Green Building Incentive Task Force — Portland, ME
Date: 2011-02-24

MEMORANDUM
To: Green Building Incentive Task Force

From: Ian Houseal, Sustainability Coordinator

Date: February 24, 2010

Re: Incentive Program Nationwide and the Green Building Ordinance


As the Task Force considers the development of a Green Building Incentive Program for the City and
revisions to the Green Building Ordinance, the following information is provided:

 1. Green Building Incentives That Work: A Look at How Local Governments Are Incentivizing Green
 Development – A survey of green building incentive program nationwide.

 2. Examples of Green Building Incentive Programs
 a. Arlington County, Virginia
 b. Chicago, Illinois
 c. Portland, Oregon

 3. Green Building Ordinance

 4. Waiver letters of the Green Building Ordinance for the Baxter Building and the Cumberland Cold
 Storage Building.
 Green Building Incentives That Work:
 A Look at How Local Governments Are
 Incentivizing Green Development




 Prepared for and Funded by
 The National Association
 of Industrial and Office Properties
 Research Foundation



 By
 Yudelson Associates
 P.O. Box 18138
 Tucson, AZ 85731
 520-207-9759
 www.greenbuildconsult.com




 November 2007




Green Building Incentives That Work NAIOP Research Foundation November 2007 1
 About NAIOP
 The National Association of Industrial and Office Properties is the nation’s leading trade association for developers,
 owners, investors and other professionals in industrial, office and mixed-use real estate. Founded in 1967, NAIOP
 comprises more than 16,500 members in 55 North American chapters and provides networking opportunities,
 educational programs, research on trends and innovations and strong legislative representation. For more information,
 visit www.naiop.org.




 About the NAIOP Research Foundation
 The NAIOP Research Foundation was established in 2000 as a 501(c)(3) organization to support the work of individuals
 and organizations engaged in real estate development, investment and operations. The Foundation’s core purpose is
 to provide these individuals and organizations with the highest level of research information on how real properties,
 especially office, industrial and mixed-use properties, impact and benefit communities throughout North America.
 Funding for the Research Foundation’s activities comes from the generous support of the Governors, annual gifts from
 NAIOP members, and underwriting from the National Association of Industrial and Office Properties (NAIOP). For more
 information, visit www.naioprf.org.




 © 2007 National Association of Industrial and Office Properties
 Research Foundation

 There are many ways to give to the Foundation and support
 projects and initiatives that advance the commercial real estate
 industry. If you would like to do your part in helping this
 unique and valuable resource, please contact Bennett Gray,
 senior director, at (703) 904-7100 ext. 168, or gray@naiop.org.

 Requests for funding should be submitted to
 research@naiop.org. For additional information, please
 contact Sheila Vertino, NAIOP Research Foundation, 2201
 Cooperative Way, Herndon, VA, 20171, at (703) 904-7100, ext.
 121 or Vertino@naiop.org.

 Disclaimer: Due to the fast-changing sustainability environment,
 references current as of October 2007 are subject to change in the
 future.



2 Green Building Incentives That Work NAIOP Research Foundation November 2007
Table of Contents



 1. Executive Summary......................................................................................................5
 2. Introduction ...................................................................................................................6
 a. The Local Government Response..........................................................................7
 b. Representative Case Studies..................................................................................8
 c. Survey Approach ..................................................................................................10
 d. Survey Respondents.............................................................................................10
 3. Findings .......................................................................................................................12
 4. Conclusions .................................................................................................................16
 5. Recommendations......................................................................................................17


 Bibliography/Telephone Interviews.................................................................................19


 Appendix 1 – Local Government Incentive Programs ...................................................21
 I. By State and City ...................................................................................................21
 II. By Type of Program ..............................................................................................25
 Appendix 2 – Survey Questions (for Developers) ..........................................................30
 Appendix 3 – Detailed Survey Results ............................................................................33


 Figures
 1. LEED for New Construction Project Growth, 2002-2006 ........................................... 6


 Tables
 1. Types of local incentives ............................................................................................12
 2. Survey results – developers .......................................................................................33
 3. Survey results – architects .........................................................................................33
 4. Survey results – local government officials............................................................. 33




Green Building Incentives That Work NAIOP Research Foundation November 2007 3
4 Green Building Incentives That Work NAIOP Research Foundation November 2007
Executive Summary
The NAIOP Research Foundation retained Yudelson There are literally hundreds of different incentive
Associates in the summer of 2007 to investigate local programs for green buildings. Developers need to
government incentive programs, specifically for green research what each local jurisdiction offers and make sure
buildings. Through an extensive literature review, that they are “at the table” when such incentives are being
Yudelson Associates identified and characterized local discussed and adopted. Our surveys revealed that
and state incentives for green building construction by developers are aware of these incentives, but don’t always
the private sector. Additionally, Yudelson Associates use them. One reason is that the timing of development
conducted three separate online surveys of developers, decisions and the response time of local government don’t
architects and local government officials, with email and always mesh together. In a nutshell, developers need to
telephone interviews used to supplement survey results. make quick decisions, and governments prefer to move
 more slowly to observe “due process.”
The main categories of green building incentives we
found were: Finally, we recommend that developers take this list
1. Priority in building permit processing and plan review, of incentives and use it to proactively lobby local
 sometimes with a requirement for posting a bond to governments with their preferred incentives when the
 guarantee the result. subject of green buildings appears on the local agenda.
2. Tax incentives, particularly property tax abatements, for Often, the experience of other government agencies is
 projects achieving LEED Silver or better certification. very persuasive to local jurisdictions wanting to take
3. Increased Floor-to-Area (FAR) ratios, which allow a immediate action.
 developer to construct more building area than
 allowed by applicable zoning.




Green Building Incentives That Work NAIOP Research Foundation November 2007 5
 Introduction
 The green building movement continues to grow at a
 rapid rate. In 2006, the U.S. Green Building Council’s
 (USGBC) LEED green building rating system recorded a
 50 percent increase in cumulative LEED-registered
 projects (those intending future certification) and nearly a
 70 percent increase in LEED-certified projects (Figure 1).
 As of November 2007, more than 8,000 projects
 representing more than 1.5 billion square feet of space
 had registered under the LEED system and more than
 1,100 projects had received certification.1



 Figure 1. LEED for New Construction Registered/
 Certified Project Growth, 2000-2006
 700

 600


 500




 LEED-NC Numbers
 400


 300


 200


 100


 0
 2000 2001 2002 2003 2004 2005 2006
 Year-End

 Cum. LEED-NC Reg x 10%
 Cum. LEED-NC Cert’s

 Cum. LEED-NC Area, MMSF




 1
 U.S. Green Building Council, unpublished data furnished to the author.




6 Green Building Incentives That Work NAIOP Research Foundation November 2007
The Local Government Response
As of July 2007, more than 600 U.S. Mayors had signed Most municipal actions represent market-driven
the U.S. Conference of Mayors’ Climate Protection incentives, but they are by no means the only types of
Agreement, committing their cities by 2012 to reduce incentives in practice. Each city and county seems to
greenhouse gas emissions by seven percent compared tailor the incentive process to fit best with their particular
with 1990 levels.2 This level of local government needs. Thus, the array of means supporting green
involvement presages a rapid growth in green building building is growing monthly as more municipalities take
incentives and regulations in the next few years. action. There is certainly a wealth of knowledge and
 experience from which other cities may gain. Our
Additionally, cities and counties are becoming the research sought to uncover the scope of green building
“celebrities” amongst the band of actors on the green incentives being offered across local governments in the
building stage. With a lack of substantial federal and state U.S. and to assess what optimal mix of economic and
green building legislation, locally-based, market-driven procedural incentives may further green building goals in
incentives are sprouting up in municipalities across the other municipalities, while assisting developers who
country. For example, in July of 2007, Howard County, want to “build green.”
Maryland passed Bill 47-2008 which included expedited
permitting for projects aiming for LEED Gold or Platinum
and granted a five-year property tax credit for projects
obtaining LEED-NC and LEED-CS certification. About ten
cities have already adopted municipal ordinances and
regulations requiring the private sector to certify all
future projects above a certain size, including such large
cities as Boston and Washington, DC, with timetables
ranging from the end of 2007 out to 2012.3




2
 U.S. Conference of Mayors, http://usmayors.org/climateprotection/climateagreement_071307.pdf, accessed September 15, 2007.
3
 U.S. Green Building Council, https://www.usgbc.org/ShowFile.aspx?DocumentID=691, accessed September 15, 2007.



Green Building Incentives That Work NAIOP Research Foundation November 2007 7
 Representative Case Studies
 Just about every jurisdiction offering green building beyond the bare minimum of LEED certification may also
 programs also has policies and programs that go with the qualify for waiver of plan review fees.
 incentives. A developer should take the time to become
 familiar with the full range of potential benefits offered Chicago also is giving $5,000 in grants and offers density
 by the city or county. Very often, city staffs are quite bonuses to small businesses that include green roofs in
 knowledgeable not only about their programs, but about their building design. Furthermore, Chicago has participated
 green building design and construction as well. in Green Building pilot projects which essentially test the
 waters for developers and make building sustainably less
 risky. Finally, Chicago has a comprehensive Green Building
 Arlington County, VA Education and Awareness Program that highlights the
 work of green builders and seeks to drive demand for
 Started in 1999, Arlington County has a very prolific Green their product. For more information, please see
 Building program including a green building density h t t p : / / w w w. a i a . o r g / s t a t i c / s t a t e _ l o c a l _ r e s o u r c e s /
 bonus program. Through this program, a builder may adv_sustainability/Permitting%20and%20codes/GreenPermi
 request a slightly larger building than is normally allowed tBrochure.pdf.
 by the County Code if the project gains official LEED
 certification at any of the four levels. The amount of extra
 space depends on the award level and other project San Diego County, CA
 specifics. This density incentive applies to all types of
 development, not solely commercial office projects. Please see San Diego County’s Green Building program offers
 http://www.arlingtonva.us/departments/EnvironmentalServ various incentives to commercial green building projects.
 ices/epo/EnvironmentalServicesEpoIncentiveProgram.aspx For example, a builder can obtain expedited plan checks
 for further details. saving approximately 7 to 10 days on a project’s timeline.
 Developers may also qualify for a 7.5% reduction in plan
 Arlington County is also known for its Green Building check and building permit fees for projects meeting
 Fund. In 2003, all developers must contribute $0.03 per program requirements. (Note that these incentives only
 square foot to the fund (this is equivalent to the cost of apply to projects in unincorporated areas of the County.)
 LEED certification for most projects.) Projects that At least one of the following measures must be
 achieve at least a basic LEED certification from the implemented to qualify for the incentives:
 USGBC receive a refund of their contribution. The Green
 Building Fund is then used to provide educational and 1. Natural Resource Conservation
 technical assistance to the community and developers. • Recycled content materials. (a) Show that 20% or
 more of the primary materials being used in the
 Arlington County’s Green Building Program is still building system contain 20% or more post-
 growing and, most recently, they are touting a Green consumer recycled content. Any reused materials
 Home and Remodeling Resource Directory to spotlight will be found to satisfy the 20% post-consumer
 green builders. recycled content requirement; or, (b) Show that at
 least one primary building material (such as roofing)
 is 50% or more post-consumer recycled content.
 Chicago, IL (This can be fairly easy to do for projects pursuing
 LEED certification, since the documentation is
 The City of Chicago encourages builders to build required for LEED purposes).
 sustainably in a variety of ways. For one, Chicago’s 2. Water Conservation
 Department of Construction and Permits (DCAP) touts a • Graywater Systems. The installation of a graywater
 Green Permit Program which offers expedited permit system will qualify for the incentives. Graywater is
 processing. Projects accepted into the Program can receive the wastewater produced from bathtubs, showers
 their permits in as few as 15 business days depending on and clothes washers. In order to conserve water, it
 the complexity of the project. Projects which go above and can be used for irrigation through subsurface




8 Green Building Incentives That Work NAIOP Research Foundation November 2007
 distribution systems. A permit is required from the State of Oregon
 County Department of Environmental Health for
 the graywater system. Oregon provides a Sustainable Building Tax Credit for
3. Energy Efficiency buildings achieving Silver, Gold or Platinum LEED
 • Energy Use Below State Energy Code Standards. certification. Credit is calculated based on the gross
 Residential projects must exceed the minimum square footage of all conditioned spaces. For a large
 California state “Title 24” standards by 15%, and LEED Gold project, the credit might be worth $1.50 per
 commercial projects must exceed the standards sq.ft. off state taxes. The Oregon 35% five-year Oregon
 by 25% qualify for the Green Building Incentive Business Energy Tax Credit is also available to projects
 Program. that fulfill certain energy conservation, equipment
 efficiency and renewable energy systems requirements.
Please see http://www.sdcounty.ca.gov/dplu/green A pass-through option is also available for businesses
buildings.html for further details. San Diego’s Regional that choose to pass their tax credit onto a partner in
Energy Office is active in offering training, design exchange for an equivalent cash payment. For
assistance and technical support for public and private- preliminary information about the Oregon tax credit,
sector green building projects. please visit: http://www.oregon.gov/ENERGY/CONS/BUS/
 docs/betcbro.pdf. Oregon is also home to the Oregon
 Energy Trust’s Business Energy Solutions Program which
Seattle assists businesses in identifying energy savings in
 existing buildings and in new buildings. Financial
Seattle has a variety of green building incentives. First incentives and technical support are available for such
and foremost is Seattle’s density bonus incentive. A measures as energy modeling, design assistance and
project must achieve LEED Silver to be eligible for the installing high-efficiency HVAC equipment. Please see
greater FAR and density bonus. However, if the applicant the Energy Trust’s website for further details: http://
for this bonus fails to deliver a timely report specified by www.energytrust.org/newbuildingefficiency/index.html.
the city, a $500/day penalty will be assessed. For more
information, please visit: http://www.seattle.gov/dpd/
stellent/groups/pan/@pan/@sustainableblding/document New York State
s/web_informational/dpdp_018423.pdf. Seattle partners
with its commercial and industrial developers on water The New York State Energy Research and Development
issues as well. The Water Smart Technology Program Authority (NYSERDA) provides computer modeling,
offers financial assistance to qualified water conservation design charrette coordination, assistance in obtaining
projects for technical research and installation making LEED® certification, Executive Order 111 assistance, New
water conservation a financially feasible venture. For York State Green Buildings Tax Credit assistance (for further
further information: (http://www.seattle.gov/util/Services/ information: http://www.dec.ny.gov/regs/ 4475.html#17897),
Water/For_Commercial_Customers/WATERCONS_200311 green materials recommendations, commissioning and
261707523.asp). Lastly, Seattle’s Lighting Design Lab life cycle costing analysis to building design teams to
offers free design and technical assistance to projects, help make new and rehabilitated commercial, industrial
especially daylighting modeling. (http://www.seattle.gov/ and institutional buildings green. Green Building services
util/Services/Water/For_Commercial_Customers/WATERC are offered under the New Construction program PON
ONS_200311261707523.asp). 1155. Energy-efficiency services to new building
 construction and renovations are offered under the New
 Construction Program on a first-come first-serve basis.
Portland Capital cost incentives are calculated using energy
 performance and technical assistance is provided on a
Portland touts a Green Investment Fund which offers cost-shared basis. Since 1999, NYSERDA has given more
grants up to $225,000 to commercial, industrial, residential than $92 million in federal and state funds to provide
and mixed-used public and private entities. However, this assistance for projects affecting more than 137 million
program is very competitive so developers may not get square feet of building space in New York State.
much use out of it. For more information, please see:
http://www.portlandonline.com/osd/ index.cfm?c=42134.




