Andrew R. Sanderford

Adoption of Energy Star certifications: theory and evidence compared

ABSTRACT Energy Star, the largest voluntary housing eco-labelling programme in the US, conveys important signals to housing market actors about the energy efficiency of homes. With energy demand from housing being a significant energy consumer and contributor to climate change, gaining insight into the diffusion patterns of these certifications is an important analytical step. Informed by theories of new product adoption, research is used to identify the factors associated with the diffusion patterns of Energy Star certifications into US single-family housing from 2002 to 2013. The findings are generally congruent with recent studies of energy-efficiency adoption patterns in commercial property (real estate) and residential building construction. The key significant predictors of variation in the proportion of Energy Star-certified homes across US core-based statistical areas (CBSAs) are found to be public policy, climate, market attributes, industry characteristics and energy prices.

Energy-efficient homes and mortgage risk: crossing the chasm at last?

A topic of recent interest is energy-efficient houses. In the last twenty years, the US market has witnessed growth in the adoption of energy efficiency via various building technologies, design schemes, and eco-labels by developers, homebuilders, and homebuyers. Although housing and real estate scholars have begun explorations of the factors associated with the diffusion of energy efficiency, the subject has yet to be explored from the perspective of a critical stakeholder—the mortgage lender. This paper distinguishes itself from the extant literature in several ways. First, using a diffusion of innovation intellectual framework, the authors explore the role of the lender as an innovation gatekeeper. Second, as a review article, the authors summarize several key papers from the underwriting, credit scoring, and finance literature to help frame a number of market frictions that could mute further diffusion of energy efficiency in housing. Finally, the authors analyze these frictions and offer both market and public policy suggestions that may help overcome these frictions and increase opportunities for both private competitive advantage and market transparency.

Urban Sustainability Preferences Revealed Through Multifamily Rents

Rising urban population growth increases demand for multi-family housing; sustainable urban form and building level sustainability represent vital planning areas for this demand . Here, the multi-family housing stock is used to examine consumer preferences about sustainability in growing urban areas. Drawing on a data set of more than 40,000 apartment buildings/complexes from Apartments.com and secondary data from the describing urban form, walkability, proximity, access to transit, schools, and crime, this paper addresses the question: what sustainability features are desirable both in building and locational form in the largest U.S. CBSAs? Methodologically, the paper uses the traditional hedonic modeling techniques that include both apartment complex and unit attributes. These models are augmented with spatial and locational attributes designed to reveal preferences for sustainability in cities. Further, the unique data reveals previously unobserved property and locational traits. Model results have implications for property investors, developers, asset managers, and urban policy makers

Obtaining Differentiation Premiums in the Presence of Fee Regulation in the Residential Real Estate Appraisal Industry

Abstract In the context of the customary and reasonable pricing standard imposed by the Dodd–Frank Act, this article considers whether residential real estate appraisers are able to obtain differentiation premiums for their services. Regression models estimated using data from the Commonwealth of Virginia offer some evidence that professional certifications and the complexity of an appraisal task are positively associated with fee levels in this type of regulatory environment. However, differentiation premiums appear more difficult to obtain across geographies and when an appraisal is procured by an appraisal management company. The findings suggest appraisers can differentiate themselves from competitors, but also that policymakers should be mindful of the potential for commodification on the residential appraisal industry in select market settings. Since appraisals are a critical component of the mortgage underwriting process, and the majority of housing transactions utilize mortgage debt, developing new understanding of how policies influence appraisers and how the appraisal process makes an important contribution to the housing policy literature.

How Location Efficient Is LIHTC? Measuring and Explaining State-Level Achievement

Abstract A growing recognition that the cost of transportation should be included in calculations of housing affordability has led to efforts to promote location efficiency (LE) in affordable housing policy. Because the program is responsible for most new affordable housing in the United States, the Low Income Housing Tax Credit (LIHTC) program has the potential to be a link between housing affordability and LE. This research analyzes the extent to which LIHTC units built between 2007 and 2011 were in location-efficient places. Ordinary least squares regression analysis was used to test the role of market, policy, developer, and urban form factors in determining state-level LIHTC LE. We find that for the nation as a whole, from a quarter to half of LIHTC units added during this period were in location-efficient places, depending on the LE criteria applied. State-by-state comparisons showed wide variation in both our absolute measures of LIHTC LE and our relative measures of LIHTC LE compared with overall housing in each state. State policy and nonprofit developers were associated with higher LIHTC LE and had a positive effect on a state’s ability to outperform its underlying urban form.

Hedonic models and the inclusion of conditions of sale in commercial real estate transactions: A review of the literature

Where the hedonic analysis literature has explored a plethora of topics, it has not given focused attention to conditions of sale or the context, motivating factors, and contract specifics associated with real estate transactions. As conditions of sale are often present in commercial real estate transactions, the limited insight into their marginal price effects attenuates the effectiveness of both research and practice. Presented as a literature review designed to help begin the process of systematic study, the objective of this paper is to analyze the literature surrounding conditions of sale in two ways. First, it examines the hedonic literature to gain perspective on the extent to which conditions of sale could be an appropriate variable cluster added to hedonic analysis models. Then, it summarizes and thematically organizes the empirical findings to date on specific conditions of sale in the real estate literature to help guide future ex-ante empirical expectations.