Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Calliope Communications, LLC

Yesterday, I wrote about Senator Merkley's new set of incentives to encourage green commercial building retrofits, and left you with the question of whether these new incentives will actually change behavior. An interesting article came out today on CNN.com which highlights a barrier to incorporating green building technologies into building projects:

Appraisals for newly built green homes do not fully reflect the cost of green technology, and the lower appraisal values mean buyers often cannot get the full financing they need from banks.

In essence, according to this articel, the cost of incorporating the green features is not covered by a commensurate increase in the purchase price, causing homeowners to avoid incorporating costly green technologies, even if they represent savings in the long run. 

This is the perfect opportunity for designing a targeted grant or financing incentive.  The government agency could look at the difference in the appraisal of homes without green technologies, homes with green technologies, the cost of those technologies and the ultimate payback, and design an incentive to make up the difference.  A great example would be providing financing for green renovations at a lower rate than standard renovations.  Unfortunately, most incentives are not designed around barriers to entry and cost data, but are essentially throwing some non-targeted amount of money at the problem without analyzing would be the best amount and struture to really change behavior.

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At the National Association of Home Builders' Green Conference in Dallas this weekend, conversation turned to retrofitting buildings.  There was universal acknowledgement among the homebuilders I spoke to that building new homes was going to be dwarfed by retrofitting and renovating existing dwellings for the next decade.   

There has been a lot of discussion about upgrading building codes to incorporate green standards.  ICC is working on a commercial green code, and ASHRAE recently released a new draft of standard 189, also for commercial green buildings.  NAHB developed an ANSI/ICC standard for residential green building, NAHB Green.     

The problem? Many building codes do not apply to residential renovations. In Pennsylvania, the Uniform Construction Code does not apply to: 

(8) Alterations to residential buildings which do not make structural changes or changes to means of egress, except as required by ordinances in effect under sections 303(b)(1) or 503 of the act (35 P. S. § § 7210.303(b)(1) and 7210.503). Under this subsection, a structural change does not include a minor framing change needed to replace existing windows or doors.
 
(9) Repairs to residential buildings, except as required by ordinances in effect under sections 303(b)(1) and 503 of the act.

So, even if the building codes are upgraded to be "green," many home renovations will not need to comply, thus leaving behind a big chunk of existing building stock.

One possible solution is to apply the standard new construction building code to all projects.  New York has recently announced its intention to do this with respect to its Energy Code.   Opponents argue that forcing every small house renovation to comply with the components of the comprehensive building code would be unnecessarily costly and burdernsome.

The other is to develop an existing building code, alongside the building code for new construction, that applies specifically to retrofits.  The ICC already has an existing building code, and it could be used as a base for creating appropriate green requirements for even small renovations.  The key is keeping the requirements simple and focused on key green priorities which can be addressed in even the smallest kitchen renovation--construction waste management, energy efficiency, water conservation, indoor air quality, and materials reuse. 

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