Implications of Energy Ratings for Residential Real Estate Markets

White Paper, March 2020

A white paper co-authored by affiliate Timothy Riddiough of the University of Wisconsin and Analysis Group Principal Todd Schatzki evaluates whether energy rating requirements used in conjunction with the residential property listing process are a useful policy tool to help mitigate environmental impacts or achieve related policy goals.

In Implications of Energy Ratings for Residential Real Estate Markets, Dr. Riddiough and Dr. Schatzki state that inaction at the federal level has required efforts by state and local governments to address climate change. Some areas have introduced or are considering introducing mandatory disclosure of energy ratings when a residential real estate property is listed for sale. These ratings typically measure a property’s energy efficiency “performance” through a single metric, similar to product ratings. The authors report that while home sellers might voluntarily use energy ratings to complement other information of potential interest to possible homebuyers, mandating the use of such ratings is not, in general, warranted. 

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Riddiough T, Schatzki T