Green Building Incentives That Work NAIOP Research Foundation November 2007 9
 Cincinnati, Ohio Survey Respondents

 On May 9, 2007, the City of Cincinnati amended The numbers of survey respondents were as follows.
 legislation that established and defined The City of Percentages are shown in the table below and a
 Cincinnati Community Reinvestment Area, adding an summary of survey results by respondent type can be
 automatic 100% property tax exemption for found on pages 13-15 and in the appendix at pages 24-30.
 developments that meet a minimum of LEED Certified for
 newly constructed or rehabilitated commercial or Developers: 53
 residential buildings. For buildings that meet LEED Architects: 37
 Certified, Silver and Gold, the maximum amount of Local Government: 22
 abatement per dwelling unit is $500,000 over 15 years for Total: 112
 new construction or over 10 years for renovation/
 remodel. There is no maximum for LEED Platinum. For
 Survey # Responses/ % Responses/
 details, see: http://www.usgbc.org/ShowFile.aspx? Total Sent Total Sent
 DocumentID=1974.
 Developers 53/295 18%
 Architects 37/201 18%
 Survey Approach Municipal Government Officials 22/47 47%

 We started with a literature search of available
 information on green building incentives offered by state Local government had the highest percentage of
 and local government. Most of the information comes respondents. Most of those surveyed are highly
 from four sources: the USGBC web site, which attempts motivated to promote green buildings. Responses just
 to keep up with all government programs and incentives short of 20 percent by developers and architects can be
 favoring green buildings; the Directory of State Incentives seen as positive, since this was an online survey, and
 for Renewable Energy4; NAIOP’s Stateside Associates' response rates are typically low for such polls. Please
 iStateLink portal; and the general green building literature refer to pages 13-15 for a summary of survey results by
 available on the Web. Our approach was then to respondent type.
 categorize incentives in terms that made sense for
 developers. Characteristics of survey respondents. Of the total number
 of survey respondents, 48 percent had experience in five
 We decided to take advantage of a previous NAIOP survey or more green building projects, 95 percent were
 and include developers who had responded to that survey members of the USGBC, 75 percent were LEED
 in this new survey. Additionally, we used Yudelson Accredited Professionals and 78 percent had personally
 Associates’ database of government officials, architects participated in a LEED-registered project. By these
 and developers (this list is biased toward the western numbers, this group of respondents is very experienced
 U.S., since that is where most of Yudelson Associates’ with green buildings. In terms of geographic location of
 contacts are located.) We administered a 20-question projects, 60 percent were in the West or Southwest, and
 survey using the Survey Monkey website.5 Following the only five percent represented Canadian projects. Finally,
 initial survey requests via email, we also used the 45 percent had developed or worked in a location that
 reminder tool in Survey Monkey to follow up with people offered green building incentives.
 who hadn’t responded by the original deadline.
 Additionally, we followed up selected interviews with In terms of green building achievements, 69 percent of
 some of the people who indicated they would be willing respondents had secured a LEED Gold or Platinum
 to talk with us, either in person or via email. designation for at least one project. However, 28 percent
 thought that green buildings carried a four percent or
 more cost premium. One developer surveyed stated,
 “There are definitely added costs to doing green - even at
 two to four percent, in a competitive market with




 4
 Available at www.dsireusa.org.
 5
 Survey Monkey, www.surveymonkey.com.



10 Green Building Incentives That Work NAIOP Research Foundation November 2007
outrageously high construction costs, it can be a barrier.
Also, developers face many risks in getting a project
completed. It’s natural that they would want to streamline
their process by working with the same team over and
over. If that developer's team doesn't know how to build
green, he/she will need a carrot to mentally get over the
hurdle that it will take to decide to do green, because it
WILL add time, confusion and cost the first time you do it
(especially if it's a LEED project, and not just something
green-washed). If a city offers priority permitting and
$15-20k of incentives that will likely be enough to get the
developer to take the leap.” This was not a lone voice
amongst those surveyed. When asked why local
incentive may or may not help build local green building
momentum, another developer stated that “it would help
pay for some of the added costs of the building.”

Additionally, 48 percent thought that perceived cost
increases were still the biggest barriers to building more
green buildings. One developer said, “I believe that our
perception is built on reality. The cost of third party
testing and certification is a significant part of it. Certified
lumber is also a potential big cost item since there are so
few sources and availability and cost will be affected.”
Furthermore, 40 percent thought they had NOT received
an adequate amount of publicity or new business for the
decision to build green. Developers and architects both
expressed interest in “increasing visibility.”




Green Building Incentives That Work NAIOP Research Foundation November 2007 11
 Findings
 Incentives. From the survey, the following incentives other forms of recognition. For instance, one surveyed
 were offered by various local governments, listed in architect states, “What I observed in a group full of
 descending order of frequency. (Answers below the five developers…they appeared to not care about green
 percent level of frequency are not listed). building, but faster permitting caught their attention.” In
 some areas, this change is already happening. For
 example, one county official stated in an interview “The
 Types of Local Incentives Percent Offering County has already been approached to enter into
 Incentive payment from a utility energy- 57% partnerships to facilitate the timely delivery of
 efficiency program entitlements and associated permits for green projects
 which we may follow up on.”
 Direct monetary payment from a city or county 52%
 (grant, rebate or reimbursement)
 In probing what additional development incentives
 Expedited permit processing 36% would make a difference to developers, the highest
 Marketing/publicity/awards 35% number of responses was for these four methods:
 State income tax credit 29%
 Expedited permit processing 13%
 Property or sales tax rebates or abatements 22% Tax reductions 13%
 Density bonus 21% Density bonuses 12%
 Expedited plan review 10%
 Access loans/loan funds 17%
 Full or partial refunds for development fees 9% The conclusion: money is important (in the form of tax
 reductions), but equally or more important are faster time
 to market, more certainty in the development approval
 Interestingly, more than half the incentives involved process and additional flexibility to add more space if
 direct payments, either from utilities or local market conditions warrant.
 governments. About one-third of the agencies offered
 some “intangible” but still valuable incentive such as Are local government incentives necessary to accelerate
 expedited permit processing or assistance with the growth of green buildings? In our survey, 62 percent
 publicizing the project. Less than a quarter of agencies said yes. Interestingly, 70 percent of responding local
 offered tax incentives or density bonuses, and less than agencies required LEED certification for their own
 ten percent offered fee reductions. projects. This follows a general pattern: first cities do
 their own projects; then, with that experience they begin
 Looked at another way, of the nine most frequent pushing the private sector to respond, typically with both
 incentives for green buildings, energy efficiency and non-monetary and monetary incentives. So far, most
 renewable energy, two-thirds represent some form of local jurisdictions have not made LEED certification
 monetary inducement. This suggests that local and state mandatory, preferring the carrot to the stick. This could
 governments view money as the major issue for be working as one developer states “We are seeing in the
 encouraging developers to “go green,” based likely on last 12 to 18 months a significant amount of interest from
 the perception that green buildings cost more and need many who were previously unconcerned. We are
 to be incentivized with funds to lower costs. One receiving RFP’s from major corporations who want a
 government official put it this way, “When it comes down commitment to LEED from their developer.”
 to it, it is about money. Would we not build ALL green IF
 we had the money for it?” Two major classes of discoveries resulted from the study.
 The first was that there is a wide range of green building
 The survey also suggests that local governments may be incentives in municipalities - priority permit processing,
 missing a bet in not using such non-monetary incentives expedited plan reviews, loan funds, direct grants and tax
 as expedited permit processing, density bonuses and credits to name a few. In Appendix A, we delineate the
 assistance with marketing and publicity via awards and incentives we found and which jurisdictions offer them,




12 Green Building Incentives That Work NAIOP Research Foundation November 2007
to aid developers, architects and government officials in Portland:
understanding where efforts have been made and where • Publicity/Marketing (e.g. Build It Green! Home
opportunities exist. Tour)
 • Free Technical Assistance (e.g. case studies,
The second finding related to the attitudes and wants of project guidebooks, etc.)
developers, architects, and municipal government • Green Investment Fund, a competitive grant
officials with respect to green building incentives. In program that offers funds to industrial,
general, these groups were practical and business- commercial, residential and mixed-use projects.
oriented yet still optimistic for the goal of achieving • Commercial Incentives (e.g. Sustainable Building
sustainability in the built environment. One surveyed tax credit, Business Energy tax credit, see
developer stated, “The incentives will stimulate enough http://www.portlandonline.com/osd/index.cfm?a=
activity to create the necessary infrastructure to bring the 114662&c=41676 for additional information)
costs down.” Developers were concerned with the • Residential Incentives (e.g. Purchase and
financial feasibility of whatever incentives were Renovation loans, Home Repair Loans, Multi-family
proposed. Another developer revealed, “A proactive city Weatherization Program; for additional information,
that supports sustainability and streamlines the process please see http://www.portlandonline.com/osd/
would really help. Time is money for developers/ index.cfm?a=114658&c=41591)
owners/contractors.” Additionally, developers were
interested in the involvement of public stakeholders to 3. Survey Question: In your experience, what is the
gain buy-in, as well as what could be done to increase most compelling approach to consider building green
overall demand for green building. Another surveyed aside from government or client requirement?
developer states, “Local examples, expertise and Respondents believe that the most significant
incentives seem more accessible and less strange when incentive or trigger that has been effective in
neighbors are involved.” promoting green building is an internal philosophy to
 build green (44%). The second most significant trigger
What Developers Think. From the surveys, we have culled in their opinion is when business case benefits are
some of the most interesting and representative comments recognized and desired by tenants (33%).
made by the developers who responded to the survey.
 4. Survey Question: Besides direct monetary payments
1. Survey Question: Which is the most significant barrier (grants, rebates, tax incentives, utility payments),
 at this time to the rapid growth of green buildings? which Green Building Incentives were/would be the
 The most significant barrier to the rapid growth of most significant for you, in your choice to develop
 green buildings is perceived cost increase (41%). In green projects?
 developers’ opinions, the second highest barrier is the Incentives that developers indicated would be the
 lack of knowledge of how to build green (18%). most significant for them and that they would like to
 see implemented include:
2. Survey Question: From your knowledge or direct a. Density bonuses (83%)
 experience, what two cities or counties (include b. Expedited permit processing (75%)
 state) do you think have the most successful green c. Development fees partially or fully refunded (58%)
 building incentives in place? d. Marketing/Good publicity / Awards (42%)
 The most successful green building incentives are in e. Access Loans/Loan Funds (17%)
 Chicago (13%) and Portland, Oregon (9%).
 Chicago: 5. Interview Question: The following conclusion was
 • Priority permitting (i.e. Green Permit Program) gleaned from various follow-up interviews.
 • WasteCap's Construction and Demolition Debris Builders want to have input into the incentives that
 Recycling Training And Accreditation Program, for will be offered or the requirements that will be
 details see the City’s Department of the Environment imposed upon them, which is of course not
 web site, www.cityofchicago.org/environment surprising.
 • Green Roof Initiative
 • Awards/Publicity (e.g. GreenWorks Award, 6. Survey Question: Please give one brief reason why
 Landscape Awards) you think local incentives will help build momentum
 for green building development.




Green Building Incentives That Work NAIOP Research Foundation November 2007 13
 Developers are concerned foremost with the financial levels. You really need a client who wants to achieve
 aspects of green building. They support incentives higher ratings for other than hard economic benefits
 because incentives assist in making green building a to justify the cost,” said a Midwest developer.
 profitable venture. “Until customers are willing to pay
 a premium, incentives are necessary to make green 9. Survey Question: Please give one brief reason why
 projects feasible,” said one. “Anything that makes it you think local incentives will help build momentum
 financially desirable will help people make the for green building development.
 decision to do it,” said another. Developers understand that the development/
 construction industry is reluctant to make changes.
 7. Interview Question: The following conclusion was Incentives will help developers get over this
 gleaned from various follow-up interviews. resistance. They believe that incentives are necessary
 Some developers believe that the perceived costs to enable this change. One respondent said, “I believe
 match the actual costs. They believe that the costs are that there are many compelling reasons to build green
 substantially higher to build green. As one but that there are still also many perceived barriers
 experienced and large California developer of mixed- (many arising out of incomplete or missing
 use communities said, “I believe our perception cost information). Providing incentives to bring down the
 is built on reality. The cost of third party testing and barriers to adopting green building techniques helps
 certification is a significant part of it. We are presently develop the 'critical mass' of reasons to motivate
 going through an evaluation of both LEED-H and people to at least try this approach.” A broker echoed
 LEED-ND to understand where we are now, and where this sentiment: “Incentives may compel
 we will need to get to in order to be LEED certified. At developers/builders to build green when they may be
 that time we will have a better understanding of what 'on the fence'.”
 the cost impacts are.”
 To this point, one developer said, “If that developer's team
 8. Survey Question: In your experience, what is the doesn't know how to build green, he/she will need a carrot
 most important barrier at this time to the rapid to mentally get over the hurdle that it will take to decide to
 growth of green buildings? do green, because it will add time, confusion and cost the
 Some developers believe that there is a lack of first time you do it (especially if it's a LEED project, and not
 knowledge of how to build green and that this is a just something green-washed). If a city offers priority
 substantial barrier to gaining green building permitting and $15-20K of incentives that will likely be
 momentum. There is some buy-in with larger enough to get the developer to take the leap.”
 corporations but there is a lack of knowledge on how
 to implement their vision. “I think there is a need to Additionally, some developers believe that incentives are
 better publicize the information on how to build green necessary to increase awareness among the
 to a larger audience. Our clients, mostly multinational development community that people’s values are
 corporations do have 'green' as one of the items in changing and that they should respond to these changes.
 their Corporate Social Responsibility program. Said one, “Every catalyst [project] helps to bring down
 However, they do need our help in translating it into a costs and to raise awareness of importance of reducing
 ground level application,” said one commercial impact of growth on earth.”
 broker in a large international firm.
 Survey Results by Type of Respondent. Each of the three
 Developers want cold, hard facts. They are interested types of respondents, architects, developers and local
 in the bottom line. “'How much will it cost me?” “How government officials has a different perspective. Here we
 much would I gain from it?” are the questions being profile their responses.
 asked. One developer states “In a competitive market
 with outrageously high construction costs, it [extra Architects
 costs for green building] would be a barrier.” • All of the architects had green building projects
 underway or unplanned.
 Some developers believe that higher levels of LEED • Government agencies and colleges/universities are
 certification do not justify the costs of achieving them. the two most prevalent client bases (68% and 62%
 “We typically do high quality design, but don't worry respectively).
 about LEED certification, especially at the higher • 86% are LEED accredited.




