Builders and real estate agents in the state next to mine have joined to oppose a plan that would increase the state real estate transfer tax to fund public transportation, meaning that $3,358.24 would be added to the cost of buying a home, based on the median price of $241,600 for an existing home.

Both groups argue that the additional tax comes when the real estate market is "turbulent," that the higher-price new-home segment will suffer the greatest impact and that, because of the roller-coaster nature of the housing industry, the funding source would be inconsistent.

As someone who depends on the train to go to and from work each day and drives about a mile a week to the supermarket (more if I have to make a trip to the home center), I'm a major supporter of mass transit.

That support increases as gasoline prices rise. Even though the price of gas in my neck of the woods remains below $2 a gallon, the train I take to work each morning is standing-room-only, and has been for 15 months, right after Hurricane Katrina allegedly tightened the supply.

Frankly, however, the idea of using increased taxes on real estate is not particularly bright. If you wish to encourage use of mass transit, you should raise the tax on gasoline to finance operation and expansion.

Transit-oriented development has become a "buzz-phrase" among developers, who recognize that the cost of energy likely will play a more important role in home buying decisions.

In fact, "house miles" (the number of miles a home is from employment, retail, education and entertainment) becoming a deal breaker or maker, according to land use industry experts at ULI's recent annual fall meeting in Denver.

There is a connection -- the connection between energy use and community design. The upshot: the smart response to long-term increases in oil and gas prices, along with shrinking energy supplies, is to develop in a way that reduces energy consumption by both buildings and cars.

Much-discussed designs that are now gaining traction include close-in infill projects, more downtown housing, and more mixed-use projects in urban centers and on the urban fringe.

The cost of distance, along with heating and cooling, is a factor in energy consumption that has a direct impact on housing affordability, according to ULI senior fellow John McIlwain pointed out, noting that "miles per house" could become a standard measurement of location desirability.

These factors are driving interest in green and sustainable development "like never before," and this will only increase as the environmentally conscious Generation Y enters the home buying market in full force, he said.

"A new generation of home buyers is looking at the world differently, and to them, green building will be a given," McIlwain said. "The issue of energy savings will be a fundamental driver in their decisions on what and where to buy."

A 2005 ULI survey found a growing number of consumers willing to combine more trips and use mass transit more to cut down on fuel consumption. Transportation spending is the second largest component of consumer expenses, taking up an average of 19 percent of their monthly income (monthly home mortgage payments generally at least 33 percent).

ULI senior fellow Robert Dunphy suggested that cost-of-living expenses per metro be recalibrated to more accurately reflect the impact of transportation costs by housing location.

Former Indianapolis mayor William Hudnut, also a ULI senior fellow, cited three converging forces that he predicted would thrust consumption of energy into the spotlight: "How much gas prices will affect people who are already squeezed; a declining investment in oil and gas exploration and production; and the need to reduce fossil-based fuels to counteract the impact of global warming."

Despite growing interest in alternative fuel and power sources, reducing dependency by the United States and other countries on fossil fuels "will not be easy," said petroleum geologist Elizabeth Wilson of the University of Maine at Oreno.

For instance, in 2003, 39 percent of the energy used worldwide was oil, followed by gas, at 24 percent. In the United States, public policies that more stringently mandate fuel efficiency of cars are one solution; another is greater investment in mass transit, she said.

There have been even more dire predictions. World oil production has either peaked or is close to peaking, according to some experts. The result: Though it may take a long time for supplies to run out completely, demand will outstrip supply. And that, New Urbanist author James Howard Kunstler says, will force Americans "to downscale and re-scale virtually everything we do. "

"The sprawling American suburbs, with their overdependence on the car, will take the biggest hit in the post-oil world," says Kunstler, author of The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century. "We are going to see an unprecedented loss of equity value and, of course, basic usefulness. We are going to see an amazing distress sale of properties, with few buyers ... ."

Worst-case scenario, Kunstler and others say, is a suburban McMansion occupied by two families, with most of their food produced in the front yard.

Published: November 16, 2006

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Al Heavens writes about real estate and home repair and improvement. He is the author of What No One Ever Tells You About Renovating Your Home: Real-Life Advice For Hassle-free, Cost-Effective Remodeling.