The following news summaries are compiled from NMHC's Update newsletter.  For more information on all of NMHC's legislative and regulatory issues, read the NMHC Update here.

Related Articles

• Free Sustainable Development Newsletter (August 31, 2010) 
• Energy Legislation Stalled (August 10, 2010)
• PACE Energy-Saving Loans Restricted (July 29, 2010) 
• Davis-Bacon Wage Requirements Could Derail Building STAR (June 18, 2010)
• Senate Climate Change Legislation Excludes Onerous Building Code Provisions (May 19, 2010) 
• Energy/Climate Change Bill Stalls in Senate (May 6, 2010)
• Older Posts 

AUGUST 31, 2010

Free Sustainable Development Newsletter

A new newsletter covering sustainable community development and planning is available free of charge from the Partnership for Sustainable Communities.

The monthly newsletter, P4SC News Wire, brings together all the latest news to help developers, planners and related professionals understand sustainable development and keep pace with changes in land-use policy.

Among other things, it tells developers where to look for opportunities, where to acquire land, how to cope with new green building mandates, how to comply with funders' increasing interest in "green locations" and what new state carbon emission reduction goals mean for your projects.

For a free subscription to P4SC News Wire, visit www.p4sc.org (click on "Subscribe to P4SC News") or call 415/453-2100.

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AUGUST 10, 2010

Energy Legislation Stalled

The Senate has reached an impasse over sweeping energy and climate change legislation and is unlikely to pass a comprehensive bill this year.  Several far-reaching measures addressing carbon caps, energy production, building and transportation efficiency, among other issues, have failed to achieve broad support, forcing Senate leaders to refocus on a small, targeted energy bill.  NMHC/NAA's primary concerns in energy legislation are onerous building energy codes and mandatory building labeling language. 

The House passed an extensive energy and climate package last summer (H.R. 2454), but the Senate wasn't able to come to a consensus on a far-reaching package.  A much-anticipated compromise proposal released in May by Senators John Kerry (D-MA) and Joseph Lieberman (I-CT) was scaled back In the face of waning support to limit carbon emissions from the utility sector only.  That effort stalled in July when Senate Majority Leader Harry Reid (D-NV) proposed a narrow energy bill, principally focused on oil spill and drilling issues.  That measure also was unable to secure the 60 votes needed to pass. 

Although unlikely, this modest Senate package could be paired with the broad House-passed legislation, which does contain the NMHC/NAA-opposed building codes and labeling provisions, in a conference committee after the fall elections.  Even without election pressures, numerous controversial provisions and economic concerns work against passage of a significant energy and climate bill this year.

Importantly, the NMHC/NAA-opposed provisions enjoy bipartisan support, so they could be enacted separately even in the absence of a comprehensive energy bill.  NMHC/NAA will continue to educate lawmakers about the need for building efficiency incentives instead of one-size-fits-all energy performance mandates.

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JULY 29, 2010

PACE Energy-Saving Loans Restricted

The Federal Housing Finance Agency (FHFA) released guidance on July 6 that severely limits the ability of multifamily properties to use Property Assessed Clean Energy (PACE) loans to finance energy efficiency retrofits of existing buildings.  Under the PACE program, participating jurisdictions use municipal bonds proceeds to fund energy upgrade loans to property owners. The loans are repaid through an additional assessment on the borrower’s property tax bill.

As the GSE regulator, FHFA objects to fact that most PACE debt acquires a senior lien over existing mortgages.  The guidance essentially prohibits the GSEs from purchasing mortgages subject to PACE financing.  FHFA is also requiring the GSEs to refine their policies for all borrowers in jurisdictions with PACE programs, including adjusting loan-to-value ratios, requiring additional loan covenants and tightening debt-to-income ratios.  As a result, most jurisdictions have suspended their PACE initiatives.

Rep. Mike Thompson (D-CA) is pursuing legislation to reverse the FHFA policy, and California has filed a federal lawsuit to overturn it.  However, the FDIC and the Office of the Comptroller of the Currency have subsequently echoed the concerns raised by FHFA and have issued an alert to banks to mitigate the risks posed by PACE loans. 

Given the limitations of the PACE program, Fannie Mae has convened a Green Rental Task Force to better understand existing energy-efficiency programs and to explore new possibilities in green and energy retrofit financing.  NMHC/NAA participate in the task force.

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JUNE 18, 2010

Davis-Bacon Wage Requirements Could Derail Building STAR

Efforts to enact a rebate and technical assistance program for commercial property owners who make energy-efficiency improvements were derailed when the House version of the legislation added a provision requiring that the work be done by contractors following federal Davis-Bacon prevailing wage requirements.

The legislation (S. 3079/H.R. 5476), known as Building STAR, was supported by NMHC/NAA and a coalition of other organizations.  Among other things, the measure would create a new two-year program providing rebates to property owners for qualifying energy-efficiency retrofit measures. 

In a letter sent to lawmakers last week, we objected to the Davis-Bacon requirements, noting that they will undermine the job creation, energy efficiency and environmental benefits of the Building STAR program by making it more difficult for companies to participate. 

Earlier this year, the GAO identified comparable requirements as one of the reasons for delayed disbursements in the federal stimulus bill (H.R. 1).  We will continue to urge lawmakers to remove the wage provisions.  The future of the $6 billion proposal is in doubt, however, given the crowded legislative calendar and rising concerns over increased deficit spending.

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MAY 19, 2010

Senate Climate Change Legislation Excludes Onerous Building Code Provisions

On May 12, Senators John Kerry (D-MA) and Joseph Lieberman (I-CT) released a long-awaited draft of their climate change legislation.  The "discussion draft" is the result of months of work by Kerry, Lieberman and Senator Lindsey Graham (R-SC); Graham later withdrew his support over a political rift with Senate Majority Leader Harry Reid (D-NV) over immigration reform.

