ICLEI USA Executive Director Martin Chavez sat down with E&E TV’s Monica Trauzzi to discuss the latest developments regarding local government property-assessed clean energy (PACE) programs, left in limbo by flawed regulatory decisions from FHFA, Fannie Mae and Freddie Mac. Chavez describes the hurdles facing PACE programs and also calls on Congress and the Obama administration to step in and take actions to allow the programs to resume.

Click here to watch the video on the E&ETV website.

By Geof Koss, CQ Staff

Municipalities and business groups are asking lawmakers for help in their standoff with federal housing regulators over tens of millions of economic stimulus dollars designated for clean-energy building retrofits.

Led by the U.S. Green Building Council, almost 350 businesses told lawmakers last week that a dispute with the Federal Housing Finance Agency (FHFA) over property-assessed clean energy, commonly known as PACE, is stalling projects that would provide thousands of jobs in 22 states. Municipal groups are expected to weigh in with similar letters to Congress this week.

PACE programs provide money for renewable-energy projects and retrofits that property owners repay over a period as long as 20 years through assessments on their property taxes.

Building retrofits are strongly backed by the Obama administration, both to save energy and to create jobs. The Energy Department has earmarked $150 million for local governments to support PACE projects under the 2009 stimulus law (PL 111-5).

But the program has stalled amid “significant safety and soundness concerns” raised by FHFA, which regulates mortgage giants Fannie Mae and Freddie Mac. The agency is concerned that PACE loans could take precedence over mortgage debt — echoing the earlier concerns about the program cited by Fannie and Freddie.

“Mortgage holders should not be forced to absorb new credit risks after they have already purchased or guaranteed a mortgage,” FHFA Acting Director Edward J. DeMarco said in July.

California Attorney General Edmund G. Brown Jr. has filed a lawsuit against FHFA, saying that its position is at odds with state law.

PACE supporters are urging lawmakers to pass a bill (HR 5766), sponsored by Rep.Mike Thompson, D-Calif., that would direct FHFA to adopt new underwriting standards that support the programs. The bill would also bar discrimination against communities participating in the programs. “This could be a quick, easy legislative fix that gets these programs up and running,” said one clean-energy advocate.

PACE has enjoyed strong support from top Democrats in Congress, including House SpeakerNancy Pelosi of California, but its backers have been unable to advance the bill on its own or find a legislative vehicle for it or its Senate companion (S 3642), sponsored by Barbara Boxer, D-Calif.

Last week, South Carolina Republican Bob Inglis was rebuffed by the House Rules Committee in his effort to offer the legislation as an amendment to another bill (HR 4785) that would promote energy upgrades.

A PACE supporter said advocates are eyeing all possible legislative vehicles for the fix, including a possible post-election debate in the Senate on energy legislation.

The PACE (Property Assessed Clean Energy) program is simple and brilliant: Cities borrow money using their credit and then make that money available to homeowners who, in turn, use it to install solar systems and other green technologies. The money given to homeowners is paid back by special assessments on their property taxes.

By all accounts, the PACE program is remarkably successful: It’s been adopted by 23 states and the District of Columbia. It creates jobs, lowers utility bills for homeowners, cuts pollution and easily transfers to new homeowners when homes change hands.

Read the full story here: http://www.huffingtonpost.com/mike-stark/whos-killing-the-pace-pro_b_721375.html

Sept. 15, 2010 (Washington, D.C.) – Today, nearly 350 businesses from around the country joined together to push Capitol Hill to pass legislation that revives PACE programs, which have been launched in cities around the country to make green, energy-saving improvements more affordable for businesses and homeowners.

For months, Property Assessed Clean Energy (PACE) programs in 22 states have been stalled due to guidance issued from the Federal Housing Finance Agency (FHFA), which suspended dozens of retrofit programs, created thousands of lay-offs, and clouded the future of these programs indefinitely. PACE programs allow commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems) and then repay the financing over 20 years via an annual assessment on their property tax bill.

“In PACE, we have an engine for creating new retrofit jobs in every community in America. We need to revive these programs and unlock investment in green, energy-efficient buildings that will save people money, save energy and create thousands of jobs,” said Jason Hartke, Vice President of National Policy at the U.S. Green Building Council, the primary organizer of the letter. “We urge Congress to put jobs first and move quickly to ensure that local governments can use this innovative investment tool to help boost local economies and save money for homeowners and businesses across the country.”

