The last thing the housing industry needs at this time is another time of sale expense. With commissions, taxes, staging and legal fees burdening buyers and sellers it is hard to imagine encumbering the real estate sales process with yet another layer of expenses. That said there is an emerging understanding that ‘energy is the second price tag of any house ©'. With natural gas prices, oil prices, and time of use electricity costs on the rise there is an increasing understanding that cost of living related to energy will continue to increase. The Home Energy Rating Act, 2008 is aimed to protect the quality of life of Ontarians in the face of rising energy prices.
If the Government of Ontario proceeds with this bill it will be making a solid political decision to protect the interests of the home owning public in Ontario through the introduction of the Home Energy Rating Act. The opportunity for Builders, Architects and Realtors® is to get behind the initiative and show the public that the protection of their asset value and their property interests are at the centre of our businesses. This Bill will make selling EnergyStar® houses easier, and will raise public awareness in turn increasing demand for energy related upgrades in new build sales centres.
The Ontario Conservation Act allows the Ontario government to ‘impose' a time of sales energy label for houses at any time. By putting the bill through the House of Commons, I believe the Government is offering stakeholders opportunity to shape the bill to achieve specific market goals. Resisting the adoption of this label could relate to unfavourable press and public perception. On the other hand the opportunity to capitalize on this necessary market move could create incredible market opportunities for all.
The BC program is set to begin in 2010 while the UK has already implemented programming as have many European jurisdictions. Even the collapsed housing market in the United States is seeing the emergence of "Energy Staging" as a successful tool for generating interest and differentiation for energy efficient houses. "Ultimately, energy labels are about transparency for consumers" says Jeff Colley editor of Construct Ireland. Mr Colley has suggested that the government of Ireland is missing an opportunity to meet a future market demand sooner by delaying implementation of a time of sale energy label to 2009.
Given how high the stakes are becoming, people buying homes or any other property need to know what they're getting themselves into. Property is by far and away the single biggest investment most Ontarians will ever make. It behoves the housing industry to provide the public with opportunity to make informed decisions in a changing market.
The Appraisal Institute of Canada in its RENOVA report says that energy-efficient upgrades are high among the list of top paybacks along with kitchen and bathroom renovations. The challenge for real estate professionals and home owners is understanding the objective difference in energy performance between similar looking houses. The Home Energy Rating Act, 2008 will ensure that home buyers are absolutely clear about the energy performance characteristics of a house that they are buying. It tells consumers that it is important to understand the value of insulation in the walls, efficiency of appliances, heating and cooling, and lighting systems.
Anyone can observe the presence of new windows, however the presence of new windows is not itself an assurance of energy efficiency. "Improper window installation can relate to reduced energy performance of a house, even if the windows are EnergyStar® rated", says ecoEnergy auditor David Elfstrom (Elfstrom.com). Proper installation from a Window Wise certified installer will ensure that a building performance gain accompanies the aesthetic and functional benefits of new windows.
You have heard me advocate "Future Friendly Houses are Worth More". For years I have been writing, and preaching this mantra. When I teach Realtors® about the convergence of issues, I emphasize the importance of understanding and differentiating building efficiency. It is the role of Realtors® to demand higher prices for houses which are materially better than the market average.
In a scientific report examining the implications of climate change on real estate, Hot Property, the David Suzuki Foundation asserts that Builders, Architects, Realtors®, appraisers, insurers and lenders need to be able to accurately identify "green" and ‘energy efficient' real estate, and to identify potential liabilities relating to the site and building. The Home Energy Rating Act is the piece of public policy that will simplify and enable the marketplace to understand energy performance. At the end of the day Ontarians will benefit from improved quality of life in the face of inflationary energy pressures and economic crises.
Chris Chopik is a Toronto Based Realtor®, an instructor at the Toronto Real Estate Board and a dedicated ecopreneur chris@evolutiongreen.com, 416.993.4870.
