Radical Austin City Council Mandates

April 9, 2008

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Austin, it’s time to get involved because the City of Austin has proposed two radical mandates that will make selling your home incredibly difficult.

  • Single family homeowners will be required to obtain a license from the city of Austin prior to selling their homes.
  • Also, they’re proposing to mandate energy efficiency retrofits for all types of properties in Austin, including single family owner-occupied homes prior to the sale of any single family owner-occupied home, a certificate of compliance proving the required efficiency retrofits have been done must be done prior to closing.

On Thursday, April 10, Austin REALTORS® are sponsoring a City Council Candidates’ Forum and lunch for industry professionals. We will be in attendance to express our strong opinions on the proposed ordinances. If you have any thoughts you’d like us to share with the City Council on your behalf, leave your concerns in the comments and we’ll be sure to make them public.

What this means to Austin homeowners

(according to the Austin Board of Realtors)

  1. Without a Certificate of Compliance filed of record prior to closing or at point of sale, a single family home cannot be legally sold in Austin.
  2. Delays in the time from escrow of a purchase agreement to closing due to the compliance and inspection process could exceed, by days or weeks, the typical 30 to 45 day time frame in a sales transaction today.
  3. Immediately upon the effective date of the ordinance, the city will have to implement methods and processes to meet the demand created by the sale of some 25,000 homes per year. That’s 25,000 inspections, assuming the first inspection results in the issuance of a certificate of compliance. City inspectors say that at least 50% of all inspections result in a subsequent inspection to correct problems found. That’s an additional 12,500 inspections, at a minimum, or some 37,500 new inspections in a typical year to determine if single family owner-occupied properties comply with the new proposed ordinance. Who will pay?
  4. Homeowners will bear the expense of retrofits to obtain the certificate of compliance. These expenses will vary from home to home, but the range could be anywhere from $1,500 to $10,000 per home.
  5. Expect delays in acquiring another home as homeowners scramble to comply with the new ordinance, especially if that homeowner needs to sell his or her existing home prior to closing on a new one.

Austin, think about what you’d like to say to the City Council and if you don’t think you’ll have the chance to have face time with them, we will be printing the comments to this article and taking them with us, so speak up!

Posted by Lani, Asset Director | Filed Under Austin News, Blog 

Comments

12 Responses to “Radical Austin City Council Mandates”

  1. William Bay on April 9th, 2008 4:54 pm

    I will not be able to attend but please feel free to quote me:

    Are you kidding me???
    Right off the bat I have three major issues with this. First, I can’t see any other reason for this than revenue. Second; there is an overwhelming level of incompetence behind the red tape. And third; despite being an advocate for sustainable design and living, I don’t want to be told what to do with my house except at the time of initial permitting, and only for building and energy code related issues.

    I don’t know enough to know what the motivation behind this is, but it comes off VERY blatantly as financial. I know we have a pretty decent housing market in the area compared to the rest of the country, but this will almost surely slow down at some point, and this could likely be the impetus to that. If the city is trying to “get their’s” It is choosing a very delicate time to do so. House sales WILL go down, as not everyone will have the money to make improvements to their homes before a sale.

    After negotiating a handful of Site Plan Development Permits through the Watershed Department, I don’t have any faith that the city is an efficient enough of a machine to be able to handle 7,000+
    new listings (which is the current number) each month. Each house will need to obtain a permit, and than at least one inspection. And who will decide what improvements takes precedence? That will require even more time still. If you think the first and second floor at One Texas is busy now, wait and see what happens…

    It’s very easy to get caught up in the “Green Wash” mentality. I practiced Architecture in California prior to moving here. The Energy codes are quite a bit stricter there than here. I have always supported the codes, because it has always been important to me to conserve resources. I remember as a kid watching the “Don’t be a Waterhog” PSA’s on Saturday morning cartoons. I have a compost pile, and soon I’ll be starting my own vegetable garden and rain collection system.
    And I agree we should all do our part, but on our own property we should have the choice to do so or not. And if I’d like to sell my property “As-Is” I should be able to.
    Now, I’m no lawyer, but to mandate this would seem to border on constitutional infringement.
    If you want something more effective, and that will stimulate economy offer more incentive programs.

