Jimmy Carter’s impact on energy and affordability (a Propcast episode)

• Governments globally have housing initiatives focused on building codes and funding. In the U.S., key programs for homeownership support are FHA and VA loans.
• As the 39th president of the U.S., Jimmy Carter championed energy conservation to alleviate burdens on the less affluent, introducing solar panels to the White House and advocating reduced household energy consumption.
• The Carter-era Appliance Standards Program led to significant energy savings in household appliances, exemplified by refrigerators’ 75% energy reduction from 1972 to 2014.
• Energy efficiency regulations from the 1970s influence today’s households, democratizing comfort and promoting collaborative advancements between landlords and tenants.

In Season 2, Episode 14 of the Poplar Propcast, Justin Lieberknecht, VP of Marketing at Poplar Homes, explores the ripple effects of Jimmy Carter’s regulations on households, from homeowners to renters.

This blog summarizes the episode. To delve further into this intriguing topic, catch the full episode on Spotify or your preferred podcast platform.

Global housing programs

Justin highlights various international housing programs, stating, “When you’re talking about how the government kind of has its hand in housing, most of the stuff is around building codes, funding for houses, tax breaks, and zoning.”

A snapshot of these programs includes:

• Singapore: “Singapore has stuff like the Housing and Development Board that manages public housing. It has a comprehensive approach, and it does rigorous planning subsidies for low-income houses.”
• UK: The ‘Right-to-Buy’ program from the 1980s, which “increased home ownership and helped families build wealth through property ownership.”
• Canada: Justin praises Canada’s National Housing Strategy, commenting that the “current opinion on that is it’s really strong.”
• Australia: Justin humorously notes, “Australia has the National Rental Affordability Scheme introduced in 2008. I like that. They call it a scheme, which feels very, very Australian.”
• Brazil: The ‘My Home, My Life’ program “aims to provide affordable housing for low-income families.”

Stating these programs as international examples, Justin notes that the U.S. has its set of housing initiatives as well. Justin remarks, “In the US, we have several programs around this.”

• FHA loans: “I bought my first house with an FHA loan. They are so pivotal to first-time homeownership.”
• VA loans: Speaking from experience, Justin notes, “My grandfather bought his house with the VA loan.”
• USDA programs: “Sometimes the mortgage is the same or even cheaper than renting just because the USDA has so much money backing it.”

Justin emphasizes the common goal of these programs: “They’re trying to truncate the path to homeownership.”

Jimmy Carter’s progressive approach to energy

Justin delves into the influence of President Jimmy Carter on energy conservation and its impact on households. He reflects on how certain regulations have long-standing consequences, especially when seen through the lens of efficiency and availability.

Justin points out, “The poorer you are, the higher percentage of your income goes to those things… you’re paying more for transportation, and you’re paying more for heating, air conditioning… all these things are a higher percentage of your income.” He argues that Carter’s focus on energy conservation was a significant move toward helping lower-income individuals and households.

The 1970s saw the US heavily dependent on oil imports. During this period, oil embargoes even dictated which day certain citizens could buy gas. Justin recalls, “Embargoes made it so that you had to go wait in line at a gas station depending on your zip code, phone number, or social security number. I can’t remember which one they used, but certain numbers got to get gas on certain days.”

Justin describes one Carter talk as a noteworthy speech that recognized the vulnerability of this dependence. Justin shares one Carter line as this: “All of us must learn to waste less energy. Simply by keeping our thermostats, for instance, at 65 degrees in the daytime and 55 degrees at night. We could save half the current shortage of natural gas.”

While Carter’s pragmatic approach was mocked by some, he didn’t deter from his mission. A notable action was his decision to install solar panels on the White House’s roof. As Justin clarifies, “Those solar panels weren’t photovoltaic. To my understanding, they were for heating water, so it was a way to get away from using natural gas.” 

Reflecting on personal memories, Justin adds, “My dad made some and put ’em on our roof when I was a kid. You basically run copper tubing through a metal box with a piece of glass on it, and inside that metal box, it turns into a little greenhouse effect that heats the water, and it makes you less reliant on natural gas.”

However, these energy-saving panels were removed in the 1980s during Ronald Reagan’s administration. The tradition of using solar panels in the White House was only revived by George W. Bush and, later, Barack Obama.

Through Carter’s approach to energy conservation regulations, Justin underscores the significance of efficient and sustainable practices that can benefit households, particularly those under financial strain.

