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Pennsylvania is First State to offer Tax Credit for Passive House

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By 2.2 min readPublished On: Thursday, January 15th, 2015Categories: Environmental Law

Pennsylvania is the first state to offer tax credits for low income Passive House building.

Applications submitted under the PennHOMES and low income housing tax credit program are scored and ranked in accordance with a numerical criteria. By way of example, up to 30 points are awarded to developments located in areas with high poverty rates or large numbers of senior citizens eligible for affordable housing.

Up to 25 points are awarded for green building, including up to 5 points for redevelopment of a brownfield site, and up to 10 points for an adaptive reuse of a vacant building.

What is unique in the applications due by January 30, 2015 is that up to 10 points may be awarded to those developments which meet Passive House certification requirements (national or international). Actual Passive House “certification” from PHIUS or the Passive House Academy is not required. At construction completion, all third party test results and verifications required by Passive House, including blower door testing and commissioning reports, are submitted to the state and the project must be Passive House “certifiable.”

For the uninitiated, the Passive House green building rating system uses a set of design principles to attain a rigorous level of energy efficiency. “Maximize your gains, minimize your losses” summarize the approach. A Passive building is designed to employ continuous insulation through its entire envelope without any thermal bridging and that building envelope is ‘extremely airtight’ preventing infiltration of outside air and loss of conditioned air. It employs the use of high performance windows (typically triple-paned) and doors.

An issue may be that while worldwide Passive House reports more than 40,000 buildings meet the standard, today there are only 130 Passive buildings in the United States, and only 11 of those are multi-family or commercial.

The Pennsylvania Housing Finance Agency reports that it is aware of at least one eligible building. “We may get 130 applications and we are going to fund about 40,” said Brian Hudson, executive director of the Agency, so the points available for Passive building would be key in the highly competitive tax credit process.

No points are available for LEED projects.

But, recognizing the limited efficacy of a program tied only to the very little used Passive House, Pennsylvania will also incentivize low income green housing with the $1 Million in tax credits when 10 points may be awarded for green building to projects achieving Enterprise Green Communities Criteria optional 25 points for new construction and 20 points for substantial or moderate rehabilitation properties. At construction completion, written certification must be submitted describing which Green Communities criteria were achieved.

An architect working on a housing retrofit in Pittsburgh observed, the State of Pennsylvania may have singlehandedly moved Passive House from the radical fringe to mainstream green building.

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About the Author: Stuart Kaplow

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Stuart Kaplow is an attorney and the principal at the real estate boutique, Stuart D. Kaplow, P.A. He represents a broad breadth of business interests in a varied law practice, concentrating in real estate and environmental law with focused experience in green building and sustainability. Kaplow is a frequent speaker and lecturer on innovative solutions to the environmental issues of the day, including speaking to a wide variety of audiences on green building and sustainability. He has authored more than 700 articles centered on his philosophy of creating value for land owners, operators and developers by taking a sustainable approach to real estate, including recently LEED is the Tool to Restrict Water Use in This Town and All Solar Panels are Pervious in Maryland. Learn more about Stuart Kaplow here >