2009-02-26, 15:51

D.C. MULTIFAMILY DEVELOPERS: SHOULD YOU CARE ABOUT THE D.C. GREEN BUILDING ACT?

By: Multifamily Real Estate Industry Team
There was much fanfare, at least among proponents of green building, upon the passage of the Green Building Act of 2006 in Washington, D.C. The act was a first-of-its-kind law that establishes green building standards to both public and private commercial and residential construction meeting certain square footage thresholds.

Seems like something that multifamily owners and developers should at least become familiar with, right? Well, probably only certain owners and developers. The act breaks down incentives and requirements among categories of public vs. private, and commercial vs. residential. The good news for many multifamily interests is that the act does not contain mandatory green building standards for private residential projects (although one caveat could be that this is an omission the D.C. Council intends to address).

However, any residential project—whether new construction or substantial improvements—having 10,000 or more square feet of gross floor area must conform to the Green Communities 2006 standard or a “substantially equivalent standard” if the project (i) is situated on land leased from the District of Columbia, (ii) is owned by the District of Columbia or an instrumentality thereof, or (iii) is publicly financed for 15% or more of the total costs. Note that there are other requirements for such public projects, such as completing a Green Communities Self-Certification Check List with the certificate of occupancy application.

While the mandatory aspects of the act are primarily targeted at publicly financed projects, the act’s incentive provisions apply to private residential buildings. Applicants who seek permits for private residential buildings from October 1, 2009 until December 31, 2015 that will fulfill or exceed certification requirements for LEED-NC 2.2, LEED-CS 2.0 or Green Communities 2006 are eligible for grants. As various certification standards change, the D.C. Mayor must amend requirements for the grants and mandatory aspects of the act to reflect such updated standards.

Although the act provides that grants will be awarded from October 1 of this year, the implementing agency, the D.C. Department of Consumer and Regulatory Affairs, has not promulgated specific information about how and under what standards the grants will be given. In the context of the current economic environment, and the resulting falloff in revenues, the awarding of funds may get off to a slow start.

(This entry published by Mark Polston, a member of Womble Carlyle's Real Estate Development group)

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