The impact of the Appliance Standards Program

Under Carter’s guidance, the Department of Energy took major strides in promoting energy efficiency. Justin says, “Jimmy Carter was the first one to put them there in that space where he was kind of figuring out how to be more efficient.” The Appliance Standards Program, a pivotal initiative by the Carter administration, addressed 65 categories of appliances accounting for 90% of home energy use, including washers, dryers, lighting, refrigeration, and even heating and cooling systems.

The switch to energy-efficient solutions, like LEDs, which caused much uproar, finds its roots in the Carter Administration’s Appliance Standards Program. Carter didn’t just suggest these standards; he made sure they were actionable. Justin notes, “He was the first president to pass a law on energy efficiency standards that had teeth.” The program introduced both rewards and punitive measures to ensure compliance.

Jeff Genzer, an attorney and expert on energy standards, is quoted saying, “The impacts were extraordinary, even though he was in office for only four years. The advent of appliance standards produced in terms of lower energy costs for all consumers in the United States has to be in the hundreds of billions of dollars, and that’s over the last 40 years.”

While Carter’s approach to energy efficiency was initially viewed as a national sacrifice, Justin presents a compelling argument: “In trying to be more efficient, the downstream effect has been a progressive saving where you’re saving more money as a percentage of your income as you go down the economic ladder.”

The astonishing efficiency of modern appliances

The refrigerator stands out as a prime success story under these efficiency regulations. Justin outlines the impressive statistics: “In 1972, before these standards, a refrigerator would be using 2000 kilowatt hours a year of energy. By 2014, that consumption plummeted to just 500 kilowatt hours.” 

Not only did energy usage reduce by a whopping 75%, but the financial implications are just as impressive. “In 2014 dollars, the average price of a refrigerator had been cut almost in half from 1972. Even with pandemic-driven price hikes, they’re still considerably less expensive when adjusted for inflation than in 1972,” Justin notes.

The ripple effect of these regulations didn’t stop at refrigerators. “The washing machines you use consume less water. The dryers are more energy-efficient. Your heating and cooling equipment has vastly improved in efficiency,” Justin continues.

He touches on the recent advancements in heating, ventilation, and air conditioning (HVAC) systems, explaining the significance of the Seasonal Energy Efficiency Ratio (SEER). “A higher SEER number is better. It’s essentially how much energy and money it requires for efficient operation.” This metric demonstrates how inventive manufacturers have become in their approach to energy conservation. The strategies range from two-stage compressor systems to simple tactics like letting fans run a few minutes post-system shut-offs to optimize cool air circulation.

Looking back at older HVAC units, Justin points out, “Units from 20 years ago hovered between 8 to 10 SEER. Now, most are between 13 and 21.” With the option to incorporate heat pumps and even integrate with solar systems, the efficiency and subsequent savings continue to rise.

The real-world impact on households

Justin marvels at the longevity and ongoing relevance of these energy efficiency regulations conceived in the 1970s, “I just think it’s phenomenal that there was a program put together in the seventies whose tail end is still affecting us today.” He cites innovative concepts like zero houses, which boast exceptional insulation standards. “It’s so well insulated that the amount of energy to heat and cool it over the year is less than it costs to run a toaster.”

These advancements in energy efficiency have broader societal implications, too. They make previously challenging environments like Phoenix and Las Vegas or cold regions like Michigan more habitable. Justin observes, “The better we are at retaining the heat or cold in those environments, the easier it is for us to live there.” And this efficiency doesn’t just benefit a select few; it democratizes comfort, making it more accessible across socio-economic classes. Justin poignantly adds, “You don’t have to be rich to be able to afford to live. If you wanna live somewhere, you should be able to live there.”

Justin hints at the potential of the latest Inflation Reduction Act (IRA) in the future. He believes this legislation, with its significant financial incentives, might be the next catalyst for profound, long-lasting effects in the realm of energy efficiency and household affordability.

A win-win for property owners and renters

Building on the broader implications of energy efficiency regulations, Justin dives deeper into the dynamic between landlords and tenants and the opportunities that await them.

For landlords considering property improvements, Justin suggests a symbiotic approach where both parties stand to gain. “Utilities are included, and I will pay your electric bill. But you do that by putting solar on the roof,” he proposes, illustrating a scenario where renters can enjoy reduced utility costs while landlords enhance the property’s value. Such arrangements could extend further, with Justin suggesting, “I will work with you to put heat pumps in if you work with me to keep the property maintained.”

Given the vast rental landscape – “15 million single-family rental homes across the United States” – the potential for such collaborative efforts is immense. If property owners and renters nationwide harness these energy-efficient solutions, the ripple effects will benefit not just individual households but the country at large. Justin encapsulates this sentiment aptly: “The money’s out there. The incentive in funding is there. The long-term value is huge.”