    To sum: This is a move that will suppress economy rather than expand it. Home listings will fall considerably and sales will plummet. It is a gestapo-esque move on the city’s part, when the infrastructure cannot already handle what’s on their plate development wise. And climate problems are best dealt with through education and incentive programs.
    Austin is one of the leaders in the nation with sustainable building design. Please do not let that good name turn sour with a demand in which many people will recoil against.
    Thank you,
    William Bay

  2. James Hill on April 9th, 2008 6:28 pm

    I agree. At this point, in our national and regional economy, this is severely bad timing. More importantly, this appears to be a great idea that’s gotten contorted into something akin to “Public Domain” seizure rights that the federal government currently holds. Why not incentives by the city like they offer when a homeowner buys a new SEER rated HVAC.

    I’m currently working on getting my EcoBroker license, and am excited about efficiency and “greenness” for Austin, but forcing all Austin homeowner’s to participate in the “Green Wash” movement before they can sell their homes, for another (green) feather in Will Wynn’s political hat, is ridiculous.

    What good is a Homestead designation (one that Texans are proud of) if you can’t sell it? Is that really a homestead? This is like saying you can’t sell your car until you covert it to a hybrid. If the city does this to real estate, what will this do to Austin’s economy? My take, it will make a sluggish market more so. Contrary to popular belief, Austin’s real estae/economy isn’t bullet proof.

    James Hill / Owner

    Austin Urban Properties

    p - 512.947.3135

    f - 512.366.9481

    james@MyAustinUrbanProperties.com

  3. Benn, Single Pointe CEO on April 9th, 2008 6:37 pm

    James, I hope to see you at the coucil meeting tomorrow, regardless, I will deliver your comments.

    @William, I’d be honored to personally deliver your statement as well. Thank you.

  4. Austin Real Estate Blog | National Real Estate Review | Real Estate Scene on April 9th, 2008 6:50 pm

    [...] For some time, I’ve heard rumors of Austin City Council passing some insanely ridiculous mandates that require home sellers to retrofit their homes for energy efficiency to obtain a certificate of compliance that could cost homeowners any profit margin they could ever expect in the sale of their home!!! (for full story, click here) [...]

  5. BawldGuy Talking on April 9th, 2008 7:18 pm

    This is what happens when everyone jumps on the ‘green’ bandwagon. The concept is the same. If it’s OK to force developers to set aside stupidly large ‘greenbelts’ than this is just an extension of that approach.

    Funny how folks learn the difference between telling others what to do with their real estate, but when the gun is pointed at them they scream like stuck pigs.

    What’s good for the goose is good for the gander.

    I suspect though, most citizens of Austin won’t see it that way. Their castles shouldn’t be subject to what they perpetrated upon the builders’ properties.

    It was evil when done to builders, and it’s evil when done to individual home owners. And home owners? This is only the beginning if you don’t take charge and begin to treat all real estate owners the way you’d like to be treated.

    The wheel? She turns.

  6. William Bay on April 9th, 2008 8:50 pm

    @ Benn: My pleasure! And if they scoff at being overburdened in the development department, ask them what the average time is to obtain a site development permit compared to the rest of the country’s.

    @ BawldGuy Talking:
    Your comparison isn’t apples to apples here. A new development is subject to certain requirements; zoning, FAR, IC, etc. So are new houses and housing tracts.
    This is totally different. This isn’t even a case of “comply to current standards as you remodel or improve your house” which does trigger new codes to apply.

    To be clear, I’m totally agreeable with codes and regulations for building sizes, etc. And I’m an Architect (to be) and at some point want to develop as well. So I’m not biased over saving the planet one less shopping center at a time.

    But this is a simple change of ownership on an existing house! There is no comparison between the two.

  7. Lani, Asset Director on April 9th, 2008 9:02 pm

    [UPDATE] after requesting specifics from the Austin Board of Realtors’ Government Affairs Department, they were kind enough to provide more info:

    “This ordinance is still being drafted by the task force created last December. The task force is due to submit a completed draft ordinance for the City Council to vote on in June of this summer. The task force has been charged with determining how to implement a Point of Sale ordinance in order to reach fuller residential energy efficiency. Our member on the task force has reported that they are leaning heavily towards a point of sale ordinance that would require a home owner to obtain a certificate of compliance before being able to sell your home. There’s not a specific list of potential retrofits the homeowners would have to make, but the task force has discussed such items as weather stripping, window replacements, radiant barriers in the attic, and other things of this nature. “

    Details have not been released on what it will take to meet compliance and I think this will be what we will hinge our support or opposition on.