14 Green Building Incentives That Work NAIOP Research Foundation November 2007
• 59% have designed projects in a city that offers green Government Officials
 building incentives. • 95% had green building projects underway or
• Money from a utility energy efficiency program was planned.
 the most common incentive offered (79%) as • 90% work in agencies that are members of the
 compared with direct municipal monetary payment USGBC.
 from a grant, rebate or reimbursement (57%), • 55% are LEED accredited.
 property or sales tax rebates or abatements (43%), or • 68% have participated in a LEED project (any level).
 state income tax credit (50%). • 50% work for an agency that offers green building
• 50% worked in cities that offered publicity, marketing incentives.
 or awards to their client base. • 78% worked in cities or counties with incentive money
• Marketing/good publicity was cited by the most from a utility energy efficiency program, 67% with
 architects (71%) as the most influential incentive for direct monetary payment (grant, rebate or
 them to persuade their clients to build green. reimbursement).
• 56% believe that perceived cost increases are most • 60% stated that marketing/publicity was one of the
 significant barrier. most significant incentives they offered; 50% stated
• Answers to what was the most significant incentive that density bonuses were one of the most significant
 that triggered or is effective at promoting green incentives.
 building were varied. The highest percentage (26%) • 82% stated that their green building programs had
 said that the client requiring it as part of their policy formal policy support.
 was the significant incentive. • 38% stated that their municipality mainly incentivizes
• 97% believe that local incentives will build green building by establishing councils or working
 momentum in the next three years. groups to develop an overall plan of action for
• 60% believe that local incentives are necessary for increasing green building; 25% said that they reward
 green building’s success. and celebrate current green building activities;
 another 25% said that they have legislated to require
Developers compliance with a standard; and 12.5% said that they
• 50% of developers received priority permit processing have taken no action.
 (50%) with direct monetary payment (grant, rebate or • 70% of agencies require LEED or equivalent for their
 reimbursement) and marketing/publicity and awards own projects.
 both trailing at 42%. • 41% perceived that public contracting requirements
• Density bonuses were stated as the most significant were a barrier in governmental green building
 incentive to green building. projects.
• 41% believe that perceived cost increases are most • 50% stated that most significant barrier to rapid
 significant barrier. growth of green buildings is perceived cost increases.
• Three percent said that they had no green building • Answers to what was the most significant incentive
 projects underway or planned. that triggered or is effective at promoting green
• Locations of development projects were spread out, building were varied. The highest percentage (26%)
 with a high of 27% of developers with projects on the said that the internal philosophy to build green was
 West Coast. the most significant incentive.
• Only three percent of developers consider themselves
 as very experienced with green building (over 10
 projects).
• No developers believe that good public relations or
 marketing benefits are most compelling reasons to
 consider building green.
• Developers perceived that Chicago and Portland were
 two cities with the most successful green building
 incentives (30% and 22% of developers respectively).




Green Building Incentives That Work NAIOP Research Foundation November 2007 15
 Conclusions
 From the findings, we identified recommendations that
 would optimize the adoption of green building incentives
 in municipalities. Actions like creating incentives that
 affect a developer’s bottom line, and increasing
 community awareness to the benefits of green building
 in order to induce greater consumer demand are just two
 of the proposed recommendations that naturally stem
 from the survey results.

 Furthermore, developers, architects and government
 officials made it clear what incentives they wanted to see
 going forward. There was a wide range of incentives in
 this list and a need for customization based on locality
 was expressed. However, the most prevalent incentives
 desired were expedited permitting, tax reduction, density
 bonuses and reduced-cost building permits. To
 complement these incentives, those surveyed also
 wanted technical support for these new mechanisms.
 Some expressed the desire for websites dedicated to
 helping developers find reliable services to implement
 green building details like on-site water remediation and
 construction site recycling.

 There was little disagreement among the three types of
 people surveyed about the value of incentives and the
 need for more comprehensive green building promotional
 programs. If there is a difference in practice, it will always
 be about money. Developers are concerned with the
 bottom line and interested in possible offsets to their costs.
 Cities and counties currently have the budgets to support
 small incentive programs, but they are much more drawn
 to non-monetary incentives such as publicity and awards,
 faster permit processing and greater density bonuses.

 All in all, there is much that can be done to promote
 green building at the local level – actions that are not
 insurmountable by any means. NAIOP hopes to help build a
 conduit that will bring these ideas and needs to realization.




16 Green Building Incentives That Work NAIOP Research Foundation November 2007
Recommendations
1. Encourage developers to have a greater say in the
 incentive process. They will be more likely to buy-in
 to the programs and use the incentives.

2. Increase awareness in selected towns and
 communities of the benefits of green building so that
 there is a pull by political supporters of progressive
 local officials.

3. Continue to talk to developers in their language:
 business and finance. Work with other green building
 organizations to accumulate project cost and benefit
 data. Show NAIOP members hard numbers and
 statistics. They will be more convinced to build green.

4. Increase awareness among developers that there is a
 change in values within the development community
 and among consumers to support the rapid growth of
 green building construction and energy-efficient
 operations.

5. Start creating language for specific incentives that we
 know the development community wants:
 a. Expedited permitting
 b. Property tax reductions or abatements for
 significant periods of time
 c. Density bonuses and entitlement assurances
 d. Accelerated building permit processing (this of
 course works best in cities where the permit
 process is convoluted and slow!)




Green Building Incentives That Work NAIOP Research Foundation November 2007 17
18 Green Building Incentives That Work NAIOP Research Foundation November 2007
Bibliography
1. Building Design + Construction, “Green Buildings and the Bottom Line,”
 http://www.bdcnetwork.com/contents/pdfs/whitepaper06.pdf

2. Database of State Incentives for Renewables and Efficiency (DSIRE),
 http://www.dsireusa.org/library/includes/incentivenew.cfm?&CurrentPageID=3&EE=1&RE=1

3. Building Design + Construction, “White Paper on Sustainability,”
 http://www.bdcnetwork.com/article/CA6326262.html?industryid=42784

4. Stateside Associates’ iStateLink, “Target Report on Green Buildings,”
 http://www.stateside.com/iStateLink/NS/iStateLink.asp

5. Law Library of Congress (for each state’s legislative online law databases)
 http://www.loc.gov/law/help/guide/states.html

6. American Institute of Architects, http://www.aia.org/cote_a_0703_greencities

7. USGBC, “Summary of Government LEED Incentives,” https://www.usgbc.org/ShowFile.aspx?DocumentID=2021

8. USGBC, Gainesville Green Building Program, http://www.usgbc.org/ShowFile.aspx?DocumentID=1979

9. USGBC, City of Cincinnati Incentives, http://www.usgbc.org/ShowFile.aspx?DocumentID=1975

10. State of Kansas, HB 2843, http://www.kslegislature.org/legsrv-legisportal/index.do

11. State of New York, S.B. 5442, http://www.assembly.state.ny.us/leg/?bn=S05442&sh=t

12. State of California, AB 35 (Sustainable Building Act of 2007): http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_0001-
 0050/ab_35_bill_20070601_amended_asm_v97.html

13. State of California, AB 888: http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_0851-
 0900/ab_888_bill_20070411_amended_asm_v97.html


Telephone Interviews

1. David Wick, Hines, Houston, TX
2. Roger McErland, The Irvine Company, Irvine, CA
3. Tondy Lubis, Colliers International
4. David Plotkin, Seaver Franks Architects, Tucson, AZ
5. Steve Kendrick, LPA Inc., Roseville, CA
6. Russell Perry, SmithGroup, Washington, DC
7. Anthony Bernheim, HDR Inc., San Francisco, CA
8. Mary McLeod, Austin Energy, TX
9. Stuart Cooley, City of Santa Monica, CA
10. Bill Smith, City of Tacoma, WA
11. Yves Khawam, Pima County (Tucson), AZ




Green Building Incentives That Work NAIOP Research Foundation November 2007 19
20 Green Building Incentives That Work NAIOP Research Foundation November 2007
Appendix 1. Local Government Programs
Local governments have increasingly instituted policies, California:
programs and incentives in the effort to encourage • The state has created programs to encourage green
sustainable building. The following are a partial list of these building activity;
policies, programs and incentives. Policies are formal rules • Requires LEED Silver or better for all new state-owned
to guide decisions. Programs are systems of projects or buildings; we have seen this requirement also apply
services intended to meet public needs. Incentives are any to leased buildings, e.g., in “Request for Lease
factors (financial or non-financial) that provide a motive for Proposals” from developers.
a particular course of action. Wherever the text says “meet • The state has created a working group to develop
LEED or equivalent,” it means for the government’s own standards/plans;
projects, not for private development. Information is current • The state offers technical support;
only through August 2007; as this is a fast-changing field, • The state offers training;
we encourage developers to monitor local and state • The state has green building guidance documents for
developments through NAIOP national newsletters, its own projects, such that every building achieves
conferences and other sources. For an up to date listing, go LEED Silver certification, per Executive Order of the
to the USGBC web site: https://www.usgbc.org/ShowFile. Governor; these documents are produced by the
aspx?DocumentID=2021. California Department of General Services; since
 2003, the state has created many LEED certified
 buildings.
I. By State and City
 • Los Angeles:
Alabama: no cities with known green building incentives • Has a policy to meet LEED or equivalent;
or programs at the time of writing. • Has created programs to encourage green
 building activity;
Alaska: no cities with known green building incentives or • Has created green building guidance documents;
programs at the time of writing. • Has created LEED demonstration projects for its
 own use, including libraries, animal shelters,
Arizona: community centers and similar types of buildings.
• Scottsdale: • Alameda County:
 • Has a policy to meet LEED or equivalent; • Has a policy to meet LEED or equivalent;
 • Has created programs to encourage green • Offers technical support;
 building activity; • Offers training for the private sector, including
 • Has created green building guidance documents classes in green building;
 for housing (e.g. a checklist); • Has created green building guidance documents;
 • Carries a priority permitting program. • Offers grants for certain green building activities;
• Phoenix • Evaluates work through third-party certification,
 • Has a policy to meet LEED or equivalent; LEED or equivalent.
 • Offers bond funds; • San Mateo County:
 • Offers loans/loan funds; • Has a policy to meet LEED or equivalent;
 • Offers tech support for energy efficient retrofits for • Has created programs to encourage green
 A/C and lighting; building activity.
 • Offers technical support. • San Diego County:
• Tucson: • Offers training;
 • Has a policy to meet LEED or equivalent; • Offers reduced building permit fees/plan review
 • Has endorsed and encouraged LEED or equivalent. fees as incentives.
 • Santa Barbara County:
Arkansas: no cities with known green building incentives • Has created a working group/tasked an agency to
or programs at the time of writing. develop standards/plans;
 • Has created green building guidance documents;




Green Building Incentives That Work NAIOP Research Foundation November 2007 21
 •  Offers reduced building permit fees/plan review • Boulder:
 fees as incentives. • Has created programs to encourage green
 • Berkeley: building activity.
 • Has a policy to meet LEED or equivalent; • Denver:
 • Offers technical support that varies according to • Has a local green building program known as
 staff expertise and developer needs. “Greenprint,” with the details accessible at
 • Calabasas: www.greenprintdenver.org
 • Has a policy to meet LEED or equivalent. • Fort Collins:
 • Long Beach: • Has a policy to meet LEED or equivalent.
 • Has a policy to meet LEED or equivalent.
 • Oakland Connecticut: no cities with known green building
 • Has a policy to meet LEED or equivalent. incentives or programs at the time of writing.
 • Pasadena
 • Has a policy to meet LEED or equivalent. Delaware: no cities with known green building incentives
 • Pleasanton or programs at the time of writing.
 • Has a policy to meet LEED or equivalent;
 • Has created programs to encourage green District of Columbia/Washington D.C.:
 building activity; • Has a policy to meet LEED or equivalent;
 • Offers energy-efficient rebates. • Offers technical support;
 • Sacramento • Carries a priority permitting program;
 • Has a policy to meet LEED or equivalent; • Evaluates work through performance monitoring and
 • Refunds LEED certification fees. reporting;
 • San Diego • By 2012, all new commercial developments over
 • Offers reduced building permit fees/plan review 50,000 square feet have to meet the LEED Silver
 fees as incentives. standard.
 • San Francisco
 • Has a policy to meet LEED or equivalent; Florida:
 • Carries a priority permitting program; • Sarasota County:
 • Has an expedited review incentive (non-monetary). • Has a policy to meet LEED or equivalent;
 • San Jose • Carries a priority permitting program;
 • Has a policy to meet LEED or equivalent; • Has an expedited review incentive;
 • Has endorsed and encouraged LEED or equivalent. • Offers reduced building permit fees/plan review
 • Santa Barbara fees as incentives.
 • Offers technical support; • Gainesville:
 • Has an expedited review incentive. • Has a policy to meet LEED or equivalent;
 • Santa Monica: • Offers training;
 • Has a policy to meet LEED or equivalent; • Carries a priority permitting program;
 • Has created green building guidance documents; • Has an expedited review incentive;
 • Carries a priority permitting program; • Offers marketing materials/publicity;
 • Has an expedited review incentive (non-monetary) ; • Offers reduced building permit fees/plan review
 • Offers grants. fees as incentives;
 • Riverside: • Evaluates work through third-party certification,
 • Has an expedited review incentive. LEED or equivalent;
 • Evaluate work through performance monitoring
 Colorado: and reporting.
 • Statewide Built Green (nonprofit) Program for new • Miami-Dade County:
 homes provides technical and training support. All • Has an expedited review incentive.
 homes registered as Built Green are inspected on a
 random basis by certified raters of an independent,
 non-profit agency, E-Star Colorado.




22 Green Building Incentives That Work NAIOP Research Foundation November 2007
Georgia: Maryland:
• Chatham County: • The state has a policy to meet LEED or equivalent.
  • Program details not known. • Bowie:
• Atlanta: • Has endorsed and encouraged LEED or equivalent.
  • Has a policy to meet LEED or equivalent.
• Tybee Island: Massachusetts:
  • Has a policy to meet LEED or equivalent. • Acton:
 • Offers density bonuses as incentives.
Hawaii: • Arlington:
• Honolulu: • Has a policy to meet LEED or equivalent.
  • Has a policy to meet LEED or equivalent. • Boston:
 • Has a policy to meet LEED or equivalent;
Idaho: no cities with known green building incentives or • All new commercial development required to
programs at the time of writing. meet LEED or equivalent standards.

