Wednesday, March 18, 2009

Enforcing "Green" Building Laws: Do "Feebates" work?

I give much of the credit for my starting this blog to Chris Cheatham who publishes the Green Building Law Update blog. Chris has been very generous with his time and advise and I thank him for that.

Chris has a number of posts about two local initiatives, one in Portland, OR and the other in Washington, D.C.

In Portland, the city council is developing a "Feebate" program which imposes a fee for construction that is mandated to meet LEED standards but fails to do so. Any fees collected would be deposited in a "green building fund". The fund would be used, in part, for "staffing and operating costs to provide technical assistance, plan review, and inspection and monitoring of green buildings."

The Green Building Act in Washington, D.C. requires the posting of a "performance bond" for projects required to meet LEED standards. If the building fails to meet LEED standards, the performance bond is forfeited to the City.

Both laws would face serious challenges in New York. The first issue is whether there is statutory authority for a local municipality to exact either payment as a "fee". In New York, there is no power to regulate land use other than through legislative grant. The most common exaction allowed by statute is the payment of parkland fees in-lieu-of-land as a condition of subdivision approval. State statute allows local municipalities to provide for the collection of parkland fees in its local laws.

While neither the Portland nor the D.C. programs would find statutory authority in New York, there may be an exception. Under the NYS Municipal Home Rule Law, local municipalities may enact local laws that are not inconsistent with the state constitution or statutes. Local municipalities may also "supercede" state law unless the state has expressly prohibited the adoption of such local law. Under Municipal Home Rule, both programs would be permissible if the legislation was specifically adopted under the municipal home rule law, and there was a "rational nexus" between the property and the specified problem being addressed. Is there a sufficient nexus between either exaction and a "matter" distinctly of local concern (ie. mandating/encouraging sustainable building)? Is it more difficult to prove this nexus when the exaction is "penal" in nature?

The second issue is whether the exaction is a tax as opposed to a fee. In Radio Common Carriers of New York, Inc. v. State (601 NYS2d 513) the court defined the difference as follows: "a tax is defined as a levy made for the purpose of raising revenue for a general governmental purpose; a fee is enacted principally as an integral part of the regulation of an activity and to cover the cost of regulation". If the exaction is a tax, it must be enacted under a taxing authority granted by state law. To be considered a fee, the exactions similar to Portland and D.C. must be for the purpose of offsetting the costs of a specific governmental service, as opposed to generating revenues to offset governmental regulations generally. Is either exaction imposed to specifically offset the costs of government services provided in relation to the construction activity? Does this argument fail because the exaction will not be collected if the construction obtains LEED certification?

Are there similar issues in other jurisdictions than NY? What are your thoughts?

Friday, March 13, 2009

NYS Industrial Development Agencies and "Green" Building

For 40 years, Industrial Development Agencies (IDAs) have been providing financial incentives to businesses locating their facilities throughout NYS. According to the NYS Comptroller's Report for the year 2007, there were 115 active IDAs statewide providing $970 million in tax exemption benefits. By law, each IDA is empowered to recover a portion of such tax exemptions by programs providing for payments in lieu of taxes, commonly known as "PILOT Programs".

Each IDA develops its own tax exemption policy and PILOT Program. Of the $970 million in tax benefits in 2007, $377 million were recovered by PILOT payments. The net tax benefit to businesses totaled $593 million.

Each IDA develops its own guidelines and policies to maximize the ancillary benefits from providing tax exemptions, such as job creation and increased economic activity. IDAs are in a strong position to require, through their policies and programs, "green" development and building practices in exchange for a business receiving IDA benefits.

The Onondaga County IDA provides one example of "green" initiative by giving a "Green Building PILOT Credit" to encourage the construction of sustainable buildings. The credit is available by meeting the IDAs' Tax Exemption Policy, and by construction that is LEED certified. The basic credit is a percentage of hard construction costs ranging from 4.8% (LEED Certified) to 15.6% (LEED Platinum). Projects where 75% of the work is performed by workers located within 200 miles of Onondaga County qualify for an increase of 20% in the basic credit (Local Contractor's Incentive).

