Washington, D.C. – Colorado U.S. Senator Michael Bennet and Colorado U.S. Representative Ed Perlmutter introduced the Getting Renewable and Energy Efficient Neighborhoods (GREEN) Appraisals Act, a bill to encourage energy-efficient and clean energy features to be considered as part of the residential homebuying and appraisal process. The GREEN Appraisals Act aims to ensure home appraisals accurately reflect the value of renewable and energy-efficient features of a property. The legislation would also help standardize the value of energy-efficient features across the housing market, encourage green, sustainable building practices, and support green jobs in the housing industry.
“Making homes more energy-efficient and installing clean energy technologies saves consumers money and is critical to building a 21st century clean energy economy,” said Bennet. “Our legislation will help ensure the full value of those investments are reflected in property appraisals, creating a more accurate and complete picture of a home’s value. This is a win-win that will help cut costs, reduce emissions, and advance clean energy.”
“This bill will work to incentivize and develop a more energy-efficient housing supply, an important piece of the puzzle in the fight against climate change,” said Perlmutter. “By encouraging energy efficiency and energy conservation, homeowners can reduce their energy costs as well as their carbon footprint.”
“The GREEN Appraisals Act is a critical step in the right direction that will allow homeowners to capture the value of energy efficiency upgrades,” said Robin LeBaron, President and Co-Founder of Pearl Certification. “From the outside of a home, it is impossible to tell if it is net-zero. This bill will provide the tools to make sure home appraisal prices are more accurate in including even those aspects we cannot see, as well as empowering homeowners to think beyond simply upgrading their countertops or floors when looking to sell.”
Specifically, the energy appraisal will take into consideration the energy efficiency characteristics of the property, any renewable energy-related features, estimated energy savings, the energy consumption for the property compared to similar properties, and whether such characteristics are relevant to the market value of the property. It also requires additional training for appraisers in order for them to qualify to provide accurate green appraisal reports.
The bill also directs the Federal Housing Administration (FHA), Federal Housing Finance Agency (FHFA), and Department of Veteran Affairs (VA) to require lenders, when making the disclosures under the Real Estate Settlement Procedures Act (RESPA), to notify home loan borrowers they have a right to request an energy report as well as a right to provide an energy report to the lender or a qualified appraiser which must take the energy report into consideration when developing an opinion of value for a home.
The GREEN Appraisal Act is supported by: the American Society of Appraisers, Building Performance Association, E4TheFuture, National Consumer Law Center (on behalf of its low-income clients), and Pearl Certification.
The bill text is available HERE.
In March 2022, Bennet welcomed funding from the bipartisan Infrastructure Investment and Jobs Act (IIJA) to help Colorado families make their homes more energy efficient and more resilient to climate change, while improving public health. This IIJA investment will help low-income households make weatherization improvements and upgrades to their homes to increase energy efficiency and reduce energy costs.