Illinois: Michigan:
• Cook County: • Grand Rapids:
 • Has a policy to meet LEED or equivalent. • Has a policy to meet LEED or equivalent.
• Chicago:
 • Has a policy to meet LEED or equivalent; Minnesota: no cities with known green building
 • Has created programs to encourage green incentives or programs at the time of writing.
 building activity;
 • Operates a priority permitting program. Mississippi: no cities with known green building
• Normal: incentives or programs at the time of writing.
 • Has a policy to meet LEED or equivalent.
 Missouri:
Indiana: no cities with known green building incentives • Kansas City:
or programs at the time of writing. • Has created demonstration projects.

Iowa: Montana: no cities with known green building incentives
• The state has created a working group/tasked an or programs at the time of writing.
 agency to develop standards/plans.
 Nebraska:
Kansas: • Omaha:
• The state has a policy to meet LEED or equivalent. • Has a policy to meet LEED or equivalent.

Kentucky: Nevada:
• The state has created programs to encourage green • The state has a policy to meet LEED or equivalent;
 building activity; • The state has created demonstration projects;
• The state has created a working group/tasked an • AB621 (2007) preserves former substantial property
 agency to develop standards/plans. tax breaks (25% to 35%) for up to 10 years for LEED
 Silver or better projects. The breaks do not apply to
Louisiana: no cities with known green building property taxes owed to local school districts.
incentives/programs in place at time of writing. Additionally, the bill eliminates sales tax exemptions
 on construction materials provided by the previous
Maine: no cities with known green building incentives or 2005 law.
programs at the time of writing.
 New Hampshire: no cities with known green building
 incentives or programs at the time of writing.




Green Building Incentives That Work NAIOP Research Foundation November 2007 23
 New Jersey: Pennsylvania: no cities with known green building
 • Cranford: incentives or programs at the time of writing.
 • Has a policy to meet LEED or equivalent;
 • Fields incentive requests from developers; Rhode Island: no cities with known green building
 incentives negotiable. incentives or programs at the time of writing.
 • Princeton:
 • Has endorsed and encouraged LEED or equivalent. South Carolina: no cities with known green building
 incentives or programs at the time of writing.
 New Mexico:
 • Albuquerque: South Dakota: no cities with known green building
 • Has a policy to meet LEED or equivalent. incentives or programs at the time of writing.

 New York: Tennessee: no cities with known green building
 • The state has a policy to meet LEED or equivalent. incentives or programs at the time of writing.
 • Suffolk County:
 • Has a policy to meet LEED or equivalent. Texas:
 • New York City: • Austin:
 • Has a policy to meet LEED or equivalent. • Has a policy to meet LEED or equivalent.
 • Babylon: • Dallas:
 • Requires LEED certification by end of 2007 for all • Has a policy to meet LEED or equivalent.
 new projects over 4,000 sq.ft. • Frisco:
 • Refunds certification fees. • Levies fines/disciplinary action for non-compliance
 • Syracuse: with LEED standards.
 • Has a policy to meet LEED or equivalent; • Houston:
 • LEED required for renovations. • Has a policy to meet LEED or equivalent.
 • San Antonio:
 North Carolina: • Offers reduced building permit fees/plan review
 • Chapel Hill: fees as incentives.
 • Has a policy to meet LEED or equivalent.
 Utah:
 North Dakota: no cities with known green building • Salt Lake City:
 incentives or programs at the time of writing. • All new buildings since 2005 are to meet LEED
 Silver standard, by Executive Order of the Mayor,
 Ohio: www.slcgreen.com
 • Cincinnati
 • Has a policy to meet LEED or equivalent; Vermont:
 • Offers grants. • The state refunds fund contributions.

 Oklahoma: no cities with known green building Virginia:
 incentives or programs at the time of writing. • Arlington County:
 • Has a policy to meet LEED or equivalent;
 Oregon: • Has created programs to encourage green
 • Eugene building activity;
 • Has a policy to meet LEED or equivalent for its • Has created green building guidance documents;
 own projects. • Operates a priority permitting program;
 • Portland • Offers marketing materials/publicity for successful
 • Has a policy to meet LEED or equivalent for its LEED certified projects;
 own projects; • Refunds some development fund contributions;
 • Offers grants to innovative projects, very • Offers density bonuses as incentives;
 competitive process. • Evaluates work through third-party certification,
 LEED or equivalent;
 • Evaluates work through performance monitoring
 and reporting.




24 Green Building Incentives That Work NAIOP Research Foundation November 2007
Washington: II. By Type of Policy, Program or
• King County: Evaluative Action
  • Has a policy to meet LEED or equivalent;
  • Offers grants. To assist developers in finding programs that meet their
• Issaquah: particular needs, we’ve organized the results above by
  • Offers technical support; type of program. The reason for this approach is that a
  • Carries a priority permitting program; developer may want to (or be asked to) serve on an
  • Has an expedited review incentive. advisory committee for creating a green building
• Seattle: program in a particular jurisdiction. When the discussion
  • Has a policy to meet LEED or equivalent; turns to policies or grants or non-monetary incentives,
  • Offers technical support; one can then refer to the specific provisions of programs
  • Offers marketing materials/publicity; in various jurisdictions. A simple Google search under
  • Offers limited grants; “green building incentives” and the name of the city is
  • Offers density bonuses as incentives. often all that’s required to find the details of a particular
 policy or ordinance.
West Virginia: no cities with known green building
incentives or programs at the time of writing. A. Policies
 1. Meet LEED or equivalent: The state or municipality
Wisconsin: has mandated by official policy that all of their
• Madison: buildings must meet LEED or equivalent
 • Has a policy to meet LEED or equivalent. requirements. In some municipalities, an alternative
 to the LEED program may serve as a substitute.
Wyoming: no cities with known green building incentives
or programs at the time of writing AZ - Scottsdale
 • Tucson
 • Phoenix

 CA - Los Angeles
 • Alameda County
 • San Mateo County
 • Berkeley
 • Calabasas
 • Long Beach
 • Oakland
 • Pasadena
 • Pleasanton
 • Sacramento
 • San Francisco
 • San Jose
 • Santa Monica

 CO - Fort Collins

 FL - Sarasota County
 • Gainesville

 GA - Atlanta
 • Tybee Island

 HI - Honolulu




Green Building Incentives That Work NAIOP Research Foundation November 2007 25
 IL - Cook County 3. Create programs to encourage green building
 • Chicago activity: The municipality has created a formal
 • Normal program whereby it organizes communication among
 green builders, green construction material suppliers,
 MA - Arlington local government staff, consumers and all other
 • Boston stakeholders to ensure the success of green building
 in the municipality. Often, specific services such as
 MI - Grand Rapids training are offered regularly.

 NE - Omaha AZ - Scottsdale

 NJ - Cranford CA - Los Angeles
 • San Mateo County
 NM -Albuquerque • Pleasanton

 NY - Suffolk County CO - Boulder
 • NYC
 • Syracuse IL - Chicago

 NC - Chapel Hill VA
 • Arlington County
 OH - Cincinnati

 OR - Eugene 4. Create a working group or task an agency to develop
 • Portland standards or plans: The municipality has formally
 provided for a green building working group through
 TX - Austin legal channels such as executive order or agency
 • Dallas regulation.
 • Houston
 CA- Santa Barbara
 VA - Arlington County

 WA - King County B. Programs
 • Seattle
 1. Technical Support: The municipality offers support
 WI - Madison concerning building methods, building preparation,
 site evaluation and material selection. Technical
 DC - Washington D.C. details are disseminated to building designers and
 contractors who will do the actual construction and
 design work. Technical support may include design
 2. Endorse and encourage LEED or equivalent: The assistance to help create well-designed, smoothly-
 municipality has a policy or policies in place that running building projects. Support may be in written
 formally endorse and encourage building to a LEED or form (e.g. handbooks, website tutorials and other
 equivalent standard. technical documentation) or it may be live assistance
 (e.g. telephone hotline, availability of green building
 CA officials to public).
 • San Jose
 MD AZ
 • Bowie • Phoenix
 NJ CA
 • Princeton • Alameda County
 VA • Berkeley
 • Arlington County • Santa Barbara




26 Green Building Incentives That Work NAIOP Research Foundation November 2007
 WA C. Incentives
 • Issaquah
 • Seattle 1. Priority building permit process: The municipality
 Washington, D.C. will give preference to projects meeting certain
 criteria for green building when passing a project
 through the permitting process. Green building
2. Training: The municipality offers training workshops, projects will pass through the process faster, saving
 classes, seminars or on-the-job coaching for building time and money.
 professionals. This may include design as well as
 construction training. CA
 • San Francisco
 CA • Santa Monica
 • Alameda County FL
 • San Diego • Sarasota County
 FL • Gainesville
 • Gainesville IL
 GA • Chicago
 • Atlanta VA
 • Tybee Island • Arlington County
 WA
 • Issaquah
3. Guidance Documents: The municipality has written District of Columbia
 documents that specifically guide developers in green • Washington, D.C.
 building certification and compliance with local
 regulations.
 2. Expedited development plan review: The municipality
 AZ gives preference to working on green building
 • Scottsdale development plan reviews. Projects that commit to
 CA certain sustainable certifications or other criteria
 • Los Angeles representing achievements of stated goals will be
 • Alameda County processed more quickly through the plan review phase,
 • Santa Barbara thus gaining a time advantage which translates into
 • Santa Monica cost savings.
 VA
 • Arlington County AZ
 • Scottsdale
 CA
4. Demonstration Projects: The municipality has taken • Santa Barbara
 the first steps to demonstrate certain benefits of green • San Francisco
 building by building first. This proves to developers • San Diego County
 the feasibility of certain types of projects or green • Santa Monica
 construction methods. • Riverside
 FL
 CA - Los Angeles • Miami-Dade County
 • Sarasota County
 MO -Kansas City • Gainesville
 WA
 • Issaquah




Green Building Incentives That Work NAIOP Research Foundation November 2007 27
 3. Solar energy permit fee credit/tax credit: Developers 7. Rebates from utilities: Utilities partner with the
 receive a permit fee remittance or a tax credit if solar municipalities to offer rebates for certain green
 energy is included in the developed site. Many states building features. There are a huge number of such
 offer solar energy tax credits. See the Directory of programs in the U.S. This list is just a brief sampling
 State Incentives for Renewable Energy for a complete of such programs.
 list: www.dsireusa.org.
 AZ
 AZ • Phoenix (Salt River Project -Earthwise)
 • Tucson (permit fee credit) CA
 CA • Pasadena
 • San Diego County PA
 • Reading – Municipal Light Dept. – Business
 Lighting Rebate Program
 4. Tax refund/abatement/credit: The municipality gives MA
 a tax incentive to qualifying green building projects in • All cities - National Grid (Mass Electric) –
 the form of a tax refund, tax abatement or tax credit. Commercial Energy Efficiency Incentive Program

 AZ
 • All cities (AZ House Bill 2429) 8. Energy-efficient rebates: Utilities offer rebates to
 CA projects that meet certain energy-efficient criteria for
 • Pasadena mechanical systems and design.
 GA
 • Chatham County CA
 MD • Pleasanton
 • Baltimore County • LA: LADWP – Non-Residential Energy-Efficiency
 NV Rebate Program
 • All cities (AB 632)
 OH
 • Cincinnati 9. Marketing materials/publicity: The municipality
 offers marketing materials and good publicity thereby
 increasing the visibility and community recognition of
 5. Bond funds: The municipality collects funds from the green developer. Plaques, job site signs, press in
 bonds which are then offered to fund sustainable local papers and features on local websites are all
 development projects. techniques used here.

 AZ AZ
 • Phoenix • Scottsdale
 FL
 6. Loan/loan funds: The municipality offers attractive • Gainesville
 loans to sustainable development projects. VA
 • Arlington County
 AZ WA
 • Phoenix • Seattle
 CA
 • Alameda




28 Green Building Incentives That Work NAIOP Research Foundation November 2007
10. Development fee or fund contributions refund: The 14. Incentives by request or negotiation: The
 municipality requires all developers/builders to municipality allows developers to request incentives
 contribute to a fund. Those builders creating projects that best fit their needs. The requests are reviewed
 that conform to certain sustainable criteria receive and then granted if reasonable/feasible.
 their fund contributions back.
 NJ
 VA • Cranford
 • Arlington County

 15. Density bonuses (higher FAR): The municipality
11. LEED certification fees refunded: The municipality allows a project to build at a higher density if certain
 gives back LEED certification fees if projects meet green criteria are met. This allows the developer to
 certain green criteria. expect more rent from the building site and increase
 the valuation.
 CA
 • Sacramento MA
 NY • Acton
 • Babylon NJ
 • Cranford
 VA
12. Direct Grants: Money in the form of grants is given to • Arlington County
 developers for green projects. WA
 • Seattle
 CA- Alameda County
 Santa Monica
 OH - Cincinnati
 OR - Portland D. Evaluation
 WA- King County
 Seattle 1. Performance monitoring and reporting: The municipality
 requires post-commissioning performance reporting.

13. Reduced development fees (e.g. building permit fees, FL
 plan review fees): The municipality allows fee • Gainesville
 reduction or no fee for green projects. VA
 • Arlington County
 CA - San Diego County Washington, D.C.
 Santa Barbara County
 San Diego
 FL - Sarasota County 2. Fine or disciplinary action for non-compliance with
 Gainesville green building requirements: The municipality in
 TX - effect has created a disincentive to not build
 • San Antonio sustainably. Fines can be imposed for certain non-
 compliance issues.

 TX
 • Frisco




Green Building Incentives That Work NAIOP Research Foundation November 2007 29
 Appendix 2. Survey Questions (for Developers)
 Green Building Incentives for Developers

 Welcome!

 Thank you for responding to our previous survey on green issues. In conjunction with a research project being funded
 by the NAIOP Research Foundation, we would greatly appreciate your opinions on green building incentives.

 1. Have you developed property in a city or county that currently offers or has offered incentives for green building at
 the time of your project?
 Yes (goes to question 2)
 No (goes to question 5)



 2. Which cities or counties (include state) offered or are offering you incentives for green development? (Fill in as
 many as apply.)
 a. _____________________________________
 b. _____________________________________
 c. _____________________________________
 d. _____________________________________
 e. _____________________________________
 f. _____________________________________



 3. What was the form of the incentives? (Check as many as apply.)
 Incentive money from a utility energy efficiency program
 Direct monetary payment (grant, rebate, or reimbursement)
 State income tax credit
 Access Loans/Loan Funds
 Marketing/Good Publicity/Awards
 Density Bonuses (Higher FAR)
 Development Fees Partially or Fully Refunded
 Priority Permit Processing
 Other (please specify) __________________________



 4. Besides direct monetary payments (grants, rebates, tax incentives, utility payments), which Green Building
 Incentives were/would be the most significant for you, in your choice to develop green projects?
 Access Loans/Loan Funds
 Density Bonuses (Higher FAR)
 Development Fees Partially or Fully Refunded
 Marketing/Good Publicity/Awards
 Priority Permit Processing

 5. What other incentives could be offered that would make you more likely to build and certify green development
 projects? (Please be as specific as possible.)




