SAR Commercial Report

Climate Action Plan in the City of Sacramento

The Sacramento City Council passed a comprehensive Climate Action Plan in February to help the City come into compliance with AB 32, a bill passed by the State Legislature in 2006 mandating greenhouse gas reduction. The final version of the plan is a true compromise between those who favor mandates and those who prefer incentive-based programs. The Sacramento Association of REALTORS® was integrally involved in the formulation of this plan for the past two years, which initially included a provision that a commercial property or home would need an energy rating at point-of-sale before it could close escrow.

The plan deals with many things, but those that effect commercial real estate include implementing a Commercial PACE Program and adopting a CECO. The Commercial Property Assessed Clean Energy Financing Program (Commercial PACE) will create a voluntary special assessment district to help finance energy efficiency retrofits of commercial establishments. The Commercial Energy Conservation Ordinance (CECO) will require some very basic greening when building permits are pulled for major renovations or additions.

This was a long and arduous process, but the end result shows that when both sides come together and are willing to talk and compromise, good policy can result. Local governments are under strict mandate from the State of California to lower greenhouse gas emissions. Now that a Climate Action Plan passed, the next step will be to create ordinance language, which will actually put Commercial PACE and the new CECO into effect. SAR will be very involved in drafting language. Background Information

Controller, lawmakers propose energy efficiency program

Last week, California Controller John Chiang joined state lawmakers, labor representatives and business groups to announce legislation aimed at increasing energy efficiency in commercial buildings. "It is really nice for a change to talk about moving California forward," Chiang said. "We want to make sure California grows."

If the legislation passes, the state would facilitate private loans for financing improvements to commercial buildings, such as more efficient heating and air conditioning systems. The bill's supporters, which include Sen. Kevin de Leon (D-Los Angeles) and Assemblywoman Nancy Skinner (D-Berkeley), said the program would not cost any taxpayer money and could create jobs for out-of-work contractors hit hard by the recession."It is a very potent combination: job creation where we need it most, as well as energy efficiency to lower our costs," de Leon said.

"Half of the state's 9 billion square feet of commercial building space was built before tougher energy regulations were enacted, meaning there's plenty of room for improvement," said Rex Hime, head of the California Business Properties Association.