Austin, the fourth largest city in Texas, established a goal of offsetting 800 megawatts of peak energy demand by 2020. The city’s Energy Conservation Audit and Disclosure (ECAD) ordinance has begun to bear fruit by inserting energy-efficiency into any real estate dialogue. Sierra Club Green Home CSO Jennifer Schwab sat down with Carlos Cordove and Heidi Flaspar of Austin Energy to discuss the success of this program.
The ordinance, adopted in 2008, requires sellers of homes over ten years old to have an energy audit performed and then provide the report to the buyer prior to sale. This enables the buyer to either request energy-efficiency upgrades as part of the transaction, or to undertake them after closing. The ECAD audit addresses aspects of the property such as the condition and estimated R-value of the attic insulation, the percentage of air leakage through the duct system, and the energy-efficiency rating of the air-conditioning equipment.
Although the ordinance does not mandate any upgrades to single-family homes, the audit reports, which include suggestions for improving the home’s energy efficiency, allow buyers to make more informed purchasing decisions. An earlier proposal would also have required sellers to provide copies of utility bills, but that requirement was eliminated because how much energy any one family or person uses can vary so greatly.
The ordinance also imposes energy-efficiency requirements for multifamily and commercial properties. Multifamily properties must undergo an energy audit, and the owner must post the results on-site. The owner must also provide the report to current and prospective tenants, as well as to the city-owned electric utility, Austin Energy. High energy-use properties, defined as properties using more than 150% of the average energy use per square foot by multifamily properties in the Austin Energy service area, must reduce their energy use by 20% within 18 months.
Owners of commercial properties are required to submit energy benchmark ratings to Austin Energy annually, using Energy Star’s free online energy management tool, Portfolio Manager. This requirement took effect in June 2012 for the largest properties, phasing in over the next two years for smaller properties.
The city has coupled the mandates of the ECAD ordinance with significant rebates from Austin Energy for energy-efficiency improvements. In the first year the ordinance was in effect, approximately 5% of homes subject to the audit requirement had been improved through this process, with about half of those being undertaken by the seller and the other half by the buyer. The city hopes to increase that rate to 25% of all audited homes, and is using the information collected through the audit process to develop additional strategies to improve the success of the initiative.
Nearly four years after the ordinance was adopted, it still has its detractors, particularly in the area of residential sales. Some oppose the ordinance due to the cost to sellers or because it changes the balance of power in real estate transactions, while others argue that it doesn’t do nearly enough to compel sellers to make improvements or to encourage buyers to do so.
However, it is undisputable that Austin’s ECAD ordinance has led to energy-efficiency improvements to hundreds of buildings across the city. As an Austin Energy representative told Sierra Club Green Home, “Austin Energy and the City of Austin are clearly taking steps to influence building owners’ behavior with regard to energy-efficiency upgrades.” That influence will only become more significant as building owners come to realize the true value of the energy data and the benefits of making improvements.
For more information about the Energy Conservation Audit and Disclosure ordinance, see Austin Energy’s ECAD webpage.