IDAs are in a uniquely strong position to accomplish substantial economic, social and environmental gains for their communities. It is a sound proposition to require sustainable development and construction when the financial benefits in return, in the form of tax exemptions, are so substantial. All IDAs should explore incorporating responsible "green" requirements in their policies and programs.

Wednesday, March 11, 2009

Orange County Legislature (NY) adopts "Green Building and Environmental Protection Policy"

By Resolution No. 312, Orange County, NY adopted the "Green Building and Environmental Protection Policy" on recommendation of its Green Building Study Committee. The Resolution provides that:

* One employee of the County Department of Public Works shall be "trained and accredited in LEED Standards".

* All new construction and renovation of County buildings "address and incorporate into its design 'Green Building' practices", which include "sustainable sites; water efficiency; energy and atmosphere, material and resources; indoor environmental quality and innovation in upgrades; operations and maintenance".

* Any architect hired by the County for new construction projects shall have a LEED accredited person working on the project, and such person will work with a NYSERDA representative and an engineer chosen from a NYSERDA referral list.

* All "in-house construction projects" shall avail itself of the County LEED accredited person and/or the NYSERDA representative.

The minutes of the December 6, 2007 legislature meeting indicate concern with the reference to LEED standards while omitting competing standards. It should be noted that there is no requirement that construction actually be certified as meeting LEED or any other standard, and there are no continuing compliance requirements after construction is completed.

Monday, March 9, 2009

Incorporating Third Party Standards into "Green" Legislation

In my March 1, 2009 post, I discussed the Town of Blooming Grove Zoning Ordinance provision that gives a:

"Ten-percent increase over the base lot count for adherence to New York State Energy Star guidelines, low-impact development guidelines, or U.S. Green Building Council Leadership in Energy and Environmental Design (LEED) standards as they may be amended from time to time." (§ 235-14.1)

When a local law incorporates the standards or guidelines of a private association, in this case USGBC LEED standards, the municipality runs the risk of violating the NYS constitutional prohibition against relinquishing its legislative function. In other words, the legislative body would give up its delegated power to adopt laws and the standards contained therein.

Two factors may affect the validity of the legislation:

1. The Blooming Grove Ordinance provision is "incentive" based; it is not punitive and does not require any conduct except as to obtain the benefit of the density bonus. This type of legislation will be less susceptible to constitutional challenge than an ordinance that requires all construction to be to LEED or other third party standards.

2. An ordinance that requires compliance with a third party standard "as they may be amended from time to time" is problematic. By approving a future amendment to a private standard, the municipality improperly delegates its sovereign and legislative power, to a third party. The legislature loses control over its laws, and improperly empowers private entities, which may gain a benefit in the marketplace from its control of the legislation.

Towns, Villages and Cities considering "green" legislation should be careful to either adopt its own standards or incorporate with specificity third party standards that exist at that time. If thoses standards are amended by the third, the municipality should be prepared to amend the law to include the changes in the standards, if it so chooses.

Friday, March 6, 2009

New York adopts State Green Building Construction Act

In September, 2008, Gov. Paterson signed into law the "State Green Building Construction Act", as Article 13 of the NYS Energy Law. The intent of the law is to require the new construction and "substantial renovation" of State buildings to be "green". The main provisions of the bill are:

* The State is to give "preference" to reconstruction of existing buildings in considering the need for new construction.

* The NYS Department of Conservation (DEC) shall "promulgate rules and regulations in order to implement the purpose of this article."

* When developing the rules and regulations, the DEC is to be "informed" by the LEED criteria developed by the USGBC, the Green Globes rating system developed by the Green Building Initiative, historic preservation considerations, and reference the "Green Building Credit" in the State's Tax Law (Section 19).

* The definition of "substantial renovations" uses the "50% rule" discussed in my February 27, 2009 post ("NY State Bar Association issues report on Climate Change"). Renovations of less than 50% of any building "subsystem" are exempt from the law. The law also exempts projects for which the "consultant selection process or in house design has been completed."

