The advance word has been mixed about President Obama's September 8 jobs speech. Bold or not bold? Rumors have been floated that bold will be the order of the day, but some of the President's advisors have been attempting to diminish expectations.
Were I advising President Obama on his speech, sustainable and energy-efficient building programs would be included in the mix as a high-growth and cost-effective way to get America back to work and enhance American competitiveness.
Programs that focus on building energy-efficiency create jobs not only in construction, but also in architecture; engineering; interior design; energy audit; the design, manufacture and sale of building equipment, materials and supplies; finance; law; and -- to support the tracking of building energy savings -- software development and sales.
As economists would say, building energy-efficiency programs have a high multiplier effect—they create significant economic activity per dollar spent. And, by reducing the operating costs of homes and commercial properties, such programs are cost-effective and improve American competitiveness.
Here are several building energy-efficiency programs that have tremendous promise, have won substantial bipartisan support, and produce meaningful, long and which warrant aggressive implementation:
PACE. Property Assessed Clean Energy (PACE) programs are much-needed vehicles to create American jobs while reducing building energy costs. PACE programs allow municipalities, upon state authorization, to create building energy-efficiency retrofit programs that are repaid by tax assessments on participating properties.
The programs can be used for a wide range of building energy-efficiency improvements, ranging from weatherization, to upgrading heating, ventilating and air conditioning equipment, to installing solar panels and other renewable energy systems.
PACE initiatives, the local creation of which has been authorized in 27 states, have been largely sidelined since mid-2010. The Federal Housing Finance Agency put the kibosh on residential PACE programs [PDF] by precluding Fannie Mae and Freddie Mac, which buy the lion's share of U.S. home loans in the secondary mortgage market, from purchasing PACE-encumbered mortgages. FHFA's action shut down the residential PACE market and had a chilling effect on commercial PAC E initiatives. (Full disclosure: My firm has advised several jurisdictions on PACE and serves on a team that will be creating a commercial PACE program for the District of Columbia.)
Getting PACE back in gear should be easy for the President to support. Bipartisan legislation introduced in July in the U.S. House of Representatives, the PACE Assessment Protection Act of 2011, would require Fannie Mae and Freddie Mae to participate in PACE programs that met threshold criteria for safety and soundness.
Next page: EISA & the 179D Tax Credit