Ideas

Home Renovation Tax Credit: Clever but Harmful

Any renovation program should put highest priority on retrofits of existing leaky buildings to make them more efficient, reduce pollution, contribute to urban renewal and enhance housing values.

By Ted Mitchell
Published February 11, 2009

Most of the recent federal budget struck me as political, not useful. But one element stood out as actually harmful. Clever, but harmful.

I mean the home renovation tax credit.

The clever part is to insist on receipts in an industry that has a significant underground economy. This means the program helps pay for itself due to increased income reporting amongst contractors.

The harmful part is that it stimulates a sector that is already on fire, meaning it will be difficult to get work done in a timely manner at a reasonable price.

It does nothing to increase the quality of work out there, so Mike Holmes' job is not in jeopardy. And it shifts contractors away from working on stuff that is more useful.

What gets me is the breadth of inclusion. Anything goes: sodding the lawn, building a deck, resurfacing the driveway, installing new carpet.

That sounds like good environmental strategy, no? I'm going to apply for the cost of dog food, because dog crap on the lawn makes it thick and lush.

Squandering Opportunity

New sprawl housing projects depress me. It isn't just the pretentious designs or the killing sameness or the isolation or car dependence or the rape of farmland or the bidness at City Halls that grease their progress.

It's that they're squandering opportunity by building crap.

If you have a clean slate to build a new house, there are so many simple things you can do to build it better. Given that the house will last at least 50 years, when petroleum will cost who knows what, this is not a trivial concern.

Start with simple and sensible design: if it doesn't have a function, it doesn't deserve to be included. Give a thought to where the windows and doors go, given the surrounding environment and orientation. Look at the slope of the roof and drainage design and levels of redundancy for material failure. Build for easy future maintenance.

Add more insulation than code requires, and be really anal with vapour barriers.

None of this is difficult or costs a lot, and any extra marginal cost will be quickly recouped in energy savings. Moreover, it gives you a quieter and cozier house to live in, with lower maintenance costs and better long term value.

No Choice

This is simple, sensible, and nonexistent. The reason that mediocrity continues? An oligopoly in the development industry and incestuous relationships of said companies with municipal governments.

In these projects, which make up most of the new housing stock, there is little option for prospective buyers to choose something of better quality or influence the design. It just doesn't pay for developers to concern themselves with these 'little details'. It would pay for the potential buyer, but they are not given that choice.

Back to the tax credit: get rid of it.

Instead, expand the ecoENERGY Retrofit program to be more inclusive and less cumbersome.

Any energy conservation program should put highest priority on retrofits of existing leaky buildings. This not only offers the best bang for the buck, it also contributes to urban renewal and enhances housing values.

It employs talented engineers and contractors and rewards good quality work. Quite probably, the spin-offs of such a strategy pay for themselves in tax revenue, not just because of damaging the black market economy.

But no, we are spending government cash on perfect new sod and flawless asphalt driveways.

Ted Mitchell is a Hamilton resident, emergency physician and sometimes agitator who recently completed a BEng at McMaster University. He is fascinated by aspects of our culture that are harmful, but avoid serious public discussion.

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By seancb (registered) - website | Posted February 12, 2009 at 12:40:33

Can I apply the tax credit to the before and after energy audit cost?

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By A Smith (anonymous) | Posted February 12, 2009 at 13:15:14

Ted, >> New sprawl housing projects depress me. It isn't just the pretentious designs or the killing sameness or the isolation or car dependence or the rape of farmland or the bidness at City Halls that grease their progress

Rape of the farmland? If farmland was actually valuable, it would stay as a farm and not get converted to homes. Why would any farmer sell off land and take a loss? He/she wouldn't.

>> An oligopoly in the development industry and incestuous relationships of said companies with municipal governments

All the more reason to take politicians out of the decision making. Leave decisions on where and what to build up to the builder and the buyer, no middlemen.

>> It just doesn't pay for developers to concern themselves with these 'little details'. It would pay for the potential buyer, but they are not given that choice

This makes no sense. Businesses are constantly looking for ways to differentiate themselves from each other and if you could prove to your customers that buying a green home would be cheaper over the long run, this would increase a builders market share.

Furthermore, if I could build a house with a lower lifetime cost, this would allow me to increase my profit margins, compared to those who did not.

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