Two U.S. Senators—one from each side of the aisle—want you to keep building energy-efficient homes, and yesterday, they introduced a bill that could better help you sell them. The Sensible Accounting to Value Energy (SAVE) Act of 2011, sponsored by Michael Bennet (D-Colorado) and Johnny Isakson (R-Georgia), would require all federal lenders to consider projected energy efficiency when underwriting mortgages.
"This bill is all too rare," Senator Bennet told a group of reporters yesterday afternoon. "It’s supported by diverse interests, unlike a lot of things in this town." Bennet pointed out that by factoring in energy costs the same way that interest, principal, and property taxes are considered, SAVE would help provide homeowners and home buyers with useful information about energy usage, lead to more complete and accurate mortgage-underwriting, and encourage investments in home energy improvements.
Senator Isakson, who has more than 30 years of experience in the residential real estate business, cited the importance of recovery in the housing market. "Job creation in the construction sector is pivotal to getting our economy back on track," he said. The bill, he added, "has the potential to create jobs without any cost to taxpayers and will improve mortgage underwriting by including energy as a factor."
This means that features like a geothermal HVAC system and Vetrazzo kitchen countertops would get equal consideration when the mortgage is written. According to the Institute for Market Transformation, the numbers shake out like this. Let’s say the average American house uses $2,400 worth of energy a year. A new or remodeled home that’s 30% more energy efficient would consume about $1,700 worth of energy over the same period, a savings of $700 per year or about $60 per month. Under the SAVE Act, if an energy efficiency package adds $30 per month to the mortgage payment, that $60 per month in savings would offset the mortgage increase, making for a $30 savings each month. If the legislation passes, being energy efficient wouldn’t have to increase the cost of owning a home.
Though Congress is bitterly divided right now, SAVE may actually have a fighting chance: It benefits homeowners, the environment, and potentially the economy. In addition to being bi-partisan, the bill has earned support from interest groups as varied as the Natural Resources Defense Council, Appraisal Institute, U. S. Chamber of Commerce, Institute for Market Transformation, and Leading Builders of America. Proponents of the bill say that driving growth in energy-efficient home construction and upgrades for existing homes would generate 16,000 new jobs and a $95 million savings in energy bills in the next two years. By 2020, those estimates rise to 83,000 jobs and $1.1 billion in savings.
Amy Albert is a senior editor at Builder.