Climate Change Legislation May Provide Massive New Dollars for Energy Retrofits

By
3 min read

Tax Credit Advisor, September 2009: Energy and climate change legislation working its way through Congress holds the promise of massive additional federal dollars to promote green building and to help finance energy efficiency retrofits to existing buildings.

These elements are part of the American Clean Energy and Security Act of 2009, a bill (H.R. 2454) passed in late June by the U.S. House of Representatives. The Senate is expected to begin writing its own version of the legislation in coming weeks.

A core part of the House-passed bill, intended to combat global warming, would establish a cap and trade market for the purchase and sale of pollution permits (allowances) by companies that are sources of carbon emissions. Permit fees collected by the federal government would be used to fund a variety of activities.

Components of the legislation include the:

  • Retrofit for Energy and Environmental Performance (REEP). This new program would provide federal funds through states and localities to provide financial support and other incentives to help pay for energy retrofits to residential and non-residential buildings. At least 10% of funds would be earmarked for retrofits to public housing projects and assisted housing properties (HUD Section 8, 202, 811). This set-aside has been estimated between $65 million and $100 million per year. Funds couldn’t be used for demolition costs, nor could a retrofit be used to justify a rent increase. A property receiving retrofit funds would have its affordability period extended. Funds could cover half of retrofit costs. Special incentives would be provided for historic buildings.
  • GREEN Act (Green Resources for Energy Efficient Neighborhoods).This section would authorize new federal resources and incentives for greater energy efficiency in affordable housing for low-income persons. The U.S. Department of Housing and Urban Development would establish minimum building energy efficiency standards, provide incentives for new and existing HUD-financed structures that meet or exceed these standards, and create mortgage incentives for energy-efficient multifamily housing projects. The bill would also authorize a new assisted housing energy loan pilot program, a new federal residential energy efficiency block grant program, and create green development requirements for HUD’s HOPE VI public housing revitalization program.

“From programs that would generate billions of dollars to spur and scale green retrofitting of our existing building stock to inclusion of the GREEN Act, which would create new opportunities for green affordable housing, this bill recognizes that green building is a major part of the solution to our economic and energy challenges,” said Rick Fedrizzi, CEO of the U.S. Green Building Council, which administers the LEED green building certification program.

Affordable housing advocates have written to key U.S. senators asking that the Senate version of the climate bill provide $750 million a year for energy retrofits to public and assisted housing properties.

The July 27th letter, signed by 41 organizations, was coordinated by the Preservation Working Group, organized and convened by the National Low Income Housing Coalition and the National Housing Trust. The letter was sent to Chair Barbara Boxer (D-Calif.) and Ranking Member James Imhofe (R-Okla.) of the Senate Energy and Public Works Committee.