Portland, Oregon Passes Landmark Policy to Disclose Energy Performance to Homebuyers

On December 14, 2016, the Portland City Council unanimously adopted an ordinance requiring home energy scores for single family homes listed for sale. This innovative new policy will help Portland create jobs for its home performance contractors and assessors, reduce carbon emissions, and help the city's consumers save money on energy. The Home Performance Coalition (HPC) collaborated with the Home Performance Guild of Oregon (HP Guild), Earth Advantage, and other stakeholders to support the Ordinance’s passage.

HPC is an alliance of like-minded organizations working together to ensure all homes are healthy, comfortable and energy efficient. HPC’s project research strengthens the residential energy efficiency industry. Portland’s new Home Energy Score Ordinance (HESO) will provide information to home buyers on the home’s energy performance so that they can make more knowledgeable decisions about the full costs of operating homes prior to purchase. HESO will help drive consumers toward local residential energy efficiency programs, such as Energy Trust of Oregon and Enhabit, which incentivizes investments in home improvements that lower utility bills, reduce carbon emissions, and increase comfort, safety, and health for home owners.

Buying a home is the largest investment many of us will ever make, but “most houses are sold without consideration of the home's energy performance,” said David Heslam, the Executive Director of Earth Advantage, a Portland-based nonprofit organization that participated in the city's policy development process. “The scale of this policy represents a great opportunity for local real estate and lending professionals to consider it every time a home is put on the market, make it part of their daily activities, and allow home buyers and sellers to make the most out of home performance.”

“Home energy use ratings provide visibility into the amount of energy a home uses and the monthly costs of that energy,” said Don MacOdrum, Executive Director of the HP Guild. “We believe it is a consumers right to know who much energy a potential new home will consume. We also believe it is essential that new home owners understand their home’s energy performance when they move in, just as they are getting ready to make major upgrades in their new investment”. 

Historically, information on a home’s energy performance has not been available to home buyers. However, over the last several years, as consumer interest in energy efficiency as a valued feature of residential properties has grown, HPC, Earth Advantage, the HP Guild of Oregon, as well as other organizations, have been working with realtors and appraisers to make information about home energy efficiency readily available for property listings. This includes the development of labels and scores as well as standards and information technology (IT) solutions that allow for quicker and more automated transfer of home energy data to the real estate community. HESO marks a major step forward on providing consumers with the information they need to make informed decisions on home purchases.

For more information on HPC’s efforts on home energy labeling research please visit: www.homeperformance.org. HPC’s current activities include:

  • As part of the Department of Energy’s Home Energy Information Accelerator (HEIA), HPC is working with leaders in the energy efficiency, real estate, and appraisal industries to update and expand the use of BPI-2101-S-2013 Standard Requirements for a Certificate of Completion for Residential Energy Efficiency Upgrades, commonly referred to as the “Home Performance Certificate.”

    The Home Performance Certificate is a Building Performance Institute standard, managed by HPC, which provides a clear, easy-to-understand description of the home energy upgrade, including predicted energy savings or other performance indicators, such as Home Energy Score. The Certificate is designed to be used as a reference document by real estate agents, appraisers, and other professionals during the home sale process. It is also aligned with the Real Estate Standards Organization (RESO) Data Dictionary and the Appraisal Institute’s Residential Green and Energy Efficient Addendum to allow energy efficiency programs or other third parties to quickly and more cost-effectively share reliable information with the real estate and appraisal industries.
  • HPC has also collaborated with the Appraisal Institute and the Building Codes Assistance Project to adapt the two-page handout, Appraised Value and Energy Efficiency: Getting it Right, to the resale market. The new version, which will be released to the public shortly after the new year, features information for homeowners on the value of documenting the energy efficiency features and performance of a home for appraisers and lenders. The handbook also provides links to a number of resources for contractors, including links to Home Performance Certificate and the Residential Green and Energy Efficient Addendum, to help them document efficiency upgrades for appraisers.

The new year promises to be an exciting time for HPC as we continue to work with our partners to make home energy efficiency visible in the real estate transaction.

- Julie Carcino and Joe Cullen

Julie Caracino is the Home Performance Coalition (HPC)'s Director of Research & Standards and Joe Cullen is HPC's Director of Policy & State Outreach.

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Comment by Tony Hicks on January 3, 2017 at 7:37am

Any news on this policy getting passed in Indiana?

Comment by CharlieK on January 3, 2017 at 7:15am

Amazing how our government keeps putting in place new regulations that increase the cost of acquiring a home. No doubt this new addition will require a consultant that adds cost to the overall buying process. Perhaps one can accept this requirement for a new home since it has no history. But every existing home has a detailed and often lengthy level of documentation which is past utility bills where most utilities are able to provide a month by month reporting of energy used compared to degree days experienced. Certainly actual energy data is a whole lot better than somebody's calculation of such.

Comment by Luke Langhals on December 29, 2016 at 8:52am

This is what every state should begin requiring. Home buyers already are made aware of the insurance, interest, principle, and tax part of their monthly payment....why not the utility performance? My current utility payments represent roughly 30% of my monthly cost to own/occupy my home. In a Net-Zero style construction, I could effectively put the difference towards my mortgages principle. Policies such as this give clear understanding to all home buyers. Whether they care about efficiency or not -- everyone cares about their monthly cost of living. Thank you for sharing.

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