New Resources for Cities to Unlock Housing Improvements

As we all spend significantly more time inside our homes during COVID-19 shelter-in-place and stay-at-home orders, understanding how our homes perform (and the implications for affordability, comfort, and health) has arguably never been more important. And yet in most parts of the country, the status-quo is that residents have no way to access information about the performance and expected energy costs of a home before they move into it.

City policymakers can play a critical role in addressing this major blind spot—not only from a consumer protection standpoint given the changing economy, but also with added benefits in terms of community and economic development, climate action, and resilience.

Cities interested in tapping into these benefits for their constituencies now have an opportunity to join an online community of their peers to advance policy development. RMI is announcing this online community for cities to access technical assistance resources, peer learning, and other support.

Home Energy Labeling

Among the chief mechanisms for providing critical home performance information are residential energy labeling and disclosure policies. Such policies require sellers and/or landlords to make this information available to prospective buyers and/or renters at a specific moment in the real estate transaction process.

Labels provide succinct details about a home’s energy consumption, costs, and emissions based on its physical assets. They include specific upgrade recommendations and connections to local contractors and financing products that enable residents to save.

These policies can also unlock market activity in support of the city’s goals. They can create new pathways for local contractor businesses, utilities, lenders, and cities themselves to better target resources for home energy improvements—especially in ways that reduce energy burdens and improve outcomes for lower income households.

Environmental, Social, and Economic Benefits

Since the residential sector is responsible for 20 percent of US carbon emissions, cities will need to address emissions from homes in order to meet their climate goals. But as the saying goes, “You can’t manage what you can’t measure.” Home energy assessment tools such as Home Energy Score create the equivalent of a “miles-per-gallon” metric for homes and make emissions visible, which is the first step in RMI’s framework for enabling the transition to clean energy.

This metric is important for the market as well. Home energy labeling can provide a critical mechanism for markets to start valuing home energy performance and thereby incentivize home energy improvements at a greater scale.

Home energy labeling programs can also have considerable social and economic benefits. Since many energy efficiency workers have been furloughed or laid off during the COVID-19 pandemic, these programs can help retain and create jobs for energy assessors, inspectors, and home performance contractors, which will benefit local small businesses and residents. Home energy assessments can be done virtually in ways that engage homeowners in the process, allowing project pipelines to continue to build during periods when on-site work is disrupted.

There are also benefits for lower income households, which spend a disproportionate amount of their income on energy bills. These policies can help homeowners make informed investments in efficiency measures that reduce this burden. Programs can be designed thoughtfully to take advantage of new and existing financing products that can reduce barriers to low-income customers accessing home improvements such as weatherization and HVAC incentives.

And finally, while many current home energy labeling programs do not explicitly include resilience, cities can choose to develop and incorporate criteria that ensure homes are safe for a longer period of time, especially in extreme weather events.

The city of Minneapolis’ time of listing disclosure policy went into effect earlier this year. Six cities in the United States have now passed residential labeling and disclosure policies and two other cities have publicly announced their progress on passing the policy as shown by this map, while many others are actively exploring the option. In Austin, Texas, 12 percent of homeowners pursued energy efficiency upgrades based on the audits required by the city’s home energy disclosure policy, and significantly higher retrofit conversion rates were found in international jurisdictions with similar policies in place.

Join an Online Community of Cities Advancing Home Energy Labeling Policies

Earth Advantage and Rocky Mountain Institute teamed up with 22 cities serving over 19 million people in the United States and Canada on a program last year providing technical assistance to support the development of home energy labeling policies. In addition to policy fundamentals and best practices, this program covered many topics including equity, stakeholder engagement, data considerations, compliance, and enforcement strategies.

In the exit survey, a representative from one participating city said that “RMI and Earth Advantage were extremely well organized, diligent, and grounded in the realities of municipal barriers. [It was] the most impressive third-party support I’ve been a part of.” One hundred percent of the cities that participated in the exit survey agreed that they would recommend this program to other cities and that the program helped improve the quality of the policies their city will implement.

In the spirit of greater transparency, we are opening up the content, resources, tools, and discussion forum from this program and inviting new cities and municipalities to join in on the discussion, peer learning, and latest developments and advancements of this work at a critical time. Municipalities will have access to policy blueprints, workshop content and recordings, and all the resources provided to the original cities that participated.

While the timeline for implementing new policies is understandably variable in cities around the country, now can be a good time to learn and get an initial policy framework in place as a powerful lever to help bring post-crisis economic, social, and environmental goals within reach. Interested city and county government employees should reach out to Sneha Ayyagari at sayyagari@rmi.org or Anthony Roy at aroy@earthadvantage.org to join this online community or provide feedback.