Hood River Real Estate Update

Are you familiar with the dramatic effects of the CAP & TRADE BILL on real estate? 

If you own a home, or are in the real estate industry you should seriously read the Energy Audit & Labeling sectionsof the Cap and Trade bill as it will affect every residential and commercial real estate transaction for the rest of our lives. This post is not to start a politcal battle, but to bring awareness, so all are not surprised in the very near future of what is entailed to sell a home under this proposed bill. This may be a bit slow to read, but take in every word if you are in the real estate industry or know anyone that owns a home.

Most people have not been educated by the government or media that a major part of the Cap and Trade bill is to have a goal, in time, to convert every real estate (commercial and residential) building up to the US government's green building requirements (at that particular time).  Some cities (including Austin, where I live) have, somewhat, a similar structure, where Green improvements/retros are usually negotiated between a buyer and a seller.  

This is a very comprehensive and massive energy auditing program that you need to understand.  Because the bill is in legal language, it makes for difficult reading, but you will then understand what life will be like forward in the real estate industry.  The main parts of the residential energy audit and labeling are in sections 201 to 204.  Warning: The file is massive and may take a bit of time to open and to scroll down pages.  

Happy reading.....but a brief breakdown is below the link so you will not be reading hearsay, but the actual bill, as it is currently written.

http://www.govtrack.us/congress/billtext.xpd?bill=h111-2454

If passed, this bill will create a national to state Energy Audit program whereby all homes and commercial buildings will be required to have an energy audit to compare the home in its condition to green building standards as determined by the US Gov't.

There are incentives planned for the homeowner to update their home to such standards. The confusing part of the bill is all the grey matter. There are numurous parts of the bill that gives the government powers to decide what may be required by the government in the future. i.e. it is pretty open ended for interpretation.

This would go into effect in 2014 for residential and 2015 for commercial. The bill is effective through 2050. We have a very similar program in Austin. The question many are pondering is whether the government, in time, will require minimum standards to be changed out prior to a change in owners. That would devastate the lower income families, so I doubt that would be a reality.

The national government's energy audit is similar to a home inspection...but it is a secondary inspection; thus, secondary negotiations on repairs or updates to be made on a home. A buyer may or may not ask for items to be retrofitted, and the seller may or may not decide to retro such items. In 20 years or so, we may look back and say this was a good idea. In the interim, it is a second inspection all have to deal with....and negotiate.

The shocking part is that the public and most of the real estate industry have not been informed about the program and the affects the program may have on the industry, and the implications of how lower income buyers and sellers will be able to negotiate substantial costs for retros on older homes.   Some retros we are seeing are not a few hundred dollars, but tens of thousand of dollars.

Nothing is being demanded at this point, and is up to the buyer and the seller to negotiate what will be retrofitted.  One would assume as time goes on that certain retros will be required.  I personally think that this is a great long term benefit for our country, but will be painful for the low income or those with little to no equity in their home. The dates are set far enough in advance to be able to swallow this after this recessionary period.