Multifamily green investment loan program updates, EPA revisions on lead paint standards, and climate gentrification
Federal Appeals Court Orders EPA to Revise Lead Standard Within a Year
In late December, a federal appeals court ordered the Environmental Protection Agency to revise its nearly 17-year-old standard for dangerous levels of lead in paint and dust. The agency has one year to do so. The EPA must propose a new rule within 90 days, instead of the six years the Trump administration had requested to reconsider what levels of lead exposure are acceptable for children.
The Trump’s Administration request came after a six-year delay under former President Barack Obama. The court said the holdup was unreasonable, particularly in the face of new research on the hazards of lead paint.
The EPA under Obama acknowledged the need for stricter rules in 2011 and agreed to take action. The agency, though, failed to do so, and did not set timelines for modifying the rule.
Sliding-scale Proposal for Civil Damages Resulting from Construction Fatalities, Injuries Draws Ire of Trades
A New York City Council proposal that would mandate a sliding-scale system be used when awarding civil damages for construction-related injuries or fatalities has drawn fire from two prominent unions. The measure would limit city penalties to $500,000 for companies and $150,000 for individuals when safety violations result in serious injury or death. The Building Trades Employers' Association and the General Contractors Association slammed the proposal, saying that ability to pay should not be a consideration when upholding safety regulations and determining damages.
In civil cases related to construction injuries and deaths, judges would have to consider the degree of injury, the defendant's violation history, the extent of willfulness or negligence, and the defendant's ability to pay before making a monetary award. The bill seems designed to prevent companies from being penalized so heavily that they have to go out of business.
One union representative said that the bill sends a message that workers’ lives at larger, more established companies are more valuable than workers’ lives at smaller, less established firms.
TRUE Zero Waste Provides Roadmap to Divert Waste Away from Landfills
In an effort to greatly reduce waste sent to landfills, more than 130 companies or facilities have signed on to TRUE Zero Waste. The USGBC certification program was designed to be a roadmap to achieve high diversion levels; help create a zero waste, closed loop economy; and increase bottom lines. Participating organizations learn best practices in redesigning waste systems, from upstream management, to zero waste purchasing, to training employees.
Program participants also learn how to document diversion and develop metrics to measure their progress. Participants earn credits for things like redesigning packaging to reduce waste, donating food, or buying 100% recycled products.
They must engage in those practices and maintain a specified diversion rate for 12 months to receive a certification. Some companies have seen returns of up to $100,000 to $1 million through waste sustainability projects in six months to a year.
Properties at Higher Elevations in Miami Appreciating in Value Faster
Research indicates a link between elevation and price appreciation in Miami neighborhoods. Properties at higher elevations in Miami-Dade County have been increasing in value since 1971, but since 2000, the correlation between increased value and elevation has grown stronger. That could be due to market preference for properties that are more resilient to flooding.
This trend points to “climate gentrification,” a new term to describe climate change’s transformation of real estate markets. In a worse-case scenario, a rapid decrease of real estate values for high-risk properties could result in a foreclosure crisis. Climate gentrification could also prompt wealthy people to crowd into mixed-income areas with lower flood risks. This could displace longtime residents.
Standards on Discounted Loan Programs for Multifamily Green Investments Evolving
Both Fannie Mae and Freddie Mac launched discounted loan programs in 2016 to incentivize investments in green multifamily properties. In 2018, the standards are evolving, with multifamily property projects required to achieve a 25% reduction in energy or water usage in 2018—a slight increase from 2017.
Incentives are also available to properties with Green Building Certification, such as LEED or ENERGY STAR. Developers who improve their property’s electricity or water consumption by 25% will be eligible for discounted loan pricing that typically generates a two- to three-year payback on the investment.