Just been updating my (increasingly slowly) expanding list (up to 41) of studies on the effect of eco-certification on real estate prices. The most recent paper that I have seen focuses on the effect of Energy Star rating on the prices of new homes in three US cities (Austin, Portland and the N Carolina Research Triangle). Although it’s not in a peer reviewed journal yet, it looks like a pretty rigorous econometric analysis to me. As ever, results vary with model specification – but the broad finding is of price premiums of approximately 2% for Energy Star rated residential properties. Unlike other papers (mea culpa), the authors also looked at whether those price effects were consistent with expected energy savings. They find that this is the case. You can read all about it here. However, there are different versions of the papers with different findings – so be warned. In one version of the paper, the premium is only applicable to older Energy Star dwellings.
In the paper, one figure that caught my eye was a claim that, in 2011, 26% of new housing completions in the US were Energy Star certified. Digging around a bit, I found a good source of recent data. It provides a detailed breakdown of Energy Star penetration by state. With an average of about 10% of new homes E* certified in 2016, there were some astonishing variations between states. Arizona had over half its new dwellings certified whilst in neighbouring Utah, the comparable proportion was 4%. Literally a case of “Go figure”?
In other interesting news, a sort of new environmental certification for real estate has just been launched by the Australian government – the National Carbon Offset Standard for Buildings. They describe it quite well themselves.
The National Carbon Offset Standard for Buildings is a voluntary standard to manage greenhouse gas emissions and to achieve carbon neutrality. It provides best-practice guidance on how to measure, reduce, offset, report and audit emissions that occur as a result of the operations of a building…The Standard can be used to better understand and manage carbon emissions, to credibly claim carbon neutrality and to seek carbon neutral certification.
It seems that certification will be validated by existing eco-labelling organisations – NABERS and Green Star. Carbon neutral certification – coming our way I suspect.