Property Taxes As Financing Vehicle for Green Upgrades
February 10th, 2010 by Kevin SkurskiSan Francisco’s mayor, Gavin Newsom, signed legislation on Monday that will enable property taxes to serve as a vehicle for financing energy efficiency upgrades of buildings and homes.
The Property Assessed Clean Energy (PACE) program, which will make $150 million in bonds available, is apparently not the first of its kind, but it will be the nation’s largest. Launched in November of 2008 in Berkeley, CA, there are currently 17 states that have authorized PACE programs.
The idea is that since up-front costs often represent the most significant barrier to the implementation of more energy efficiency solutions, by spreading the cost out over time, such cost-saving and more sustainable solutions will become more widespread. Essentially the city or district makes a loan for the project and then is paid back on the loan through the property tax bill. Another feature of PACE programs is that the loans are attached the the property and not the owner.
It’s another example of the type of innovative financing programs that are springing up all across the country to help spur more improvements in energy efficiency and hopefully will lead to an increase in green jobs.
