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Cap and Trade may cripple housing market
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Among the thousands of pages of the House-passed "Cap and Trade" bill, one element jumped out at anyone interested in the state of the housing market: the mandatory home energy audits and repairs required of home sellers.
While the Obama administration spends countless sums of money to improve the housing market with a first-time homebuyers tax credit and programs to help owners refinance their loans, Congress (and presumably the President if the Senate passes the bill and Obama signs it) are sabotaging these efforts.
Green building and green remodeling efforts are terrific innovations that most builders and contractors see as part of the overall impetus to build higher quality homes. Homeowners who are interested in improving the air quality and energy efficiency of their homes should certainly be encouraged to do so.
But mandatory inspections and improvements? I cannot begin to imagine what a crushing blow this will be (if passed) to the vast majority of home sellers who would be forced to replace windows and furnaces and plumbing fixtures to meet government standards of water use and energy efficiency - regardless of whether the potential buyers want these features.
Even green building advocates recognize that the biggest issue with "greening the planet" is how to overhaul the existing housing stock - the millions of homes which could use better insulation, low-e windows and energy efficient appliances. Gradually, all of these homes will be improved with today's higher quality home features .... as owners choose to make changes or the home changes hands to new buyers or even as the homes are torn down and replaced with new residences.
Forcing home sellers to comply with these new regulations will mean that they either opt not to sell - thus slowing down the market - or will be forced to increase the price of their home in order to cover their expenses, meaning the home is less likely to sell and fewer buyers will be able to afford it.
Perhaps the over-eager Representatives should have stopped to think about the economic impact of their votes before passing this bill. Can we hope that Senators will take their time to understand the implications of this bill for one of the most important sectors of our economy? Everyone seems to agree that until the housing market improves it will be impossible for the economy overall to fully recover. If everyone points this out to their Senators maybe we can stop this egregious bill from passing.
Pre-order your copy now from Capital Books: "HOMEBUYING: Tough Times, First Time, Any Time"
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