Importantly, the Kerry-Lieberman bill does not address building energy efficiency standards.  While the Senate Energy and Natural Resources Committee has held days of hearings on this topic and did advance a provision related to building energy performance and standard setting within the context of the building codes, this work was not referenced in the legislative language that has been released. 

The Kerry-Lieberman measure seeks to cut U.S. greenhouse gas emissions 17 percent from 2005 levels by 2020; comparable to the targets in H.R. 2454.  Its focus is regulating the biggest sources of greenhouse gas in the nation's economy.  It also preempts states from running their own cap-and-trade programs.

The measure has not been formally introduced in the Senate; it is not clear whether the building-specific provisions will be folded in.  It remains unclear how lawmakers will move forward given the crowded legislative calendar and November elections. 

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 MAY 6, 2010

Energy/Climate Change Bill Stalls in Senate

Last week's expected release of a long-awaited climate change bill being drafted by Senators Lindsey Graham (R-SC), John Kerry (D-MA) and Joe Lieberman (I-CT) was derailed in the wake of Majority Leader Harry Reid's (D-NV) announcement that he would move immigration reform before the energy bill.

The announcement prompted Graham, also an active participant in the immigration debate, to withdraw his support, saying that the two issues were sufficiently complex and critically important that they should not be competing for floor time.  Reid's subsequent remarks that energy would move first have not been sufficient to secure Graham's return to the climate change measure. 

Although its contents are not yet known, the Kerry/Lieberman/Graham bill has been carefully crafted by its co-sponsors to address some of the most contentious energy issues, including the future of nuclear energy and off-shore drilling.

While release of the bill has been postponed, Kerry has submitted a "description" of it to the EPA for a detailed cost analysis in hopes of keeping the measure moving forward.

Administration Directs $452 Million to Building Retrofits

On April 22, Vice President Biden announced that $452 million in Recovery Act dollars will be used to fund energy efficiency building retrofits.  The funding is being distributed through 25 regional, state and local efficiency programs selected by the Department of Energy's Retrofit Ramp-Up initiative. 

A number of these programs specifically target multifamily properties, and assistance will range from technical services to grants and low-cost financing. 

In addition, the Administration clarified that this funding did not diminish the need for additional building retrofit incentives and encouraged Congress to pass the pending "Home Star" bill (H.R. 5019) that provides efficiency rebates for single-family houses.  The House is expected to take up the $6 billion bill, also known as "cash for caulkers," this week. 

NMHC/NAA have been working with a coalition of real estate and environmental interests to enact a comparable Building Star program to provide technical and financial assistance to multifamily and commercial building owners to improve energy and water efficiency. 

The Senate Energy Committee held a hearing on the Building Star measure in March; however, no comparable legislation has been introduced in the House.  Overall, this effort has been stalled by cost concerns and differences over labor-related provisions, making the future of the bill unclear.  

House Moves GREEN Act for Federally Assisted Multifamily Properties

On April 22, Earth Day, the House Financial Services Committee passed bipartisan legislation supported by NMHC/NAA that promotes sustainability and energy-efficiency practices in HUD-assisted multifamily housing.  The GREEN Act (Green Resources for Energy Efficient Neighborhoods, H.R. 2336) provides incentives for new and existing structures financed by HUD that meet or exceed minimum energy-efficiency standards established in the bill.

It also authorizes (but doesn't fund) a four-year, 50,000-unit demonstration program of building rehabilitation strategies and energy-efficient technologies.

NMHC/NAA staff worked closely with the sponsor of the legislation, Representative Ed Perlmutter (D-CO), to tailor language regarding green appraisals.  As a result of our efforts, a future rulemaking on how appraisals will value energy efficiency and other green features will permit stakeholders to offer suggestions on how such features should be evaluated.  

H.R. 2336 also directs the Comptroller General to conduct an analysis of whether certain provisions of the current building energy code pose an obstacle to deploying distributive energy generation technology and water efficiency measures in federally assisted multifamily housing.

An earlier version of the bill passed the full House in 2008 and again in 2009 as part of climate change legislation (H.R. 2454) and is expected to pass again.  Senate passage is unclear at this time.

Report Identifies "Existing Authorities" for Federal Green Building Agenda

On April 29, a coalition headed by the U.S. Green Building Council released a report detailing the "existing authorities" and appropriations in place throughout the federal government to promote a green building agenda.  

According to the report, the Obama Administration can use over 30 existing federal programs worth $72 billion to enhance efficiency in multifamily and commercial properties with no new legislation.

The document details numerous ways the Administration can shift the focus of existing programs to include an emphasis on green alternatives, such as reforming the appraisal and underwriting processes at Fannie Mae and Freddie Mac and integrating sustainability criteria in competitive grants and funding formulas. 

The report, "Using Executive Authority to Achieve Greener Buildings," is available at http://bit.ly/axpjhH. 

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APRIL 8, 2010

ICC Publishes Green Building Code

The International Code Council (ICC) has released the initial draft of its new International Green Construction Code (IGCC), the first model code for green buildings.  The IGCC was designed to be compatible with the widely adopted ICC family of codes and standards, including the National Green Building Standard (NGBS). 

Importantly, the IGCC directs most residential projects, including multifamily buildings three stories or less, to comply with the NGBS.  Multifamily buildings four stories or more have the choice of either following the new IGCC provisions or complying with the NGBS. 

The IGCC provides apartment firms with a complete toolbox of green building guidelines while increasing the visibility and credibility of the NGBS.  However, building owners and developers are cautioned that the code is still in draft form and has not been fully vetted through the code development process. 

Since official publication of the IGCC is not expected before 2012, firms should be alert for jurisdictions considering the premature adoption of draft versions. 

