by Brooks Rainwater
Director, AIA Local Relations

Summary: The AIA on June 10 issued Local Leaders in Sustainability—Green Incentives, an online report detailing how local and state governments use a variety of incentive-based techniques to encourage green building practices. The report examines many types of incentive programs, identifies inherent barriers to success, and highlights best-practice examples from around the country.

To inform the report, the AIA facilitated a Developers Roundtable in December 2007, which included representatives from development companies, the finance/investment sector, retailers, building owners and operators, the insurance industry, and other pertinent stakeholders.

Local Leaders in Sustainability—Green Incentives examines density/floor-area-ratio bonuses, expedited permitting, grants, loans, award programs, technical/design assistance, leasing assistance, permit/zone fee reduction, rebates, subsidized green premiums, and discounts on Energy Star® appliances. Although all are valuable, the analysis concluded that the development community considers particularly conducive:

• Tax incentives: Temporarily reduced taxes for specific levels of green measures and certification
• Density/floor-area-ratio bonuses: implement height bonuses, floor-area-ratio bonuses, reductions in landscaping requirements, and inclusion of green roof space as landscaping/open space in return for achieving levels of green building ratings
• Expedited permitting: Streamline the permitting process for building plan and site permits on projects that achieve a certain level of sustainability.

As local and state governments continue to develop green building programs, they can incorporate a number of incentives to encourage the green private development. The Green Incentives report analyzes the full-spectrum—from cost-free or revenue-positive incentives to those that require direct long-term investment by the community—to enable governments to match inducements to their particular needs.

This report is part of the AIA’s sustainability effort and its Local Leaders Report series. It was co-sponsored by Ceres, The Real Estate Roundtable (a member of Allianz Group), Sustainable Enterprise Management, and Fireman’s Fund Insurance Company. “We support all incentives that encourage green building practices,” said Donald Soss, chief underwriting officer for Fireman’s Fund Insurance Company’s personal insurance division. Fireman’s Fund, the nation’s first provider of green insurance for commercial buildings, is introducing green insurance for homeowners starting this summer. (See reference column.)

The AIA will follow up the Green Incentives report with legislative advocacy efforts to accelerate adoption of local and state green building programs. In July, the AIA and the National Association of Counties will announce research findings on the number of counties nationwide that have instituted green building programs.