How the SAVE Act could save the American DreamJanuary 11, 2012
Guest Author: CR Herro – Vice President, Environmental Affairs
Normally, Congress passes legislation that takes from one and gives to another. Someone wins, someone loses. But, the SAVE Act is a violation of political pundit philosophy. It requires no additional government expenditures, reduces national infrastructure expenses, and returns individual discretionary income back to our citizens. In a tough economy where uncertainty has caused the US’s economy to hesitate, it has the potential to create new jobs, reduce costs, and stimulate spending.
The SAVE (Sensible Accounting to Value Energy) Act is a bipartisan bill introduced by Sen. Michael Bennett (D-Colo.) and Johnny Isakson (R-Ga.) that will direct federal mortgage agencies to create a new mortgage underwriting and realty appraisal process that reflects homeowner energy costs. The Act also would allow homeowners to finance cost-effective home energy upgrades as part of their mortgages. Basically, the SAVE Act allows homeowners to identify the benefits of better construction practices and requires banking institutions to recognize the utility savings in their loans.
By promoting better construction and energy efficient retrofits, homeowners are able to lower their monthly operating expenses greater than the cost of the upgrades. The economy benefits from increased individual discretionary income and job creation for energy efficiency, and the country as a whole saves energy. The reason the SAVE Act has the ability to impact America in such a significant way is that buildings represent the largest resource and energy consumption sector in the U.S. — greater than the transportation and industrial sectors.
Currently, the average home will consume over $100,000 in energy cost during a 30-year mortgage. Better appliances and construction techniques such as Meritage Homes has adopted as our standard building practice can reduce that cost by over 50%. Lights work better with one quarter of the electricity, washing machines get clothes cleaner with half the energy and water, better insulated homes stay more comfortable with half the AC costs. Additionally, according to a recent McKinsey Energy Efficiency Report, adopting better building practices could also reduce utility operating expenses 1.2 trillion dollars. At the national scale, the SAVE Act represents 83,000 new construction jobs and trillions in reduced resource losses to our economy. This is the essence of the SAVE Act — trillions of dollars of expenses could be redirected into economic stimulus.
For details on the bill, visit http://www.imt.org/save-act