Local Leaders in Sustainability- Green Incentives

Washington, DC (June 17, 2008)- State and local governments are using a variety of incentive-based techniques to encourage green building practices. These efforts have encountered challenges including the cost of new incentive programs, resource shortcomings, and implementation difficulties. In order to help communities overcome these obstacles, the American Institute of Architects (AIA) commissioned a report, Local Leaders in Sustainability- Green Incentives, that defines and examines many types of incentive programs, details the inherent barriers to success and highlights best practice examples from around the country.

After evaluating a dozen different green building incentive options, the report identified the most attractive incentives as:
1. Tax incentives- temporarily reduced taxes for specific levels of green measures and certification.
For example, in Cincinnati, Ohio, a 100 percent tax exemption for LEED certified buildings, not to exceed $500,000 over 15 years for new buildings and over 10 years for renovations, is offered by the city. If the building receives LEED Platinum certification, there is no maximum exemption.
2. Density/floor area ratio bonuses- implement height bonuses, floor area/ration bonuses, reductions in landscaping requirements and inclusion of green roof space as landscaping/open space in return for achieving levels of green building ratings.
For example, in Arlington, Virginia, an incentive awards commercial projects and private developments that earn LEED certification additional density between .15 and .35 FAR and/or additional height of up to three stories (the higher the certification level, the greater the density awarded). Certification does not guarantee additional density – projects are analyzed on a case-by-case basis. The Master Certificate of Occupancy is awarded when the building is certified.
3. Expedited permitting- streamline the permitting process for building, plan and site permits on projects that achieve a certain level of sustainability.
For example, in Chicago, Illinois, the program reduces the permitting process for developers and owners who build green to less than 30 business days and, in some cases, less than 15 days. The length is determined by the number of green building elements, the LEED certification level, and the project complexity.
“No matter what option a community uses, the best recipe for success is a policy that is easy to implement and execute,” said AIA vice president, Government and Community Relations, Paul Mendelsohn. “Our intention is to help speed the process for which green building practices become the norm. As we move towards that possibility through incentives, local building department resources become strained and progress is stalled. We recommend state and/or federal subsidies as the best solution to help ease the burden of stretched local officials and ensure effective green building incentive programs.”
Additional recommendations include:
* Hire trained professionals in multiple departments who are knowledgeable about sustainable design and green rating systems to ensure expedited permitting and zone fee reductions can be executed
* Conduct public education campaigns to better inform the public and building owners on the environmental, economic and public health benefits of green buildings
* Target a wide spectrum of builders, developers, owners and operators with a mix of mutually beneficial incentive options
* Develop grant and loan programs to address needs of smaller businesses
* Seek federal support for green building through grant programs, district tax credits and small business loans
Last year, the AIA convened a Developers Roundtable to gather recommendations from business leaders and their representatives in the development community on the best types of green incentives. This report is part of a follow up to that effort. This will be followed up with AIA legislative advocacy efforts to accelerate the adoption of state and local green building programs. The AIA and the National Association of Counties will also announce the findings of a report on the number of counties nationwide that have instituted green building programs in July.
For more information, visit AIA Local Leaders in Sustainability- Green Incentives.