An additional concern is the fact that the IGCC incorporates ASHRAE's green building standard 189.1 as an alternative compliance option within the IGCC.  As currently written, a jurisdiction that approves use of ASHRAE 189.1 for IGCC compliance is agreeing to rely solely on the 189.1 provisions--eliminating the ability of building designers to follow the IGCC's own criteria.  This is a departure from the usual structure of alternative compliance options, and we are concerned that adopting jurisdictions will not fully understand the implications of their selections.

NMHC/NAA will continue to support the development of the IGCC and its reference to the NGBS and will provide further guidance for apartment firms facing adoption of the ASHRAE 189.1 standard. 

The IGCC draft is available at http://bit.ly/9MsaWd.

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MARCH 11, 2010

ICC Drafts International Green Construction Code

The International Code Council is working on a draft version of an International Green Construction Code (IGCC), which will be released for public comment on March 15.  The IGCC covers apartment properties.

As reported in the February 10 Update, the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) has also recently published a new green building standard, Standard 189.1.

Importantly, the IGCC will reference the National Green Building Standard (NGBS) (which ASHRAE 189.1 does not) and multifamily buildings can comply with the IGCC by either following the new IGCC provisions or by simply complying with the NGBS.  The NGBS has been a top priority for NMHC/NAA, and we were instrumental in ensuring that apartments were included in the green building standard.

NMHC/NAA continue to advocate for green building standards that specifically address multifamily buildings and that provide meaningful and cost-effective green solutions to the apartment industry. 

NMHC/NAA Attend White House Clean Energy Economy Forum

As mentioned in the February 10 Update, the EPA, HUD and the Department of Transportation are working together to create more sustainable communities.  NMHC/NAA were invited to participate in a White House Clean Energy Economy Forum on March 3 as part of that initiative. 

HUD Secretary Shaun Donovan, Transportation Secretary Ray LaHood and Chairman of the Council on Environmental Quality Nancy Sutley addressed the Obama Administration's commitment to sustainable communities, focusing on collaborative efforts between HUD and the Department of Transportation to link planning, transportation and housing.  The agencies pledged that efforts to stimulate energy-efficient houses and communities would continue. 

List of Multifamily Properties Automatically Eligible for Weatherization Assistance Released

On January 25, the Department of Energy (DOE) implemented a new rule streamlining the Weatherization Assistance Program (WAP).  Under the new NMHC/NAA-supported rule, assisted and tax credit multifamily units included on a list published by the DOE automatically meet certain WAP income eligibility requirements and may meet other requirements without the need for further evaluation or verification.

Prior to these new rules, apartment properties had to verify the income of every resident to apply for weatherization funds, even though HUD and the IRS were already collecting resident income verification data for subsidized properties.

The DOE list of eligible multifamily buildings has been published and is available at www.nmhc.org/goto/5126.

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FEBRUARY 25, 2010

Seattle Program to Require Energy Rating and Performance Disclosure of Apartments

On January 25, Seattle passed a first-of-its kind-ordinance requiring annual energy performance rating and performance disclosure in all multifamily buildings with five or more units.  Beginning in 2012, apartments must benchmark their energy performance using the Energy Star Portfolio Manager or a similar, yet-to-be-specified tool.  Performance data must be reported to the city annually and disclosed to current and prospective residents, potential buyers and lenders upon request. 

Seattle’s legislation follows a growing trend in building energy benchmarking mandates, yet is unique both in its broad applicability to all multifamily buildings and the breadth of disclosure requirements compared to similar laws in New York City and Washington, DC.  As such, Seattle has initiated a pilot program to better understand the implementation needs of the multifamily sector.

The pilot program provides our industry with a unique opportunity to help shape the final regulatory requirements.  This is especially meaningful since it is expected that Seattle’s program will be replicated in other jurisdictions.  Firms with a presence in Seattle are currently being sought for inclusion in the pilot program.

For more information about the pilot program and how to get involved, please contact NMHC's Paula Cino at 202/974-2345 or pcino@nmhc.org.

Climate Change/Energy Legislation Stalled

Congress remains unable to pass a comprehensive climate change bill.  While there was some possibility that lawmakers would be able to come to agreement on a set of initiatives, that effort, led by Senators John Kerry (D-MA), Joe Lieberman (I-CT) and Lindsey Graham (R-SC) appears to have foundered under the weight of other “must-do” legislation.  With health care, a jobs/tax extension bill and financial reform on the agenda, there is little possibility that a climate bill will pass this year. 

Work on energy policy is nevertheless continuing.  ”Cap and dividend” is being talked about as a strong alternative to the ”cap and trade” measured passed by the House.   While both scenarios envision a limitation (cap) on greenhouse gas emissions, the cap and dividend plan does not create a massive derivative trading scheme likely to benefit large utilities.  The dividend plan, advanced by Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) would return funds to consumers to offset the cost of higher utility prices. 

Congressional Staffers are trying to attach energy provisions to legislation that is expected to have an easier time passing, such as a future "jobs" bill.  The President has indicated strong support for a bill that would create green jobs and help property owners improve the energy efficiency of existing properties.  

The House passed a jobs bill as part of a broader appropriations measure (H.R. 2847) before adjourning in December.  Senate Majority Leader Harry Reid (D-NV) says the jobs initiative will move forward in phases.  The first phase involves a scaled-back $15 billion jobs bill that passed the Senate on Tuesday and does not include any incentives for building retrofits.

NMHC/NAA continue to support measures that provide both technical and financial assistance to property owners to improve the energy and water performance of their properties.  Currently, a coalition of interests has offered support for a "Building Star" program that would provide incentives for the retrofit of certain features on commercial properties, including multifamily.  Senator Jeff Merkley (D-OR) has indicated that he will introduce legislation to create the Building Star program.  Whether it is possible for this measure to move as part of a later phase of the jobs bill or as a stand-alone measure is unclear. 

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FEBRUARY 10, 2010

ASHRAE Publishes New Green Building Standard 

On January 22, the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) published a new green building standard (Standard 189.1) covering new and substantially renovated commercial buildings, including multifamily properties over three stories.

