Langevin, Welch Introduce Bill to Incentivize Energy Efficient Construction

Sep 12, 2019 Issues: Economy and Jobs, Energy & Environment

WASHINGTON - Congressmen Jim Langevin (D-RI) and Peter Welch (D-VT) today introduced the Building Efficiently Act of 2019, a bill to encourage property developers to improve the energy efficiency of the buildings they work on. The bill would extend residential construction tax credits that expired in 2017 and expand them to rental properties.

“Too often, developers neglect to make energy efficiency a priority when building and renovating properties because it’s deemed to be too expensive,” said Congressman Langevin, a founding member of the Sustainable Energy and Environment Coalition. “What we truly cannot afford is high utility bills for Rhode Islanders and the damage greenhouse gas emissions cause to our climate. The Building Efficiently Act renews and expands tax incentives so developers are encouraged to construct more efficient properties. More energy efficient homes and businesses will strengthen the economy, lower pollution, and provide for a more sustainable future.”

“Encouraging energy efficiency in the private sector is a win-win-win, as it saves money, creates local jobs and reduces environmental impact,” said Congressman Welch. “I’m proud to support the Building Efficiently Act, which provides incentives for efficiency retrofits. This is another common sense idea whose time has come.”

The Building Efficiency Act extends the expired New Energy Efficient Home Credit, which provides a tax credit of up to $2,000 for contractors who build new energy efficient homes. This tax credit encourages developers to build with an eye toward green design and to help explain to home buyers that small investments in efficiency up front can pay long-term dividends in terms of lower utility bills. When offered the choice, many buyers prefer more energy efficient homes because the costs of ownership are lower.

However, these same dynamics do not always apply to rental properties, where the landlord has to pay for energy efficiency upgrades but the savings are realized by the tenants. The Building Efficiently Act creates a new tax credit worth up to 3.3% of the total cost of construction for residential rental properties that are planned to reduce energy use by 40% or more. The bill would also ensure low-income properties that are eligible for other tax credits can claim efficiency savings as well. A 2017 report by the Natural Resources Defense Council on cost-effective ways to cut greenhouse gas emissions indicated that reducing residential energy use is likely the single most effective area for policy intervention.

The Building Efficiently Act is supported by the American Institute of Architects (AIA), an industry group comprising over 94,000 members, and the International Facility Management Association (IFMA), a professional association supporting the largest community of facility management professionals in the industry.

“We would like to commend Rep. Jim Langevin for his leadership on fighting climate change. By encouraging more energy efficient building through expanding existing tax credits, the Building Efficiently Act isn’t just good for the environment, it is also good business,” said AIA EVP/Chief Executive Officer Robert Ivy, FAIA. “As the Committee on Ways and Means considers its policy response to the climate crisis, we urge the members to pass this legislation.”

“High performance buildings require smart systems and smart people. Both require regular investment to achieve and sustain improved performance,” said Jeff Johnson, the Chair of the High Performance Buildings Coalition. “The ability to finance these systems and deduct their cost provides a much needed tool to continue to make buildings more efficient. We thank Congressman Langevin for his leadership on this issue and for his continued commitment to improvements across the built environment.”

Text of the Building Efficiently Act.