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Proposed Incentives for LEED Buildings

Written by Andy Newton        

Thursday, 25 February 2010 20:23

As Michigan's economy continues to struggle, state legislators agree that bringing new business and new jobs into the state is part of the formula for improvement. The Michigan Senate has recently introduced a bill that not only satisfies that criteria, but also aims to improve Michigan's ecological footprint. Originally introduced by Senator Jim Barcia (D) on February 4, 2010, Senate Bill 1114 would authorize additional tax breaks to recipients of certain brownfield tax breaks, if the building used "renewable" energy systems (like wind, solar, heat pumps, etc.) to meet certain energy efficient building standards (michiganvotes.org). These additional tax breaks would only apply to buildings that are in accordance with LEED specifications.

Senate Bill 1114 was introduced to amend the Brownfield redevelopment financing act, legislation enacted in 1996. The legislation from 1996 was initially introduced as a means to clean up Michigan's pollution with the potential to strengthen the economy through entrepreneurship. While the 2010 version only aims to amend the bill, it provides greater incentives to invest dollars into Michigan's economy by replacing brownfields with new businesses that provide new jobs.

The state generally defines a brownfield site as any expansion, redevelopment, or reuse of land that is or may be contaminated with pollutants (epa.gov). Though many of these brownfield sites do in fact house a number of contaminants, the clean up and eventual redevelopment of this land has become increasingly common as clean, useable land for development becomes less available in populated areas. Replacing these blighted areas of pollution and contamination with energy-efficient developments is clearly one of the main goals of Senate Bill 1114.

Because you would be hard-pressed to find anybody opposed to cleaning up pollution and building under LEED guidelines, there is relatively little opposition to the bill. Members of both parties in the state Senate support the bill as Republicans such as Jason Allen and John Pappageorge support Democrat Jim Barcia as the primary sponsor of the bill. Governor Granholm would probably support the bill, as she has pushed similar legislation through the state Congress throughout her term. Possible opposition could come from those who believe further tax cuts would be a detriment to the state budget, though any possible opposition hasn't showed their hand to this point.

Further reason to believe this bill will go through is that the entire nation seems to be putting greater emphasis on becoming more eco-friendly. Various LEED initiatives including legislation, executive orders, etc. can be found in 45 states, with legislation being passed as recently as November of 2009 in Rhode Island (usgbc.org). It is likely because of this that Michigan senators are attempting to amend the bill. With so many states providing incentives for "green" development, Michigan must go above and beyond the other states in order to induce investment within its borders.

Sources:

http://www.michiganvotes.org/2010-SB-1114

http://www.legislature.mi.gov/documents/2009-2010/billintroduced/Senate/pdf/2010-sIB-1114.pdf

http://www.usgbc.org/DisplayPage.aspx?CMSPageID=1852

The U.S. Green Building Council clears the air: LEED 2009 does not include a new provision allowing LEED-certified projects to be "decertified" as suggested by recent headlines.

by Rachel Z. Azoff

The Washington, D.C.-based U.S. Green Building Council (USGBC) refutes an article that ran in the San Francisco Business Journal last month stating that under LEED 2009, the latest version of LEED, USGBC now has the power to “decertify” an existing LEED-certified development. The article, “Risk of LEED Decertification Looms Large for Real Estate,” stated that “… a little known provision in LEED 2009, which allows LEED certifications to be challenged and removed at any time after they have been certified, presents a threat to all existing and future LEED 2009-certified projects.”

"The idea that there is this new thing call decertification is inaccurate," says Scot Horst, USGBC's senior vice president for LEED. "The way LEED works is we have a rating system; you send us information about your project, and we certify to that. But let's say that there was someone out there who lied about the prerequisite information or unintentionally provided inaccurate information. We have always had a policy to go back and say this wasn’t what it was represented to be. That is nothing new."

Potential ramifications of not meeting LEED's prerequisites include losing a credit and potentially dropping to a lower LEED certification level. The only way you would ever lose a certification that you've already been awarded is if you didn't meet the prerequisites of the system; USGBC currently does not evaluate or monitor the ongoing operations of a building, Horst adds.