Standard 189.1 represents a significant departure from existing green building programs and standards, such as the National Green Building Standard and the LEED rating systems, because it does not allow users the flexibility of selecting from a menu of sustainable practices.  Instead, all of 189.1's provisions are mandatory and regulate a broad spectrum of building practices including energy and water efficiency, site sustainability, indoor air quality, materials and resource conservation and building operations.

As a development committee member, NMHC/NAA successfully removed the most onerous provisions from draft versions, including arbitrary caps on apartment unit size and requirements for on-site renewable energy systems (regardless of geographic appropriateness and technical feasibility). 

We also successfully incorporated common-sense exceptions for multifamily buildings from measures impractical for residential occupancies.  While the final standard is an improvement over earlier versions, it still requires the use of products and technologies not used and unproven in the multifamily sector.

Energy Department Streamlines Weatherization Assistance Program

On January 25, the U.S. Department of Energy (DOE) issued new rules streamlining the Weatherization Assistance Program application process.  The NMHC/NAA-supported rule makes certain HUD-assisted and Low-Income Housing Tax Credit (LIHTC) properties automatically eligible without further evaluation or verification.

Prior to these new rules, which are effective as of February 24, apartment properties had to verify the income of every resident to apply for weatherization funds, even though HUD and the IRS were already collecting resident income verification data for subsidized properties.

NMHC/NAA have urged the DOE and HUD to make these changes to the application process since 2006.

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OCTOBER 27, 2009

Beyond Building Codes: Building Retrofits Take Center Stage

Efforts to improve the energy efficiency of the U.S. building stock are increasingly looking beyond new construction and focusing on retrofitting existing buildings.  On October 19, Vice President Biden's Middle Class Task Force announced a plan to use Recovery Act funds to encourage energy retrofits in residential buildings.

Unfortunately, a principal component of the plan is to develop energy performance labels that can be used in building valuation and transactions, mimicking controversial building labeling provisions of the House-passed Waxman-Markey energy bill (H.R. 2454). 

Significant industry push-back resulted in legislative language specifically excluding existing buildings from the labeling requirements of the House bill.  NMHC continues to press for the expansion of voluntary energy efficiency programs like Energy Star and caution lawmakers against any program that will impose undue costs or hamper real estate transactions.

In related news, Enterprise Community Partners announced a $4 billion commitment to accelerate the greening of affordable housing.  In part, this initiative will provide funding for energy and water efficient retrofits in multifamily buildings.  More information about grant and loan opportunities for green building from Enterprise is available at www.enterprisecommunity.org/financial_products/.

Sustainability and Energy Efficiency Concerns Temporarily Drop in Economic Downturn

Federal efforts to stimulate green building haven't prompted many investors to change their investment decisions, according to a new ULI report.  Climate Change, Land Use and Energy 2009 finds that 57 percent of the respondents said the economic downturn had significantly or somewhat weakened the business significance of climate change and energy issues.  Many say they are waiting to see how they will be affected by regulations yet to come on the federal, state and local levels. 

In addition, investors tend to view energy efficiency -- rather than climate change -- as an important bottom-line issue, and are more apt to reshape their business strategies around reducing energy costs rather than reducing greenhouse gas emissions.

While interest rates and job growth dominated investment concerns among the survey respondents, the majority said that issues related to climate change will be increasingly important in the years ahead and many are preparing for that by conducting energy-efficiency analyses and increasing their internal expertise.  Nearly 50 percent said they have developed significant expertise in energy or energy-efficiency issues, and one-third have developed professional expertise in sustainable community development.

The report also finds that 80% of firms incorporate energy-related questions into their due diligence and that many are developing internal metrics to define sustainability instead of using the widely accepted green rating systems, such as LEED, NGBS and EPA Energy Star. 

The ULI study is available at: http://tinyurl.com/ULIClimateChange.

Congress Forms Livable Communities Task Force

While sustainability may be taking a back seat to the economy for some firms, it is firmly taking root in Congress and the Obama Administration.  

Earlier this year, HUD, EPA and the Department of Transportation created an Interagency Council on Sustainable Communities, and Senator Christopher Dodd (D-CT) has introduced a Livable Communities Act (S. 1619) that would create a grant program for communities to plan smart growth projects.

Last week, 19 Congressional Democrats formed a new task force to promote livable communities.  The group will focus on curbing oil dependence, cutting greenhouse gas emissions, and promoting good urban planning that links housing and transportation.

NMHC welcomes these high-profile efforts to advance our long-held mission of encouraging smart growth and overcoming opposition to apartments.  We will use these opportunities to promote apartments as the most sustainable form of housing.  Firms are reminded that NMHC has produced numerous resources to help them create a new appreciation for compact development, including an NMHC-ULI density toolkit and a compelling “Plan for Tomorrow” presentation. 

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OCTOBER 19, 2009

Senate Climate Change Bill Takes Alternate Approach on Energy Codes
Senators Barbara Boxer (D-CA) and John Kerry (D-MA) introduced the Senate's long-awaited climate change bill, the Clean Energy Jobs and American Power Act (S. 1733), on September 30.   

This bill offers more pragmatic and practical alternatives to several issues in other energy bills that were problematic for building owners.  Most notably, it eliminates specific energy efficiency building code targets and timelines, leaving those decisions to an EPA rulemaking. 

An NMHC-opposed provision in the House of Representatives’ climate change measure (H.R. 2454) would require the Energy Department to establish and enforce a national energy efficiency building code that is 30% more efficient than current standards by 2010 and 50% more efficient by 2016.  The Senate bill also does not include a building labeling requirement. 

The Senate Environment and Public Works Committee will begin three days of hearings on S. 1733 on October 27, allowing the EPA to first complete a cost analysis of the measure.  While Boxer says she is confident the bill will pass the committee by mid-November, Senate Majority Leader Harry Reid (D-NV) has cautioned that a floor vote may have to be delayed into 2010.

