Rewarding Green in 2014

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3 min read

If you are a frequent reader of this column you know that energy, water, and utility efficiency is one of my pet issues.

A few months ago I wrote here about the Obama Administration’s forthcoming launch of its Multifamily Better Buildings Challenge. On December 3, I participated   in the official rollout and want to share with you what it is all about.

It is incredibly gratifying to see so many National Housing & Rehabilitation Association members leading the inaugural class of Better Buildings Challenge (BBC) partners. Kudos to BRIDGE Housing, Corcoran Management, Eden Housing, Homes for America, McCormack Baron Salazar, National Church Residences, NHP Foundation, Preservation of Affordable Housing, The Community Builders, Volunteers of America, and Winn Companies! Owners and property managers participating in the Better Buildings Challenge have committed to reducing energy consumption in their multifamily residential buildings by at least 20% over

the next 10 years.

At the rollout event, HUD previewed to NH&RA and other BBC partners a series of new incentives and flexible policies intended to help owners of affordable multifamily housing properties overcome the current market and policy barriers they experience in greening their properties.

Complete details of the new policy will be contained in a forthcoming memo issued by HUD. In the meantime, following is a brief description of some of the incentives that will be available to partner companies and multifamily properties participating in the Better Buildings Challenge:

 

  • Section 202 and Section 811 PRAC properties will be able to classify energy savings payments associated with property and tenant utility allowance reductions as an eligible expense in the property’s budget;
  • Temporary additional distributions to owners (for-profit and nonprofit) of Section 8 properties;
  • Inclusion of the cost of energy/green measures in the management fee. This will help management companies defray the extra cost of energy management best practices;
  • Expedited approvals for “stand-alone” green items. HUD will approve certain stand-alone green measures (that are not part of a larger rehab) with a clear set of parameters and schedule in order to facilitate streamlined green rehab projects; and,
  • Mark to Market (M2M) Waiver Amendment. Existing M2M properties adopting 75% of the green energy measures and all of the water conservation measures recommended in the Green Project Capital Needs Assessment will be eligible for the Incentive Performance Fee, the same as for first-time M2M Green Initiative properties.

These incentives should have a significant positive impact and empower owners of HUD-assisted multifamily properties to invest in portfolio-wide energy efficiency improvements. We are excited to promote the Better Buildings Challenge, and to also, through NH&RA’s Preservation Through Energy Efficiency Initiative, help owners build their capacity to make cost-effective investments in energy improvements. I encourage all of our members and partners to participate in both of these initiatives.

Thom Amdur is Associate Publisher of Tax Credit Advisor and Executive Director of National Housing & Rehabilitation Association