PACE Legislation in the News
Miami-Dade County's Green taxing district start rests on who gets the green first
by Zachary S. Fagenson
18 August 2010 3:39 PM
Miami-Dade County is a step closer to starting an optional taxing district to fund energy-efficient home improvements similar to those in Boulder, CO, and Berkeley, CA, but the program is stalled around the nation as regulators raised concerns over the program, questioning who gets paid first if a borrower defaults.
The county commission late last month approved a hearing on an ordinance sponsored by Commissioner Katy Sorenson that could move the county closer to implementing a "Voluntary Energy Efficiency and Renewable Energy Program."
In May, County Manager George Burgess provided a report to commissioners outlining the Property Assess Clean Energy, also known as PACE, financing.
The county also analyzed models used in California, Colorado, New Mexico and some Florida counties.
The proposal in Ms. Sorenson's ordinance would allow Miami-Dade property owners, commercial and residential, to finance energy-efficient improvements "not exceeding 10% of the just value of the property as determined by the county's property appraiser."
Property owners would then repay the loan through a special assessment attached to their property taxes.
The county would finance the improvements by issuing bonds secured by those special assessments.
"We lobbied [the state] for legislation so that local governments could pursue this kind of funding strategy in order to get some energy-efficient and renewable energy at a small-scale level," Ms. Sorenson said Tuesday. "PACE enjoys broad local support from environmental groups to the construction industry."
But the energy improvement debt would be senior to that of the existing mortgage and would be repaid first in the event of a foreclosure, according to a Wall Street Journal report.
The Federal Housing Finance Authority, regulator of Fannie Mae and Freddie Mac, has raised concern over being second in line to be paid in the case of a foreclosure.
The authority guarantees nearly half the nation's $11 trillion in mortgages.
Though the county could move forward on the PACE program for commercial properties if Ms. Sorenson's ordinance is approved, when Miami homeowners could finance appliances like solar panels through the county remains unclear.
"The Federal Housing Finance Authority has challenged the structure of PACE liens and that's caused a reassessment of PACE throughout the country," Ms. Sorenson said. "Boulder and San Francisco have suspended their programs. We have to work at it at the federal level as well."
Meanwhile, in the southern part of the county Cutler Bay Mayor Paul Vrooman has been working to band several municipalities together to create an energy financing corridor that would allow cities to partner for the bonding necessary to make the loans.
Like the county, however, his hands are tied until Washington sorts out the confusion.
"It's still coming," he said, "but when you're doing something this big in scope and dramatic and innovative, things pop up and you need to consider and iron them out."
Mr. Vrooman said he's also brought the City of Miami into the green corridor and now has contiguous support from Miami to Cutler Bay.
"Before too long we'll be getting the mayors together and start talking about organizational structure," he added, while noting they, like the county, will be using the PACE system. "At the same time a green corridor involves more than PACE funding. I would like to work with the University of Miami, Florida International University and others for some research partnerships to help new technologies find a home in Miami-Dade County so that we can own or get our rightful place in the sun with green industries and jobs.
"That's the far-reaching vision of corridor. It starts with solar panels on roofs, but when we do that we're creating a market for these technologies that lend themselves to a market solution for innovation," he added.
The county commission's Budget, Planning and Sustainability Committee is to hold a hearing on Ms. Sorenson's proposal in September. If approved there, it would head to the full commission for a vote.
With commission approval, the county would begin the process of procuring an administrator for the program and later determine how large a bond to issue to finance the first set of green improvements.
Senate PACE bill adds to pressure to restore clean-energy program
by Jonathan Hiskes
22 Jul 2010 3:39 PM
Grist has been covering the fate of Property Assessed Clean Energy (PACE), a tool that helps homeowners finance green improvements to their properties. PACE programs had been spreading quickly across the country until Fannie Mae and Freddie Mac put a stop to them in recent months. Here's the latest:
Sens. Barbara Boxer (D-Calif.), Jeff Merkley (D-Ore.), Kirsten Gillibrand (D-N.Y.), and Mark Begich (D-Alaska) introduced a bill Thursday that would put Property Assessed Clean Energy (PACE) programs back in action over Fannie Mae and Freddie Mac's objections. Based on the Senate's less-than-speedy performance in recent years, it's not likely to pass anytime soon.
The bill is a companion to the House bill introduced by Rep. Mike Thompson (D-Calif.). Thompson told me last week that he'd prefer to see the PACE dispute resolved through negotiation with Fannie, Freddie, and their regulator, rather than through legislation or a lawsuit, both of which would take longer.
On Tuesday, he and other House members met with the Federal Housing Finance Agency, the mortgage corporations' regulator, to try once more to hash out a compromise. Rep. Steve Israel (D-N.Y.) pitched the idea of a pilot program that would test the performance of PACE tax assessments. FHFA promised a response by Wednesday, but has remained mum, at least in public.
The outpouring of support for PACE from the Obama administration, governors, mayors, the House, and now the Senate suggests the mortgage-finance corporations will have a tough time maintaining their opposition.
Here's Sen. Merkley's prepared quote on the appeal of the PACE model:
Innovative financing programs like PACE are simultaneously supporting a growing clean energy sector, creating jobs, and putting more money in the pockets of families and businesses -- it's a job creation trifecta. Innovative energy financing has been a key driver in making Oregon a leader in the clean energy sector and it is crucial that we protect important programs like PACE which help our economy and create jobs.