There is only a small window in 2010 to act, however, before pending mid-term elections will make it difficult for lawmakers to take up this controversial bill.  The result could be a scaled-down energy bill with no climate change or cap-and-trade provisions.  NMHC will continue to work with lawmakers to ensure they understand the apartment industry's needs and concerns.  

We have produced a side-by-side analysis that compares the House and Senate climate change bills as well as another Senate energy bill (S. 1462).  It is available at www.nmhc.org/goto/5144.

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OCTOBER 1, 2009

Climate Bill May Be Pushed into 2010

The outlook for passage of a climate change bill in 2009 is increasingly unlikely as Senate Majority Leader Harry Reid (D-NV) signals that health care, financial regulation and must-pass spending bills take priority.

There is only a small window in 2010 to act, however, before pending mid-term elections will make it difficult for lawmakers to take up this controversial bill.  The result could be a scaled-down energy bill with no climate change or cap-and-trade provisions.  Under this scenario, the most onerous apartment-related provisions, including building code mandates and building labeling, may unfortunately be included in the scaled-down energy package.

In spite of the predicted delays, this week the Senate unveiled its long-awaited climate change bill, adding to the package of energy-related bills passed by a Senate committee this summer and the House's Waxman-Markey bill (H.R. 2454). 

In the absence of legislation, the EPA is expected to take steps to regulate greenhouse gases (GHG) under the Clean Air Act (CAA) (see the April 29 NMHC Update).  Unlike climate change legislation, which would only have a direct effect on large entities such as utilities and manufacturers, GHG regulations could result in rules for small GHG emitters, including large apartment buildings. 

The EPA has indicated a preference to exclude small emitters, but certain legal requirements within the CAA may prevent such tailoring.  Congress may take steps to stop GHG regulations, though.  Last week, Senator Lisa Murkowski (R-AK) sought an amendment to the FY 2010 EPA spending bill that would have blocked the agency from moving forward with its proposed GHG regulations.

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SEPTEMBER 9, 2009

USGBC to Assess How Well LEED-Rated Buildings Save Energy, Water

The U.S. Green Building Council (USGBC) announced last week that it will develop a program to determine how buildings certified under its LEED (Leadership in Energy and Environmental Design) program save energy and water.

The group plans to develop a database of LEED-certified buildings to help owners address any performance gaps that stem from predicted building performance versus actual performance.

The move is a response to a 2008 study of 121 LEED-certified buildings that found several performed below their expected energy efficiency. 

An August 31 New York Times article (Some Buildings Not Living Up to Green Label) highlighted the fact that some LEED-certified buildings are not living up to the green label.  It notes that properties can accumulate LEED points for a variety of environmentally friendly traits that don't necessarily improve energy efficiency, such as proximity to public transportation, indoor air quality and building materials.

It also points out that unlike the EPA Energy Star rating, which owners must apply for every year based on their building's performance, once LEED certification is given there are no recertification or energy performance testing requirements.

The article also supports NMHC's claims that building codes, such as those being considered in the pending climate change bill, are an ineffective means of improving energy efficiency because much of the energy used in a building is out of the control of the building codes; it is a result of how people use the building and whether occupants take steps to conserve energy. 

USGBC says it plans to hold meetings this month and next with property owners and developers to promote its building performance initiative and it may consider revising its rating program to ensure buildings reduce energy consumption.

National Academy of Sciences Report Urges Compact Development

On September 1, the National Academy of Sciences (NAS) released a report calling for "compact development" to help reduce carbon emissions. 

According to Driving and the Built Environment: The Effects of Compact Development on Motorized Travel, Energy Use, and CO₂ Emissions, if 75 percent of new development were built at twice the density of current norms, vehicle miles traveled could drop 25 percent and greenhouse gas emissions could be reduced up to eight percent by 2050. 

Recognizing that doubling the density of 75 percent of new construction would be challenging, it notes that even if just 25 percent of new development were compact, it would cut driving by 12 percent and would reduce greenhouse gas emissions by 1 percent above baseline emissions in 2030, and between 1.3 and 1.7 percent by 2050.  

The report is available at www.nmhc.org/goto/5387.

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AUGUST 20, 2009

Implementation of Mandatory Green Building Laws Problematic 
Implementation of mandatory green building requirements is proving to be problematic at the state and local levels, underscoring NMHC's ongoing concerns with mandatory programs.  

The latest example comes from Baltimore City, where as of July 1, all new and renovated commercial and multifamily buildings over 10,000 square feet are required to meet the city’s green building standards under a two-year-old law.  However, the city's green standards remain incomplete and no guidance has been produced to help developers comply with the new law.  As a result, Baltimore’s development community is calling on the City Council to reconsider the legislation. 

Until final standards and guidance are provided, developers must follow the U.S. Green Building Council’s LEED criteria (although LEED certification is not required).  Developers also note that the new law's high costs and complexity undermine the city's smart growth policies by incentivizing development in surrounding communities that do not have green building requirements and instead offer incentives for sustainable building. 

NMHC has previously raised these issues at the federal level as Congress considers various green building and energy code mandates.  We have voiced support for voluntary, incentive-based green building initiatives and stressed the importance of using national consensus codes and standards, such as the National Green Building Standard, to establish minimum efficiency or sustainability benchmarks.  

In addition, NMHC has emphasized the need to marry green building policies with land-use and smart growth efforts promoting density, mixed-use and infill projects.           

More information about NMHC’s contribution to the National Green Building Standard is available at www.nmhc.org/goto/5036. 

Livable Communities Act 
Senator Christopher Dodd, Chairman of the Senate Banking, Housing, and Urban Affairs Committee, has introduced the Livable Communities Act of 2009 (S. 1619).  

