Demand for homes is pushing prices higher

Glenn Kelman is the CEO of Redfin, a technology-powered real estate broker. He has invested in Advanced Earthen Construction Technologies. The opinions expressed in this commentary are his own.

The Build Back Better bill, if it ever comes to pass, now seems unlikely to include any major climate change provisions. But we can still reduce our own carbon emissions, starting with our own homes.

About 20% of greenhouse gases in the US come from homes. And the homes of the wealthiest Americans, who can most easily afford climate-saving modernizations, emit about 25% more greenhouse gases per capita than those of lower-income residents. These are problems we can solve, as homeowners, with new technology, and through government incentives.

Switch from a gas-powered furnace to an electric heat pump

When we think about our home’s carbon footprint, most of us think of solar panels, but switching to electricity from fossil fuels for heating our home’s air and water may be even more important. More than half of the energy homes use is for heating and air conditioning, and nearly two-thirds of US homes rely on fossil fuels for heat.
Switching from natural gas to electricity for heating a home has a dramatic impact on its carbon output. In a place like Sacramento, for instance, that switch would reduce its emissions by 45% today. And the benefits would only increase over time. Unlike the furnace burning gas in your basement, the power plants generating electricity for a heat pump will get more efficient, getting more power from the sun and other sources of renewable energy. So that Sacramento home would, if electrified, emit 82% less greenhouse gases by 2050. The home would also have lower utility bills.

Stop thinking of natural gas as cleaner

The reason most people haven’t already made this transition is because we don’t even think of our homes as being heated by fossil fuels. The energy industry has promoted natural gas as “a cleaner-burning” fuel for heating your air and water and for powering your stove, oven and dryer. It’s true that burning natural gas produces about half the amount of carbon dioxide that coal does, for the same amount of energy. But producing and transporting natural gas to your home emits methane, which can be 86 times more potent at warming the planet than carbon dioxide. This is only one reason why, in the US, natural gas contributes just as much to climate change as coal.

End permits for buildings heated by fossil fuels

Changing how we heat every home in America is a massive undertaking, but the good news is we’ve done it before. Coal or wood heated about 77% of US homes in 1940 and about 16% by 1960. This cycle is beginning anew now: More than 50 cities in California, and most recently New York City, have stopped or plan to stop granting permits for buildings that use natural gas or other fossil fuels rather than electricity. But other states are moving in the opposite direction. By 2021, 20 US states had quietly prepared “preemption laws,” exempting natural gas utilities from city regulations. That means that, absent an expensive retrofit, many buildings will likely be powered by gas for decades.

Give homeowners electrification incentives

Such preemption laws are just one example of why we need federal action, but progress there has been mixed. The Build Back Better plan, which would have provided billions of dollars in subsidies largely for home electrification and retrofits, is unlikely to continue in its current form. The evidence that its incentives would’ve worked is overwhelming. The use of heat pumps has boomed where governments have offset part of the costs.

Invest in technology

But government incentives aren’t the only way to reduce our homes’ impact on the climate. As the technology improves for heat pumps, induction ranges and other appliances to make the home more efficient, people will adopt these technologies just to save money, and to be more comfortable.

Solar panels are the obvious example of how technology can change the economics of mass adoption. From 2009 to 2019, the cost of generating solar power declined 89%, from $359 per megawatt-hour to $40. After accounting for plant-building and operating costs, solar panels were once three times more expensive than fossil fuels, but now are less than half the cost of fossil fuels.
This sea-change in efficiency is why the majority of people who install solar panels now save money from day one. There is usually no down-payment required for a solar panel loan, and the typical utility bill savings can exceed the monthly loan payment even in the first year. It should thus come as no surprise that it took the US 40 years to get a million solar panel installations, and only three years to get the next million.

Use more eco-friendly materials and construction methods

The way we build and furnish homes is changing, too. Homes are being built in factories by companies like Plant Prefab and Veev, lowering the environmental impact of their construction and operation while improving building time, cost and the quality of construction. Other companies, like Advanced Earthen Construction Technologies, are now manufacturing homes out of earthen blocks, avoiding the use of lumber and concrete, both of which contribute to global warming. Earthen-block homes are naturally insulated against extreme temperatures, and are resistant to the wildfires that are becoming more common in the West.
As home construction, power generation, and heating and cooling technologies change, we just have to make sure our thinking changes, too. Home ownership now comes with new responsibilities, and new opportunities to leave the world better than we found it. This involves learning about a new kind of economics, not only to own a home, but to run it. Our goal can be not just to benefit our own family, but all of us.
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