A Stronger Economy Starts at Home
By: Phil Ting
Do you want to know one of the most powerful tools we have to balance the city’s budget in the years ahead without drastic cuts or painful tax increases?
Then look no further than the “Green Grade” of your own home.
San Francisco is showing that one of the most effective ways to increase a home’s value is to lower the carbon footprint of that home. And when our housing prices stay strong – our city economy and our city budget stay healthy.
Strength in the real estate market means our city revenue rises from increased transfer taxes and stronger baseline assessments made after homes are sold. This increased revenue goes directly to balance budgets without drastic cuts. Economists have also detailed the “wealth effect” that increases consumer spending when homeowners have more equity in their properties. That helps keep the economy humming, which in turn, increases other tax revenues like sales taxes and payroll taxes.
And by creating this increased revenue and economic activity by investing to make homes greener – that’s a win for our economy, our environment and for the city’s bottom line.
“Greening” the Environment and the Economy
Considering just how important the health of the real estate market is to the fiscal health of our city, it does not always get the attention it deserves. But there are smart ways local government can help homeowners increase their home values by investing in getting greener.
The most successful program so far is the GoSolarSF local incentive for rooftop solar installations. This small civic investment has not only helped quadruple the number of solar rooftops in San Francisco while creating hundreds of local jobs – it more than pays for itself by increasing the value of the homes with solar roofs. While assessments do not go up after you install solar (or make energy efficiency upgrades), the home values do increase and the city sees a significant civic return on investment when the “green” homes are sold through increased transfer taxes and an increased assessments. In a city in which the average home is sold every 7 years, this civic dividend add up quickly.
This program will also help protect our environment, stimulate our local economy and create long-term revenue by increasing the value of the city’s housing stock. It is a joint program between San Francisco’s Department of Environment and my Assessor-Recorder’s Office that will promote the significant state and federal incentives available to help owners make their homes more energy efficient. Up until the end of the month, homeowners can access up to $7,000 in state and federal funds, and after September 1, up to $6,000.
This incentive helps pay for simple upgrades like new insulation in our walls and attics, upgraded windows, and other basic improvements that can dramatically lower energy use. These home improvements may not get the public attention attracted by solar roofs and other green investments – but they can do just as much to lower our carbon footprint and utility bills.
What they also can do is raise the value of our homes – which matters in a world in which our homes are frequently our retirement accounts, our capital reserve to start a small business and a college savings accounts for our kids.
Calculating the Civic Return on Investment in San Francisco
At Reset, we’ve been talking about the concept of Civic Return on Investment. It is just a simple way of understanding the civic benefits returned for the civic investments we make. By looking closely at how we spend our precious city dollars we can start to increase our Civic ROI so we can do even more with the dollars we have.
At the top of the list of return Civic ROI is helping homeowners understand the nexus between green investments in their homes and the increased value those investments deliver.
When we Go Solar, or help our homes go green by taking simple steps to lower energy use, we see lower utility bills and higher resale values. Our environment is cleaner. We create local jobs and a stronger economy. And we help balance budgets in a city that still relies on property tax and transfer tax revenue to fund vital services.
That’s a Civic ROI that makes sense for all of us.
Want to know more about the local incentives? Check out GoSolarSF or SF’s Home Improvement and Performance Program.