The bill would create a grant program for communities to plan for housing and transportation projects, including public transportation, transit-oriented development, redeveloping brownfield sites, and affordable housing.  Communities could then receive challenge grants to implement their plans.

It would also create an Office of Sustainable Housing and Communities within the Department of Housing and Urban Development (HUD).  And as mentioned previously, it would establish the Interagency Council on Sustainable Communities, consisting of the HUD Secretary, the Secretary of Transportation and the Administrator of the Environmental Protection Agency.

NMHC will continue to educate policymakers that apartments are the most sustainable form of housing and a key ingredient in smart growth. 

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AUGUST 5, 2009 

Survey on Building Energy Model Usage, August 15 Deadline

NMHC members are asked to participate in a new Harvard University survey regarding building energy models. 

The survey will examine the use of building energy simulation during design, construction and operation. 

Harvard intends to develop recommendations of how real estate owners should interact with their building design teams to get maximum benefit from their building performance analysis contracts. 

We believe that the information gathered by this survey will be extremely helpful to our work on the development of model building codes.

The survey is posted at http://tinyurl.com/BuildingSurvey.  Responses are due no later than August 15, and results will be available in January 2010.

Congress Looks Beyond Building Codes for Energy Savings

After targeting buildings for higher (and in some cases technologically infeasible) energy efficiency mandates, Congress is also now focused on how to get building occupants to do their part in saving energy. 

NMHC originally raised this issue with lawmakers as they consider onerous energy efficiency building codes (see the June 10 NMHC Update), explaining that 50-70 percent of the energy consumed by a building falls outside of the items covered by building codes. 

As a consequence, highly expensive building efficiency mandates are of limited value if the occupants, who control the lights and HVAC systems of the high-performance properties, do not use the systems properly or are careless regarding energy consumption by appliances etc.

Last week a House Committee approved $60 million in funding for social and behavioral sciences research to study the choices people make related to energy efficiency and new technologies. 

The research will explore why consumers adopt some energy efficiency equipment and behaviors but not others and will identify perceived reasons for non-adoption, such as lifestyle disruption and ease of operation.

NMHC will continue to press policymakers to take a more comprehensive approach to energy savings that recognizes the limitations in addressing just the building instead of the building occupants’ behavior. 

This is important as several studies show that one-third of total U.S. carbon emissions are produced by the equipment over which individuals have direct control.

In addition, the apartment industry will benefit from the research produced under this bill, which will predict what new products and practices will be accepted and will be properly used by residents.

HUD Appoints Senior Sustainable Housing Advisor

As the federal government emphasizes sustainable housing, the Department of Housing and Urban Development announced on Friday the appointment of Shelley Poticha as Senior Advisor for Sustainable Housing and Communities. 

As mentioned in the April 3 NMHC Update, a new partnership between HUD, the Environmental Protection Agency, and the Departments of Transportation and Energy aims to advance communities that are livable, sustainable, and affordable.

NMHC welcomes this embrace of sustainable communities.  As our country strives to grow more sustainably we will work to remind policymakers that apartments are inherently sustainable and a key building block of Smart Growth.

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 JULY 14, 2009

DOE Tightens Lighting Efficiency Standards

On June 29, the U.S. Department of Energy (DOE) announced tighter lighting efficiency rules for incandescent and fluorescent floor lamps.  These rules will have significant cost implications for property owners and managers.  The rules do not phase out incandescent lights, but require incandescent reflector lamps (IRLs) used in recessed and track lighting to be 25 percent more efficient by 2012.  General service fluorescent lamps must be 15 percent more efficient than current baseline models. 

While the DOE asserts the new efficiency requirements will save money over the life of the lamp, they estimate that the upfront costs of fluorescent lamps will increase as much as 13-fold, and IRLs will cost up to 64 percent more than today’s lamps.  Additional information is available at http://tinyurl.com/kmsxhn.

DOE Directs Stimulus Funds to Building Efficiency

On June 29, the Department of Energy announced an investment of $346 million in American Recovery and Reinvestment Act (ARRA, P.L. 111-5) funds to promote energy efficiency in buildings.  The largest distribution, $100 million, will go towards the Advanced Building Systems Research Program, which researches building design, construction and operation practices. 

In addition, $50 million will fund advanced lighting research, such as light-emitting diodes (LEDs), $70 million will support worker training, consumer education and energy retrofits under the Residential Buildings Development and Deployment Program and $53.5 million will promote public-private partnerships under the Commercial Buildings Initiative. 

Importantly, $72.5 million will go to the Buildings and Appliance Market Transformation Program for the stated purpose of implementing new high-efficiency building energy codes, like those mandated by the House-passed Waxman-Markey energy bill (see the June 10, 2009 NMHC Update.)  In a positive turn, a portion of those funds will be used to help the industry prepare and achieve new code requirements and to expand the Energy Star program. 

NMHC has long argued for greater support of voluntary efficiency programs like Energy Star and has emphasized that higher efficiency goals for the apartment sector require greater DOE efforts to develop and deploy new technologies for multifamily buildings.

More information about the Waxman-Markey bill and new code requirements is available at: www.nmhc.org/goto5144.

In a separate announcement, the DOE has awarded $454 million in stimulus funds to promote clean and renewable energy in 18 states.  While these funds are directed toward a wide variety of programs, a portion of the funds is specifically directed to state efforts to develop and adopt building energy codes. 

Some states will also use funds to support energy-efficiency programs creating funding opportunities and incentives for building owners to improve the energy performance of their properties.  

Renewable Energy Grants

On July 9, the U.S. Treasury Department released more details and application procedures for the renewable energy grants authorized by The American Recovery and Reinvestment Act (ARRA) of 2009 (P.L. 111-5).  The new federal grant program allows taxpayers to elect to obtain a grant in lieu of Section 48 tax credits that they would otherwise be eligible to receive.

