In this paper, we are evaluating the data fields available and in use in Multiple Listing Service (MLS) property listing systems (MLS databases) from the Real Estate Standards Organization (RESO) Data Dictionary version 1.7 certification analytics data against the Tax Incentive offerings in the Inflation Reduction Act (IRA) of 2022. The purpose is to evaluate if there is a need for additional data fields to be added to the RESO Data Dictionary or to MLS databases to support an anticipated increase in the popularity of this equipment and property features.
The methodology used was to look at a table of the Inflation Reduction Act Equipment Type tax credits and try to match the equipment type up to a data field (or fields) in the RESO Data Dictionary Wiki 1.71. If there is a match, the latest certification use percentages are available on the web page. The data field(s) used as a match and corresponding certification percentages were added to the table.
There are approximately more than 550 multiple listing services (MLS) in the United States serving nearly as many markets. Looking at the Real Estate Standards Organization (RESO) certification analytics data, there are 15 different systems used to support property listing data (MLS databases), and 389 organizations (MLSs) that were evaluated for certification on the latest round on the Data Dictionary (DD) version 1.7. Not all MLSs are required or choose to obtain RESO certification.
The RESO Data Dictionary is the real estate industry’s universal language for data. It allows a wide range of systems to talk to each other in a seamless manner2. MLS systems that use the RESO standard fields make data interoperability easy and provide for the faster creation of new tools, for example.
As our buildings have evolved over the years, so have the data fields included in the Data Dictionary Wiki. In 2022 the Federal Government passed the Inflation Reduction Act. This will invest $369 billion in Energy Security and Climate Change programs over the next ten years. According to the most recent Residential Energy Consumption Survey, the U.S. housing stock includes approximately 118 million occupied houses that serve as primary residences (EIA 2019). Of those, 69% were built before 1990, before the 1992 Energy Policy Act mandated more stringent building energy codes3.
The building sector’s total emissions, including electricity use, account for 34% of greenhouse gas emissions in the U.S4. Because most of the greenhouse gas emissions in the US come from burning fossil fuels for energy use5, there is a big push to make energy-efficiency improvements to our homes and focus on the electrification of buildings which will reduce carbon emissions.
This will happen in two ways. Changes to the 45L tax credits for builders mean much more new construction will be built to either ENERGY STAR ($2,500 tax credit) or the U.S. Department of Energy’s Zero Energy Ready ($5,000 tax credit) certifications. Each one of these certifications also comes with a HERS rating. The tax credits referenced in this paper are intended to spur updates and improvements to our existing housing stock. These incentives, as noted earlier, are intended to be a driver of adoption, and increase the popularity of these property features and characteristics, thus driving the need for these data fields to be supported in real estate systems. Home improvements also need to be factored into the value of the property, and without the fields to support this information it’s difficult to establish accurate value.
The Inflation Reduction Act of 2022 provides tax incentives that are available today to support these efforts. Let’s look at what these are and evaluate them against the availability and use of the data fields from the RESO DD certification process to see where we’re at. Below is a summary table of the findings for the Home Clean Electricity Products.
Going back to the title of this paper, “The U.S. Housing Stock is Evolving, How are the Property Listing Systems Keeping Up?” The data shows that there is a lot of opportunity to align organizations’ MLS property listing systems (aka MLS databases) to better align with the changing housing stock. The purpose of the tax credits listed here in addition to those to builders of new construction is to drive change and improvements resulting in a larger number of properties with these features and characteristics. Not only should MLS databases be prepared to support this data, but also brokerages and any property databases including tax/public records and third-party real estate marketing websites. Consumers are already interested in these property features and characteristics, but they are largely unable to be found on listings. Together we can better serve the market by adding these fields, making them searchable, including them in data feeds and displaying them on websites and property reports.
There are several real estate industry resources available to support you in adding these fields to your MLS database systems. The Council of Multiple Listing Services (CMLS) Green Data Best Practices Guide, several Essentials tools including the CMLS Home Energy Information Guide, the CMLS Quick Start: Guide to Green MLS Fields, CMLS Green Sheet: Solar Power Fields also available under Research on the coundilofmls.org website. The RESO Data Dictionary Wiki should be used to ensure that you are setting up the fields to be in compliance with industry standards. Data Dictionary 1.7 is the most current version for RESO certification testing purposes, but it would be best to add any new fields to be in compliance with version 2.0.
Please reach out to let us know how we can help you provide the best data field options to your members to support the changing housing stock for buyers that want a more sustainable and energy-efficient home. Our homes have been evolving for years, it’s time to get the data fields in alignment.
Earth Advantage® is a 501(c)(3) nonprofit focused on helping to create an informed and humane residential real estate marketplace that: Acknowledges both the climate impacts of housing and the impact climate has on housing; Provides all homebuyers and renters with access to sustainability-related information about a home; Supports equitable housing outcomes, protecting those most vulnerable from the effects of climate change, and; Recognizes both the personal and societal value that climate-friendly housing creates.
Earth Advantage's team is located across five states with a headquarters in downtown Portland, Oregon in the PAE Living Building. The organization’s commitment to carbon reduction strategies is demonstrated by the 17,000+ individuals who have participated in Earth Advantage training, the approximately 4,000 high-performance residential units certified each year by our green building team, the 30,000+ homes with a verified Home Energy Score, and the over 2 million homes contained in our Green Building Registry.
Meg Garabrant is the Senior Manager of Real Estate Services and GBR Lead at Earth Advantage. She spent more than a decade as an MLS executive working to generate awareness and adoption of data fields to support energy-related “green” data in the real estate transaction process. Meg has been appointed to serve on the National Association of REALTORS® Sustainability Advisory Group, is a member of RESO and CMLS, and continues her support to the real estate industry in data field adoption, building performance data aggregation, and driving auto-population of this data into property databases and listings. She can be reached at firstname.lastname@example.org.