The DEC has already promulated regulations setting forth green building standards for construction qualifying for the "Green Building Credit" (6 NYCRR 638.7) It is worth noting that the State has chosen to adopt its own "green building" standards, and has not adopted LEED, Green Globes or other existing standard by reference.

Wednesday, March 4, 2009

William & Mary Law School Symposium on Green Building

In January, 2009, I attended the “It’s Not Easy Building Green” Symposium sponsored by the William and Mary Environmental Law and Policy Review. A panel of speakers from across the country discussed issues relating to Green Building Standards and Sustainable Development Legislation.

Speakers included Prof. Patricia Salkin, Albany Law School, and Prof. John Nolan, Pace Law School, who together discussed how to accomplish reductions in green house gas emissions through local government controls (comprehensive plans, zoning and subdivision regulations, environmental ordinances, etc.). Prof. Salkin urged local governments to conduct "green audits" and to incorporate green zoning into local comprehensive plans.

Prof. Timothy Beatley, University of Virginia School of Architecture, spoke on the topic of "biophilic" urban design, which incorporates nature into traditional infrastructures in projects. Some examples include the use of bike and walking trails instead of concrete sidewalks, and replacing traditional stormwater systems with streams and gardens.

Other speakers included Shari Shapiro, Stephen Del Percio, and Chris Cheatham, all green building law attorneys and LEED Accredited Professionals.

For a full summary of the Symposium and for links to each speaker, go to

Sunday, March 1, 2009

NAHB Green Building Standard approved by ANSI

The American National Standards Institute™ (ANSI) has approved the National Association of Home Builders' (NAHB) rating system known as the "National Green Building Standard"™ (NGBS). NGBS certification applies to residential construction of single-family homes, apartments and condos, including remodeling and renovation. I listened to the NAHB tele-conference announcing the approval and it is clear that the NAHB intends to got head-to-head with LEED™ and other competing standards.

“The National Green Building Standard is now the first and only green building rating system approved by ANSI, making it the benchmark for green homes,” said Ron Jones, who chaired the NAHB consensus committee that developed the standard. Rachel Neuhaus, Government Affairs Director at the Builders Association of the Hudson Valley, sent me a comparison showing that the additional cost of NGBS certification is significantly less than LEED-H certification.

How do we reconcile competing "green" standards? LEED is positioned as the "top of mind" brand but is considered expensive in application. NGBS is touted as affordable, has stature afforded by the ANSI certification, but is new to the market. Throw in Green Globes™ and Energy Star™ and there is bound to be confusion in the marketplace (developers, design professionals, municipalities, etc.)

Locally, the Town of Blooming Grove Zoning Ordinance provides an example of the uncertainty these competing standards create. In the Ordinance, the district regulations provide for a 10% density bonus for residential subdivisions based upon "adherence to New York State Energy Star guidelines, low-impact development guidelines, or U.S. Green Building Council Leadership in Energy and Environmental Design (LEED) standards". Each standard is remarkably different but all will result in the same bonus. The Town may now want to add the NGBS to the list, and at the same time, clarify what actions will constitute "adherence" to each.


Being a land use attorney brings a unique perspective to the many interests at play in the making of land use decisions. In the course of any application, you encounter public policy and private property issues that require both advocacy and compromise in hopefully attaining the goals of your client while serving the common good.

Recently, I have been immersed in issues involving "green building" and sustainable development. I have researched the "legislating" of "green building", familiarized myself with "LEED" and other "green building" certification models, and studied the science of environmental impacts on commercial, industrial and residential development to gain an overview of what might be accomplished by bringing concepts of sustainable development to the forefront in our planning processes.

My goal with this blog is to create a dialogue between towns, villages, cities, their planning boards and ZBA's, counties, developers, engineers, designers, surveyors, attorneys, IDA's, empire zones, building associations, and the like, in order to set a course in which "green building" and sustainable development become primary in the decisionmaking on all land use matters. This is a "from the ground up" endeavor. Let's make things happen!

Jay R. Myrow