A 139-unit development in Washington, D.C., has become the first affordable housing community in the nation to be financed with Property Assessed Clean Energy (PACE) funds.
Part of the Capper Carrollsburg HOPE VI redevelopment, 400 M Street will receive $340,000 in energy improvements, including new lighting, low-flow water fixtures, and a 37-kilowatt rooftop solar array. The improvements are expected to cut utility costs for the property by more than 15 percent.
PACE taps into the District’s ability to fund improvements by attaching special tax assessments to properties. Qualified property owners can opt-in to receive project financing that is repaid for a period of up to 20 years as a property tax assessment.
Across the country, dozens of states and jurisdictions have created the authority to create local PACE programs.
The 400 M Street transaction was handled by Urban Energy Advisors, which was selected to design and manage the District’s PACE program for energy upgrades in commercial, institutional, and multifamily buildings, with authority to issue $250 million in revenue bonds. The District Department of the Environment oversees the program.
“This is a game changer for saving money and conserving energy in the affordable housing industry,” said Bracken Hendricks, managing director of Urban Energy Advisors, in a statement. “By allowing property owners to finance green building upgrades with no out-of-pocket payments, repaid through a special tax assessment, we reduced the risk of lending and improved operating incomes on day one. This project has cracked the code for using PACE financing in affordable housing and multifamily apartment buildings, where the need for new investment is high but capital can often be constrained. This approach has huge potential to be replicated nationwide.”
Urban Energy Advisors is an affiliate of real estate developer Urban Atlantic.