  8. James Hill on April 10th, 2008 5:22 pm

    @ Benn - Thanks. Please present my opinion.

  9. Some Jerk on April 10th, 2008 8:36 pm

    Fundamentally, this issue comes down to how best to achieve retrofits of existing homes, which is going to be a necessary part of moving towards a carbon-neutral city.

    However, as described above, this proposal seems nonsensical, as the party who will reap the benefits of the efficiency improvements bears no burden on paying for them, except as passed through by an increase in the sales price. Not to mention the added time and complexity layered on an already complex transaction.

    So, while I support the goal, if it is going to be coupled to home sales I think it would be more equitable to require the buyer to bring the home into compliance with the energy code within a certain reasonable timeframe after sale. The kinds of improvements being considered here (reducing air infiltration, low-E windows, solar shades, radiant barriers) are the sort of low capital cost improvements that will pay for themselves in reduced energy costs in a short time, so there is a net benefit to the new homeowner overall.

    However, my suggestion would be to completely decouple from home sales and instead institute a rolling approach, targeting each neighborhood in turn and taking it door to door with energy audits, weatherization, and other low-cost improvements offered free, funded through Austin Energy.

    For those who are interested, the city could offer more major improvements, ie solar water heating, high SEER A/C, new windows, paid in installments through property tax bills.

    This would gradually bring the whole city into compliance with the energy code without the burden of imposing it through the sales process. Just my two cents, I’d love to have my comments presented. Thanks.

  10. Benn, Single Pointe CEO on April 10th, 2008 8:56 pm

    @somejerk I almost hate calling you that as your comment was spot on. We absolutely agree that everyone must do their part, but it must be done in a really well thought out way- much like the one you just presented here. Spot on…

  11. BawldGuy Talking on April 13th, 2008 8:34 pm

    William — It’s exactly apples and apples. It’s the local gov’t legislating either loss of property, property rights, the owner’s money, or the market itself.

    They’re the ones who created the zoning theft of developer’s property, and the ones who’re now deftly lifting wallets from those who smirked when the same thing happened to developers.

    In both cases it’s the gov’t controlling the market beyond which is their business. If the buying public wants more ‘green space’ they’ll ignore neighborhoods without it. If home buyers in Austin want the house they’re buying to be retrofit, they’ll either require it during purchase negotiations or deduct it in the price they’re willing to pay.

    It’s not the government’s business in either case.

  12. William Bay on April 14th, 2008 7:57 am

    Bawldguy:
    Do you know why Houston floods every time it rains? Because the city of Houston never mandated a FAR or IC requirement. It would have helped had they provided some type of plan for drainage too.

    Now, the city of Austin CAN tell us how much we can build on a lot because they are providing the infrastructure, planned to accommodate the developments that we build. And when we are told that we can only have 80%, 40%, and as in the case in some spots around town (a ridiculous) 20% Impervious cover, that is because that is what the cities infrastructure can handle.

    And they CAN tell us where and what we can build with zoning rules. I for one would not like to see a coal plant in my neighborhood, but there are people in Pennsylvania that have to deal with that because of poor planning and zoning.
    Unfortunately, in Austin we don’t have the brilliant planners as they do in Portland, but they do some things right.

    And Consequently, they CAN tell us in what manner we can build our house. Currently that only pertains to life safety. There are also energy codes as well. This also only applies to buildings when they are constructed or renovated.

    And YES, zoning, planning, life safety is the governments business. All the way back to Hamurabi’s Law #229. If this wasn’t regulated by the government, we would have more tragedys like the Triangle Shirtwaist Factory Fire. Even though it’s sometimes inefficient, (and admittedly, in the wake of the bridge in Minnesota collapsing, not without some cracks) I’m glad there is someone out there monitoring what is being constructed.

    I think we can both agree however that the City of Austin has no right to mandate that we upgrade our houses before we sell. I’ve made my points clear above that they should opt for incentives rather than mandate something silly like this and collapse our economy here.

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