Not that housing in San Francisco needs to get any more expensive, but officials there are considering what they hope will be a value-boosting certification system for homes that perform to relatively high levels of energy efficiency. Participating homes, whether they’re built or retrofitted to save energy, would receive “green grades” that indicate their expected level of performance under average use. 

The expectation is that, when it comes time to list a certified house, its green grade would be helpful in marketing the property and selling it at a premium.

San Francisco’s green grade idea is, of course, a variation on the “mileage sticker” concepts adopted by production builder KB Home and the Passive House Institute US (PHIUS), whose performance requirements are the highest in the homebuilding industry. It’s not clear what rating system the city might adopt, although KB Home and PHIUS use the Residential Energy Services Network’s Home Energy Rating Index to assess building performance. 

Fog City lives up to the name

Whatever system the city eventually might choose, its green graders – and the homeowners who want to participate – would have their work cut out for them. San Francisco offers a mix of foggy, sunny, cool, windy, and calm conditions, but it rarely gets hot and never gets extremely cold. The challenge lies in the deficiencies of its old Victorians, its beautiful but leaky barrel-front stucco homes, and its collection of cheaply built boxy row houses. When that bracing fog rolls in, the occupants of those buildings feel it.

Although there’s no guarantee they will increase selling prices, green grading and mileage stickers can’t hurt. The lending industry’s appraisal system has been a constant source of complaint among builders and other sellers, who, in this down market, say their properties are being undervalued by the current appraisal regimen. A credible energy efficiency rating could help offset a disappointing appraisal price.

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