Alaska leads the way in energy-efficiency appraisals
Easy-to-understand star rating system allows Alaskan appraisers to put a dollar value on energy saving features of a house
Since Alaska home appraisers began four years ago to factor in the cost of energy-efficiency features into the overall value of a home, public response has been increasingly positive. That's the word from Tim Sullivan of the Alaska Craftsmen Home Program (ACHP), who says houses with energy efficient features are appraised at five to ten per cent higher than those without.
Alaska appraisal forms now take into account the costs of extra insulation, HRVs, energy-efficient windows and appliances, they even put a dollar value to homes that are positioned to take advantage of passive solar energy.
Alaska is the first, and so far the only state, to adopt the practice.
How did ACHP manage to get appraisers plugged into the energy retrofit movement? Sullivan explains: "When we formed our board of directors as a non-profit corporation in 1989, we made sure there was a member of the Appraisal Institute on the board. That person became educated about energy efficiency and he, in turn, educated the people in his industry."
The recognition of energy-efficiency features in appraisals, with the support of local home builders' associations, was based on the energy rating system used in Alaska and another dozen or so states. The "Energy Rated Homes of America" system ranges from one star, for a small number of simple upgrades, to five star plus which is roughly equivalent to Canadas R-2000 standard.
The appraisals do not put a dollar figure on the potential savings of energy retrofitting, since life-cycle costing is not part of appraisals. However, Sullivan says, thanks to the energy rating system, financial institutions and real estate sales practitioners are now aware of the benefits both to the environment and home operating costs, and are passing the word on to their clients.
For more information:
luxury hotels in BrightonTim Sullivan, Alaska Craftsman Home Program Inc., (907) 258-2247
Where does Canada stand?
Dave Kingsley of CMHC in Whitehorse says Alaska has simply made energy efficiency upgrades part of the official appraisal form. In Canada, there is no specific line on the form, but, Kingsley says, "we certainly expect appraisers to take energy efficiency features into account."The importance given to this area by Canadian appraisers appears to be largely dependent on location. Appraisers in the south may not give it as high a priority. Chris Gwilym of Carty Gwilym Real Estate Appraisal Services in Ottawa admits, "we probably don't consider it as much as appraisers in the north."
Unlike appraisers in Alaska who examine energy efficiency on an item by item basis, Canadian appraisers tend to look at the overall impact. Ontario appraiser Jackie Cox of Jackie Cox and Associates puts it this way: "Including the value of such features as low-e windows or R-2000 components is arbitrary. We consider their overall impact on the value of a house and make a general quality adjustment. In this way, energy efficiency features reflect the quality of construction."
Cox does not feel Alaska's system would work in Canada, where there is a vast range of climatic conditions. Kingsley, on the other hand, feels the idea is worth considering, at least in the north. He says, "We should wait a little longer to see how well it works in Alaska and then see how it could be done over here."