30 Green Building Incentives That Work NAIOP Research Foundation November 2007
6. In your experience, which is the most important barrier at this time to the rapid growth of green buildings?
 Actual cost increases
 Perceived cost increases
 Lack of knowledge on how to build green
 Building codes/regulations
 Tenants not willing to pay a premium
 Certification costs/paperwork



7. From your knowledge or direct experience, what two cities or counties (include state) do you think have the most
 successful green building incentives in place?
 ______________________________________
 ______________________________________



8. In your experience, what is the most compelling approach to consider building green aside from government or
 client requirement?
 Business case benefits are recognized and desired by tenants
 Concern about current or future energy prices
 Costs are coming down
 It’s our philosophy to build green (internally)
 Priority permit processing and other incentives
 Prior experience with green building
 Public relations/marketing benefits
 Tax and other financial incentives



9. Please give one brief reason why you think local incentives will help build momentum for green building
 development.



10. Which of the following best describes your current occupation or profession?
 Developer – Office Properties
 Developer – Industrial Properties
 Developer – Mixed-use Commercial/Residential
 Other (please specify) ____________________________



11. How would you describe your experience with green buildings?
 Very experienced (more than 10 projects)
 Reasonably experienced (5-10 projects)
 Somewhat experienced (less than 5 projects)
 No projects completed (but some underway)
 Green building projects planned for this year
 No projects underway or planned
 Other (please specify) __________________________

 Please give one brief reason why you think local incentives will help build momentum for green building
 development.




Green Building Incentives That Work NAIOP Research Foundation November 2007 31
 12. Where are you located, or where do you do most of your projects?
 US – Northeast
 US – Mid-Atlantic
 US – Southeast/South
 US – Midwest
 US – Southwest/Rockies
 US – West Coast
 Canada – Alberta
 Canada – British Columbia
 Canada - Ontario



 13. If you would like to expand on your answers, may we contact you by phone or email?
 Yes, you may contact me by email ____________
 Yes, you may contact me by phone ____________



 14. Would you like to receive the survey results?
 Yes, please email me the results.
 No, thanks.



 Thank you for your responses!




32 Green Building Incentives That Work NAIOP Research Foundation November 2007
Appendix 3. Detailed Survey Results
Survey Participant Characteristics




Green Building Incentives That Work NAIOP Research Foundation November 2007 33
 Project Characteristics




34 Green Building Incentives That Work NAIOP Research Foundation November 2007
Attitudes and Beliefs




Green Building Incentives That Work NAIOP Research Foundation November 2007 35
 The following are highlights of completed research projects funded by the NAIOP Research Foundation. For a complete
 listing, please visit the Foundation’s website at www.naiop.org/foundation.




 NAIOP Research Foundation Funded Research
 The Contribution of Office, Industrial and Retail Development and Construction on the U.S. Economy (2007)

 Exploration of LEED Design Approaches for Warehouse and Distribution Centers (2007)

 Developing Influencer Relationships to Accelerate Development Success (2005)

 NAIOP Terms and Definitions: U.S. Office and Industrial Market (2005)

 The Strategic Context of Office and Industrial Property in America: Fixed Assets in a Time of Predictable Change. (2004)




 “The work of the Foundation is absolutely essential to anyone involved in industrial, office
 and mixed-use development. The Foundation’s projects are a blueprint for shaping the future and
 a road map that helps to ensure the success of the developments where we live, work and play.”

 Ronald L. Rayevich, Founding Chairman
 NAIOP Research Foundation




36 Green Building Incentives That Work NAIOP Research Foundation November 2007
Arlington County Virginia Green Building Incentive Program

Introduction

The purpose of Arlington County’s Green Building Density Incentive Policy for Site Plans
is to encourage private developers of large office, high-rise residential, and mixed use projects to
design, construct, and operate environmentally responsible buildings. The bonus density
program applies to special exception site plan requests for bonus density and/or height. The
program uses the US Green Building Council’s LEED green building rating system as a standard
for measuring the comprehensive green approach of each project. As of March 14, 2009, bonus
density in exchange for LEED certification was updated as follows:

Green Building Fund

The County established a Green Building Fund and a policy of having site plan developers who do
not commit to achieving a LEED rating from the U.S. Green Building Council (USGBC) contribute
to the Fund. The contribution is calculated at a rate of $0.045 per square foot. (This contribution
calculation is based on the fees assessed by the USGBC for registration and evaluation of a
formal LEED application.) The Green Building Fund is used to provide education and outreach to
developers and the community on green building issues. If a project receives LEED certification
from the USGBC, the Fund contribution is refunded upon receipt of the final LEED certification.

Green Building Bonus Density Program
LEED Level Prior to March 14, After March 14, 2009
 2009
 Office Residential
Certified 0.15 FAR* 0.05 FAR 0.10 FAR
Silver 0.25 0.15 0.20
Gold 0.35 0.35 0.40
Platinum 0.35 0.45 0.50


*Floor Area Ratio (FAR) is defined as the

Gross floor area (square feet) divided by (÷) site area for density purposes (square feet)

Program History

An interdepartmental team of staff from the Department of Environmental Services, the
Arlington Economic Development, the Department of Community Planning, Housing and
Development, the Office of Support Services, the County Manager’s Office and the County
Attorney’s Office was convened to develop the original policy in 1999. The staff team has sought
feedback from the Planning Commission, the Environmental and Energy Conservation
Commission, and the building community. The team and stakeholders reconvened for the 2003
and 2009 updates to the bonus density program.

In October 1999, the County Board adopted a Pilot Green Building Incentive Program based on
the U. S. Green Building Council’s Leadership in Energy and Environmental Design (LEEDTM)
Green Building Rating System to evaluate special exception site plan requests for bonus density
and/or height. The original incentive program, implemented in April 2000, offered bonus density
up to .25 FAR for office buildings achieving the LEED Silver standard.
Although many developers expressed interest in the pilot program, only one project applied and
received bonus density in exchange for a silver LEED rating. After more than three years of
experience and feedback, Arlington County updated and expanded the Green Building Density
Incentive Program in 2003. The 2003 program allowed the County Board to consider the
provision of LEED certified green building components as justification for bonus density and/or
bonus height requests in special exception site plan proposals for all types of site plan
development and at all four levels of LEED certification. See table above for densities offered as
part of the 2003 program.

For additional information on the history of the program see the March 14, 2009 Board Report on
the Green Building Density Incentive Policy for Site Plan Projects

Components of the Green Building Density Incentive Program

• Consistent with Section 36.H.5. of the Zoning Ordinance, the program allows the County Board
to consider a modification of use regulations for additional density between .05 and .45 FAR for
office buildings and between .10 and .50 FAR for residential buildings and/or additional height up
to 3 stories for special exception site plan requests. The site plan proposal must guarantee a
LEED rating at one of the four LEED award levels (Certified, Silver, Gold or Platinum) for the
bonus to be approved.

• The provision of LEED-certified green building components does not guarantee additional
density and/or height, or any particular amount of density or height. The FAR bonuses are the
maximum allowed for each level of LEED certification. Site plan requests for bonus density
and/or height will be analyzed on a case-by-case basis based on the characteristics of individual
sites.

• The provision of LEED-certified green building components will be a part of the typical site plan
negotiations for environmental amenities in exchange for the requested bonuses.

Other Considerations

• It is not the intent of this policy to compete with the affordable housing bonus density
provisions of Section 36.H.5. The combination of green building and affordable housing
incentives can be considered and utilized in a single site plan proposal.

• Under the “C-O-Rosslyn” District, the modification of use provisions of Section 36.H.5 cannot
be applied to permit densities or heights greater than the district requirements of 10 FAR and
300 feet, respectively. In order to encourage environmentally-sensitive buildings in Rosslyn,
density credit would be given towards the community benefit valuation for buildings which are
LEED-certified at no less than the Silver award level. The amount of density credit that can be
considered may be greater in ”C-O-Rosslyn”, ranging from .30 FAR to .50 FAR, for several
reasons: 1) the “C-O-Rosslyn” district allows more than twice as much density as other districts,
up to 10 FAR; 2) the environmental impacts of denser redevelopment will be greater; 3) the
density incentive should be proportionate to the size of the building; and, 4) it will accomplish
the planning goals of making Rosslyn a premiere office location.

Implementation

The Green Building Incentive Program will be implemented as follows:

1. A LEED Accredited Professional will be included on the site plan project team.
2. At the time of 4.1 site plan submission, the developer will be required to submit the LEED
scorecard (LEED Version 3 or the most recent update) along with the site plan application. The
LEED scorecard is a checklist of green building standards and allows the developer to voluntarily
score the building using the LEED Green Building Rating System. The scorecard is the
documentation supporting the developer’s request for bonus density and/or height. The LEED
Scorecard will be accompanied by an explanation of how and/or why each credit can or cannot
be achieved.

3. The scorecard is used to select which credits the developer intends to pursue and the
number of points “earned” determines the award level.

4. The building registration and other required information will be filed with USGBC at the
beginning of the project for LEED certification and rating.

5. The proposed site plan (including the requested bonus density and/or height) will undergo
the typical community review process. If the County Manager supports the project, it will include
appropriate site plan condition language requiring that the green building components identified
in the scorecard be constructed or installed in the building.

6. Once the site plan is approved, permit drawings will be reviewed to ensure inclusion of the
approved green building components, which were previously identified in the scorecard. The
County will utilize LEED-accredited inspectors or architects hired by the developer during review
of the permit drawings and construction of the building.

7. Permits will not be issued unless approved LEED components are included in the plan
drawings and required LEED documentation is submitted.

8. The application for LEED certification and rating will be submitted to USGBC for design credit
review and construction credit review at the appropriate time during design and/or construction.

9. If during construction of the building, the developer is unable to include all of the approved
green building components previously identified in the scorecard, then the developer will be
required to replace components with other green building components acceptable to USGBC and
the LEED Rating System.

10. During plan review and construction, the LEED Accredited Professional will provide
documentation and submit regular reports to the County ensuring compliance (or at least flag
problems early on) with the LEED standards and scorecard and the approved site plan.

11. If during construction, the developer is unable to include required green building
components, or if the inspector/architect finds that the developer failed to include these
components, then the County will pursue enforcement.

12. The Master Certificate of Occupancy will be issued when the building is LEED certified (at
the agreed upon level or better) by USGBC and construction is consistent with the approved site
plan. Certification by USGBC will be obtained when the building is complete and the developer
has constructed or installed the approved green building components previously identified.

13. The program will be reviewed and updated as appropriate.
Chicago, Illinois Green Permit and Green Homes

The City of Chicago encourages building design, construction and renovation in a manner that
provides healthier environments, reduces operating costs and conserves energy and resources
through their Green Permit Program. The Chicago Department of Buildings (DOB) Green Permit
Program provides developers and owners with an incentive to build green by streamlining the
permit process timeline for projects which are designed to maximize indoor air quality and
conserve energy and resources.

Green Permit Program Incentives

Projects accepted into the Green Permit Program can receive permits in less than 30 business
days or in as little as 15 business days. The number of green building elements included in the
project plans and project complexity determines the length of the timeline. In addition, projects
which meet the most stringent sustainability guidelines may also qualify for a partial waiver of
consultant code review fees, up to $25,000.

Application Procedure

Interested applicants must involve DOB early in the design process. DOB will help to guide the
applicant through the process to ensure the shortest permitting process time.

Acceptance into the Green Permit Program is based on a series of requirements that qualifies the
project for one of two different Benefit Tiers of green building certification:
• Commercial projects must earn various levels of certification within the appropriate
 Leadership in Energy and Environmental Design (LEED*) rating system developed by the U.S.
 Green Building Council.
• Smaller residential projects must earn a two-star or greater rating under the Chicago Green
 Homes program.
Both commercial and small residential projects are also required to earn from one to three menu
items, or additional green design strategies above and beyond certification prerequisites, in order
to be eligible for permitting privileges.

Chicago Green Homes Program

The Chicago Green Homes program is a checklist-based rating system for measuring a green
building’s elements developed by the Chicago Department of Environment. As of May 2010,
there were approximately 250 Green Homes enrolled in the program. Training and education
materials are available through the Green Homes program free of charge. See the City of
Chicago: Green Buildings, Roofs, and Homes for additional information on enrolling your project
in the Chicago Green Home program and how to work towards certification.
 City of Portland Proposed
 High Performance
 Green Building Policy




 e n t
 o m m
 lic C
 P u b
 l f or
 os a
 p
Pro December 4, 2008
 Table of Contents

 subject page

 I. Background 1


  II. Policy Development Process 4


 III. Policy Overview 5


  IV. New Commercial Construction Feebate 6


 V. New Residential Construction Feebate 12


 VI. New Construction Green Building Funds 15


VII. Existing Commercial Building Performance Measures 15


VIII. Institutions with Approved Master Plans 18


 IX. Existing Residential 18


  X. Green Building Technical Assistance and Education 19


 XI. Monitoring, Evaluation and Adaptive Management 19


XII. Public Participation and Next Steps 20
I. Background
City of Portland’s green building history

Climate change, rising energy prices and a fragile job market pose serious threats to Portland’s
ability to thrive, both today and in the future. Buildings are responsible for nearly half of
Portland’s greenhouse gas emissions, and Portland residents and businesses now spend $750
million each year to heat, cool and power our buildings. This ﬁgure has almost doubled over
the past ten years and will likely continue to rise sharply, stretching already tight household and
business budgets.

Because buildings last for many decades, today’s decisions will aﬀect Portland for the next century
or more. Each building represents an opportunity to strengthen Portland’s future—or weaken it.

High performance green building presents one of the best solutions to improve environmental
performance while strengthening the local economy and keeping buildings aﬀordable in the long
term. For more than a decade, the Portland development community has incorporated green
building practices as part of a framework for improving energy and water eﬃciency, stormwater
management, indoor environmental quality and materials selection. The resulting buildings are
delivering ﬁnancial savings to their occupants and owners while enhancing workplace productivity
and personal health. However, green building is not yet standard practice in Portland. To reach
important environmental and economic goals, new policies and actions must be implemented to
accelerate the spread of high performance green building in new construction and renovation of
existing building stock.

In 2000, the City of Portland Oﬃce of Sustainable Development (OSD) launched a program
oﬀering green building technical assistance, education and ﬁnancial incentives to the development
community and the general public. In 2001, Portland was one of the ﬁrst cities in the United
States to support the emergence of green buildings by adopting a policy requiring that any new
City-owned buildings achieve the U.S. Green Building Council’s (USGBC) Leadership in Energy
and Environmental Design (LEED) Silver certiﬁcation. In 2005, this requirement was raised to


City of Portland Proposed High Performance Green Building Policy 1
LEED Gold, with additional requirements for energy performance, stormwater management,
water conservation, ecoroof installation and construction and demolition waste recycling.

