NMHC and NAA recently joined with a coalition of commercial real estate groups in providing detailed comments to the Appraisal Practices Board (APB) on its draft guidance for green and high performance multifamily, commercial and institutional properties. Specifically, we expressed concerns that the position the guidance takes has unnecessarily limited its view of "green" to buildings. For example, it recognizes the value of properties that achieve a LEED label while overlooking other established rating systems like the ICC-700 National Green Building Standard. The paper also fails to recognize investments in high performance features in buildings that are unable to achieve an ENERGY STAR label.
In addition, the guidance ignores the fact that multi-tenanted buildings in many parts of the country are shut out of receiving the ENERGY STAR designation because they are unable to get access to whole building utility performance data. The draft runs counter to programs announced by HUD in the realignment of the MAP program and MIP program, which recognizes and encourages energy efficiency improvements on properties. Similarly, both Fannie Mae and Freddie Mac are offering financing tools that underwrite green property improvements.
Our coalition comment letter follows up on another letter that we sent in June objecting to the draft and seeking a meeting to discuss terms. We will continue efforts to work with the APB to improve the document with the input of commercial property owners.
Relatedly, NMHC/NAA have been asked by the General Services Administration (GSA) to provide comments on model green leasing provisions developed by the Office of Federal High-Performance Green Buildings. That’s because the GSA has been directed by Congress to develop model commercial office leases. Green leases are rental agreements in which tenants commit to or gain incentives by participating in water and energy conservation, waste reduction, recycling or other sustainability focused activities. While these leases are intended for use on residential properties, green leases are being used on other types of properties.
HUD recently cited green lease provisions as a way that property owners who are unable to obtain whole building utility data might require residents to report their energy usage for building benchmarking purposes.
Any NMHC/NAA member interested in providing comments should contact NMHC’s Eileen Lee at email@example.com.