Energy disclosure ordinances near passage

Council members highlight potential cost, energy savings

The Minneapolis City Council appears set to pass a pair of ordinances that would mandate the disclosure of utility costs to prospective apartment renters and efficiency information to prospective home buyers.

The council will vote Feb. 15 on the proposed ordinances, which would go into effect in 2020 and 2021, respectively. A second component of the apartment proposal would require the owners of large multi-family buildings to report energy use and emissions data to the city.

The vote comes as the council continues to work toward its goal of reducing citywide greenhouse gas emissions 30 percent by 2025 and 80 percent by 2050, using 2006 levels as a baseline.

Some council members said the ordinances could spur homeowners to make energy-efficiency improvements that they otherwise wouldn’t. They also said the benchmarking and disclosure requirements for multi-family buildings could prompt landlords to make those buildings more efficient.

Ward 11 City Council Member Jeremy Schroeder, who co-authored the ordinances, stressed that the city won’t require homeowners to make any improvements as part of the ordinance. Rather, he said he hopes the proposals help provide consumer protection and incentivize people to make efficiency improvements.

“This is more or less an opportunity to help a buyer improve a home … and at the same time help the city meet its climate goals,” said Chris Duffrin, president of the non-profit Center for Energy and Environment, which helped the city develop the ordinances.

Roots in climate action plan

The proposed ordinances date back to 2013, when the City Council passed its climate action plan. The plan noted residential buildings accounted for one-fifth of citywide greenhouse gas emissions in 2010, and it listed dozens of steps the city could take to reduce citywide emissions. One was to include the collection of energy-efficiency data in the truth-in-sale-of-housing program.

Kim Havey, the city’s sustainability manager, said research indicates people are most likely to make improvements to their homes right before they sell or right after they buy. He said he hoped the housing ordinance would give people more reason to make improvements.

The apartment disclosure ordinance would require landlords to provide average monthly electric and natural gas costs to prospective renters at the time of application. The homeowner disclosure ordinance would update the city’s pre-sale housing inspection program, known as truth in sale of housing, to include the collection of information on certain components of a home. That would include information such as insulation levels, the type of heating system and the type of windows.

For homes built before 1980, the energy inspection would include the drilling of a 2-inch hole in an exterior wall to verify the amount of insulation. The homeowner would be able to choose the location of the drilling, which would likely be in a discreet location, such as a closet. The housing inspector would fill the hole after the test.

The inspector would subsequently file a report on the efficiency of a home’s energy assets, which would include recommendations on ways the homeowner could improve a home’s efficiency. The report would also include an overall energy score, which homebuyers could use to compare houses when shopping.

Duffrin wrote in a blog post data from other cities indicate a low score wouldn’t prohibit any homes from selling. He wrote that the most energy efficient homes often sell at a premium.

Homeowners would be responsible for the cost of collecting the additional information during the truth-in-sale inspection, which typically costs around $225. They would be exempt from the energy inspection if they get a Home Energy Squad visit.

The collection of the additional energy information would take approximately 15 minutes, according to Duffrin.

The city would not require the homeowners or homebuyers to make any improvements as part of the policy. But it is offering interest-free financing for upgrades, and utility companies have rebate programs available to those homeowners who do wish to make changes.

Reducing costs

Duffrin said that approximately 70 percent of Minneapolis homes do not have adequate insulation, which helps keep homes comfortable in both the summer and winter. He said Minneapolis homebuyers should have that information, especially given the city’s cold winter climate.

Schroeder and ordinance co-author Cam Gordon said the policies would have the added benefit of helping renters better understand their utility costs, which can add up to hundreds of dollars per month.

During a Feb. 4 public hearing, Luke Grundman, an attorney with Mid-Minnesota Legal Aid, said the cost of energy is already a big deal for low-income renters. He noted how one client spent $200 a month in rent — thanks to a housing voucher — but $500 in heating bills in winter, because of her home’s lack of insulation and her son’s care needs.

There’s a remedy for that particular client in court, Grudman said, but most folks don’t make it to court or have a lawyer to represent them.

“This ordinance, I think, levels the playing field for everyone involved and could make housing a lot cheaper for folks out there,” he said.