Homeowners could soon have a new reason to button their homes up tight: a bad grade on an energy-efficiency report card.
Governor Charlie Baker on Tuesday filed legislation to require a home energy rating to be included in listings when a property is offered for sale.
The bill, if approved by lawmakers, would make Massachusetts the first state in the nation with such a requirement.
Proponents say the bill could prompt homeowners to modernize their homes by adding insulation, replacing windows, or installing high-tech HVAC systems. But it’s also possible many sellers in a hot market would simply take their chances with the score cards — potentially the real-estate equivalent of a scarlet letter — without making improvements.
Matthew Beaton, Baker’s energy and environmental affairs secretary, said he hopes such ratings would spur people to invest in energy-efficiency measures and help to lower carbon emissions across Massachusetts. Officials say that residential heating, cooling and electricity usage accounts for about one-quarter of the state’s greenhouse gas emissions.
“This is a market-based incentive to give the consumers a reason . . . to make an investment,” said Beaton, who worked as an energy-efficiency consultant before he joined the Baker administration.
“What we’re trying to do . . . is make a unified score that is digestible and understandable, that the general public would grow familiar with.”
It’s unclear how much support Baker will have in the Legislature, which wraps up its formal sessions for the year at the end of July. The Senate is expected to be favorable: It approved similar legislation two years ago, as part of a broader energy bill, but the measure didn’t survive the negotiations with House leadership. The real estate industry fiercely opposes the concept, while environmental groups back it.
“It seems like a no-brainer to know whether you’re going to have to wind up spending a lot of money on new windows and insulation . . . and to be able to compare that [with] other homes,” said Caitlin Peale Sloan, a staff attorney with the Conservation Law Foundation.
Home sellers would have the option of hiring an energy assessor, Beaton said, which today costs between $200 and $300, or going through the Mass Save program, which provides funding for energy audits and home efficiency measures, or through a local municipal light company.
A possible model for the grading system has been tested in the Springfield area, where nearly 4,000 homes have been rated on a scale of zero through 300, with the more-efficient homes getting the lower scores.
Only a few US cities require home energy report cards, including Berkeley, Calif. One got underway this year in Portland, Ore., where home sellers are required to have their house rated, on a 1-to-10 scale, with 10 being the most efficient.
Brokers said they haven’t seen a major negative impact on real estate sales.
“If you go into some beautiful old house in a cool neighborhood in Portland, and you love it, there’s no way you’re going to go, ‘Forget it, we got a 3,” said Mickey Lindsay, president of Oregon First, a brokerage in Beaverton, Ore.
But Portland broker Mark Wheeler said there have been a number of cases of sellers receiving reviews that contain mistakes. “People are spending $200, $300, $400 on a piece of paper that’s fundamentally flawed,” he said. “It’s such a hot market that buyers don’t care. But the scores are inaccurate, and I think the buyers are catching on to the fact it’s a ridiculous piece of paper.”
In Berkeley, the assessments haven’t hurt the market, said Ira Serkes, a broker in that city. “As long as you get it to the buyer before they make their offer, it’s a nonissue,” Serkes said.
But in Massachusetts, the real estate industry is bracing for a fight. The Massachusetts Association of Realtors said low-income neighborhoods would suffer unfairly, because many residents cannot afford to make their homes more efficient.
“The elderly will be gravely affected,” said Melvin Vieira, a real estate agent in Jamaica Plain. “So will be those who are just living paycheck to paycheck. It’s going to create a stigma.”
Realtors are also concerned a new mandate could complicate the home-selling process.
“It’s going to be fraught with failure, and it’s going to create huge problems with real estate transactions,” said Greg Vasil, chief executive of the Greater Boston Real Estate Board. “If it was voluntary, as part of a home inspection, I don’t think anybody would argue with it at all.”
The state’s environmental groups say the potential benefits far outweigh the possible drawbacks. They liken the score cards to energy ratings that already exist for appliances and autos.
“Having a home energy audit required at the time of sale would give consumers the same footing they have when they walk onto a car lot,” said Eric Wilkinson, the director of energy policy at the Environmental League of Massachusetts.
“This is going to be a great opportunity for us to move the ball forward on energy efficiency.”