Representative Ed Perlmutter (D-Colo.) is looking to make an ambitious mark during his freshman year on Capitol Hill. The congressman recently introduced a bill that would provide a comprehensive package of lending incentives meant to encourage energy-efficient and sustainable home building as well as change the way government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac do business.
The Green Resources for Energy Efficient Neighborhoods (GREEN) Act of 2008 (H.R. 6078) would require Fannie Mae and Freddie Mac to "finance energy-efficient and location-efficient mortgages as part of their goals to satisfy federal guidelines." This measure would include buildings near mass transit and using established energy-efficient standards, products, and materials during the construction process. By complying, they will receive additional credit (125%). (At press time, Fannie Mae and Freddie Mac had not responded to interview requests.)
"As Americans, it's our responsibility to move in a direction of energy conservation," Perlmutter said in a recent press statement. "Our infrastructure is old, and when renovation or rehabilitation efforts commence we must take the opportunity to use current technologies and standards to develop healthier, more sustainable neighborhoods.
"The GREEN Act helps revitalize our economy by making energy efficiency practices more affordable, accessible, and achievable by consumers, businesses, and government entities," Perlmutter continued. "By prioritizing energy efficiency practices, we can ease the woes of homeowners, lenders, financial markets, builders, and our environment."
Other features of the bill include:
• The creation of the Residential Energy Efficient Block Grant Program, which would be similar to the CDBG (Community Development Block Grant) program.
• Blocking insurance companies from denying insurance to homes in which power, heat, or electricity is provided from renewable energy sources and is not connected to any power grid.
• Creating green banking centers to provide consumers information on obtaining a mortgage or loan that rewards energy-efficient improvements.
• Altering the Community Reinvestment Act by allowing financial institutions to consider energy efficiency improvements made by low-income, first-time, and other home buyers when appraising and assessing the home or building.
So far, Perlmutter’s proposed bill has been met with mixed reviews from industry insiders. According to Jason Hartke, director of advocacy and public policy for the U.S. Green Building Council (USGBC), the proposed legislation helps to promote "a climate change mitigation strategy."
"The GREEN Act takes great strides to advance the market transformation to sustainability … ," Hartke said in an e-mail to EcoHome. "The USGBC supports these provisions as complementary to its vision of sustainable buildings and communities within a generation and looks forward to working with Congress to advance these critical initiatives."
Although the NAHB does not have an "official position" on the bill, the association has some concerns. "I think the bill is very ambitious and it seeks to try to do a lot through the government housing finance structure," says Elizabeth Odina, the NAHB's federal legislation director. "The concern that we have is that because it is such an ambitious effort, some of the affordable housing missions at HUD and the financial tools provided by the GSEs could be detracted."
Odina's statements echo those of NAHB CEO Jerry Howard, who last week remarked in a statement, "Because federal housing programs are such a critical component of the nation’s housing system, the NAHB believes that it is important to ensure that the incorporation of sustainable building practices for these programs is accomplished in a thoughtful and practical manner. Also, it is important to maintain a balance between the goals of affordable housing development and maximizing energy efficiency."
Concerns aside, Odina says the NAHB does support the Residential Energy Efficient Block Grant Program as well as incentives for builders that would offset some of the upfront costs for incorporating green features into the construction process.
The USGBC and the NAHB have presented testimony to Congress. Perlmutter’s office reports the congressman felt the testimony "offered really helpful insight into the areas covered by bill."
The congressman fully expects the bill to move on. "We are under the impression the bill will be scheduled for markup after July 4 and that House Financial Services Committee chairman Rep. Barney Frank (D-Mass.) wants to move this bill to the floor of the House as quickly as possible this year," Perlmutter said in an e-mail.