Recognizing the many beneﬁts of green building, in 2007, Portland City Council directed OSD to
develop policy options to improve the environmental performance of commercial and residential
buildings community-wide. The resulting proposed High Performance Green Building Policy also
addresses City Council’s goal to identify steps to reduce greenhouse gas emissions 80 percent from
1990 levels by 2050.

Similarly, the Portland Development Commission (PDC) adopted a green building policy in 2001
and strengthened it in 2005 to require LEED Silver certiﬁcation for new construction projects
receiving PDC funding such as tax-increment ﬁnancing or low-interest loans. PDC is currently in
the process of revising its Green Aﬀordable Housing policy in conjunction with this community-
wide green building policy proposal.

Improving building performance is imperative

As prices for energy and other natural resources rise, achieving better performance in Portland’s
buildings and the sites they occupy is critical to keeping Portland’s housing and commercial space
aﬀordable. Improving energy eﬃciency helps maintain aﬀordability in several ways:

• An investment in energy-saving measures pays back in reduced utility bills for tenants and
 homeowners. For example, an Earth Advantage home is at least 15 percent more eﬃcient than
 minimum state code, saving close to $400 annually in energy bills for a typical home.

• The added initial cost of new energy-saving measures is partly oﬀset by ﬁnancial incentives
 from the Energy Trust of Oregon (ETO) and the Oregon Department of Energy (ODOE).

• Lower energy consumption reduces the impact on budgets from current and future rate
 increases. This allows more money to be available for other expenditures, keeping money
 circulating in the local economy, strengthening the business climate and adding local jobs.

High performance green building also reduces greenhouse gas emissions by increasing the energy
eﬃciency of the building envelope, lighting and mechanical systems. In addition, occupants
of green buildings typically experience direct health beneﬁts from improvements to indoor
environmental quality.

Carbon dioxide, the primary greenhouse gas contributing to climate change, is emitted directly


City of Portland Proposed High Performance Green Building Policy 2
from buildings through natural gas and fuel oil combustion and indirectly through electricity use.
Although the Paciﬁc Northwest is home to considerable wind, hydropower and other carbon-free
energy resources, well over half of the electricity consumed in Portland is produced by regional
coal and natural gas power plants. As shown in Figure 1, nearly half of community-wide carbon
dioxide emissions result from electricity, natural gas and fuel oil consumption in buildings,
including 20 percent from residential buildings and 24 percent from commercial buildings.
 g

 Waste Disposal
 1%




 Transportation
 39% Commercial
 Buildings
 24%
 44%
 Residential
 20%

 Industry
 16%




Figure 1. Sources of carbon dioxide emissions in Multnomah County, 2006.


Figure 2 shows the existing residential and commercial building stock square footage in Portland
along with projected trends through 2050 based on the average growth of each building sector
from 2000 through 2006 and an annual demolition rate of 0.5 percent. As demonstrated in
Figures 1 and 2, achieving Portland’s 2050 climate protection goal will require a green building
policy that reduces carbon dioxide emissions from new and existing buildings in both the
commercial and residential sectors. These eﬀorts will be complemented by strategies to address
transportation, land-use planning and waste reduction, among others.




City of Portland Proposed High Performance Green Building Policy 3
 800 Commercial
 built after 2007




Portland Building Projection (million square feet)
 700 Residential
 built after 2007

 600 Commercial
 as of 2007

 500 Residential
 as of 2007

 400

 300

 200

 100
 0
 Year 2007 2020 2030 2040 2050
Figure 2. Commercial and residential building square footage projections through 2050.




II. Policy Development Process
In March 2007, Portland City Council adopted Resolution 36488 directing OSD to develop
policy options to improve building environmental performance, including reducing oil and
natural gas use and carbon dioxide emissions. Also in spring 2007, the Development Review
Advisory Committee (DRAC) formed a subcommittee to make recommendations for expanding
sustainable development practices in Portland, and the Portland City Council passed a resolution
directing the Portland Development Commission (PDC) to update the City of Portland’s
aﬀordable housing green building threshold and voluntary guidelines. Members of DRAC and
PDC participated in OSD’s policy development process. Likewise, OSD staﬀ participated in
DRAC and PDC green building processes.

In November 2007, Portland City Commissioner Dan Saltzman proposed a preliminary
framework for the High Performance Green Building Policy outlining options for new
construction and existing buildings in the commercial and residential sectors. In January 2008,
Commissioner Saltzman and Commissioner Randy Leonard invited community members to
learn about two potential policy paths to advance green building in Portland. First, the Bureau of
Development Services (BDS) announced a Technical Advisory Group (TAG) to explore a possible
local amendment to the state building code that would incorporate green building practices.


City of Portland Proposed High Performance Green Building Policy 4
The TAG continues to meet and will make recommendations that the City Council can propose
to the State Building Codes Division for consideration, probably in early 2009. Second, OSD
announced a series of stakeholder meetings for the continued development of the green building
policy and invited participation from the public. From February through June 2008, OSD
convened nine stakeholder committee meetings to review and explore draft options identiﬁed by
the policy framework. These drafts were revised to create the current proposed High Performance
Green Building Policy.


III. Policy Overview
The proposed High Performance Green Building Policy seeks to accomplish the following goals for
buildings and the sites they occupy in the city of Portland:

• Reduce greenhouse gas emissions that cause climate change.
• Maximize energy eﬃciency and cost savings.
• Keep housing and commercial buildings aﬀordable over time.
• Decrease consumption of potable water, especially during summer months.
• Increase on-site stormwater management.
• Reduce waste during construction and operation.
• Improve indoor environmental quality, occupant health and productivity.
• Increase the number of local living-wage jobs.

The proposed policy provides incentives and technical assistance for projects that incorporate
advanced green building measures as summarized in Table 1 and described below:

1) For new commercial and multifamily construction projects, the policy proposes a green
 building “feebate”—a market-based instrument that combines a fee for conventional
 construction, a waiver option for moderate green improvements and a reward for high
 performance green building projects.
2) For new single-family residential construction, the policy proposes a performance target for a
 percentage of new homes that are built to green building standards. If the target is met,
 no new regulations will take eﬀect; if the target is not met, a feebate similar to that for new
 commercial construction will come into eﬀect.
3) For existing commercial buildings, the policy proposes disclosure of building performance
 in the areas of energy usage, water usage and stormwater management. The policy also
 includes incentives to improve environmental performance. The building performance
 measures would identify buildings that have the greatest potential to improve performance and
 could help prospective buyers and tenants make informed decisions.


City of Portland Proposed High Performance Green Building Policy 5
4) Disclosure of building performance measures was also considered for existing single-family
 residential buildings, but the stakeholder meetings highlighted the need to develop much
 better ﬁnancing options for homeowners than are currently available. As a result, no
 requirements are proposed for existing homes at this time, and instead OSD is exploring
 options including the development of a large-scale fund to accelerate green building upgrades
 to existing buildings.



 Commercial Single-Family
 & Multifamily Residential


 New Feebate Performance target
 Feebate if not met


 Existing Disclose building Exploring financing
 performance score and performance score


 Table 1. High Performance Green Building Policy overview.




IV. New Commercial Construction Feebate
The proposed commercial green building feebate will apply to new construction of multifamily
buildings greater than or equal to 5,000 gross square feet and commercial buildings greater than
or equal to 20,000 gross square feet. Speciﬁc building types and permit occupancy classiﬁcations
(deﬁned by the 2007 Oregon Structural Specialty Code) covered by the feebate are as follows:

• Indoor public and private assembly buildings (A1, A2, A3).
• Hospitals, group homes and assisted living facilities (I1, I2, I3, I4, I5).
• Hotels and motels (R1).
• Multifamily residential homes (R1, R2, R4).
• Oﬃces and businesses (B).
• Retail and wholesale stores (M).
• Schools and day-care facilities (E).



City of Portland Proposed High Performance Green Building Policy 6
 A “commercial” building designation is determined by BDS at the time of permit review and
 includes multifamily residences.
 Industrial buildings and warehouses are not covered by the feebate since these building types are
 generally unoccupied or consume resources primarily through manufacturing processes rather
 than building operation.


The feebate will also apply to “major remodels,” deﬁned as permitted alterations or additions in
which:

• The project Permit Valuation of Work exceeds $250,000,

 AND at least one of the following is true:

• At the time of application, the Permit Valuation of Work is greater than or equal to the
  Real Market Value of the property as determined by the County Tax Assessor;
 -or-
• A Change of Occupancy aﬀects more than one-third of the building gross square footage;
 -or-
• A conversion of more than 5,000 gross square feet from unheated to heated space;
 -or-
• An addition of building gross square footage greater than or equal to the gross square
 footage of the existing building.

The proposed green building feebate for new commercial construction will be phased in according
to the following time frame:

• Projects smaller than 50,000 gross square feet that have permits submitted after
  July 1, 2010.
• Projects greater than or equal to 50,000 gross square feet that have permits submitted after
  January 1, 2011.

Projects exempted from the feebate include new construction or additions that are less than 5,000
gross square feet for multifamily residences or 20,000 gross square feet for commercial buildings,
initial tenant improvements in newly constructed buildings and permits that involve only site
improvements. Projects will have the opportunity to appeal the policy requirements based on
building occupancy or unusual circumstances.




City of Portland Proposed High Performance Green Building Policy 7
The green building feebate is intended to increase building environmental performance while
complementing existing ﬁnancial incentives oﬀered by ETO and ODOE for energy-saving
measures and sustainable building. The proposed feebate would present developers of new
commercial and multifamily buildings with three green building incentive options as displayed
in Figure 3 and described as follows:

1) Reward. Receive a one-time reward payment from the City of Portland for projects
 that achieve a high performance green building standard and signiﬁcantly improve energy
 performance beyond the current minimum Oregon requirements (Chapter 13 of the
 Oregon Structural Specialty Code). Proposed green building standards are shown on
 Tables 2 and 3. The reward is paid to the building owner by the City of Portland upon
 receipt of third-party veriﬁcation (such as a copy of the USGBC Rating Certiﬁcate and
 Final LEED Review). The amount of the reward varies based on the level of environmental
 performance and the gross square footage of the building. Buildings of any size are eligible
 for rewards. Aﬀordable housing projects are eligible to receive the ﬁrst level of reward
 payment by achieving what otherwise is deﬁned as the “waiver” level of performance. To
 receive higher reward levels, aﬀordable housing projects will need to reach the same
 minimum requirements as other projects.
 -or-

2) Waiver. Receive a fee waiver for projects that build to a green building standard and
 improve energy performance beyond the minimum Oregon code. Proposed green building
 standards are shown on Tables 2 and 3. To qualify for the waiver, project developers must
 document registration for the green building standard (such as a LEED Registration
 Number and Scorecard) when applying for a building permit followed by submitting third-
 party veriﬁcation within one year after receiving a Certiﬁcate of Occupancy from BDS.

 -or-
3) Fee. Pay a one-time fee to mitigate the greenhouse gas emissions and other environmental
 impacts for projects that are built to the minimum Oregon code. The fee will be based on
 the gross square footage of the building.




City of Portland Proposed High Performance Green Building Policy 8
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 3B=(Energy Trust of Oregon =2=3( Oregon Department of Energy :332(Leadership in Energy and Environmental Design




 Figure 3. Proposed commercial new construction green building feebate.




The feebate is based on third-party certiﬁcation programs established by Earth Advantage and the
U.S. Green Building Council. Projects pursuing LEED certiﬁcation must also achieve speciﬁc
minimum point thresholds for energy and water eﬃciency credits:

• Design building envelope, lighting and mechanical systems to optimize energy
  performance (LEED EAc1).
• Install on-site renewable energy (LEED EAc2).
• Reduce landscaping irrigation (LEED WEc1).
• Reduce building water use (LEED WEc3).

Speciﬁc green building requirements are described in Table 2 for multifamily residential buildings
and Table 3 for all other commercial building types covered by the feebate.
Applicable green building standards, energy eﬃciency thresholds and minimum environmental
performance requirements will be reevaluated every three years in accordance with building
code cycles to ensure that the feebate continuously reaches beyond the Oregon code.

PDC is proposing that multifamily rental housing projects that receive PDC loans and/or grants


City of Portland Proposed High Performance Green Building Policy 9
in the amount of $500,000 or more and which are a minimum of 50,000 square feet in size must
meet the “waiver” level of performance. In addition, PDC-funded aﬀordable projects must meet the
following requirements to protect the health of vulnerable populations and other building occupants:

a) Composite wood products shall not contain synthetic urea formaldehyde. These materials
 include hardwood plywood, particleboard, medium density ﬁberboard and thin medium
 density ﬁberboard.
b) Polyvinyl chloride ﬂooring shall not be installed.


 Green Building
 Feebate Option Minimum Requirements Feebate2
 Standards1

 Reward3 Living Building Challenge Net-zero energy and water $2.58 – $5.15 per sf
 documentation (1 year)

 LEED Platinum certification, PLUS:
 New Construction 2.2 EAc1 + EAc2: 10 points
 WEc1 + WEc3: 4 points $1.03 – $2.06 per sf
 Or, for projects <50,000 square
 feet, Earth Advantage4


 LEED Gold certification, PLUS:
 New Construction 2.2 EAc1 + EAc2: 8 points
 WEc1 + WEc3: 3 points $0.51 – $1.03 per sf
 Or, for projects <50,000 square
 feet, Earth Advantage4



 LEED Silver certification, PLUS:
 Waiver New Construction 2.2 EAc1 + EAc2: 5 points
 Not Applicable
 WEc1 + WEc3: 2 points
 Or, for projects <50,000 square
 feet, Earth Advantage4


 Fee None (-) $0.51 – $1.03 per sf



 Table 2. Proposed multifamily residential new construction green building
 standards and feebate specifications.


1
 LEED rating systems are currently in the process of being updated by the U.S. Green Building Council. Equivalent LEED 2009 points will
be determined after the next version of LEED is released.
 2
 A feebate range is provided here for comment; however, the level of the feebate will be established at a specific amount. The possible
range presented here is based on average values for energy use in commercial buildings multiplied by measure life multiplied by dollars
per ton of carbon. The low end of the range assumes a 15-year operational period for the building with a value of $12 per metric ton
of carbon dioxide. Since estimates vary considerably for measure life and for the appropriate valuation of carbon, the high end can be
viewed as representing a measure life of 30 years or a carbon price of $24 per metric ton or some combination of the two.
3
 Affordable housing projects will also qualify for the reward if they achieve the minimum feebate waiver requirements. However, to
receive higher reward levels, affordable housing projects will need to reach the same minimum requirements as other projects.
4
 The Earth Advantage option provides a prescriptive alternate path to LEED certification and can be used to meet the green standards
for multifamily residential projects less than 50,000 square feet.


