Real Estate Portion of Energy Bill Succeeds

By Robert Freedman, Senior Editor, REALTOR® Magazine

As you would imagine with any federal bill dealing with energy issues, NAR members have taken considerable interest in climate change legislation that passed the House late last month. It’s called the American Clean Energy and Security Act, H.R. 2454.

Although NAR lobbied extensively on the bill, the association’s focus was entirely on a narrow group of provisions that directly impact real estate. The association never took a position on the overall legislation, which is almost 1,500 pages long and gets into issues that are far outside the scope of real estate.

What’s significant about the legislation, from NAR’s standpoint, is what it doesn’t do. In the early stages of the bill’s development, there was considerable concern over provisions that would require all houses, at the time of sale, to be audited and labeled according to their energy efficiency.

You can imagine the impact of such a requirement on existing homes, particularly older existing homes. Leaders of NAR in communication to lawmakers made it clear that such a labeling requirement would strike a blow to real estate sales at a very challenging time in the market. As it was put by David Wluka, a REALTOR® who testified in the House for NAR on energy issues in mid-June, “During this time of economic crisis, many families and commercial property owners do not have the financial resources to make needed energy-related improvements. Adding to the cost of homeownership would compound the challenges many homeowners are already facing.”

The argument had an impact and the bill, as it passed the House, dispenses with the labeling requirement for all existing homes, multifamily properties (apartments), and commercial buildings. What’s more, any labeling requirements, including for new homes, would be decided at the state level, with the federal restriction that no labeling could be imposed during the sale transaction.

Other real estate provisions widely recognized as ill-conceived were cut from the bill. There was a retrofit requirement. That was removed. There was a private right of action for halting buiding development on environmental grounds. That was removed.

What’s left are a few provisions that are market sensitive, including one that provides financial incentives to property owners to voluntarily retrofit their property. That’s clearly a win-win for everyone involved.

Attention is now in the Senate, but it’s unclear when its big climate change bill will get to the floor for a vote. Since that bill is still under development, it’s impossible to say whether it would be better or worse than what the House produced, but we know that it’s less prescriptive than the House was originally on many of its real estate requirements. That’s a good thing.

Given the scope of climate-change legislation and the array of interests that weigh in on the issues, getting everything you want isn’t a realistic option. That REALTORS® succeeded in eliminating prescriptive requirements that so clearly needed additional thinking is noteworthy, even though more challenges are to come as the Senate moves forward on its version.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. The government should focus more on getting consumers to make their homes more energy efficient instead of trying to install some set of standards that thousands of home owners have no hope of meeting.

  2. B West

    I can only imagine the devastation this would cause our aging population when trying to sell their lifetime investment, their home.

  3. dhines

    I mean com’ on.we still have homes with no plumbing, here in texas !!!!!!!!!!! Not gonna happen…………
    I believe energy issues need to be addressed. However to require the current home owner to fix existing problems, prior to selling will increase the impact of home sales already causing catostrphic mayhem on the economy. Not only that, some homeonwers do not have the financial means to replace these items. As stated earlier by another respondant, have an incentive for the consumer (buyer) to fix these problems, but do not make it mandatory. However, any “New Homes” being built should be built with the newer guidelines.
    There is aleady a price gap for those who have increased the efficency of these older homes, and those who have not……………..this is called competition… get what you pay for !

  4. Eric Guggenheimer

    I disagree with NAR. We (Americans) clearly lack basic energy efficiencies in our homes. The provision only required an evaluation so consumers can make informed decisions.

    We are going to enter a period of high inflation and scarcity of resources, as a consumer I would like to know if the home I’m buying wastes 20,30,40 percent in energy cost. An 80% furnace spits out .20 cents of every dollar out the tail pipe. For the first world country we live in, we sure dont construct homes with quality in mind.

    At what point are we going to start making the tough decisions. Yes its hard, yes its the right thing to do, yes we can pull together as a nation and get it done. NAR wants health-care for agents, its hard to fight the special interests, but its the right thing to do. Energy efficiency is the right thing to do, so NAR is now the special interest preventing progress.

    Go figure, the circle of special interests in Washington DC………