State housing finance agencies (HFAs) continue to drive green building practices through their low-income housing tax credit (LIHTC) programs.
There has been a steady increase in green requirements in states’ qualified allocation plans (QAPs), according to Global Green USA, which has been analyzing state QAPs since 2006.
“We have a general rising of all boats from a green perspective occurring, which I think means the majority of developments being built using LIHTCs in the country are meeting the basic standard of green,” says Walker Wells, director of the nonprofit’s Green Urbanism Program.
A big trend that has emerged over the past few years and continued to grow from 2012 to 2013 is the shift to third-party rating systems, like LEED, EarthCraft, and Enterprise Green Communities. In order to address that trend, Global Green has created a performance pathway for states where the majority of projects use a third-party green building certification program as the basis for their green building standards.
In the 2013 QAPs, 16 states were scored using the performance pathway, two more than in 2012, and more than 65 percent of developers allocated LIHTCs in those states agreed to pursue the certifications for their projects. Six of those states also included significantly less prescriptive green building elements in their QAPs.
Wells says states are effectively outsourcing green building standards to third parties, taking the technical burden off of the HFAs.
“It’s better for everyone to do that,” says Wells. Requiring third-party certification enables developers to get a letter or certificate stating that they met those green standards, which provides more certainty for the HFAs and tax credit investors.
In Global Green’s review of 2013 QAPs, 28 states saw their scores improve, with the average score up two points from 2012, from 34 to 36. Three states received perfect scores: Connecticut and Maryland for the second consecutive year as well as Minnesota, which improved by four points from 2012. However, 13 states saw their scores decrease from the prior year.
Idaho and North Dakota, which were scored using the performance pathway, made significant year-over-year improvements, up by 15 and 17 points, respectively. Idaho went from a C to a B, and North Dakota jumped from a C to an A-.
West Virginia also brought its score up to a B+ from a D by receiving 22 additional points. The state, which was scored using the prescriptive pathway since it doesn’t solely rely on third-party programs, added a list of green and sustainable building features that developers can include in their applications to give their projects’ a competitive edge.
“When a state decides to do something, they can really boost their scores,” says Wells. “It’s clearly a standard that people are able to meet, and it seems to be a function of ambition and commitment rather than having to commit to incorporating a lot of technological innovation.”
But there is still additional work for states, says Wells.
“What’s really in the QAPs is now about design and construction, and it gets you up to the day that people move in,” he says. “What needs to happen is projects need to be signing up for water and energy management programs to let the managers keep an eye on energy and water-use patterns based off utility bills going forward to manage it to be a green project.”
To view the 2013 analysis, visit http://globalgreen.org/pdfs/2013QAP_FINAL.pdf.