City of Portland Proposed High Performance Green Building Policy 10
 Green Building
 Feebate Option Minimum Requirements Feebate6
 Standards5

 Reward Living Building Challenge Net-zero energy and water $8.65 – $17.30 per sf
 documentation (1 year)

 LEED Platinum certification, PLUS:
 New Construction 2.2 EAc1 + EAc2 : 10 points $3.46 – $6.92 per sf
 Core and Shell 2.0 WEc1 + WEc3: 4 points
 Schools
 Retail


 LEED Gold certification, PLUS:
 New Construction 2.2 EAc1 + EAc2: 8 points
 Core and Shell 2.0 WEc1 + WEc3: 3 points $1.73 – $3.46 per sf
 Schools
 Retail



 LEED Silver certification, PLUS:
 Waiver New Construction 2.2 EAc1 + EAc2: 5 points
 Not Applicable
 Core and Shell 2.0 WEc1 + WEc3: 2 points
 Schools
 Retail


 Fee None (-) $1.73 – $3.46 per sf



 Table 3. Proposed commercial new construction green building standards
 and feebate specifications.




5
 LEED rating systems are currently in the process of being updated by the U.S. Green Building Council. Equivalent LEED 2009 points will
be determined after the next version of LEED is released.
6
 A feebate range is provided for comment; however, the level of the feebate will be established at a specific amount. The possible
range presented here is based on average values for energy use in commercial buildings multiplied by measure life multiplied by dollars
per ton of carbon. The low end of the range presented here assumes a 15-year operational period for the building with a value of $12
per metric ton of carbon dioxide. Since estimates vary considerably for measure life and for the appropriate valuation of carbon, the high
end can be viewed as representing a measure life of 30 years or a carbon price of $24 per metric ton or some combination of the two.
7
 LEED NC 2.2 now accepts prescriptive options detailed by Advanced Buildings Core Performance as an alternate path to building
simulation for up to five EAc1 points. This prescriptive path will also be acceptable for LEED NC 2009 certified projects less than 50,000
gross square feet.




City of Portland Proposed High Performance Green Building Policy 11
V. New Residential Construction Feebate
 A “residential” building designation is determined by BDS at the time of permit review and
 includes single-family detached homes, duplexes and rowhouses.


The proposed green building policy will accelerate the transition to green building as standard
practice. Many area builders have expressed their commitment to building better-performing
homes, and in the Portland home construction industry, two certiﬁcation programs have gained
traction as markers of exemplary environmental performance, Earth Advantage (EA) and LEED
for Homes. With this policy, the City will work with area builders to continue to increase the
prevalence of certiﬁed green homes and to achieve performance targets for the percentage of
new homes built that achieve these standards. The proposed performance targets are as follows:

• In 2009, 20 percent of new homes certiﬁed as EA or LEED for Homes.
• In 2010, 30 percent of new homes certiﬁed as EA or LEED for Homes.
• In 2011, 40 percent of new homes certiﬁed as EA or LEED for Homes.

The City will annually monitor the percentage of EA or LEED for Homes projects to determine
whether the policy’s performance targets are achieved. Veriﬁcation of performance targets will
be based on all new residential buildings greater than or equal to 1,200 square feet with an R3
permit occupancy classiﬁcation (deﬁned by the 2007 Oregon Structural Specialty Code).

If market share performance targets are not achieved during any given year of the policy, a
residential green building feebate will become eﬀective six months later that will apply to new
home construction projects greater than or equal to 1,200 square feet. New construction projects
smaller than 1,200 square feet and additions or alterations to existing homes will be exempt from
the green building fee but are eligible for reward payments. Projects will have the opportunity to
appeal the policy requirements based on building occupancy or unusual circumstances.

The residential green building feebate is intended to increase building environmental
performance while complementing existing ﬁnancial incentives oﬀered by ETO and ODOE.
Should the feebate take eﬀect, builders of new homes would have three options as displayed in
Figure 4 and described as follows:

1) Reward. Receive a one-time reward payment from the City of Portland for projects that
 build to a high performance green building standard with third-party veriﬁcation and
 signiﬁcantly improve energy performance beyond the minimum Oregon requirements
 (Chapter 13 of the Oregon Structural Specialty Code), as described in Table 4. The


City of Portland Proposed High Performance Green Building Policy 12
 amount of the reward varies based on the level of environmental performance and is a ﬁxed
 dollar ﬁgure per home (i.e., it does not vary with the size of the home). A reward is paid
 to the homeowner by the City of Portland upon receipt of third-party veriﬁcation (such as
 a copy of the USGBC Rating Certiﬁcate and Final LEED Review). Homes smaller than
 1,200 square feet are also eligible for rewards.
 -or-

2) Waiver. Receive a fee waiver for projects that build to a green building standard and
 improve energy performance beyond the minimum Oregon code, as described in Table 3.
 To qualify for the waiver, home builders must document registration for the green building
 standard (such as an EA Points Worksheet or LEED Scorecard) when applying for a building
 permit followed by submitting third-party veriﬁcation within one year after receiving a
 Certiﬁcate of Occupancy from BDS.
 -or-

3) Fee. Pay a one-time fee to mitigate the environmental impacts for projects that build to the
 minimum Oregon code. The fee will vary based on the square footage of the home and only
 apply to new construction greater than or equal to 1,200 square feet.




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 Figure 4. Proposed residential new construction green building feebate.


City of Portland Proposed High Performance Green Building Policy 13
In addition to achieving third-party certification, projects must meet minimum energy
performance requirements as shown in Table 4, such as a minimum Home Energy Rating
System (HERS) score, NW Energy Star Homes certification, or Oregon High Performance
Homes (HPH) Business Energy Tax Credit qualification.

To enable progressive green building market transformation, the residential performance
targets, applicable green building standards, feebate thresholds and minimum environmental
performance requirements will be evaluated and reset every three years in accordance with
building code cycles.


 Green Building
 Feebate Option Minimum Requirements Feebate8
 Standards

 Reward9 LEED for Homes Platinum, or HERS 0, or
 Net-zero energy documentation $10,000 per home
 Living Building Challenge
 (1 year)

 EA Platinum, or HERS 60, or $2,570 – 5,140
 LEED for Homes Gold Oregon HPH
 per home
 EA Gold, or
 HERS 70 $1,285 – 2,570
 LEED for Homes Silver
 per home

 Waiver EA Silver HERS 75, or Not Applicable
 NW Energy Star Homes


 Fee None (-) $0.51 – 1.03 per sf



 Table 4. Proposed residential new construction green building feebate specifications.




8
 A feebate range is provided here for comment; however, the level of the feebate will be established at a specific amount.
The possible range presented here is based on average values for energy use in residential buildings multiplied by measure life
multiplied by dollars per ton of carbon. The low end of the fee range presented here assumes a 15-year operational period for
the building with a value of $12 per metric ton of carbon dioxide. Since estimates vary considerably for measure life and for the
appropriate valuation of carbon, the high end can be viewed as representing a measure life of 30 years or a carbon price of $24
per metric ton or some combination of the two.
9
 The reward for qualifying homes will be a flat amount based on a typical home size of 2,500 square feet.




City of Portland Proposed High Performance Green Building Policy 14
VI. New Construction Green Building Funds
Fees collected by the City of Portland through the implementation of the new construction
portions of the policy would create separate self-sustaining, revenue-neutral commercial and
residential green building funds that will be used to pay for feebate rewards, technical assistance,
project recognition and green building education programs. The green building funds may also
support green aﬀordable housing grants and additional ﬁnancial or technical assistance with
the permitting processes related to green building. Green building fees would be dedicated
to programs to improve environmental performance of buildings and reduce greenhouse
gas emissions. Allocation of the commercial and residential green building funds would be
determined with oversight from a City-appointed citizen advisory board (either existing or
newly created).


VII. Existing Commercial Building Performance Measures
 A “commercial” building designation is determined by Bureau of Planning zoning classifications
 and BDS occupancy classifications including multifamily residences.

 Industrial buildings are not required to disclose building performance measures since these
 building types are generally unoccupied or consume resources primarily through manufacturing
 processes rather than building operation. However, disclosure of on-site stormwater
 management still applies to industrial buildings.


To encourage green renovations and on-site stormwater management for existing commercial
and multifamily buildings, the policy proposes to require disclosure of environmental
performance measures using the U.S. Environmental Protection Agency (EPA) Energy Star
Portfolio Manager tool. As part of building performance disclosure, owners or managers of
commercial buildings greater than or equal to 20,000 gross square feet must report:

1) Building Performance. Participate in the EPA Energy Star Portfolio Manager program,
 including reporting building characteristics, energy use during the previous 12 months,
 water consumption levels and indoor environmental quality. If the building is occupied by
 tenants without accessible energy and water use consumption data (such as triple net leases),
 the building owner or manager must provide formal requests for utility bill summaries with
 guidance from OSD. Accuracy of the information provided about the building must be
 veriﬁed by a professional engineer in accordance with EPA requirements for Energy Star
 certiﬁcation.




City of Portland Proposed High Performance Green Building Policy 15
2) Stormwater Management. Disclose whether the building qualiﬁes for the City of Portland’s
 Clean River Rewards (CRR) stormwater utility discount program and indicate the extent of
 stormwater managed on-site. With CRR, Portland ratepayers managing stormwater from a
 building and site can receive up to a 100% discount for the on-site stormwater management
 charges, depending on the extent that stormwater is managed on site.

Building performance measures, including Energy Star ratings (as applicable), energy use
intensities, carbon dioxide emissions, water consumption rates and other relevant metrics, will
be disclosed to OSD through the submittal of an EPA Energy Star Portfolio Manager Statement
of Energy Performance or online reporting (http://www.energystar.gov/index.cfm?c=evaluate_
performance.bus_portfoliomanager). Building owners or managers may choose to voluntarily
disclose building performance measures through a public online resource, such as Portland
Maps. Public disclosure of building performance could help prospective buyers and tenants
make informed decisions.

An Energy Star rating provides a climate-normalized ranking of building energy performance,
from 1 to 100, based on a U.S. Department of Energy survey of nationwide commercial
building stock. The following building types are currently eligible for an Energy Star rating:

• Bank/Financial Institutions.
• Hospitals.
• Hotels and Motels.
• K-12 Schools.
• Medical Oﬃces.
• Oﬃces.
• Residential Halls/Dormitories.
• Retail Stores.
• Supermarkets.
• Warehouses.

In addition to the EPA Energy Star Portfolio Manager building performance measures, all
qualifying buildings that are not registered for the CRR program must ﬁll out and submit the
appropriate program form to BES. If a building site does not qualify for the CRR program, this
information will also be disclosed.

Disclosure of EPA Energy Star building performance measures and CRR reporting will be
phased in as shown in Table 5. Building performance measures must be updated at least once
every three years, including third-party veriﬁcation. All new construction projects covered by
the proposed feebate must also participate in disclosure of environmental performance measures
within three years after receiving a Certiﬁcate of Occupancy. Building owners or managers will



City of Portland Proposed High Performance Green Building Policy 16
have the opportunity to appeal the policy requirements based on unusual circumstances.
EPA Energy Star ratings can identify buildings that have the highest potential for improvement.
Owners or managers of buildings eligible for Energy Star ratings that do not achieve a
minimum rating of 30 will be contacted by OSD to identify strategies, ﬁnancing options and
incentives to reduce energy use within three years as speciﬁed in Table 5. Buildings that do
not achieve either a rating of at least 30 or a 15 percent reduction in energy use within three
years will be subject to a ﬁne assessed at $0.01/gross square foot for every point below the EPA
Energy Star rating threshold. A ﬁne may be assessed once every three years.

A building’s Energy Star rating will be assumed to be zero if disclosure requests for building
performance measures are not received by OSD, resulting in a ﬁne of $0.30/gross square foot.
Building owners or managers will have the opportunity to appeal the ﬁne with OSD based
on unusual circumstances. To minimize the occurrence of ﬁnes, OSD will provide technical
assistance and explore energy eﬃciency ﬁnancing options including the development of a large-
scale fund to accelerate green building upgrades to existing buildings. Any ﬁnes collected by
the City of Portland will be restricted to funding technical assistance and outreach programs for
existing buildings.


 Building Size Disclosure Date Performance
 (gross square feet) Improvement Date



 Greater than 100,000 January 1, 2011 January 1, 2014



 Between 50,000 and 100,000 January 1, 2012 January 1, 2015



 Greater than or equal to 20,000 January 1, 2013 January 1, 2016
 and less than 50,000



 Table 5. Proposed timeline for disclosure of environmental performance measures.


Buildings that achieve a green building third-party certiﬁcation, including EPA Energy Star,
Green Globes, LEED Existing Buildings Operation and Maintenance, or a BetterBricks Oﬃce
Energy Showdown award will be eligible for project recognition on the OSD Web site. In
addition, starting in 2011, OSD will annually recognize and award existing buildings and
building operators demonstrating the greatest environmental performance and improvement
in eﬃciency, and achieving at least 75 percent through the CRR stormwater discount incentive
program, or an increase in the CRR discount. These buildings will also receive recognition on
the BES Web site.

City of Portland Proposed High Performance Green Building Policy 17
VIII. Institutions with Approved Master Plans
Institutions with City-approved multi-year master plans may elect to achieve portfolio-wide
performance improvements to new and existing buildings that meet the performance objectives
of the policy in lieu of the proposed green building feebate for new construction projects. These
performance commitments will be integrated into master plans and considered as part of the
routine master plan review process.


IX. Existing Residential
The proposed policy does not include new requirements for existing residential buildings at
this time. Improving the environmental performance of existing homes, however, is essential
to achieving the City’s climate protection, energy and economic goals. To address this, OSD
is currently developing ﬁnancing options that make energy and environmental upgrades easy
and aﬀordable to homeowners. Financing options will consider the needs of low-income
homeowners to help mitigate the eﬀects of future energy cost increases.

OSD is also evaluating emerging models from other cities, including Berkeley, California, the
Cambridge Energy Alliance from Cambridge, Massachusetts, and the Palm Desert Energy
Independence Program. Legislation may be introduced in the 2009 Oregon legislature to
enable local or state government to establish funding for large-scale energy retroﬁts, and the
City will continue to partner with others to identify the most promising options.

Existing homes are the largest category of residential energy use and greenhouse gas emissions.
Conservation measures are needed to reduce emissions, save on energy costs and oﬀset future
cost increases for electricity, natural gas and fuel oil. An eﬀective policy will address upgrading
houses for better performance and empowering homeowners to eﬀectively manage energy use.

In order to upgrade energy performance, homes require individual evaluation to identify
performance improvement measures appropriate to its particular needs. This strategy depends
on availability of a commonly accepted evaluation method. Currently, EA and ETO are piloting
an Energy Performance Score (EPS) program. The EPS is expected to provide a simple score
that summarizes a home’s current and potential performance, and it will likely also produce a
set of recommendations for cost-eﬀective upgrade measures. OSD will track the progress of
the EPS to determine its rate of acceptance in the market and the number of homes that are
upgraded. This information will guide the City in determining whether an incentive or mandate
to require an EPS should be considered to accelerate home improvements.

OSD will report to City Council by January 2010 with recommendations for further action.




