PACE industry leaders, ranging from capital providers to program administrators, have cause to be optimistic regarding the potential for federal legislation and actions that support sustainable practices and "green" measures as a pathway to meeting environmental, economic and social goals. In two recent communications, the industry has cast a particular light on the opportunity for affordable housing to be a sector of great potential impact.
The premise is simple. A significant share of the commercial properties in the nation are multifamily and within that segment, affordable housing - which is generally agency financed - can benefit from energy efficiency, renewable and resiliency infrastructure investments. By way of example, a property owner using PACE financing to upgrade an end-of-life furnace will benefit from decreased maintenance costs, more efficient operations and fewer tenant complaints about heat. Tenants, particularly in affordable units will benefit greatly because their utility bill represents a larger portion of household income than that of market-rate multifamily tenants.
Nationally the organization PACE Nation saw fit to point our the opportunity to address this concern in a letter to the Biden transition team in December. The letter - linked here - ultimately requested an executive order that would direct four agencies (HUD, USDA, SBA and the Treasury) to develop new guidance supporting Commercial PACE financing.
More recently the organization The CLEEN Project, released a summary of executive and legislative actions that could tip the scales in favor of carbon reduction as a driver for both economic and social changes. Their summary marked agency support of PACE as one of the top three actions that could be taken by legislators in the near future, while suggesting that such a move could harness more $100 billion in private investment across multifamily housing and long term care facilities.
In Chicago, PACE's profile is rising as means towards these same ends as Chicago's new sustainability chief, Angela Tovar focuses her work on environmental justice.
“There’s a tremendous opportunity to impact the daily lives and vibrancy of our community residents," said Tovar in an interview in June 2020. "The decisions we make, or don’t make, impact the lives of our neighbors. The plan is to center our climate and sustainability agenda around racial and environmental justice, and ensuring climate-vulnerable communities are our priorities."
Chicago multifamily property owners and energy services professionals servicing such properties are welcome to inquire as to the potential for PACE financing at ChicagoPACE.org/inquiry.
About Chicago PACE:
Chicago PACE makes it possible for owners and developers of commercial properties to obtain low-cost, long-term financing for energy efficiency, sustainability and renewable energy infrastructure deployed in new or existing buildings. This City of Chicago program is based on legislation that classifies energy efficient and/or renewable upgrades as well as above-code new installations as a public benefit. These “green” infrastructure elements and associated soft costs (permitting, structural support, etc.) can be financed with no money down and then repaid as a benefit assessment on the property tax bill over a term that matches the useful life of improvements (often as long as 20-25 years). The program thus delivers a financial tool that facilitates the City's sustainability efforts while providing economic development opportunities by reducing capital costs and driving down operational expenses for existing properties and new projects.