Throughout my series of Local Policy Best Practices for Healthy and High-Performing Buildings, we’ve looked at examples of mandatory green building criteria and expedited reviews in other municipalities. My hope is that we can adapt some similar practices right here in Pittsburgh. To drive this home, let’s take a look at direct financial incentives.
PennSTAR: Implement a PACE district in Pittsburgh. PACE = Property Assessed Clean Energy, and it can apply to water and energy efficiency projects as well. PA Senator Matt Smith intends to introduce legislation to allow this at a state level, but it will still need local municipal approval. In PA, the program will not be called PACE, but PennSTAR. Pittsburgh should actively support Senator Smith’s legislation and then activate this opportunity in the city. There are many PACE programs already up and running across the country, including in NYC, Cincinnati, St. Louis, San Francisco, Washington, D.C., and other places. Learn more here.
Expand Tax Increment Financing (TIF) options in Pittsburgh. The city already has legislation (introduced by Councilman Bill Peduto in 2007) that requires private projects funded through Pittsburgh’s TIF program to achieve LEED Silver certification. We should consider expanding TIF financing to cover large energy and water efficiency renovations to existing buildings and campuses. Chicago, Atlanta, and many other cities have similar programs. See details on Chicago’s initiative here.
Property Tax Abatements: This is similar to PACE financing, but reduces tax payments rather than adding loan repayment to property taxes. It may be impossible to do under Act 47 constraints, but is still worth a look. See examples from Nevada, Cincinnati, and Chatham County, GA, the latter of which provides a full abatement of state and county property taxes for commercial buildings achieving LEED Gold certification for five years, then a decreasing abatement in year six that tapers off by 20% each year until the tenth year. Qualifying projects are new or expanding businesses in an Enterprise Zone that increase employment opportunities.
Pittsburgh should actively support Senator Smith’s legislation and then activate this opportunity in the city.
Credit Enhancements: Create a set of credit enhancements that make it less expensive to borrow money for desired project types. Credit enhancements include loan guarantees, interest rate buy-downs, and loan loss reserves. PA Keystone HELP is a version of this. It might be possible to do this with a community development financial institution (CDFI), such as Bridgeway Capital. Pittsburgh could take it further on its own. Learn more here.
Loan Fund: Create a city-backed loan fund. The city would provide initial funding and proceeds would allow for revolving redeployment of capital. We could also do this through a dedicated portion of a CDFI. Check out an example from Minneapolis.
EEIC: Create an Energy and Water Efficiency Investment Corporation to make direct investments in projects or to provide credit enhancements to private investment and lending. The city would seed the fund with its own money or bond issue. See information on a similar program in NYC.
Grants: Make direct grants to support desired projects, via the Urban Redevelopment Authority (URA) or another city agency. El Paso’s Green Building Grant Program provides grants for commercial projects greater than 5,000 sq. ft. and/or multi-family residential projects that obtain LEED certification. Grants are awarded at increasing intervals based on level of certification. The maximum grant allowance is $200,000 for LEED Platinum for new construction and $400,000 for LEED Platinum for multi-family existing buildings that are mixed-use and have been 50% vacant for five years or as further defined by the city. The program along with the Los Angeles Department of Water and Power Green Building Incentive that provides up to $250,000 to help defray the costs of making a building green and achieving LEED standards.
Green Bank: Create a “green bank” that will implement all of the above. A green bank is a public or quasi-public financing institution that provides low-cost, long-term financing support to clean, low-carbon projects by leveraging public funds through the use of various financial mechanisms to attract private investment so that each public dollar supports multiple dollars of private investment. (Definition from this website.)
Mayor Bill Peduto had included this idea in his campaign platform. Connecticut, New York, Hawaii, California, and Vermont have green banks and others are under consideration. More details can be found here. I am not aware of any city that has created its own green bank, but Pittsburgh could lead the way in this respect.
I am not aware of any city that has created its own green bank, but Pittsburgh could lead the way in this respect.
Okay, people, those are my ideas! Have some of your own? Please share them! Want to do a little more research? Here are some suggested websites for further information:
- American Institute of Architects
- City of Philadelphia
- Department of the Interior
- Environmental Law Institute
- Institute for Market Transformation and MIT CoLab
- U.S. Green Building Council
- World Green Building Council