Will the Cap and Trade Bill Have an Impact on Housing Sales?

By
Real Estate Agent with The Buyers' Counsel

House with reflectionIn the interest of creating a better environment, new legislation that is along the lines of the Waxman-Markey Cap and Trade Bill is scheduled to be unveiled by the end of the month.  The bill will include language for a new National Building Code calling for homes to be more energy efficient. 

With regard to new construction, there have been some notable innovations in green building designs and the use of these should be encouraged in new homes.  

However, according to a recent article, the proposed code has a provision which would mandate that all housing transactions be required to undergo and pass an environmental inspection.  In older home sales this could be significant.  Windows that are not airtight and appliances that are not Energy Star certified would have to be replaced before the sale could happen.  

The fear is that this bill could possibly affect the sales of "fixer-upper" homes; however, I cannot honestly see the government moving in with these types of restrictions at this point which would severely impact the sale of the huge inventory of foreclosure properties now sitting on the block with millions more expected.   

Currently, sellers in Massachusetts and many other states are mandated to have smoke and carbon monoxide detectors as a requirement before any property can be transferred.  Also, owners with private septic systems must have a Title V inspection and it fails, they are required to remedy the problem by installing a new septic system. 

Most people are onboard with these items since they have a huge impact on safety and protecting the environment.  However, if home sellers have to repair every problem prior to a sale, it could significantly drive up the cost of selling a home.  

At a time when the country is spending countless sums of money to shore up the housing market with a first-time tax credit and the possibility of extending and expanding this program, it seems contradictory to come up with legislation that could sabotage these efforts. 

I will be on the lookout for more clarification of this bill in the coming weeks and hope that the stir about it is more smoke than fire.  

With the housing market still in a depressed state, it is hard to imagine that the government would choose this time to make housing sales more difficult.

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Re-Bloggged 4 times:

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  1. Vicky Henry 09/26/2009 08:34 AM
  2. Dana Devine 09/27/2009 08:38 AM
  3. mike gorman 09/28/2009 08:43 AM
  4. Sandy Mitchell 09/28/2009 05:41 PM
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Anonymous

Cap and Trade is really all about TRADE - trade the credits back and forth like a bushel of corn or a barrel of oil in the trade board and pocket the premium! It will do nothing for anyone in our profession or for our customers and clients.

What will happen when the $8,000 tax credit expires and the latest flood of REOs hits YOUR neighborhood? All the appraisers marking "Stable" or "Increasing" prices on the 1004MC will have been wrong.

September 28, 2009 04:43 PM
Rainmaker
197,630
Mark Velasco
Friendly Hills Homes for Sale - Whittier, Ca. Real Estate - Listings
Realty Source, Inc (Luxury Homes Division)

I hope that this is not the case Claudette. Most Sellers have very little equity to work with as it is.

September 28, 2009 08:31 PM
Anonymous
Anonymous

Cap and trade is going to pass, so why argue if it is good or bad?  Of course it will be bad for the economy, jobs, us, etc., but hey, at least the lawyers will be getting paid.  And that is why it will pass.  Who do you think writes the bills? The other reason it will pass is that everyone is so preoccupied with healthcare, no one has noticed this has already passed the house.  Oh well, get ready to double your electricity costs.

September 28, 2009 10:58 PM
Rainer
31,150
George Wilson
Lincolnton, NC

Diane #97: First, the cigarette tax was conceived to reduce smoking related health problems; just like the bill running through HOUSEcommittees to add a 4% surtax on all times of food that uses or contains sugar( IE milk, bread, baked products, soda, enriched water, etc) yogurt to reduce obesity related health problems; reduce waste in our dumps by adding 3% surtax on product containers. Like any new Congress bill it will create jobs on one side & reduce jobs on the opposite side. I have seen new businesses locally that to increase efficiency & reduce waste caused by human error are using automation (factory that 5 yrs ago would require 100 employees now need just 25). I agree that Eco-friendly building codes are good on many levels but if to be mandatory then mandate on new construction not on older buildings.

Cap & Trade will probably pass. It will create jobs but the unintended consequences is also a loss of jobs. As has happen locally, when businesses see a net capital loss to their stockholders (IE textile & furniture mills) the jobs move overseas with lower business costs. The idea of mandating energy efficiency on older buildings is ludicrous; do you think REO/Bank owed properties are going to be fixed to meet this standard; I don't think so as they are already selling homes "As Is w/ no repairs" w/ no HVAC systems.

As for environmentalists, IMO follow a plan of do as I say not as I do. They are so concern about the environment that they fly or drive to their meetings and usually by themselves (don't count the pilot, the aircrew or support staff).  Use technology to hold your meetings or use public/commercial transportation to get where you have to be. I have seen real estate caravans using multiple cars instead of 1 bus for all; excuse is always I have to meet a customer so I have to drive myself so I can meet them when they call. How about having customer meet at office then carpool to see properties? Don't say you're for protecting the environment but then drive by yourself to multiple properties to show a customer his/her list of homes.

Finally, For all the "climate warming" people, I read somewhere in a scientific journal that a steady increase in human carbon footprint was showing up in Arctic ice samples around the 1700's sandwiched between volcanic ash from eruptions in Europe & South Pacific. It then jumped dramatically during the industrial revolution & expansion. A simple but extreme solution to significantly reduce human carbon is for the world to revert to a 1700 business model & we all become farmers.

October 08, 2009 10:41 AM
Rainer
332,837
Paul Gapski
619-504-8999,#1 Resource SD Relo
Berkshire Hathaway / Prudential Ca Realty

yes they look so nice but Foreclosures are such tough on to stomach.

September 12, 2011 02:17 AM
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Rainmaker
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Claudette Millette

Buyer, Broker - Metrowest Mass
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