At In Balance, we often work with our affordable multifamily housing clients on ways to help them qualify for a variety of tax credits from both state and federal government programs. One in particular, the Low-Income Housing Tax Credit Program (LIHTC) provides incentives that help fund affordable rental housing developments for low-income Californians. It is governed by the California Tax Credit Allocation Committee (CTCAC) and includes incentives for incorporating sustainable building practices in multifamily housing projects.
Programs such as LITHC regularly go through regulation changes to improve and streamline effectiveness. This isn’t what happened this past December. Despite public comments submitted in November overwhelmingly opposing proposed changes to the CTCAC regulations, the changes removing requirements to address sustainability in program applications were approved in December. The argument was that the current building code is sufficient to cover sustainable measures, but this is decidedly not the case.
With California aiming to reduce greenhouse gas emissions to 40% below 1990 levels by 2030, the weeks of air quality issues across California and other states during the fire season last year, and chronic droughts limiting water availability, California should be proactive in expanding incentives for sustainable building instead of reducing them.
So, what changed with these new regulations? For a CTCAC application to be approved, a project needs to achieve a certain number of points, outlined by Section 10325(c)(5). The committee entirely removed the section allocating points for Sustainable Building Methods, which incentivizes achieving a green building certification, such as LEED, GreenPoint Rated, Passive House, etc. In addition to improving a building’s design, a green building certification also provides the benefit of bringing an independent set of eyes to the site to gather documentation verifying the desired measures are correctly implemented.
CTCAC has also removed the requirement for the design team to meet with a Certified Energy Analyst and a green rating system professional, i.e., GreenPoint Rater or LEED AP, to go over an initial energy model. In our experience, these meetings have helped our clients establish clear energy and overall sustainability goals early on, saving time later by avoiding having to redesign certain aspects of the project.
There are still plenty of reasons to implement a broad range of sustainability measures in your projects. We highly recommend consulting with a CEA and green rating system professional early in the design process for those involved in multifamily housing. Green building certifications can be a great way to incorporate various sustainable practices that boost overall efficiency and occupant health and comfort.
Over time more efficient and sustainable projects will save money in operational costs and repairs. We need to recognize that these regulation changes remove measures that help us work toward California’s ambitious climate goals. They also remove incentives for building better quality, affordable housing for low-income Californians who are more vulnerable to the impacts of climate change.