Cap and Trade Will Affect Real Estate Market
Posted By admin on June 30, 2009
I’ve been doing a little reading about the Democrat sponsored Cap and Trade bill, and it is frightening on several levels. For those who don’t get the meaning of “cap and trade,” the bill is really an effort to impose energy efficiency standards and restrictions for industry at an alarming rate, with the projected benefit being reduction in greenhouse gases. The cap and trade phrase comes from the idea that some industries will be able to better meet the federal standards for emissions than others, and so will “build up” carbon credits, which they can then sell to other industries having a more difficult time meeting the requirements.
On an economic level, a lot of analysts are predicting massive tax increases for business, which will be borne by the consumer, as they always are. But there is another aspect of the bill, known as the Waxman-Markey Act, that seeks to impose a national building energy efficiency code (Section 201). Currently, not all states have building codes of their own. If this bill passes the House and Senate, and is signed into law, the federal government will move to usurp more power traditionally belonging to the states, and impose building codes on a national level. In states where codes exist, the national code will take precedence in areas of environmental impact.
The reason this is not healthy for the real estate market is that to impose energy-saving mandates on new construction will drive up costs, which will eliminate some people from the buying pool. In addition, if the new codes are imposed on existing homes and they have to meet those standards before they can be resold, some people will not be able to afford the changes and will not be able to sell their home. In the case of homes that do get the upfits, prices will rise effectively shrinking the buyer pool again.
Let me encourage you to read up on Cap and Trade, and if you don’t think it’s a good idea, then call or email your senators and let them know how you feel. I can’t say for sure how much good it will do, because the Senate is controlled by liberal Democrats, and they are used to deciding what you should think and therefore will probably disregard your voice. In any event, it is our responsibility to remind our elected officials that we live in a representative republic, and expect them to listen to what we have to say.
There is a lot more to the Waxman-Markey Act. It would be good to review this proposal, since if it passes, it will have impact on our economy for 50 years. In the meantime, China, the world’s largest producer of greenhouse gasses, and India, fast joining them, will continue to make up for whatever quantity we are able to tax out of existence.