The letter, sent to all 535 members of Congress, urged passage of legislation before the end of this Congressional session.

“Congress cannot allow the FHFA to stand in the way of clean energy jobs and lower utility bills for millions of Americans,” the businesses wrote in the letter.  “We urge you to act expediently to pass legislation that would allow the PACE pilot programs to proceed – putting Americans back to work immediately and helping our consumers do the right thing – make property investments to reduce their carbon footprint and save money.”

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U.S. Green Building Council
The Washington, D.C.-based U.S. Green Building Council is committed to a prosperous and sustainable future for our nation through cost-efficient and energy-saving green buildings.

With a community comprising 78 local affiliates, more than 18,000 member companies and organizations, and more than 140,000 LEED Professional Credential holders, USGBC is the driving force of an industry that is projected to contribute $554 billion to the U.S. gross domestic product from 2009-2013. USGBC leads an unlikely diverse constituency of builders and environmentalists, corporations and nonprofit organizations, elected officials and concerned citizens, and teachers and students.

Buildings in the United States are responsible for 39% of CO₂ emissions, 40% of energy consumption, 13% water consumption and 15% of GDP per year, making green building a source of significant economic and environmental opportunity. Greater building efficiency can meet 85% of future U.S. demand for energy, and a national commitment to green building has the potential to generate 2.5 million American jobs.

LEED
The U.S. Green Building Council’s LEED green building certification system is the foremost program for the design, construction and operation of green buildings. Over 35,000 projects are currently participating in the LEED system, comprising over 6.9 billion square feet of construction space in all 50 states and 114 countries.

By using less energy, LEED-certified buildings save money for families, businesses and taxpayers; reduce greenhouse gas emissions; and contribute to a healthier environment for residents, workers and the larger community.

USGBC was co-founded by current President and CEO Rick Fedrizzi, who spent 25 years as a Fortune 500 executive. Under his 15-year leadership, the organization has become the preeminent green building, membership, policy, standards, influential, education and research organization in the nation.

For more information, visit www.usgbc.org.

Fannie and Freddie Hold PACE Homeowners Hostage – Latest Action Prevents Homeowners from Refinancing Unless They Pay PACE Assessments Up Front – ICLEI USA Urges Congress and the Administration to Prevent Dismantling of PACE Programs in 23 States, 150 Cities and Counties.

Washington, D.C. [Sept. 09, 2010]  – ICLEI-Local Government for Sustainability USA, the nation’s leading local government association addressing climate change and sustainability, issues the following statement in response to Fannie Mae and Freddie Mac’s latest actions on Property Assessed Clean Energy (PACE).  Fannie Mae and Freddie Mac recently issued a statement that homeowners who have participated in PACE programs must pay off their local government-financed energy improvements before they can refinance their mortgages. (see attached Fannie Pace Guidance issued August 31, 2010)

“Fannie and Freddie are absolutely shameless! They misled Congress and the American people about their intentions to work out a solution that would protect homeowners currently engaged in PACE programs.  Incredibly, they are now forcing current PACE customers to pay their clean-energy improvements up-front before they can refinance their homes,” said Patrick Hays,  Mayor of North Little Rock, AR and President of the Board of Directors, ICLEI USA.

“Congress and the administration need to step in and put an end to this Fannie and Freddie runaway train.  Their first priority should be to protect these clean energy pioneers who are now being forced to pay off their local government clean energy improvements up front,” said Martin Chávez, ICLEI USA Executive Director and former three-term mayor of Albuquerque, NM.

“Congressman Barnie Frank was right.  Perhaps, it really is time to end Fannie Mae and Freddie Mac, along with their multimillion dollar campaign contributions and their supposed overseer, the Federal Housing Finance Agency (FHFA)!  Think of the savings to taxpayers and homeowners,” added Chávez.

Background:

PACE programs are not loans or liens tied to traditional loan mechanisms.  Local governments instead finance the upfront costs through voluntary tax assessments, which are paid incrementally in small amounts through a homeowner’s annual property tax bills and offset by reduced energy costs.

As we have noted previously, these latest actions by Fannie and Freddie serve to reinforce the widely-shared notion that Federal Housing and Finance Administration, the federal regulator in charge of Fannie & Freddie is not interested in giving a helping hand to battered homeowners and beaten local economies, instead, FHFA simply wants to protect Fannie & Freddie’s bottom line.

More information on PACE programs can be found at www.pacenow.org

More information on ICLEI USA can be found at: www.icleiusa.org

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