ADC Blog

The Bay Citizen has a story touting a report that “green” homes sell for nearly 10 percent more than regular homes:  “California homes that meet environmental standards, such as energy efficiency and proximity to public transportation, are selling at higher prices than homes that don’t.”

The part about “proximity to public transportation” is probably a gratuitous offer by the reporter since transit use is so pathetic in most urban areas.  Instead, what adds value to a home are things like well-insulated ceilings and walls and energy-efficient lighting that researchers at UC Berkeley and UCLA looked at in their study.  For many people, these things create long term savings that are worth the higher up-front costs.

Housing policy, like all public policy, bestow benefits but also costs to the user.  The problem with reports like this one is that over-zealous politicians will see only the benefits and believe they can mandate these savings for everyone.  You can expect the simple-minded central planners to cite this study to justify more onerous regulations.  Yet there are also costs.

Making homes 10 percent more expensive invariably prices some people out of the market.  They are stuck in the rental market, wanting but unable to achieve the dream of owning their own home.  There are benefits to widespread homeownership.  Green mandates diminish these benefits.

A truly robust housing market has a little bit of everything, and political leadership that truly respects its citizens doesn’t mandate its “preferred” option.  In a lightly regulated market, some people will “go green” because it makes sense to them and they can afford it while others will go with a tradition build for them because it works for them.