The fear of decertification likely stems from one of the Minimum Program Requirements (MPRs) of LEED 2009. The MPRs, which apply only to projects seeking certification under LEED 2009, list the basic characteristics that a project must possess to be eligible for certification under the LEED 2009 rating systems. Requirement No. 6 states that “all certified projects must commit to sharing with USGBC and/or GBCI [Green Building Certification Institute] all available actual whole-project energy and water usage data for a period of at least five years."

But the information collected under MPR6 is for research purposes only and won't be used to penalize project teams with buildings that do not perform as well as intended, according to the LEED 2009 Supplemental Guidance document published in November 2009.

“MPR6 specifically is an exercise to improve the future iterations of LEED rather than to strip the certification from prior program participants and all information remains confidential,” says USGBC communications manager Ashley Katz. "LEED certification is granted based on a building’s design and construction at the time certification is sought. LEED certification does not evaluate the ongoing operation or maintenance of a building—there are too many factors that have to do with how the building is operated.”

So what’s the deal with the LEED Gold-certified Northland Pines High School in Wisconsin referenced in the Business Journal as potentially facing decertification? "We are reviewing the project to make sure that what was represented in the [LEED] documentation was accurate," Horst says. "That is consistent with what a good certification program would do." He declined to comment on who brought the project to the USGBC's attention for review.

Is Green Lending Your New Mortgage Niche?

By: David Reinholtz
The hot topic in real estate is green homes. People are building, buying, and remodeling existing homes to make them more energy efficient, healthy, and have less of an impact on the environment. While it is a fairly recent trend in housing, it started in commercial building more than two decades ago as owners looked for ways to cut rising utility bills. The field quickly grew beyond a concern with energy to incorporate materials, techniques, and products that conserve scarce resources, recycle used materials, and avoid the use of toxic ingredients and processes. As better and cheaper products and materials became available, green or eco-friendly building spread to residential construction.

Green building is fast becoming the norm for new commercial projects, but it isn't clear how many houses are actually being built with energy saving and environmentally friendly features because the statistics still conflate commercial and residential markets. In 2006, McGraw Hill Construction estimated that by this year green building would represent 10 percent of all construction and the president of the U.S. Green Building Council (USGBC) said last April that green construction had contributed $178 billion to the gross domestic product during the previous eight years. But in neither case do we know if residential building represents 20 percent or 90 percent of those figures. There is anecdotal evidence, however, that green building is a growing factor in both new residential construction and remodeling. For example, the State of California just enacted the first statewide "green" building code and 6,500 builders have signed on to build Energy Star approved homes. USGBC's LEED program which originally monitored green commercial construction now offers five levels of certification for housing. We can also assume that however big green home building is today, it will get bigger; to what degree is still an unknown.

So far there hasn't been a lot of news about financing green homes, partially because a special mortgage would be overkill for many purchases. A lot of green building merely reflects new technology applied to old products such as Low-e (low emission) coating on window glass or formaldehyde-free kitchen cabinets. Where a green house is just a regular home with green features, a plain vanilla mortgage will work just fine.

Nonetheless, some environmentally sensitive homes do have financing issues. A subset of very green homes such as domes, Yurts, and earth bag homes are growing in popularity but many projects do not get off the ground because the chosen construction methods, while valid, confound appraisers or scare lenders. Even ordinary homes that have a single unique feature such as a geothermal HVAC system or solar embedded roofing shingles can run afoul of underwriting guidelines. Construction loans are also an issue. Think of all the usual problems inherent in placing construction financing for a single family home and quadruple it if the house is really green. Building codes have not yet caught up with green technology - it is another year until even California's new regs take effect - nor have many of the loan officers who must sign off on construction advances.