Seems like Fannie and Freddie would want to support that (here's more on their objections).
Fate of PACE clean-energy programs about to become clearer
20 Jul 2010 1:18 PM
Fannie Mae and Freddie Mac have shut down most of the nation's programs using Property Assessed Clean Energy (PACE), an innovative tool (explained here) that helps Americans finance green improvements to their homes. Here's the latest news:
The Federal Housing Finance Agency will say Wednesday whether it will allow a 30-month pilot project for Property Assessed Clean Energy (PACE), Congressman Steve Israel (D-N.Y.) said after a meeting today with FHFA reps.
Israel said he proposed a demonstration project of 300,000 homes that would test out FHFA's concern that PACE creates additional risk for mortgage lenders.
"Right now you've got the regulatory community advancing a theory about PACE bonds," he said in an interview. "You have PACE advocates advancing their theory. Let's test out which theory is valid. At the end of the 30-month period we'll have hard data on which to base decisions."
That could provide some clarity over the fate of the popular finance tool that helps homeowners green their properties. PACE programs had been spreading quickly around the nation until Fannie Mae, Freddie Mac, and FHFA, their regulator, came out opposed to them.
Israel and three other Congress members met Tuesday with FHFA leaders and what sounds like a small army of Obama administration officials -- including representatives from the White House National Economic Council, FDIC, and Energy, Treasury, and Housing and Urban Development departments -- to try to hash out a solution. The administration has endorsed the PACE model with $150 million in stimulus funding and tried unsuccessfully to resolve the impasse with FHFA earlier this month.
FHFA already faces a California lawsuit and a House bill that would prevent it from blocking PACE programs. But Israel, like bill author Mike Thompson, would prefer to resolve the dispute without waiting on courts or Congress.
"We'll see how serious they are," Israel said of FHFA. "I think they clearly understood that Congress is not backing down on this and they simply have to work with us."
He said FHFA responded to his proposal by suggesting a much smaller 10,000-home pilot, Israel said -- a plan that didn't impress him.
"[That figure] does not suggest a real commitment to the program. There's no statistician in America who would suggest you could get a valid sample with 10,000 homes," he said.
FHFA Acting Director Edward DeMarco and General Counsel Alfred Pollard said they would make a counter proposal by Wednesday morning, he said. FHFA's spokesperson declined to comment.
Nobody has determined which cities and counties could join the pilot project, whatever its size, although a 300,000-property pilot would leave room for new programs. For perspective, the nation's largest existing program, in Sonoma County, Calif., enrolled about 900 participants in its first year (though it continues to grow).
Israel said the first priority would be to reinstate suspended programs, including San Francisco's, which was launched just before Fannie and Freddie warned lenders to stay away from PACE.
He was sympathetic to Fannie and Freddie's concerns -- among other things, they want to ensure PACE programs have consistent lending and retrofitting standards. He said programs have addressed these and a demonstration would only make the model safer.
"These can all be worked out if people would go from a reflexive 'no' to a thoughtful approach towards 'yes,'" he said. "The choice is litigation, legislation, or [FHFA] can try and solve the problem. The ball is in their court."
House Democrats introduce bill to defend PACE clean-energy program
Thirty House Democrats signed on to a new bill on Thursday that would save Property Assessed Clean Energy (PACE) programs, which have been under attack from mortgage giants Fannie Mae and Freddie Mac. PACE is a finance tool that helps homeowners afford energy-efficiency retrofits and renewable-energy installations.
The PACE Assessment Protection Act of 2010 would force the government-sponsored corporations to adopt standards that support PACE, based on Department of Energy guidelines
Green Links and News
South Florida Business Journal
New finance tool would set PACE for energy efficient refits Read more: New finance tool would set PACE for energy efficient refits
Gov. Charlie Crist weighs bill to help cities go green
A great article on how St. Petersburg, Florida is offering residents th opportunity to take part in PACE legislation
Click HERE to send a proactive message out on PACE legislation
PACE under attack from Fannie Mae and Freddie Mac
You've no doubt heard about the attempts by Fannie and Freddie to block PACE. Thirty House Democrats signed on to a new bill on Thursday that would save PACE programs...
Yet the bill's author, Rep. Mike Thompson of northern California, hopes the legislation persuades Fannie and Freddie to accept a compromise before it's signed into law. "These guys don't want to pick a fight with Congress," he said of Fannie and Freddie. "There's no value in that. I've been absolutely mystified as to how they've come to the conclusions they've come to, and I'm not sure why they're doing what they're doing. I think they're way off base and I'm hopeful we'll be able to bring them back into this universe."
California attorney general sues Fannie & Freddie over PACE
California Attorney General (and candidate for governor) Jerry Brown sued Fannie Mae and Freddie Mac today for blocking Property Assessed Clean Energy (PACE) programs. There's a good chance that Fannie and Freddie's legal costs from defending this suit will add up to more than they ever stood to lose from the clean-energy programs, but here we are. The town of Babylon, N.Y., has also been threatening to sue over the same issue, but Brown was quicker.