Two weeks ago, President Obama introduced his Climate Action Plan. To some, it probably seemed like big news. But to me, his speech emphasized the “Back to the Future” nature of his plan. The President remarked: ”This used to be a bipartisan issue,” and reminded the audience that some of the original leadership on climate policy came from Presidents Nixon and G.W. Bush, as well as Senator McCain.
The President’s Climate Action Plan includes a key focus on reducing energy use in buildings. Buildings account for about 40 percent of total energy use and carbon pollution in the United States, more than industry or transportation.
I’m pleased to see that the issue Reducing Barriers to Investment in Energy Efficiency ended up in the plan. In May I had the honor of joining staff from the Institute for Market Transformation to brief the White House Council on Environmental Quality (CEQ) on this topic.
In my work I encounter a fascinating combination of professionals from private and public sectors who work tirelessly to make energy efficiency more accessible to home owners every day, and to make the process for reselling these homes straightforward and fair. From insulation contractors and builders, to Realtors, MLS operators and appraisers, it was an honor to report on the cooperation and progress among these trades as depicted in the image below.
CNT Energy’s Value for High Performance Homes Campaign website continually tracks and reports progress in this space. While industries are working together to make progress on the resale process for high-performance homes, underwriting progress has not kept pace. Research indicates that owners of energy efficient homes are far less-likely to default on a mortgage, but current underwriting practices, which are largely influenced by government-owned entities such as Fannie Mae and Freddie Mac do not account for efficiency. As a result of the CEQ briefing, the climate plan calls for progress on page nine:
In order to advance ongoing efforts and bring stakeholders together, the Federal Housing Administration will convene representatives of the lending community and other key stakeholders for a mortgage roundtable in July to identify options for factoring energy efficiency into the mortgage underwriting and appraisal process upon sale or refinancing of new or existing homes.
And so we have “Back to the Future”. This roundtable is needed to help federal underwriting standards keep pace with industry advancements like I encounter every day. Recently, I stumbled across the original MLS listing sheet for my home when it was first sold back in 1967. Back then, energy costs (a surrogate for efficiency) was just part of the deal. No roundtable was needed get it in there back then. And sadly, no roundtable was convened to pull it out at some point in our recent past.
So I applaud the President’s leadership to get back to the future – and I look forward to being a part of the process to support a better home finance process and a better planet by including efficiency again.