There are green mortgages available but so far they aren't widely known. FHA offers a wrinkle to its 203(b) and 203(k) loan guidelines that permits recognition of the cost savings of green improvements. The Energy Efficient Mortgage (EEM) program allows the borrower to incorporate the cost of some green improvements on the top of the approved mortgage without qualifying for the higher loan amount or basing the down payment on it. Freddie Mac, Fannie Mae and VA mortgages offer similar concessions and Energy Star, a joint effort of the EPA and Department of Energy, has a pilot program underway which, in addition to the features of the FHA program, encourages lenders to offer preferential rates, reduced fees, or lower closing costs to borrowers. There are caps on most of these EEM programs but they are still useful, especially where customers are pushing the limits of their ratios.

It would appear that, at present, green home financing has the following characteristics: 

* The size of the potential market is unknown. 
* There is an unmet demand for creative products in some sectors. 
* Programs are that are available are not being appropriately marketed and promoted. 
* No one really understands what is going on. 
* Not many people are doing anything about it.

Sounds like the very definition of an opportunity. There appears to be a need for entrepreneurs who understand what is going on out there and some excellent reasons to position yourself as a green financing expert.
It is a pretty empty niche. If there are lenders specializing in green loans they are doing a poor job of marketing. Google green mortgages, green lenders, or green mortgage brokers and you will get millions of hits but the top ones lead to blogs bemoaning the lack of green financing or to the Websites of mortgage brokers named Green. USGBC's national green directory lists only six financing sources. The National Association of Realtors offers members a green designation, the Mortgage Bankers Association does not. 

Becoming the green mortgage expert in your area code or even staking a national claim to the title would not be difficult. First, learn the basics of green building and green home ownership. Most of the methods and terminology are pretty simple and there are dozens of books and Websites to get you started. It is important that you are familiar with the underlying concepts of green building such as sustainability and, while you should be aware of materials and products, technical knowledge is not required; it is good to know what a geothermal heat pumps is but not necessary to know how it works.

Learn who the players are. LEED, USGBC's Leadership in Environmental Education and Design program mentioned above, is one of the gatekeepers, establishing standards for green building and for professionals in the field. Energy Star has long rated appliances and other products for energy efficiency and is now doing the same for new homes. The National Association of Home Builders is active in developing green residential building standards and the Forest Stewardship Council certifies the sustainability of wood-based building materials. You will quickly learn about another dozen or so organizations and agencies which are active in the field.

Qualify for existing programs such as those offered by FHA or the pilot Energy Star program. If you are in a position to do so, develop programs of your own. Talk with your investors about this potentially explosive market and how you might capitalize on it. If you can develop a conduit for financing some of the more extreme building techniques, you will be a market maker. Techniques such as straw bale building have a long history, are structurally valid, and are growing in popularity, but can be mortgage orphans.

Be prepared to educate appraisers and insurance agents. A lack of comps or the ability to secure hazard insurance kills a lot of green financing. There is no reason a home with a conventional gas furnace cannot be a comp for one with a geothermal system and when an insurance agent balks at insuring a straw bale house he needs to know those houses have four times the burn rating of stick construction. You will sometimes have to force these people to lift their heads out of their rule books.

Marketing a green business focus is easy and relatively inexpensive. 

Contact green builders in your area as well as realtors, especially any holding the NAR green designation. Qualify as a partner with Energy Star at http://www.energystar.gov/index.cfm?c=bldrs_lenders_raters.pt_lender_benefits. If you can provide financing for any of more outr building techniques, contact and post on the dozens of blogs that support their use; financing is a big topic of discussion. Advertise in the USGBC and NAHB directories and, depending on your focus, in community directories in green conscious cities such as Austin, Texas; Portland, Oregon; and Cambridge, Massachusetts.

