pace p roperty a ssessed c lean e nergy national league of cities congressional cities conference...
TRANSCRIPT
PACEPROPERTY ASSESSED CLEAN ENERGY
National League of CitiesCongressional Cities ConferenceMarch 15, 2011
David GabrielsonExecutive DirectorPACENOW Coalition
www.pacenow.org
THE BIG PICTURE
40% of our Energy is Used in Buildings
21% Unemployment in Building Sector
$500 Billion Net Savings from Energy Efficiency by 2020
www.pacenow.org
THE INTRO……….THE ASK
Benefits of Energy Efficiency & Renewable Energy
PACE Basics – a quick review
FHFA July 6 Statement
PACE Commercial
Bi-Partisan Legislation to restore PACE
www.pacenow.org
THE PROMISE OF PACE
PACE is Property Assessed Clean Energy Jobs Permanent Local Diverse Skills
Energy Independence Middle East
Avoided Costs Power Plants Transmission
$ Savings Owners
Energy $ Hedge Rising Fuel Costs Threat to Mortgages
Cleaner Air Environment
Voluntary Only if Needed
No Subsidies Requires NONE
www.pacenow.org
HOW PACE WORKS
1) State enabling legislation establishes public purpose Energy Conservation Goals Jobs Avoided Costs Environment Fuel Hedge
2) Local government creates public benefit district Establishes public purpose
• Energy conservation – Climate Action Plans
• Jobs
• Taxpayer relief
• Fuel Cost Hedge
www.pacenow.org
HOW PACE WORKS
7 Dec 1736 Opt-In Fire District
www.pacenow.org
HOW PACE WORKS
3) Municipality establishes program guidelines Audit shows money saving measures Positive Equity – No Underwater Mortgages Taxes Paid on Time No Defaults or Bankruptcies
4) Building owner opts-in Voluntary
5) Municipality Provides Financing
6) Municipality Assessment Charge Only Participants Pay
www.pacenow.org
PACE SOLVES THE BARRIERS
Uniquely Powerful Initiative
www.pacenow.org
PACE
The Good News
www.pacenow.org
24 STATES IN 24 MONTHS
State Government Majority When PACE Legislation was PassedMajority RepublicanMajority Democrat
www.pacenow.org
SO THEN WHAT HAPPENED?
The Bad News
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FHFA JULY 6TH STATEMENT
PACE assessments are invalid FHFA has NO Authority to Define Public Purpose 37,000 benefit districts and 100+ years of precedent
PACE is Dangerous for Borrowers $$ Saved Helps Pay Mortgages
• Efficient Homes are Worth MORE
PACE Protects Against Oil Price Shocks Experience is the Exact Opposite
• Sonoma County – 1,300+ Projects - $42 Million – 1 Default
• Babylon, NY – 650+ Projects - $6.5 Million – 0 Defaults
www.pacenow.org
FHFA JULY 6TH STATEMENT
Assessments are a Senior Lien Only to homes with positive equity
• If every home has enough equity – NO losses to anyone PACE assessments do not accelerate on default
• Only portion in arrears is senior Efficiency and Renewables increase home values
• Appraisal Journal study – $21 to $1 of annual fuel reduction
www.pacenow.org
PACE IS GREAT FOR TAXPAYERS
PACE is a Burden on American Taxpayers PACE is Great for Taxpayers
www.pacenow.org
ASK YOUR MEMBERS OF CONGRESS
Support Bi-Partisan Legislation
to Restore PACE Residential
www.pacenow.org
PACE COMMERCIAL
FHFA NOT Involved Senior Lien Status is Negotiated with Existing Lender Greater Diversity…… Potential for Huge Savings
• Small Businesses….. Similar to Homes• Large Buildings• Shopping Centers
Major Programs Initiated• Washington, D.C.• Greater Cleveland• Los Angeles• San Francisco• Many others…… New York, Michigan, Florida, Missouri
www.pacenow.org
PACE BENEFITS
Benefits to Our Nation Creates permanent jobs - nationwide and across a range of skills. Uses private capital for funding – NO taxes or government subsidies. Saves owners money – lower operating cost make their buildings more valuable. Promotes energy security - without federal regulation or taxes that drive up energy
costs. Avoids costly power plants – increasingly difficult to site. No budgetary impact - voluntary participants pay all fees and expenses.
Benefits to Municipalities Permanent local jobs – estimated at 10 per $1 million in spending, makes communities
stronger. No debt or credit risk - bonds are secured solely by the assessment payments of opt-in
participants. Saves money for residents - PACE is the only assessment that creates positive cash flow. Voluntary participation – building owners opt-in if they decide benefits warrant. Improves air quality – reduced exhaust makes communities healthier.
www.pacenow.org
PACE BENEFITS
Benefits to Property Owners No upfront cost - PACE financing spreads costs over the life of improvements. Owners save money - programs are designed to ensure annual savings exceed assessments. Assessment transfers upon sale - new owner benefits from improvements that stay with the
property. Safety - assured by best practices and guidelines established to protect all program participants. Broad applicability - residential and commercial properties can use PACE. Voluntary - only opt-in participants pay assessments (and benefit from improvements). Comfort – efficient buildings are healthier and more comfortable.
Benefits to Existing Lenders Lowers default risk – improved cash flow makes it easier for owners to pay mortgages. Improves Loan to Value Ratio‐ ‐ - buildings that are less expensive to operate are worth more. Safety and soundness - best practices framework developed to meet all participants’ concerns. Lien risk minimized - non-acceleration of assessments in default limits senior lien PACE exposure
to about $100 per home on average.