To qualify for the grants, the property must generally be placed in service in 2009 or 2010 (or, in some cases, construction must begin during 2009 or 2010 with a later placed-in-service date).  Taxpayers receiving the grants must also make appropriate adjustments to the basis of the property.

As part of the Treasury guidance, the Department clarified that REIT eligibility for the grants is limited to the extent that the REIT retains taxable income.  NMHC, NAREIT and a coalition of commercial real estate organizations had been actively engaging with numerous legislative and regulatory parties regarding this matter with the hope that the conclusion would allow for a wider utilization of the grants by REITs.

Additional information is available at www.nmhc.org/goto/4915.

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JUNE 29, 2009

House Passes Climate Change Bill, Includes Apartment-Related Provisions

On Friday, the U.S. House of Representatives passed comprehensive energy and climate change legislation by a narrow seven-vote majority.  In addition to having economy-wide effects on energy costs and supply, The American Clean Energy and Security Act of 2009 (H.R. 2454), or "Waxman-Markey bill," includes a Title that specifically targets building efficiency.  The section provides incentives for retrofits of existing buildings as well as very troubling building code-related mandates.

Links to the full bill and NMHC’s side-by-side analysis of the House measure and a more limited Senate bill are available at www.nmhc.org/goto/5144.

Key Building-Related Provisions:

• National Energy Efficiency Code (Sec. 201).  Establishes a national building code that must be 30 percent more efficient than existing codes by 2010 and 50 percent more efficient by 2014.  Federalizes building code enforcement. 

NMHC/NAA and other real estate organizations opposed the measure because of the unreasonably tight timeframes for achieving the levels of efficiency called for in the measure and the usurpation of the states’ role in the code process.   

• Building Retrofit Program (Sec. 202).  Creates a “Retrofit for Energy and Environmental Performance" (REEP) funding program, administered by the states, that would offer up to $3,000 to help offset the costs of retrofitting properties to make them more energy efficient.  Although the provision encompasses all multifamily buildings, funds are strictly limited, and priority is given to public and assisted housing.
  
  
• Water Conservation Incentives (Sec. 217).  Creates an incentive program for single- and multifamily buildings to use water-efficient plumbing fixtures and irrigation systems.
  
  
• Building Energy Performance Labeling (Sec. 204).  Establishes a program to develop energy performance labels for residential and commercial buildings.  The label would be designed to display actual and as-designed building energy performance for the purpose of making transactional, operations and maintenance decisions.  The final language applies only to new buildings.

While NMHC supports voluntary energy labeling programs such as Energy Star, we are concerned that this provision could result in problematic mandatory requirements.

• Green Building Standards for Federally Assisted Properties (Sec. 281-299).  Fully incorporates the GREEN Act (H.R. 2336), which imposes new energy-efficiency and green building standards in HUD-assisted buildings.  As a result of NMHC concerns raised last term (when the GREEN Act was originally introduced), the measure now cites the National Green Building Standard as a compliance method for the bill's green building requirements.  
  
  
• Energy Efficiency Incentives for Federally Assisted Properties (Sec. 281-299).  Provides incentives for new and existing federally assisted and insured properties that incorporate energy-efficient equipment or features that improve the property's energy performance.
  
  
• Lighting and Appliance Energy Standards (Sec. 211-219).  Increases minimum energy-efficiency standards for certain lights and appliances manufactured after 2010.

Outlook

The House bill passed by a narrow seven vote-majority.  The tight final vote reflects the deeply divided constituencies on this broad measure, which Republicans have labeled as an energy tax bill. 

Fueling the controversy was the disparate cost estimates of the measure released by the Congressional Budget Office, although there is no doubt that the costs of this bill will be reflected throughout the economy from utility bills to transportation and building construction costs. 

The House-passed language will now go to the Senate for consideration.  The Senate Energy and Natural Resources Committee has been considering legislation that contains several apartment-related provisions, including building code requirements, new appliance efficiency standards and a grant program for energy-efficient retrofits.  Notably, this measure does not call for federal building code enforcement. 

The Senate Committee on Environment and Public Works also has not moved forward on cap-and-trade legislation, although efforts to pass a cap-and-trade initiative (S. 11) in the last Congress were defeated.  
Senate Majority Leader Harry Reid (D-NV) has said that he hopes to bring a bill to the floor in September; however, many Senators are saying that health care and financial industry reform are higher priorities and require more immediate attention.

NMHC will continue to work with the Senate to seek more realistic building code energy targets and to oppose federal enforcement of such codes.

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JUNE 25, 2009

Proposed Regulations Streamline Weatherization Program                                                    

On June 17, NMHC/NAA and the National Leased Housing Association (NLHA) submitted joint comments on a proposed Department of Energy (DOE) regulation streamlining the Weatherization Assistance Program application process for multifamily properties. 

Under the new rule, HUD-assisted and Low-Income Housing Tax Credit properties would be exempted from the cumbersome process that requires individual residents to verify that they meet the program income requirements. 

While NMHC/NAA/NLHA are generally supportive of the new rule, our comments express concern that the proposed language allows state and local programs to treat multifamily applicants as a secondary priority to single-family applicants. 

We argue that this is counter to the program direction that was laid out in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5), which recognized the importance of moving quickly to improve energy performance in low-income properties and provide new jobs. 

ARRA makes available $5 billion in additional funding over the next thee years for state weatherization programs.  The inventory of assisted multifamily housing offers a tremendous opportunity to achieve the aims of the program.  

We have encouraged DOE to amend the rule to support the equal distribution of program funds to multifamily and single-family applicants.  Our comments and more information on the program are available at www.nmhc.org/goto/5126. 

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JUNE 10, 2009

Climate Change Bills Contain Onerous Building Code Provisions

NMHC continues to work to protect the industry's interest as it relates to the climate change bill working its way through Congress, including opposing an onerous building codes section.  The House Energy and Commerce Committee passed its version of the legislation (H.R. 2954) on May 21, and House Speaker Nancy Pelosi (D-CA) has told the other committees set to consider the measure that they have until June 19 to make their revisions.  