The trend to green building could become a mega trend; develop into the industry standard, or merely remain a small and healthy market sector. Mortgage lenders who start to focus on this market early could find a steady flow of new business or a potential bonanza. In any case, they will be ahead of the curve when the competition finally discovers the market.

www.articlesnatch.com

LEEDing the show

Date:  February 17, 2010

Thursday, January 28, 2010 - MiBiz 

By Joe Boomgaard | MiBiz        This e-mail address is being protected from spambots. You need JavaScript enabled to view it   This e-mail address is being protected from spambots. You need JavaScript enabled to view it   

WEST MICHIGAN — Leaders in the greater Grand Rapids area have long touted the region as a nationwide center of excellence for LEED-certified buildings.

Despite those grand claims, however, there hasn’t been a way for interested people from within or outside the region to see those buildings up close and learn more about the tangible, real world benefits of the LEED certification process.

But that’s about to change. The West Michigan Chapter of the U.S. Green Building Council, the issuing body of the LEED program, is partnering with local building owners, as well as students at local colleges, to not only showcase the region’s green buildings, but also put some dollar figures behind the LEED program.

The need for a local green building showcase was even suggested by a national representative of the USGBC in town for a local chapter retreat.

 “Because we have so many LEED buildings in this area, (the showcase) has been on our minds for a while, and we’ve been wanting to have case studies,” Renae Hesselink, VP of sustainability at Nichols Inc. and chair of the board of directors of the USGBC West Michigan Chapter, told MiBiz.

While numerous case studies have highlighted the benefits of LEED buildings, none of them had been done locally.

“People would pay more attention (to LEED) if people in their own backyard have proven that LEED works better,” she said.

Hesselink connected with local LEED building owners to gauge their interest in being a part of the showcase and in participating in the case study. Local colleges and universities with LEED projects immediately jumped on board, and she’s obtained commitments from Spectrum Health, Steelcase, Grand Rapids Public Schools, Herman Miller, Bazzani Associates, the Grand Rapids Art Museum and Dwelling Place, among others.

The local chapter has also linked with students at the University of Michigan’s MBA program to perform case studies and analyses of what the LEED certification means to those building owners. The aim, Hesselink said, is to come up with real dollar figures that building owners were able to save by following LEED protocols in the buildings. That information could be a powerful persuader for others in the area thinking of building a new building or renovating an existing structure.

Armed with the case study information, the West Michigan chapter plans to publish a book on the region’s green buildings. The book wouldn’t necessarily be limited to the buildings featured on the tour, either, but rather encompass LEED projects out of the city area and into Holland and Muskegon, for example.

One of the challenges in setting up the showcase thus far has been timing. Some building owners — like the public school system — will have to work around the tours. The solution might be to hold a two-day tour on a Friday or Saturday. The group is aiming to hold the event some time in September or October.

Hesselink said while the chapter was initially thinking the tour would be marketed to a broad Midwest or national audience interested in or working with green buildings, the group is also considering opening the tour to the public.

For the inaugural showcase, she’s hoping 200 to 300 professionals will attend.

And while the buildings certainly are the stars of the showcase, the chapter also expects the event could be used as an economic development tool.

“If we prove this is a healthy place to live and work and a good place to send kids to school, why would it not be an economic development tool?” Hesselink asked.

The planning for the showcase kicks off at a time of transition for the local chapter. In 2009, the national USGBC body changed the way it structured its professional accreditation and that impacted a key revenue stream for the local chapters across the country.

From the start of the USGBC program, local chapters like the one in West Michigan had been offering exam preparation classes to would-be LEED APs. Under the restructuring, the national body does not allow the local chapters to hold those courses, choosing instead to provide them through the national organization.

“There was pretty much an uproar across the country,” Hesselink said. “Most of us (at the local chapters) depended on that income.”

In part, revenue from those prep classes supported the hiring of an executive director, Linda Frey, who had been with the organization for the past two and half years. But with the main revenue stream cut off and with memberships down from peak numbers — the organization currently has about 300 members, down from 344 in the middle of 2009 — the local USGBC had to go back to being an all-volunteer organization. It currently has three paid interns from local colleges.

Several local foundations also contribute to the chapter’s funding, and none of them have dropped off since the downturn in the economy, Hesselink said.

However, “new opportunities dried up” once the downturn really started to hit last year.

