Consumer interest in efficiency is the name of the game!
According to the 2019 NAR REALTORS® & Sustainability Report, homeowners are increasingly interested in greener and smarter, more ‘sustainable’ homes. But here’s the catch, they might not realize it! (NAR Sustainability Report, 2019)
The study found a majority (59 percent) of responding REALTORS® reported clients were at least somewhat interested in sustainability. That number jumped to 69 percent when asked whether energy efficiency is ‘very or somewhat important’ to clients, with a full 71 percent of respondents sharing the most in demand home feature is a ‘comfortable living space’.
Simply put, while clients may not necessarily ‘want’ sustainability, they often highly value features of sustainability, such as transportation/commute costs, neighborhood walkability, smart homes, and community green features (bike lanes, green spaces). Of these features energy efficiency is the most marketable benefit of sustainability. (NAR on Common Ground, pages 4-7, Aug. 26, 2017)
Although it may seem as if the green/sustainability movement is slow to gain momentum, the U.S. Green Building Council (USGBC) recently reported LEED certified residential homes (the country’s most popular green ranking system) have increased by 19 percent since 2017, with nearly one million properties certified. (NAR on Common Ground, pages 8-9, Aug. 26, 2017)
In fact, Ohio is currently the 7th most popular state for LEED certified housing units with 7,400 certified residential units. (RIS Media, The U.S. is Going Green, December 2019)
And this number is only projected to increase with 51 percent of home builders reporting they will utilize green practices and products in at least 60 percent of their projects by 2020. (NAR on Common Ground, pages 4-7, Aug. 26, 2017)
Energy efficiency leads the list of green products and practices builders and remodelers say their customers want. Durability ranked second, with highly efficient HVAC/water heating systems, code-exceeding insulation, energy efficient appliances and code-exceeding windows following close behind. Other green products and practices listed were increased moisture control/ventilation, water-conserving appliances, efficient lighting including use of daylight, and water-conserving plumbing fixtures. (NAR on Common Ground, pages 4-7, Aug. 26, 2017)
Surprisingly, it is not the millennial demographic driving this green demand, it is consumers aged 55 plus.
“One possible takeaway is that greater familiarity with home features leads to a greater emphasis on home performance.” (NAR on Common Ground, pages 4-7, Aug. 26, 2017)
As sustainability and green features continue to increase in priority for consumers, it is critical that REALTORS® educate themselves on the benefits of sustainability to better serve their clients.
Searching for Sustainability on the MLS
It is with this in mind that the Columbus and Central Ohio Regional Multiple Listing Service (MLS) recently updated the Energy/Green Features Checklist.
As explained by Matt Warren, Senior Trainer and Systems Analyst with the Columbus MLS, “Subscribers can and should now identify more energy saving/green home features and certifications.
The greatly expanded list of green features and certifications includes a glossary geared to help REALTORS® educate themselves and their clients. Certifications can catch the eye of sustainability-seeking, energy-efficiency Buyers, especially if the Buyer’s Agent is also checking the Green Features Checklist.
The MLS Add/Edit screen has a ‘Green Features Y/N’ field that is searchable. The Green Features Y/N field allows agents to search specifically for homes that were listed as having energy efficient features.”
“Once the popularity of specific green features and sustainable buildings has been aggregated by MLS data, appraisers will be able to compare features and extract recognized value from the marketplace,” according to Tom Francis, an appraiser with Real Property Analysts, Inc.
Practically speaking, the more energy/green features entered into the Checklist by Columbus REALTORS®, the sooner the data will reflect values and trends in the market that REALTORS® can use to demonstrate value to consumers.
REALTORS® will be able to counsel Sellers on pre-listing green renovations and to advertise their certifications and green features; help Buyers sort through homes to find the upgrades they crave; and advise new homeowners on ecologically smart investments to quickly add comfort and value to their homes.
And the potential for increased volume and income for well-informed REALTORS® and their firms almost goes without saying! But, there! We said it anyway!
Sustainable building green features are just one way to help create a more sustainable environment.
Stay tuned to In Contract in the coming months for more useful information, including green features, certifications, and programs!
And to learn more about sustainable practices and earn recognition for your business, you may be interested in The City of Columbus Office of Sustainability GreenSpot program.
What a Waste!
The Franklin County Commissioners and the Mid-Ohio Regional Planning Commission (MORPC) recently released a study on energy usage and efficiency in Franklin County. The study found that 69 percent of energy used in the county is wasted due to inefficient building technologies. Meaning Franklin County consumers spent over $3 billion in 2015 on wasted energy.
Tax benefits are still available for going green! Owners of residential and commercial solar systems are able to deduct up to 26 percent of the total cost of a new system on their federal taxes through 2020 and 22 percent starting in 2021. Don’t wait! While congress has extended the tax break since 2007, the tax provision is slated to end in 2021.
Financing Green Upgrades
P.A.C.E. is a government-funded financing program, through which homeowners are able to finance 100 percent of project costs upfront in the form of a lien on their property, paid along with their property tax payments. P.A.C.E. funding may be applied to upgrades like energy-efficient lighting systems, more efficient heating and cooling systems, and solar panels.
Sustainability Certification for Commercial Properties
By Christine Beckman
In November 2019, The U.S. Green Building Council (USGBC) reported surpassing 100,000 registered and certified LEED commercial green building projects.
LEED is a green building rating system that provides for healthy, high efficiency, clean, and cost-saving green buildings through the reduction of carbon, water, waste, transportation and materials.
One way to advance clean energy goals in privately owned buildings in Ohio is through the PACE program (Property Assessed Clean Energy).
PACE is a tax assessment-based financing tool that requires little to no upfront capital for commercial properties, and now also for residential upgrades to sustainability building features.
In 2018, Ohio saw 31 commercial PACE projects, representing 79.1 million dollars in energy-efficient investments (Bricker & Eckler, 2019). The two-building historic Hayden office building in downtown Columbus at 16-20 East Broad Street is an example of a PACE-funded gut rehab project. Upgrades to lighting, HVAC and elevators totaling a financed amount over $4 million dollars is to be paid back over 25 years (Greenworks Lending).
Click here, for more information on Ohio PACE.