President Obama and Vice President Biden have unveiled a new initiative to survey America for ideas on creating a green economy. At the official White House website, you can follow Vice President Biden's Middle Class Task Force tour, which will be holding a series of town hall meetings around the country starting February 27, 2009, in Philadelphia, PA.
On that same web page, there's also a space to submit ideas for jobs in a green economy.
Here's my idea: create Home Energy Auditors with expanded responsibilities tied to a larger policy agenda that "greens" the home buying and ownership process.
You're only allowed 500 characters (inclusive of spaces) in the White House email form, so here's what I posted:
Let me unpack that a little.
There are already Home Energy Auditors. In the state of Minnesota, Home Energy Auditors are required to undergo a 5-day training before they can be hired. And it seems like a job category that's hiring, a tiny ray of hope in this wintry (in more ways than one) economic climate.
I'm asking for more. I'm asking for an expanded training program that would upgrade Home Energy Auditors to an important arm of a larger policy initiative, one that greens the homebuying process by making offsets to a mortgage's principal, much in the same spirit as Location Efficient Mortgages were supposed to increase buying power, and may help homeowners currently in trouble with an upside-down loan.
When I think about the various policy responses to helping homeowners buried under upside-down home mortgages, the emphasis has been on delaying what is sometimes an inevitable--foreclosure--or once homeowners reach foreclosure, to empower bankruptcy judges to structure mortgage workouts in the hopes that lengthening the mortgage term or otherwise resetting mortgage interest rates can help people stay in their homes. While focused on the immediate problem, these solutions stay within the existing system and do not address other dimensions of home ownership.
Currently Home Energy Auditors assess residential houses for opportunities to weatherize--stop up air leaks that make heating and cooling systems work harder than they have to, for example. Again, this seems too narrow a focus now that we're in an era where our interlinked problems call for systemic change.
I propose training Home Energy Auditors in 2-year colleges so they're qualified to assess homes for chances to weatherize, to recognize and suggest ways to use sustainable sources of energy (such as wind or solar) to power one's home, to assess vegetable gardens (and other greenscaping) for positive environmental impact, and to record a home's proximity to mass transit bus or commuter rail lines to recognize the positive value of homes that make it easy to commute.
Green mortgages offered before the mortgage meltdown already attempted to reward optimal urban density. Like mortgages offered to public school teachers who otherwise couldn't afford to live in the districts where they taught, there have been attempts to shape residential patterns toward desirable social ends using mortgage lending as a tool.
I think we should utilize the tax code and other financial tools to assign a permanent positive value to houses that contribute to greater sustainability. Before he left office, former president George W. Bush signed into law the Economic Emergency Stability Act of 2008:
This bill extended tax credits for energy efficient home improvements (windows, doors, roofs, insulation, HVAC, and non-solar water heaters). Tax credits for these residential products, which had expired at the end of 2007, will now be available for improvements made during 2009. However, improvements made during 2008 are not eligible for a tax credit.
The bill also extended tax credits for solar energy systems and fuel cells to 2016. New tax credits were established for small wind energy systems and plug-in hybrid electric vehicles. Tax credits for builders of new energy efficient homes and tax deductions for owners and designers of energy efficient commercial buildings were also extended.
However, these are stopgap and temporary measures, at best incoherent with other tools for greening home buying and owning (like Location Efficient Mortgages). And they're poorly advertised. Do you even know how to go about installing any of these energy efficient systems to your house, and claiming the tax credit?
Solar panels in a field.
Tax credits (in addition to the usual deduction of mortgage interest) could be calculated according to the type, quality, and number of a given home's green features that Home Energy Auditors identify. In terms of location, houses that are on bus or other mass transit lines, or are within a certain pedestrian-friendly radius of commuter rail stops could have a percentage decrease in the principal that can be factored in when the home changes hands. A home's intrinsic and permanent sustainable features should add to the value of the home, and that value to the owner is a decrease in the principal owed.
Home Energy Auditors should conduct a national survey of every possible house in the nation in order to collect data--much in the same way census takers gather information about the country's population. This data would aid in Obama's already-stated efforts to weatherize federal buildings and low-income homes. Data collected by Home Energy Auditors could also be used to assist banks or bankruptcy judges who oversee loan workouts for homeowners facing foreclosure. In fact, Home Energy Auditors should collect data about homes facing foreclosure first, in case a home's desirable sustainability features decrease the principal owed and make it possible for people to stay in their homes.
Home Energy Auditors would be paraprofessionals and could work through utility companies or in conjunction with architects. They would have to be trained and carefully screened and regulated to guard against corruption. Or maybe they might fall under the federal pay grade system and operate akin to federal workers who work in specific locations, like IRS agents or post office employees. They should be licensed and periodically tested for knowledge in their field given the rapidity of change in sustainable energy and construction methods.
These would truly be good-paying, middle class jobs. The constant need to update data on the nation's housing stock would ensure a constant demand for well-trained, capable workers.
We'd finally be using the tax code in a way that encourages residential homes to be sustainable by virtue of alterations to the house and consideration of location efficiency.
Now, there are drawbacks to my proposal. In California, for example, most of the homes suffering the greatest loss in value in the post-subprime lending market are in the Inland Empire, about 30-40 miles away from jobs concentrated in the city of Los Angeles. I'm not sure how to write policy in such a way that people who are already suffering the most are not punished again by their lack of commuter rail and other mass transit options. In "How Gas Prices Literally Drive the Mortgage Crisis," green real estate financial analysts lay out the problem this way:
environmentalists are pointing out that Wall Street and many economists have been curiously silent about the interaction between oil prices, energy consumption, fuel costs and foreclosure rates around the country. This silence is undermining constructive policy leadership needed for these problems.
Falling home values in exurbs, once held up by cheap gas prices and overly lax lending standards, are hardly a problem unique to Los Angeles. The problems are repeated all throughout the rest of California, Florida, Nevada, New Jersey--basically all across the country. If these houses in the exurbs cannot be revalued because they make it easy for homeowners to commute, then at least they can be revalued based on a given home's weatherization and energy efficient features.
Maybe it's also time to bring industrial parks and light manufacturing of solar panels and the like to the exurbs, precisely where land is cheap. Perhaps this would bring jobs to the exurbs and reduce commute times and help prop up home values.
So, caveat--IANAL (I am not a lawyer/legislator). I'm certainly not an economist. But I am a citizen who cares and is willing to think outside the box. Take a look at the idea I've presented here, and if you have ideas of your own or want to tinker with mine, please do.
There are probably a million reasons why my proposal can't work. But I believe the overall principle is one worth heeding: we shouldn't let panic over the wobbly financial system and a hasty desire to help homeowners result in a bandaid solution that doesn't fix what's truly wrong with the systemic flaws in our economy.
Grass-roofed house picture credit: Erik Christensen.
Cynematic also writes at P i l l o w b o o k.