Connecticut bill would give homebuyers, renters more transparency on energy costs

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The legislation is backed by state environmental groups and regulators but opposed by the real estate lobby.

Connecticut environmental regulators are backing legislation that would require homeowners and property managers to disclose a residence’s energy costs when selling or leasing.

Property owners would have to provide the previous year’s worth of energy bills at a potential buyer or renter’s request. Owners of single-family homes or rental properties of no more than four units would be exempted from that requirement if they disclosed a Home Energy Score through a multiple listing service or on websites where the property was advertised.

The legislation is intended to provide more transparency around energy costs for homebuyers and renters, while at the same time giving property owners an added incentive to make efficiency improvements, said Katie S. Dykes, commissioner of the Department of Energy and Environmental Protection, in testimony submitted to the Energy and Technology Committee last week.

Similar legislation was floated unsuccessfully in Massachusetts two years ago. Republican Gov. Charlie Baker proposed making a home energy audit a mandatory part of the home-selling process.

This bill takes more of a side-door approach, giving property owners the option of simply handing over energy bills instead.

But as in Massachusetts, the real estate lobby is lining up against the measure, arguing that energy bills can be misleading.

“Larger households with multiple teenagers may have energy bill histories that don’t necessarily accurately reflect the efficiency of a home and could negatively impact efforts to sell,” said Jim Perras, chief executive officer of the Home Builders & Remodelers Association of Connecticut. “A 12-month energy bill history is arguably more indicative of the size, age and habits of a home’s existing residents than the efficiency of the home.”

The requirement would also be unfair to owners of rental properties, who have little control over residents’ energy usage, said Bob De Cosmo, executive director of the Connecticut Property Owners Alliance, an advocacy group.

“My beef with it is, what if the previous tenant was irresponsible, left the windows open and was getting energy assistance and didn’t care what the bill was?” he said. “Versus someone who put on a sweatshirt and kept the thermostat at 64 degrees.”

A Home Energy Score, available through Energize Connecticut for single-family homes and multifamily properties of four or fewer units, gets around potential individual variability. The rating, between 1 and 10, is based on a home’s structure, envelope and systems, not an individual owner’s energy usage. The assessment costs $75, and comes with services such as air sealing and LED light bulbs, as well as a list of recommended efficiency upgrades.

Dykes compared it to a “miles-per-gallon” rating and said the program has so far generated about 35,000 scores statewide.

The legislation also allows homeowners to use the Residential Energy Services Network’s Home Energy Rating System, commonly known as the HERS Index.

But the Connecticut Realtors organization argues that scoring systems are also unfair, saying in testimony that “energy labels can inaccurately stigmatize properties.” The organization’s government affairs director, James Heckman, declined to comment further.

Only a few states have laws requiring residential energy disclosure, according to Ben Somberg, communications manager for the American Council for an Energy-Efficient Economy. Hawaii, for example, requires property owners to provide electricity costs for the previous three months when selling or leasing. And Kansas requires sellers of new construction to provide information about the building’s thermal efficiency.

Several environmental organizations have expressed support for the Connecticut proposal, including the Connecticut League of Conservation Voters. Executive director Lori Brown said a disclosure requirement could prove especially beneficial to renters by helping them avoid apartments with unaffordable utility bills. As a renter herself, she was once caught by surprise in a townhouse where the electric bill hit $500 several months of the year, she said.

Brenda Watson, executive director of Operation Fuel, a statewide provider of energy assistance, said she supports any effort to make low-income renters more aware of “what situation they’re getting into.”

But it’s also important to enlist more property owners to make efficiency improvements to their units by allowing renters to tap state and federal programs, she said. She would like to see a law that encourages property owners to provide new residents with applications for those programs at the time they sign their lease.

“Then when that tenant moves out, the new tenant is not moving into a unit that needs to be weatherized,” Watson said.

Austin, Texas, is one of a handful of municipalities across the country that mandates disclosure of a home energy rating as part of the selling or leasing process. The city has been successful at getting larger multifamily property owners to comply and also make improvements because the energy audit generates an index giving apartment-seekers a comparison with other units across the city, said Denise Kuehn, director of energy efficiency services for Austin Energy, the city utility that runs the program.

Renters may also search for energy-efficient apartments through the city’s data portal, she said.

Source: energynews.us