NMHC is strongly opposing Title 2 of the measure, which requires the Secretary of Energy to establish a National Energy Efficiency Building Code by 2010 that is 30 percent more efficient than the 2004 version of the ASHRAE 90.1 Standard or the IECC 2006 and 50 percent more efficient by 2016.  State and local governments must adopt and enforce codes that meet or exceed the efficiency levels of the national code.

Importantly, the bill creates a new federal building code enforcement program, something normally left to the states and localities to enforce. 

Our attempts to amend this title during the Energy and Commerce Committee markup were only partially successful and the underlying issue related to timetables for achieving dramatic reductions in energy consumption based on code-directed features remains unchanged.   (See the May 27 NMHC Update.)

While eight committees have claimed jurisdiction over the House bill, most eyes are on the Ways and Means Committee Chairman and the Agriculture Committee; both have expressed concerns about the consequences of the cap-and-trade program to restrict greenhouse gas emissions.  The stage is set to get the measure to a vote on the floor by the July 4 Congressional recess. 

Meanwhile, last week the Senate Committee on Energy and Natural Resources began work on its version of an energy bill with a markup of Chairman Jeff Bingaman’s (D-NM) draft measure.  The standalone Senate bill, which does not contain the cap-and-trade provisions in the House measure, does contains comparable, but slightly less onerous, building codes language. 

The Senate draft would require the Secretary of Energy to review and update model building codes at least every three years to boost energy efficiency by 30 percent above 2006 levels by 2010 and to reach a 50 percent savings by 2016.   It does not provide for federal enforcement or penalties for non-compliance.  Ranking Member Senator Lisa Murkowski (R-AK) offered an unsuccessful amendment to replace this requirement with a target goal of 30 percent above 2006 levels by 2013; it was defeated 13-10 on a party-line vote.  There is no timeframe for bringing the measure to the full Senate for consideration.

NMHC has created a side-by-side analysis of the House and Senate bills, which is available at www.nmhc.org/goto/5144.  We have also issued a grassroots alert asking members to contact their elected officials to oppose the flawed building codes provisions which are, in many cases, technologically and fiscally unfeasible (see below).

Grassroots Call to Action on Energy Bills

NMHC has issued an urgent call to action on the sweeping energy and climate change bill pending in Congress (see above) asking members to contact their Representative in the House and their Senators to oppose the entire building codes section as it is currently crafted.  A sample letter is available at www.nmhc.org/goto/5260.

As noted above, both bills would enact unrealistic energy efficiency standards that would apply to all buildings built or substantially rehabilitated after the enactment of the legislation.

NMHC is vigorously opposing these measures on several grounds.  First, the measures unravel the existing process for developing and adopting building energy codes and undermine the regional flexibility of the current code system.

More importantly, according to NMHC-commissioned research, the targeted energy savings are unachievable in some climate zones with current technology and so expensive in others that they are fiscally unsustainable.

Moreover, using building codes to achieve conservation goals is a flawed policy in the residential sector because most energy used in apartments falls outside the scope of these codes.  Building codes primarily cover the building envelope and HVAC systems, meaning energy performance improvements achieved through lighting, hot water heating and other appliances are not counted toward the 30 percent and 50 percent savings.  By excluding these items, the code targets put extreme pressure on building owners to invest in expensive upgrades that will not significantly improve overall building energy performance.

Finally, the federal enforcement measures in the House bill are a drastic departure from existing law and construction practice and would have a chilling effect on the development and transfer of properties across the real estate spectrum.

All apartment firms are urged to contact their federal elected officials as soon as possible.  More information is available at www.nmhc.org/goto/5260.

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MAY 27, 2009

Climate Change Bill Includes Onerous Building Codes Section

Following four days of intense debate, on May 21 the comprehensive energy and climate change legislation (H.R. 2454) passed the House Committee on Energy and Commerce. The 946-page bill would cap U.S. greenhouse gas emissions, cut emissions 17 percent and require states to get 20 percent of their electricity from renewable sources and improved efficiency.  Of interest to the apartment sector, the bill includes provisions concerning building codes, appliance efficiency standards, building retrofit incentives and a model building energy labeling program.

Most importantly, the bill requires the Secretary of Energy to establish a National Energy Efficiency Building Code by 2010 that is 30 percent more efficient than the 2004 version of the ASHRAE 90.1 Standard or the IECCC 2006 and 50 percent more efficient than either by 2016.  State and local governments must adopt and enforce codes that meet or exceed the efficiency levels of the national code.

NMHC has expressed serious reservations regarding the short time frame to develop and adopt such aggressive targets in baseline building code performance.  NMHC/NAA-commissioned research shows there are real practical and financial barriers preventing many apartment properties from significantly exceeding current codes.  Moreover, higher levels of improvement cannot be met in all climate zones using current technology.

We have also long argued that relying solely on the building codes to achieve aggressive conservation goals is a flawed policy because most of the energy used in an apartment falls outside the scope of the model codes.  Under this approach, many of the things apartment owners do to significantly improve the energy efficiency of their properties, such as making different water heating, lighting and appliance choices, are not included in the “math” used to determine how much a property has improved its energy efficiency.

In addition to the unrealistic energy efficiency targets, the House bill included language making it illegal to occupy, permit to occupy or convey a building that cannot or does not comply with the strict new national building code proposed by the bill.  Under this draconian language, owners could be severely penalized if they sold a building built or substantially rehabbed after the legislation went into effect that was, for example, only 20 percent or 25 percent more efficient than a model building code rather than the required 30 percent.  

It would also create a new federal building code enforcement program, something normally left to the states and localities to enforce.  These federal enforcers could assess penalties (that would accrue daily) on builders and property owners found in violation. And federal courts could void unlaw