City of Portland Proposed High Performance Green Building Policy 18
X. Green Building Technical Assistance and Education
To support implementation of the High Performance Green Building Policy, the City will expand
existing green building technical assistance programs and support new programs including:

1. Green building specialists in the Development Services Center to assist permit applicants
 in meeting the policy goals.

2. Training on LEED and green building design, engineering and construction.

3. Workshops to assist owners and managers of existing buildings with Energy Star Portfolio
 Manager reporting.

4. BES Clean River Rewards program assistance in registering for the stormwater
 discount incentive and ideas for possible increase in the percent discount for on-site
 stormwater managed.

OSD will also work with buyers, tenants, developers, builders, financial and real estate
professionals, trade unions, appraisers, other building industry professionals and City specialists
to significantly expand awareness of project requirements, green building benefits, and continuous
management of building environmental performance.



XI. Monitoring, Evaluation and Adaptive Management
OSD will establish baselines and performance parameters to measure annual progress toward the
City’s green building goals, including targets set by the City’s climate protection strategy and the
Architecture 2030 Challenge that requires all new construction to be “carbon-neutral” by 2030.
Progress toward goals will be monitored and annual performance reports will be issued, including
recommendations for improvement and broadening community awareness. In accordance with
building code cycles, specific policy parameters and green building performance criteria will be
updated through an administrative process every three years.




City of Portland Proposed High Performance Green Building Policy 19
XII. Public Participation and Next Steps
We invite you to participate in the green building policy process by reviewing the proposed High
Performance Green Building Policy and submitting your comments online at
www.portlandonline.com/osd/gbpolicy. Comments received by January 20, 2009 will be
considered in the next version of this policy in preparation for City Council consideration.

By engaging members of the public and stakeholders with diverse interests, OSD seeks to craft a
fair, eﬀective, community-wide green building policy. Upon adoption of the policy, City staﬀ will
conduct an administrative rules process that will include speciﬁc submittal requirements for the
new construction feebate and existing building performance disclosure.




City of Portland Proposed High Performance Green Building Policy 20
  Incentives for Green Building
  Beyond City Owned Projects
Research Presented to the Sustainable Portland Committee
 Shelley Hodges
 Muskie School of Public Service
 May 4, 2009
 Task Force Recommendation Item 3

Part 1:Adopt a requirement that all Part 2: Encourage non-city
  municipally funded new projects to receive LEED
  construction projects receive certification
  certification through the US
  Green Building Council’s -Possible avenue to achieve this:
  Leadership in Energy and initiate a High Performance
  Environmental Design (LEED) Green Building Policy/Fee-Bate
  rating system, targeting a program similar to one being
  minimum of silver rating developed in Portland Oregon

√Check!
Portland Oregon’s High Performance Green Building Policy
 with Fee-bate
• New Commercial Construction Fee-bate:
*multifamily buildings ≥5,000 gross square feet
*commercial buildings ≥20,000 gross square feet

• Reward: 1x reward payment from City
 -high performance green building standard + significantly improved
 energy performance beyond current minimum Oregon requirements
 -amount varies based on level of environmental performance and the
 gross square footage of the building

• Waiver: Fee waived for projects that build to a green building standard
 and improved energy performance beyond minimum Oregon code

• Fee: 1x fee to mitigate greenhouse gas emissions and other
 environmental impacts for projects that are built to the minimum
 Oregon code
 -Fee based on the gross square footage of the building


Source: City of Portland Bureau of Planning and Sustainability: Policy Document,
 http://www.portlandonline.com/osd/index.cfm?c=45879&
 New Commercial Construction Fee-bate:




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Source: City of Portland Bureau of Planning and Sustainability: Policy Document,
http://www.portlandonline.com/osd/index.cfm?c=45879&
•
 New Residential Construction Feebate:
 Reward: 1x reward payment from City to homeowner
 -high performance green building standard + significantly improved energy
 performance beyond minimum Oregon requirements
 -Homes smaller than 1,200 square feet are also eligible for rewards
 -Amount varies based on level of environmental performance and is a fixed dollar
 figure per home (i.e., it does not vary with the size of the home)
• Waiver: Fee waived for projects that build to a green building standard + improve
 energy performance beyond the minimum Oregon code
• Fee: 1x fee to mitigate the environmental impacts for projects that build to the
 minimum Oregon code
 -Fee varies based on the square footage of the home and only apply to new
 construction greater than or equal to 1,200 square feet




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 decompressor
 are needed to see this picture.




 Source: City of Portland Bureau of Planning and Sustainability: Policy Document,
 http://www.portlandonline.com/osd/index.cfm?c=45879&
 Existing Commercial Building
 Performance Measures
Encourage green renovations and on-site stormwater management for existing
commercial and multifamily buildings by requiring disclosure of environmental
performance measures using the U.S. Environmental Protection Agency (EPA)
Energy Star Portfolio Manager tool

• Owners or managers of commercial buildings greater than or equal to 20,000
 gross square feet must report:
 1) Building Performance. Accuracy of the information provided about the
 building must be verified by a professional engineer in accordance with
 EPA requirements for Energy Star certification
 2) Stormwater Management

 ~Building owners or managers may choose to voluntarily disclose building
 performance measures through a public online resource, such as Portland
 Maps. Public disclosure of building performance could help prospective
 buyers and tenants make informed decisions

 Source: City of Portland Bureau of Planning and Sustainability: Policy Document,
 http://www.portlandonline.com/osd/index.cfm?c=45879&
 Existing Residential
The proposed policy does not include new requirements for existing
residential buildings at this time, however:
-policy creators recognize that improving the environmental
performance of existing homes is essential
-currently developing financing options that make energy and
environmental upgrades easy and ﬀ aﬀordable to homeowners.
-financing options will consider the needs of low-income homeowner
to help mitigate the eﬀects of future energy cost increases



 Source: City of Portland Bureau of Planning and Sustainability: Policy Document,
 http://www.portlandonline.com/osd/index.cfm?c=45879&
 QuickTime™ and a
 decompressor
 are needed to see this picture.




-The green building funds may also support green aﬀordable housing grants programs to
improve environmental performance of buildings and reduce greenhouse gas emissions
-3rd Party verification is required application of fee-bate rewards, waivers, and fees




  Source: City of Portland Bureau of Planning and Sustainability: Policy Document, and Policy Presentation,
 http://www.portlandonline.com/osd/index.cfm?c=45879&
 Policy Process:Steps Taken in Portland, OR

1. Bureau of Planning and Sustainability developed
 an initial framework
2. General public meeting
3. 8 facilitated Stakeholder meetings
4. Policy refined and released for Public
 comment period (30-60 days)
5. Final version for City Council consideration (later
 this summer)

(Source: correspondence with Vinh Mason, Policy Analyst City of Portland Bureau of Planning and
 Sustainability)
 Challenges/Lessons
 -policy found challenges:
 -when public and stakeholder involvement was
 more limited (early on in the policy process)
 -overcoming political positions that are
 opposed philosophically

(Source: correspondence with Vinh Mason, Policy Analyst City of Portland Bureau of Planning and Sustainability)
  Key Points of Policy Success
 -Market-based incentives to encourage green building and
 energy performance improvements rather than prescriptive
 requirements
 -Community engagement in deliberative governance through
 stakeholder involvement and public comments
 -Adaptive policy design to allow for flexibility as existing
 green building programs evolve and new technologies and
 practices emerge
 -Intercity communication to share policy development
 experiences
(Source: correspondence with Vinh Mason, Policy Analyst City of Portland Bureau of Planning and Sustainability)
 Economics
Cost to City:
 In Portland Oregon, half a million dollars has been assumed for technical
 assistance and administration for the fee
Cost to the Developer: The intention of the policy is to offset all of the added costs.
 For those projects that do not comply, the fees would represent a small, but
 noteworthy, percent of total project cost
Administrative cost: The Office of Sustainable Development has five members of
 staff, two of whom will oversee aspects of the Green Building Fee-bate policy

(Source: Case Study, Seattle New Building Energy Efficiency Policy Analysis, input from Vinh Mason, Policy
Analyst City of Portland Bureau of Planning and Sustainability and Bill Jackson, Developer, updated 9/23/08
www.seattle.gov/environment/documents/GBTF_%20Portland_Feebate_Case_Study.pdf)


Pay back:
 The initial investment pays back quickly in reduced energy, water and sewer
 costs, improved comfort and healthier air quality

Job Growth:
 Analysis of the new construction component of the High Performance Green
 Building Policy by ECONorthwest found that the policy would result in an
 additional 100 jobs in Oregon for every year the policy is in place
(Source: City of Portland Bureau of Planning and Sustainability: Q and A,
 http://www.portlandonline.com/osd/index.cfm?c=45879&)
 Summary: Possibilities for
 Portland, ME
• Develop a policy that utilizes Portland Oregon’s High
  Performance Green Building Policy as framework/guide
  adapted to Maine’s business climate
• Keep community and stakeholder engagement as a major
  priority from the start
• Keep process flexible and open to review
 ARTICLE VII. GREEN BUILDING CODE
-------
*Editor’s Note: Article VII (Green Building Code) was adopted in its entirety
by Council Order 187-08/09 and passed on 4-6-09)
-------
Sec. 6-165. Purpose.

The purpose of this article is to promote standards for
construction that result in buildings that are environmentally
responsible, energy efficient, provide healthy places to work
consume less energy and create fewer emissions.

Sec. 6-166. Definitions.
The following words shall be defined as set forth below for use in
this article.
Funded in whole or in part: Receipt of tax increment financing or a
grant, HOME loan, Community Development Block Grant loan or
Neighborhood Stabilization Program loan greater than twenty-five
thousand dollars ($25,000.00).
Renovation:
(a) At the time of the application, the total construction cost is
greater than or equal to the market value of the property as
determined by the city’s tax assessor;
or
(b) A conversion from non-conditioned to conditioned space; or
(c) An addition of building gross square footage greater than or
equal to the gross square footage of the existing building; or
(d) A change of use.

Sec. 6-167. Standards for new buildings and renovation projects.
All new construction and renovation projects to be owned, or
occupied by the city of Portland that are of 5,000 square feet in
floor area or greater and have a total construction cost of greater
than $250,000.00 and all new construction and renovation projects
to be funded in whole or in part by the city of Portland that are
of 10,000 square feet in floor area or greater and have a total
construction cost of greater than $250,000 shall be certified to
the U.S. Green Building Council’s (“USGBC”) Leadership in Energy
and Environmental Design (“LEED”) Silver Standard, and shall
achieve the minimum LEED optimize energy performance points
necessary to meet the targets of the 2030 challenge as published by
Architecture 2030.

Sec. 6-168. Submission of LEED checklist.
Upon submission of an application for a building permit for new
construction or renovation projects that are required to meet the
standards set forth in section 6-167, the applicant shall also
submit a LEED checklist, along with a narrative description
detailing how the LEED points will be achieved, including the
points necessary to meet the 2030 challenge.
A copy of the final submission of LEED documentation to the USGBC
shall be submitted to the city’s department of planning and urban
development prior to the issuance of a certificate of occupancy for
new construction or renovation projects that are required to meet
the standards set forth in section 6-167. A temporary certificate
of occupancy may be issued by the city if necessary prior to the
submission of final LEED documentation to the USGBC.

Sec. 6-169. Certificate of Occupancy.
A copy of the final submission of LEED documentation to the USGBC
shall be submitted to the city’s department of planning and urban
development prior to the issuance of a certificate of occupancy for
new construction or renovation projects that are required to meet
the standards set forth in section 6-167. A temporary certificate
of occupancy may be issued by the city if necessary prior to the
submission of final LEED documentation to the USGBC.

Sec. 6-170. Waivers.
The requirement of LEED certification may be waived in an emergency
situation or under documented circumstances showing that compliance
with this requirement would be cost prohibitive and/or create an
unreasonable burden on the construction project or city; have a
negative impact on an historic structure; or, if due to specific
circumstances, would defeat the intent of LEED certification. Any
request for waiver of LEED certification must be accompanied by
specific reasons for the waiver and approved by the director of
planning and urban development. If a waiver is granted, a
reasonable effort must still be made to maximize the number of LEED
points attained by the project.

Sec. 6-171. Appeals.
Any applicant aggrieved by the decision of the director of planning
and urban development may appeal that decision to the city council
by filing an administrative appeal within twenty one (21) days of
the issuance of the decision. The city council shall place the
appeal on its next regularly scheduled meeting. The appeal shall be
de novo and public comment shall be accepted. The decision of the
city council shall be in writing, final and non-appealable.

Sec. 6-172. Applicability.
This ordinance shall apply to new construction and renovation
projects to be owned, occupied, or funded in whole or in part by
the city of Portland for which site plan applications, building
permit applications (not associated with an approved site plan), or
funding assistance requests are submitted on or after the effective
date of this ordinance.
(Ord. No. 187-08/09, 4-6-09)

MINUTES
 Green Building Incentive Task Force
 February 24, 2011
 City Hall, Room 209, 12:00 PM

1. Introductions

 Portland City Council Citizen‐at‐Large
 David Marshall, District 2 Bill Getz

 Design and Construction Property Developers
 Cordelia Pitman – Wright‐Ryan Construction Greg Shinberg
 Michael Belleau – Architect Ethan Boxer – Avesta Housing

 Chamber of Commerce Green Building Professional
 Chris O’Neil Michael Polaski – Fore Solutions

The Task Force was introduced to fellow members. Ethan Boxer and Cordelia Pitman were not in
attendance. The Task Force reviewed their charge given to them by the City Council. Their charge was
to review the existing green building ordinance and discuss and make a recommendation on a green
building incentive program. The Task Force reviewed the timeline for completing the assignment.

2. Incentive Program versus Building Code

The City’s obligations to uphold the Maine Uniform Building and Energy Code (MUBEC) was reviewed as
distinguished from incentivizing green buildings. MUBEC went into effect on December 1, 2010.
Buildings must comply with MUBEC and cannot require that buildings exceed MUBEC through Code
Enforcement. An incentive can be used to encourage exceeding the standard or discourage not
exceeding the standard.

3. Presentation of Material on Incentive Programs for Green Building

A resource document titled “Green Building Incentive That Work: A Look at How Local Governments Are
Incentivizing Green Development” was summarized. Numerous ways of incentivizing green building are
available including fee reductions, expedited plan review, targeting only certain “green” measures such
as energy performance. Portland, Oregon is undertaking a “fee‐bate” concept.

4. Review of the Green Building Ordinance

The existing Green Building Ordinance was introduced and the task force was provided the waivers that
have been issued for two publically funded green buildings. There was some discussion on
administrative process for reviewing green buildings.
Boston’s program for green building review was discussed because it was believed that the program was
funded through fees levied to review green buildings. The value of departing from LEED was also
discussed. Some municipalities only incentivize certain aspects of green buildings such as energy
performance. San Diego County was one of these municipalities.

5. Confirm Date for Next Meeting: The next meeting is currently scheduled for March 24, 2011

6. Adjourn