New Report – "Using Executive Authority to Achieve Greener Buildings"
Posted April 29, 2010
Today, the US Green Building Council, NRDC, and a collection of commercial and multifamily real estate groups rolled out our “Executive Authorities” report that thoroughly documents all the existing legal authorities that federal agencies have to put the petal to the metal on energy efficiency in commercial and multifamily buildings. I have been working with our friends at the USGBC and the agencies on this report over the last four months and am very happy to see these recommendations brought to the public.
This report is remarkable in that it uncovers what can be done right now to make buildings more efficient, and it is incredible just how much can be done without getting gummed up in Congress. Nearly every agency is touched, from the usual suspects at the Department of Energy and the Environmental Protection Agency, to the Federal Housing Administration, the Department of Agriculture, the Department of Defense, the General Services Administration, the Department of Housing and Urban Development, Fannie and Freddie, the National Park Service, and on and on. Commercial and multifamily buildings were always the sole scope of the report, but cross cutting recommendations are made that could have a tremendous impact on single family homes if implemented.
Take note of the diverse group of stakeholders from the building industry that join with us to support strong building codes, appliance standards, building labeling, and requirements and incentives for efficiency that go above and beyond the status quo. The commercial sector is certainly ready to shoulder their load in slashing emissions and moving to a clean energy economy.
In the process of reviewing the authorities and the report, the two agencies that jumped out to me as sleeping giants were the General Services Administration and the Department of Housing and Urban Development. I had a general idea that great things could be done, but as the lawyers dug deeper and translated for the buildings folks like myself, a bigger picture clearly emerged. From the broad data collection authority that HUD has to potentially transform what we know about our building stock and our retrofit success, to the lead by example ability of the GSA to influence all 72 billion square feet of commercial space in this country[i], the possibilities are vast.
A few key recommendations from the report are worth highlighting.
- Reforming appraisal and underwriting practices at Fannie Mae and Freddie Mac;
This one is near and dear to my heart. As David Goldstein says, if a $200,000 home costs $75,000 to run and $300,000 to drive to and from, shouldn’t the lending industry care if those costs could be half as much? Why wouldn’t the energy and transportation costs that an inefficient, poorly located home commits the owner to impact their likelihood of defaulting on their mortgage? Figuring out how to capture these impacts in the underwriting process would encourage builders, bankers, and homebuyers, literally every significant player in a building’s lifetime, to consider efficiency.
- Refining guidance applicable to the energy efficient commercial buildings tax deduction and the national historic preservation tax credit;
We have been pushing this one for a while now. The tax deduction for efficient commercial buildings exists and will exist through 2013, but it’s not very usable in its current form. Congress gave DOE and IRS all the direction necessary to make the deduction work; it’s time they revisited the guidance and took it seriously. Note that there are bills in Congress right now that tell them to go back and do it again, but they don’t have to wait.
- Streamlining Title 17 loan guarantees to make them suitable for buildings.
We all know “securitization” and “secondary markets” can have a huge impact on what kinds of financing that regular folks are exposed to, so why not use these markets to encourage the finance of things that are actually good for the country, like efficiency retrofits? DOE has the authority to provide loan guarantees for certain types of energy projects, why not building retrofits that could generate just as much if not more energy as a nuclear plant for a whole lot less money and environmental impact?
The responses I have gotten from some of the agencies on the report have been overwhelmingly positive to this point. I expect that the motivated folks across the government (and there are many) will use these existing authorities to push even harder on energy efficiency and I think we will begin to enjoy the results shortly.
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