Going forward, Hesselink said the local chapter has several options for revenue, including offering study groups for LEED Associate certification as well as continuing education programs for LEED APs, all of whom need to get continuing credits to recertify. She said the chapter is also considering charging for courses to professionals in facilities management and other building-related fields.

“We want to have another director, and we hope within a year to have someone back at least part-time that would have strong fundraising skills, too,” she said. “We’ve always thought of ourselves as a trade association, and we’re not. We’re a nonprofit here to serve our members and in part to move this mission forward.”

MiBiz

http://www.mibiz.com/ absolutenm/templates/default. aspx?a=16753&template=print- article.htm

Greener Hand Sanitizers Standard Enters the Market

The EcoLogo Program releases its first standard for Hand Sanitizers

The U.S. Green Building Council Awards Nottawaseppi Huron Band of the Potawatomi Tribe LEED Gold Certification for Green Homebuilding

February 15, 2010, today 3 residential homes on the Pine Creek Reservation South of Kalamazoo Michigan, were awarded LEED Gold certification by the U.S. Green Building Council (USGBC) for achievement in green homebuilding and design. LEED for Homes is a green home certification system for assuring homes are designed and built to be energy- and resource-efficient and healthy for occupants. LEED certified homes complete a technically rigorous process that includes a home energy (HERS) rating and onsite inspections to verify that the home is built to be energy and water efficient, environmentally sound, and a healthier place to live.

The three homes are each 2000 square feet with 3 bedrooms and 2 bathrooms and will be used as rental units for low- and moderate-income elders and families of the Tribe.  The homes will be open to the public and available for a community open house on February 22, 2010 from 9:00 am – 2:00 pm.

They are just 3 out of 58 local West Michigan homes that have been LEED Certified through the Alliance for Environmental Sustainability; the Grand Rapids based USGBC LEED for Homes Service Provider.  The homes were designed & built by Rivertown Homes by Design; Grandville, Michigan known for their expertise in building LEED homes and the project was managed by the Skillman Corporation; Grand Rapids, Michigan. Green homes have substantially lower utility bills [1]and may qualify for advantageous financing, lower insurance rates and government incentives.  This project included funding provided by: Housing and Urban Development Indian Housing Block Grant; Housing Urban Development Indian Housing Block Grant-American Recovery and Reinvestment Act; and Housing and Urban Development-Rural Housing and Economic Development Grant.

“Choosing to go for LEED certification started with the construction of our Health Center in 2007 and has carried forward into our residential home construction as well.  Green building is an important sustainable approach that demonstrates our commitment to the environment and the community.” comments Dan Green, Executive Planner for the tribe.

Through their commitment to green homebuilding, the NHBP Tribe is also helping to keep homeownership affordable.

“By being  LEED certified, the three homes serve as a model of greener living for the entire community,” said Nate Kredich, Vice President of Residential Market Development for the U.S. Green Building Council. “These homes are at the national forefront of quality; and their example can help us all to live better by reducing our environmental footprint, cutting our utility bills, and coming home to a healthier place to live.”

Specific information about the homes- The homes focus heavily on reducing energy use through very high performance insulation and weather sealing.  The three bedroom models feature low-e argon windows, high efficiency lighting fixtures, compact fluorescent bulbs and high density insulation.  Other energy efficiency upgrades include Geothermal Heat systems with programmable thermostats  and Energy Recovery Ventilators (ERV’s) for, mechanical ventilation.  . 

As a result of incorporating energy saving products and technologies the three homes have achieved an average 46 Home Energy Rating System (HERS) score.  Homes’ HERS score must be 85 points or lower to qualify for Energy Star.  A score of 85/100 would represent a home being 15% more energy efficient that a standard code built home, so the low score of 46/100 represents these homes being 54% more energy efficient than today’s standard home.

LEED Building Features:

                1416 finished main level sq. ft.

