How Will Cap and Trade Effect Your Real Estate Investing Business?

HR 2454: American Clean Energy and Security Act - Recently passed the House of Representatives by a vote of 219 to 212

Real estate is local when it comes to market conditions and market trends. Real estate differs from region to region in styles, architecture and amenities generally speaking. For instance; in Florida fireplaces are not the norm whereas in cold winter areas such as Colorado, fireplaces are a standard addition to a home. In some areas of our country people have wood burning stoves and others have coal burning furnaces. There are areas of our country such as Florida where you would not dare live without Air Conditioning but in many homes in Washington for instance, air conditioning is more of a luxury than a necessity.

So when discussing the effects of Cap and Trade in your real estate investing business you will need to take into account the region in which you live as some areas will be more affected than others.

The link below is for a map of the votes in the House for and against the Cap and Tax bill that just passed the House. Click Here for The New York Times map [it is interactive]

When you move your mouse over The New York Times map you can see who voted, what party they belong to and their district. You will be able to see that no matter whether they were democrats or republicans if they are in the farm country of America, high manufacturing areas of America, and low energy bills of America and the heartland of America - they voted NO on this bill and for very good reasons.

According to Ben Lieberman of the Heritage Foundation, "For a household of four, energy costs go up $436 that year and they eventually reach $1,241 in 2035 and average $829 annually over that span. Electricity costs go up 90 percent by 2035, gasoline by 58 percent, and natural gas by 55 percent by 2035. The cumulative higher energy costs for a family of four by then will be nearly $20,000.

"But direct energy costs are only part of the consumer impact. Nearly everything goes up, since higher energy costs raise production costs. If you look at the total cost of Waxman-Markey, it works out to an average of $2,979 annually from 2012-2035 for a household of four. By 2035 alone, the total cost is over $4,600."

You will notice that the states where the votes were yes are also the states that already have the highest energy bills. The states that voted no are mostly states with presently low energy bills.

Instead of calling this to Cap and Trade - We can really call it the Tax on Electricity Bills.

How does this information pertain to real estate investors? If you live in the lower energy pricing states you are going to be seeing huge increases in household energy bills. If you live in states that are coal powered or oil powered you will see the largest increases ever in your energy bills because those energy sources are going to be punished more severely with taxation.

• How is it going to affect home prices?

• How is it going to affect movement in and out of your state?

• How is it going to affect your utility bills and who is going to pay for this?

The House is at it again. This was a 1,300 page bill and again as with so many large bills was not read by most if not everyone who voted yes or no. What is it that they don't get? The American people expect our leaders to read what they vote on.

So what else is tucked away neatly into this bill that perhaps no one knows the full implications of yet?

How about the Federal imposition and takeover of building codes? Your local planning and building offices will not be qualified for any Federal funding of any kind unless they adopt what the FEDS say is the new energy efficient building standards. This will create higher prices in building new homes which is then passed on the homebuyers and then you as a real estate investor are also affected because fewer buyers will be able to afford to buy a new home built. Not to mention having to wait for the Feds to come and inspect the builders and the homes.

How about the new Federal Energy Nazis Inspectors who will come and rate your home before you can sell your home. So before you can put a home on the market for sale, you will have to wait for the Federal inspectors to come out. DMV lines anyone? Once that inspector comes out, he or she will give the home an energy rating. If the home does not meet the guidelines you will be required to do the work necessary to bring the home up to energy standards before you can sell it! Can we say money? Does that mean there will be homeowners who will become prisoners in their homes because they can not afford to make the energy repairs the feds require? Is that an invasion of your privacy as well as an attack on your property rights?

Hmmm, how is that going to effect short sales where the seller has no money to make the repairs and adjustments?

• How is this going to affect your ability to buy these properties in a timely manner?

• How is this going to affect your seller who is about to lose their home in a foreclosure?

• How is this going to affect the seller who has to relocate for their job?

• How is this going to affect estates when the heirs have to do these repairs and such when there won't be any money until the estate is sold?

I wonder if our Representatives and our Senators EVER thought to actually ask us in the field working this business day in and day out how these bills will affect the housing market?

Of course, the US will be living Cap and Tax while the real perpetrators of dirty air like China and India get off scot free. There will be an unfair advantage in pricing products and manufacturing to the point that if a US company even stands a chance of staying in the manufacturing business will have no choice but to move their company oversees which in turn will cause a massive layoff of people increasing the already high unemployment problem we are facing in our country.

• How will the unemployment affect your real estate business?

• How will the unemployment affect the REOs and massive foreclosures in your community?

• How will the unemployment affect home values as you get more and more vacant properties in your area?

If you invest in America's farmland you will begin to see farms no longer being able to produce a profit. Farms use a lot of energy. Energy use will be punished. This is why nearly every politician from a farm land state no matter what party they are affiliated with voted no on this bill. Their districts will suffer terribly. As this happens we will be buying more and more produce from other countries with far less health standards than our own. I don't trust foods, especially produce from China or other countries except Europe. But we don't import our veggies from Europe!

• How is this going to affect your real estate business if you live and work in a farm land state?

When it comes down to the nitty and the gritty about this bill you must remember that GE is the biggest supporter of this bill. They stand to make billions of dollars from the passage of this bill. The politicians voting yes on this bill, many of them are getting paid to vote yes. And Al Gore will become the very first GREEN billionaire. It is just too bad that he is not a real capitalist. He could not become a billionaire playing fair and square. Instead, he has an unfair advantage, legislation to make him filthy rich. Not exactly the free market way. It is all about the money.

Contact your Senators now to vote NO now. Click Here to find your Senators and contact them by email, phone and fax today. Let them know how this is going to affect your business and your community homeowners and buyers. Pass this on...