Angry in the Great White North

When you sell a house, the potential buyer will always ask for a year's worth of utility bills.  If you sell through a real estate agent, the agent will invariably ask for that information before listing the house.

Now house sales will require an energy audit:

Consumers, businesses and energy experts are panning the McGuinty government's new green regime as a waste of time and money when the province should be focusing on strengthening the economy.

[It] will require home sellers to conduct an energy audit on the home they are selling.

The audit, which costs about $300, will point out where a home can increase its energy efficiency, McGuinty said. His advice to sellers: negotiate with their buyer and try to build the cost of the audit and any improvements into a sale price.

The Ontario Real Estate Association disagrees. It said there is nothing simple about the new audit. Gerry Weir, president of the OREA, warned the audits could end up costing sellers thousands.

"It's not the initial cost of these audits that concerns us," Weir said in a release. "These audits will be used by home buyers as bargaining chips to significantly reduce the final selling price."

If I have a year's worth of utility bills, I already have an idea of how efficient the house is.

In fact, I have an excellent idea, because I have empirical data to go on.  What is the audit going to do other than give me some inspectors opinion?  Tell me the house needs new windows?  That the ductwork in the basement ought to be taped where there are gaps?  Tell me that the furnace is ten years old, something I could tell for myself from the installation sticker on the unit?

The fact is, there isn't much you can do with a house to make it more energy efficient.  Wrap the hot water pipes in insulating tape.  Fix up the weatherstripping.  New windows?  Sure, why not?  And if it's a 150-year-old historical property, then I know it's not efficient, and there is little I'd be allowed to do about it (if the home is designated historically significant).

And I paid $300 for someone to tell me the obvious?

How is this different from a regular home inspection?  A regular home inspection is going to cover many of the same points.

All these inspections will achieve is to suppress home sales.  It'll be interesting to see if a market for bogus energy audits is created, with the tacit approval of real estate agents.  Inspectors recommended by real estate agents because they are known to almost never find problems except for the most obvious ones that anyone would spot.  The $300 is paid, the government gets its cut, and nothing is reported in the audit that would otherwise affect the negotiations on either side.

That would be a good thing, in my opinion.  A better thing would be to get rid of this energy audit idea entirely, but Dalton McGuinty won't listen if there's a chance to create a new pseudo-tax.

But for now, assume these audits will look for any excuse to suggest thousands of dollars in improvements to save a few bucks on the hydro bill.  In that case, consider an older home, built to standards as they stood 40 years ago.  Who lives in these homes?  Retirees, for whom this was the family home.  The kids are now gone, and the home represents all their equity.  Now it's too big for them, or perhaps one has passed away, and the surviving spouse decides it's time to move into a smaller home, or in with one of the kids. 

And the reward for holding on to a home for so long, and for building up that nest egg by paying off the mortgage?  The reward is to be told that the asking price will have to drop by twenty thousand or more because the windows could be newer.

Of course the windows could be newer.  Everything could be newer.  It's an old house.  These audits are going to hurt older homeowners disproportionately.

Older homes built to older codes are going to be hardest hit, which means Ontario's most vulnerable homeowners, the elderly, are going to be hurt the most, while affluent young and middle-aged people buying home are going to benefit.

The more I think about this, the more I come to think that the net effect of this idea is to act as an inter-generational wealth transfer (from older people, who tend to vote Conservative, to younger people, who vote Liberal).  Energy efficiency won't be helped at all.