In Minneapolis, the City Council is tinkering with a proposal that would require an independent energy evaluation of houses when they go on the market.
Although the plan is still evolving, according to an article posted by the Star Tribune, evaluators may be boring holes into walls of houses built before 1980 to check on insulation, and conducting blower door tests to find out how leaky the building envelope is.
The new requirement would go into effect next year, but the exact language of the proposal has yet to be released. That’s on the schedule for a City Council meeting at the end of the month.
“The city really wants to make some headway in terms of fossil-fuel emissions,” Councilor Cam Gordon told the newspaper. “And with our cold winters … I think that the energy that goes into heating homes is a major contributor.”
The new requirements would become part of the Truth in Sale of Housing evaluation that is now performed on all houses sold in Minneapolis.
An exploratory hole bored into a wall would allow an inspector to see how much insulation had been installed. A blower door test calculates airtightness by measuring the amount of air that leaks into a house while it’s under negative pressure.
The amount of insulation in the walls and roof, and airtightness both are standard metrics in new house construction. It’s not yet clear how the information would be bundled into a report or scorecard useful to potential home buyers.
In a report for the city, the Center for Energy and Environment (CEE) described energy evaluations that are now required in several U.S. cities, and said residential energy disclosures would “unleash market forces” that would improve energy efficiency. CEE also mocked up a sample “Home Inspection Energy Report” that might be used in Minneapolis.
“By providing a simple and transparent way to assess efficiency, energy disclosure can help buyers be more sophisticated in their home search, encourage owners to invest in efficiency, and help sellers recoup the value of the efficiency investments they have made,” the report notes.
An estimated 90% of all single-family homes in Minneapolis were built before 1960, the report says, before a residential energy code requiring minimum levels of insulation and other efficiency features had been been adopted. The authors estimated that energy upgrades could save city residents $8 million a year and would have a simple payback of 10 years in savings alone.
The backdrop to the proposal is the city’s Climate Action Plan, which seeks to make whole-house efficiency upgrades to 75% of Minneapolis homeowners by 2025. A pilot program set out to upgrade 500 homes per year in 2015 and 2016.
The report makes these other points:
- A disclosure of energy bills would be less expensive than an audit of energy “assets” but ultimately would not be as useful.
- Homeowners are more likely to make upgrades soon after the purchase, so energy disclosures at the time of sale are effective in encouraging improvements.
- Knowing that efficiency will be disclosed at the time of sale motivates homeowners to complete energy upgrades early on so they will build in the best resale value.
Energy disclosure policies are already in place in a number of U.S. cities, including Austin, Texas, Berkeley, California, Chicago, and Portland, Oregon.
Real estate agents don’t like it
The plan isn’t proving very popular with real estate brokers, according to the Star Tribune.
“Although I’m all for energy improvements, why does the city of Minneapolis feel they have the right to invade the sanctity of my walls,” said Stephanie Gruver of the Re/Max Results agency. “Cutting a 2-inch hole in my 1928 hand-plastered walls is going way too far.”
Other brokers and real estate evaluators said the new requirements could more than double the cost of a Truth in Sale of Housing report, now at about $200.
Eric Myers, the director of government affairs for the Minneapolis Realtors’ association, was concerted about the financial impact on buyers and sellers. Those fears were echoed by Shae Hanson, a real estate agent.
“It’s going to be negatively impacting the real estate transaction between a buyer and seller,” Hanson said, “potentially putting Minneapolis homes specifically at a disadvantage.”
Mike Moser, an independent evaluator who compiles TISH reports, said blower door tests would take longer than the city expects. He also was concerned of potential liability should an evaluator hit a wire when they drill into a wall, according to the Star Tribune.