American Clean Energy & Security Act of 2009. Thanks Henry.

What a day. I've got 9 pages of notes from today's Real Estate Forum convened by NAR and a couple more pages from our Land Use Committee meeting so I'll divide this post into a couple parts and only try to pass along some of the most relevant comments.

Let's start with the Land Use, Property Rights and Environment Committee. I enjoy being a part of this committee because to me, this is what real estate is all about - the preservation of property rights and the advocacy thereof. Of the numerous issues discussed today, I'll comment on my favorite - and please keep in mind these are my comments and observations, not that of the committee and certainly not NAR.

The first issue, which you've probably heard about and hopefully responded to the recent Call-For-Action on, is the so-called 'American Clean Energy and Security Act of 2009'. Jeez what a moniker, eh? How can you possibly be against anything that promises both clean energy AND security? Well it's easy.

This bill, introduced by one of my favorite (heh) state legislators, Henry Waxman (D-CA), is the so-called Energy Star Building Efficiency Bill that seeks to develop a labelling system for every home & building in America.  Yeah, really! There are so many problems with this 685 page bill it's hard to enumerate them all - but let me mention a couple. 

First off, it contains the deadly 'Point-of-Sale' provision similar to the language in the Nunez Home Audit bill we defeated in CA last year. Also similar to that bill, this POS would mandate an inspection prior to COE by person or persons unknown, to determine the energy efficiency of a home or commercial building. Who knows what all they would be looking for (as usual, it's not spelled out in spite of the 685 pages), who would be certified to do the inspections or how sweeping the search would be. But the goal is to be able to certify the 'energy efficiency' of a structure and give you a little gold star to put by your door with that inspectors opinion on it. 

So, for example, if you've got single pane windows, they might knock 10 points off. R-30 insulation? add a point. Low-flow toilets? Add 15 points. Gas bill comes to $187 in December? Hmmm, how much was your neihbors bill? Electric bill comes to $347 in July, lose 15 points. And so on. The higher your home scores, the more money you can sell it for. In theory.

So lets say the above scenario garners a 325 Energy Star rating for your home. But your neighbor pulls down a 479 for the same house. Why? Is his home more energy efficient? No, he only comes home on weekends so the AC rarely runs and his electric bill is only $64. His lawn is dead because he spends no money watering and he passes out drunk on the couch in front of the fireplace so his gas bill is only $11. Yet his home will be 'Energy Star' rated higher than yours and should sell for more as a result. Make sense? It does to Henry Waxman.

Both CAR and NAR oppose this legislation as it includes POS mandates, adds unnecessary costs to transactions and has been shown to be an ineffective tool for implementing energy efficiency. It will also stigmatize older properties, cause a further deterioration in home value and will further weaken the national economy. Labeling every structure in America will not, in and of itself, save energy or reduce costs but try telling that to Henry Waxman. Fresh off a 15 year battle with big tobacco and recently ensconced in his cushy new committee chair, Waxman's got a bug up his butt (or maybe it's just his head) about energy now and has the bully pulpit to try to pull this off. 

On the other hand, NAR wholeheartedly supports increased energy efficiency, especially as  outlined in HR 1778 (Welch, D-VT) and HR 1573 (Van Hollen D-MD) which provide incentives for energy retrofits, provide matching grants to states to encourage energy conservation and provide zero interest loans to make it happen. That's the way to get something done - identify the goal and incentivize people to get there - not create a whole new level of bureaucracy, inspections, little energy stars and point-of-sale mandated costs. 

This bill is also referred to as 'the environmental attorney's wet dream act of 2009' because it would allow ANY individual to stop ANY development or project simply by claiming it did not meet federal standards, forcing costly legal battles and project re-designs to attempt to comply with specious requirements. While most people realize there are necessarily regional differences in building design and and construction, this bill ignores all that with a one-size-fits-all approach mandated nationwide.  

It's not good legislation and we'll be talking with our legislators over the next couple days so they get the point too.