits-all approach. It will hurt the housing market for all homeowners, especially those low-income homeowners with older homes who can’t afford to improve their score prior to selling their home.”

Realtors® agree with the main goal of the bill to diversify the state’s energy acquisition process, including using more renewable energy, but it also includes provisions which would require a new government energy inspection and labeling system before selling a home in Massachusetts.
One of the unintended consequences of these requirements is the negative impacts on Massachusetts’ old housing stock. Realtors assert that this especially would hurt low- and moderate-income communities where the homeowners cannot afford to make upgrades. The ratings could cause depressed values of those older homes as well.

“The idea that requiring a government energy label on your home is the same as a miles-per-gallon (MPG) rating on a new car that comes off an assembly line by the millions is a poor comparison,” said Blatz. “Every home is different and our Massachusetts housing stock generally is older, which makes that argument even weaker. Especially hard-hit will be homeowners who can’t afford to make upgrades, especially during such a complicated process as a home sale. Entire older communities could be stigmatized and lose value.”

From a market perspective, the bill as drafted would further complicate an already complicated process of buying and selling a home. Requiring an energy audit prior to listing a home will lead to home buying delays. Currently, the Massachusetts housing market is starved for homes for sale and Realtors feel that this bill would put one more roadblock in the way of needed inventory reaching the market. In addition, a home inspection is customarily not performed until the buyer is under contract to purchase a home.

The Alternatives:
Under existing state law, home inspectors already are required to provide consumers information regarding home energy audits at the time of a home inspection (see 266 CMR 6.08). Additionally, the standard contract to purchase produced by MAR includes a provision allowing for a buyer to conduct an energy audit as part of the inspection.

These alternatives provide consumers the opportunity to voluntarily conduct inspections and obtain upgrades if they so choose. Continuing to educate consumers about these alternatives is critical to the success of energy policies and programs.

“We want the Conference Committee to focus on the main goals of the bill, which is energy diversity and the increase use of renewable resources and not doing harm to homeowners,” said Blatz. “Massachusetts is already the most energy efficient state in the country*. We got there through programs like Mass Save and homeowners’ willingness to make improvements to their homes because they wanted to and not because they were forced to by statute.”

About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of Realtors® is a professional trade organization with more than 22,000 + members. The term Realtor® is registered as the exclusive designation of members of the National Association of Realtors® who subscribe to a strict code of ethics and enjoy continuing education programs.

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Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.

*Massachusetts has been ranked the most energy efficient state every year since 2011 according to the American Council for and Energy-Efficient Economy (ACEEE) State Energy Efficiency Scorecard

by Eric Berman – eberman (at) marealtor (dot) com – 781-839-5507

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