                Superior Precast Foundation Wall System

                Material and Labor Efficient Off –Site Panelized Construction

                Use of Environmentally Preferable Products

                Geo-Thermal HVAC System

                On Demand Hot Water System

                Efficient Hot Water Distribution Layout

                Very High-Efficiency Plumbing Fixtures and Fittings

                High Perfomance Window Package

                Extensive Caulk and Seal Package

                Energy Saving Insulation Package

                Exceptional Energy Performance

                HERS Index  46

                Energy Star Appliances

                Energy Star Fixtures

                Limited Conventional Turf

                90% of all Plantings are Drought - Tolerant

Located  twenty four miles South of Kalamazoo Michigan, The Pine Creek Reservation is also home to Tribal community support services such as a 6,000 square foot LEED Certified  Health Center, a Community Center, and Administration Office. 

Directions to the Open House- From Battle Creek: take M-66 south 12 miles; go west on S Drive South and travel 2 miles; go south on 1-1/2 Mile Rd. and travel 0.25 miles; go west on Pamptopee Trail to arrive at homes.

From Kalamazoo/Grand Rapids: take US-131 to Schoolcraft and go east on Elisa (turns into W. Avenue West just outside of town) and travel 20 miles; go south on 1-1/2 Mile Rd. and travel 0.5 miles (turns into S Drive South); go south on 1-1/2 Mile Rd. and travel 0.25 miles; go west on Pamptopee Trail to arrive at homes.

Contacts-

Nottawaseppi Huron Band of the Potawatomi

For more information you may contact Dan Green, Executive Planner at (616) 249-0159.

Alliance for Environmental Sustainability

For more information you may contact Calvin DeLano, Executive Director at (616) 458-6733.

Rivertown Homes by Design

For more information you may contact Jim DeVries Residential Designer at (616) 534-0466

Green Design on Display at the Olympics

BY DARRAGH WORLAND | MONDAY, FEBRUARY 15, 2010 10:33 AM ET

Oh, Canada! Sustainable design features prominently at the Vancouver Olympics.

There's no question the Vancouver Winter Olympics will be a showcase of the world's best athletes in winter sports, but some of most cutting-edge green design will also be on display. Fast Company has a great roundup of the best design elements of the Olympics, which include designs by Canada's First Peoples and some really inventive recycled materials.

For starters, the event logo is an abstract image of an Inukshuk, an iconic stone statue of a man, which has been reproduced in Inuit art for centuries. The design beat out more than 1,600 other entries in an open call.

One of the coolest and most ubiquitous "green" features of the Olympics are the medals themselves, designed by architect Omer Arbel and Corrine Hunt, an artist from the Raven Gwa’waina clan on Vancouver Island. Each of the 1,000 medals that will be awarded was cast from silver, gold and bronze reclaimed from discarded computer motherboards, thereby contributing to the reduction of electronic waste.

Scientific American reports that this is the first time recycled materials have been used in the making of Olympic medals, which are usually made from mined mineral deposits.

Some of the structures used in the Olympics also meet sustainable design standards. The Richmond Oval, where all speedskating events will take place, has Silver LEED designation. (The Leadership in Energy and Environmental Design is a sustainable building designation developed by the U.S. Green Building Council.) The structure's huge roof, the size of almost seven Olympic hockey rinks, is made entirely of discarded wood.

Even NBC's broadcast headquarters, the new Vancouver Convention Stadium on the city's waterfront, is set to earn Gold LEED certification and has a six-acre "living roof." The roof features an enormous garden with 400,000 individual indigenous plants to help regulate the building's temperature.

And of course how green could the Olympics be without sustainable transportation? The athletes will be traveling between venues and around the Olympic village via cutting-edge low-floor electric trolleys donated by Bombardier and shipped in from Brussels. The trolleys have already become a standard for green mass-transit, reports Fast Company. Since their introduction three years ago, over 450 have been installed across Europe, and Toronto has ordered 204 models of a similar design.

Be sure to check out Fast Company's slideshow featuring photos of these designs and more.

Photo courtesy of VANOC.