A requirement that Portlanders selling their houses disclose the results of a home energy audit took effect this week, though it appears to be off to an uneven start.
The requirement, approved by the Portland City Council in 2016, is intended to give buyers a better idea of their maintenance costs in the long run. It’s modeled off programs in cities including Austin, Texas; Berkley, California; and Boulder, Colorado.
It requires many homeowners to have their homes scored on a 1 to 10 scale, as well as disclose the estimated annual energy use and cost, before putting it on the market. (The policy applies to single-family houses and any housing unit that occupies the entire space from the foundation to the roof, like townhouses and certain condos.)
That information must be disclosed in listings and the audit results made available at open houses and in-person showings. The city may exempt certain low-income households, as well as households in foreclosure or other financial distress.
The disclosure requirement was off to a slow start after taking effect Monday. Many new online listings within the city limits lacked the home energy score. (Homes on the market before Jan. 1 weren’t required to obtain a score.)
Andria Jacob, the senior manager for energy programs at Portland’s Bureau of Planning and Sustainability, said the city would be monitoring new listings and contacting brokers when their listings lacked the disclosure.
“We’re expecting it to take a little bit of time,” she said. “Our plan is not to come out swinging a heavy stick right away.” The ordinance allows for fines of up to $500.
The 10-point rating system was developed by the U.S. Department of Energy, with a score of 5 representing the average U.S. home. A house that scores a 1 is estimated to use more energy each year than 85 percent of homes, while one that gets a 10 is expected to use less energy than 90 percent of homes.
The scores are based on a home’s size, its heating and cooling systems and its insulating features.
The city has contracted with Earth Advantage, a Portland nonprofit, to oversee the program. The scores are determined by energy assessors certified by Earth Advantage; many are home inspectors, while others are affiliated with contractors that do energy retrofits.
The Portland Metropolitan Association of Realtors opposed the measure, arguing it would add to a seller’s costs without meaningfully changing buyer behavior. Real estate brokers aren’t totally in agreement about that, however.
“Of course it’s going to be a bargaining chip that will help certain people make a decision,” said Annie Rose Shapero, a broker with Oregon First Realty. “But it’s also going to help those people who are more financially vulnerable make a decision about which probably is going to give them the most security as far as their future utility bills.”
And while homeowners have always considered the potential resale benefits of installing new hardwood floors or updating appliances, the return on energy-efficiency improvements has never been very clear because they’re rarely featured in listings. A required rating could change that.
“We’re helping change the conversation,” said Hilary Bourasa, a principal broker with Meadows Group Inc. Realtors. “It’s taking the focus away from granite countertops and stainless-steel appliances and putting it on housing affordability.”
In the handful of days since the program took effect, some real estate brokers have complained that scores are coming in low, or include inaccurate information.
Mark Wheeler, the owner of Roots Realty in Southeast Portland, said an energy score audit of one client’s house failed to include a high-efficiency furnace. The clients are selling because they can no longer afford the home, he said, and the prospect of spending more money or losing prospective buyers is an added stress.
“If my clients had spent $250 on doing some actual energy improvement on the house I’d feel good about that,” he said. “But they spent $250 on a flawed piece of paper.”
Jacob, the city’s energy programs manager, said Energy Trust would be auditing 5 percent of the completed energy scores to ensure they’re accurate.