Home energy performance scores – miles-per-gallon ratings for homes – are being produced with greater frequency for both new and existing homes in the Pacific Northwest and around the country. To date, these energy scores are being voluntarily generated and provided to homeowners and potential homebuyers. While legislation to mandate energy scores at certain key decision points (e.g. at time of home sale, when major remodeling occurs, etc.) is not under consideration in the near term, there are several potential mechanisms for energy scoring to become more accepted and used by real estate professionals, appraisers, and ultimately consumers.
One pathway for making home energy scores more visible to the real estate market is to include them as part of official government property records, such as property tax records. In
Energy Ratings on Property Tax Records: A Policy Analysis Earth Advantage, with support from
Washington State University Energy Program, sought to investigate the process, means, and barriers to recording energy ratings in property tax records.
The study showed that property tax assessors are uniquely well suited to obtain and record energy rating information. They not only have the legal duty to obtain and record attributes of buildings that are relevant to market value, such as the energy efficiency, but they already routinely obtain and record similar information from a number of reliable sources. Unlike other repositories of building information, assessors are unique in having legal authority to require building owners to provide information relevant to their building’s market value. In turn, assessors are often obligated to allow public access to the information they collect.
To become an effective process and means for recording energy scores in official property records, existing property tax assessment records must be enhanced to allow for the inclusion of energy ratings. Entering energy scores into property tax records has the benefit of facilitating their subsequent automated inclusion in multiple listing service (MLS) listings. MLS systems pull data directly from local property tax records. Including energy scores in property tax records streamlines the capture of data to numerous MLS systems, potentially informing prospective purchasers and renters about a home’s energy consumption. It also provides brokers and appraisers with additional information relevant to the appropriate pricing and valuation of real property.
As one of the nation’s leaders in researching and promoting effective home energy performance scoring systems, Earth Advantage will continue to investigate methods by which energy efficient homes can be more accurately valued by the real estate market. This will also ensure that American home buyers gain access to information about their most important financial purchase.
