By: Phil Ting

I love the new Reset “Don’t Forget to Look Up” photo contest. Call me a geek, but the first thing I thought of when I saw the headline was not photos but photovoltaic roofs.

Maybe that’s because I’ve been looking at even more new data showing that protecting home values starts with looking up. A recent study from the Earth Advantage Institute showed that in the Northwest, green certified homes sold for up to a maximum of 23% more than non-certified homes.

Why does this matter so much? Beyond the green jobs created by upgrades, the long-term cost savings for homeowners and the environmental benefits, why should San Franciscans take a look at this data? It matters because in San Francisco an outsized portion of our tax revenue comes from property assessments. So if we want to protect the revenue we need to fund schools, improve MUNI, fill potholes and create jobs, we need to look at how to prevent housing prices from falling.

Gov 2.0 and the Data Driven Revolution

The Reset community keeps exploring data-driven government. And one of the very best things about this community is how we “follow the data” to see how it connects the many parts of our government, our lives and our economy. The data set in this case is clear – and it shows how green homes are connected to an economically healthy city government.

The Earth Advantage study analyzed sales data from May 2010 through April 2011 and found that green-certified new homes in Seattle were selling for an average of 23% more than non-certified homes. And this is just one of the many new studies that show how energy upgrades increase home values.

The National Bureau of Economic Research (NBER) recently released an analysis that found solar panels add between 3 percent and 4 percent to the value of a home nationally. That result is consistent with a study released in April by Lawrence Berkeley National Laboratory that found that solar photovoltaic (PV) panels have a “sizeable effect” on home prices. Both studies support the conclusion that solar pays for itself in increased housing values alone.

“Our evidence suggests that similar to other home investments such as a new kitchen, solar installation bundles both investment value and consumption value,” said the authors. The “investment value” increases the sale price of a home and the “consumption value” is the benefit of having an environmentally friendly energy source.

These studies are for existing homes. A new home with significant green features and efficiency can command as much as 30 percent over a traditional home – and sell in as little as one third the time. For sellers in a depressed housing market, that’s an impressive ROI for adding green features to their home. And for those who want to stay in their homes, the ROI is getting ever shorter – about a three-year payback for most green retrofit investments.

It is important to remember that while the solar benefit accrues immediately to homeowners, the city only reassesses homes with solar once they are sold. That’s a protection to promote solar adoption. But with the average home in San Francisco sold every seven years, the city dividend arrives quickly.

The passage of Prop 13 reduced CA property tax revenue by an estimated 57%. So instead of figuring out how to get by on a shrinking tax base – which is what is going to happen if housing prices fall here in San Francisco like they have virtually everywhere else in America – I would rather figure out how to promote the win-win-win of greener homes, lower energy bills and a stronger city tax base.

San Francisco Solar and Green Upgrades

Here in San Francisco we have two important programs to promote rooftop solar and green upgrades and thus to protect home values.

I’m proud to say that I was co-chair of the Solar Task Force that developed the first program –GoSolarSF. It provides local incentives for rooftop solar. Maybe because it was a bold program, it still faces some bureaucratic resistance. So if you like the idea of green homes and a stronger economy – don’t forget to sign our petition to protect it.

We also wrote a few weeks ago about SF Home Improvement and Performance, the city-administered program that now pays up to $7,000 for energy efficiency upgrades. From energy-efficient windows to better rooftop insulation, these upgrades can both dramatically lower your energy bill while increasing the value of your home.

Of course these are just some of the things we can do to protect home values, and thus protect the services that rely on a healthy tax base. Great schools increase home values. Walkable communities increase home values. And safety increases home values.

But if you are a homeowner, and you want to save money now on your energy bill and make money in the future with a higher resale value, take a moment to consider these programs. The numbers are in – and they show convincingly these small investments in green homes are paying big dividends.