May 13–Maybe I’ve been watching California’s real estate market for way too long, but I don’t understand the strong objections (other than a case of “whatever the government does is wrong!”) to a new mandate to put solar energy in every new home.
Yes, I know housing is expensive. But it’s really not a home’s sticker price that’s the true budgetary challenge.
Remember, the financial stretch is how various costs of day-to-day living — including the mortgage and the electricity bill — add up vs. a household’s sources of income. Anything that cuts household expenses can help affordability. Solar roofs work as a cost-cutter.
The California Energy Commission has adopted new energy building standards requiring solar panels for virtually all new homes built in the state starting in 2020. That will likely will make California the first state with such a homebuilding requirement.
Yes, I know installing solar panels could boost new home prices, already one of the market’s priciest segments. For starters, I don’t see a great deal of standing inventory of unsold new homes, perhaps that market segment — many of them the well-heeled, for sure — can afford this energy-saving addition.
But if you have seen any model homes lately, I have a few ideas on how to lower sticker prices: Cut out many of the upgrades. How much marble and how many high-grade appliances does one family need?
Plus, solar panels on new homes help answer a nagging question about development: Who pays for the infrastructure required for a growing society?
In theory, mandatory solar roofs may mean communities may skip debating which side of town gets to host an ugly new power source to light their growing city. Buyers of new homes already bear much of the financial burden of a development’s impact on neighborhood’s parks, roads and schools. So this new solar mandate means they pay for their power source, too — while financially benefitting from their investment.
Almost as importantly, if today’s lenders don’t value the financial benefits of solar, well, maybe it’s time to reform the antiquated housing finance system. There are too many California loan-making entrepreneurs for there not to be a workable solution on how to make the cash generated by a solar roof part of the mortgage process.
Let me throw out a wild idea. (I’ll let builders, lawmakers and lawyers iron out the wrinkles.) Have builders give the new homeowners associations the solar systems to own and operate. The HOA could keep the net proceeds to lower association dues. (Psst! They own and operate a lot of other things from pools to hillsides that don’t generate income.) Note: Those HOA dues are home-owning costs that lenders count AGAINST a house hunter’s buying power! Thus: My idea means lenders would indirectly “value” solar’s benefit.
Let’s be California bold. The state’s many housing affordability challenges — and that includes the impact of future development on a community — will require novel solutions outside of build-build-build. If California’s smarts can change how information flows around the globe, tweaking housing finances seems like a simple hurdle to overcome. No?
Solar power isn’t just a decent idea for the environment. It can make pocketbook sense for homeowners, too.
PS: I have solar panels on my roof (second installation in two decades) … and drive a plug-in hybrid car.
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This article provided by NewsEdge.
This article provided by NewsEdge.