APARTMENT AVOCATE
Energy Efficient Commercial Buildings Deduction
Beginning for property placed in service in 2023 , the base credit for buildings with four or more stories that exceed 25 % of ASHRAE standards in effect three years before a building is placed into service would be $ 0.50 per square foot for energy savings . It would increase by $ 0.02 per square foot for every percentage point by which energy savings exceed the 25 % baseline threshold , up to $ 1 per square foot . Bonus amounts , as described above , are available for taxpayers both prevailing wages and meeting apprenticeship requirements .
Additionally , taxpayers would be able to take a deduction for energy efficient lighting , HVAC and building envelope costs placed in service as part of a retrofit . The value of the deduction would be based on how much energy savings is achieved . A minimum 25 % reduction would be required to realize a $ 0.50 per square foot gain in the base credit .
The base credit would be increased by $ 0.02 per square foot for each additional percentage point in energy savings , up to $ 1 per square foot . Bonus amounts , as described above , are available for taxpayers meeting paying prevailing wages and meeting applicable apprenticeship requirements . The National Apartment Association ( NAA ) and National Multifamily Housing Council ( NMHC ) have long called for retrofits with energy savings measured against an existing building ’ s baseline energy usage to be eligible for the credit .
Finally , the provision includes a special rule to enable REITs to take advantage of the deduction .
Regarding apprenticeship requirements for bonus amounts , projects would also have to be staffed by apprentices ( 10 % of labor hours must be performed by apprentices for projects commencing construction in 2022 , 12.5 % in 2023 and 15 % thereafter , with a minimum of one apprentice for each contractor or subcontractor employing at least four workers ). Exemptions would be permitted if apprentices are unavailable .
New Energy Efficient Home Credit
The proposal would extend the New Energy Efficient Home Credit through 2032 ( which under current law applies to buildings of three or fewer stories but after 2022 would apply to all buildings meeting the requirements of the ENERGY STAR Multifamily
New Construction Program ). For multifamily units acquired after 2022 , a base credit of $ 500 is provided for units that participate in the ENERGY STAR Multifamily New Construction Program while meeting both national and regional program requirements . It is , however , unclear whether multifamily units will decide to participate in this program . A base credit of $ 1,000 is available to multifamily homes certified as zero energy ready under the Department of Energy Zero Energy Ready Home Program . Bonus amounts , as described above , are available for taxpayers meeting applicable prevailing wage requirements . Finally , a provision is included so that the credit may be better used in conjunction with the Low-Income Housing Tax Credit .
Building Codes
The package allocates $ 330 million in grants to help states adopt the most recent residential and commercial building energy codes International Energy Conservation Code ASHRAE
Standard 90.1-2019 or codes achieving equal or greater energy savings . In addition , it provides state and local governments $ 670 million to adopt building codes that meet or exceed the zero-energy provisions in the 2021 IECC .
While NAA and NMHC support costeffective and technologically feasible energy codes , we caution against onesize-fits-all federal policies that direct the use of specific code provisions or editions . The codes and standards
" A property may be eligible for $ 2,000 / unit if the project achieves at least 20 % modeled energy savings up to $ 200,000 and $ 4,000 / unit if the project achieves at least 35 % modeled energy savings up to $ 400,000 . "
specified in this program are designed to be amended and adopted by state and local jurisdictions based on their individual needs and characteristics . Federal incentives must be designed to improve code implementation and performance over a jurisdiction ’ s existing baseline and acknowledge the diversity of conditions that impact state and local code adoption .
Infrastructure
The package includes $ 1.89 billion for fiscal 2022 for states , local governments , territories or transportation authorities to increase neighborhood access and transportation equity . It also includes $ 1.26 billion for additional grants to communities that adopt anti-displacement policies or community land trusts .
Affordable Housing
The package includes $ 837.5 million for the U . S . Department of Housing and Urban Development ( HUD ) to provide grants or loans to affordable housing owners that implement :
46 | TRENDS SEPTEMBER 2022 www . aamdhq . org