Portland's Battle To Legislate Green Building

On December 3, 2008, Portland unveiled its new suite of green building regulations based around a fee and rebate system.  My fellow green building laywer Chris Cheatham over at Green Building Law Update describes the "feebate" system:

Under the Feebate system, all new buildings built to code are assessed a fee.  If a project is built to LEED Silver, then the fee is waived and the owner obtains access to financing options.  Even better, if a project attains LEED Gold, the city writes the project owner a check! 

Although the Feebate system is a great idea, Oregon Live reports that not everyone was happy with the program, specifically the homebuilding industry, forcing Portland's mayor to exempt homes from the feebate program

New homes would not get the new fees or rebates. But the city would ask of the homebuilding industry: Meet a citywide goal of getting more new homes certified green each year, or else Portland would impose a fee-and-rebate system to make builders comply.

This is a pretty big compromise, and an interesting precedent for cities looking to emulate Portland's system.  For example, in Philadelphia, retrofitiing and building homes is a large component of the building stock.  If homes are exempted, what impact will that have on the overall efficacy of green building programs?