Green Building Law Update : Green Building & Construction LEED AP, Lawyer & Attorney Chris Cheatham : Washington DC, Virginia, New York City

Federal stimulus funding has provided $242 million to Illinois to weatherize more than 25,000 homes, but poor oversight of that work puts the funding at risk and in some cases puts the residents of poorly weatherized homes in danger, an audit report warns.

In an interim report released today, the Energy Department's Inspector General warned that oversight of the Illinois program is failing at many levels.

The inspector general report says the state of Illinois has failed to inspect any weatherized units completed by seven of the 35 local agencies carrying out the work. The state also lacks a system for tracking major findings of its inspections and has not inspected 5 percent of DOE-funded weatherized units, as required by DOE.

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On Monday we highlighted "headaches" that may arise from climate-related stimulus funding.  Cities and towns are struggling to come up with worthy programs for the funds.  Furthermore, the Department of Energy has warned officials that funding should go towards the long-term establishment of programs: 

"Don't use the entire amount of this money to set up a single capital fund that when that fund is done, your program is done," Bailey told local officials. "Because you will have potentially, I think, wasted an opportunity to set in motion a program that could last five, 10, 15, 20 years."

Virginia should heed this advice.  The state recently announced plans to use stimulus funding from the DOE to create a long-awaited financial incentive program for renewable energy development:

After years of zero financial incentives for alternative-energy enthusiasts, Virginia is bursting out of the starting gate with tens of millions of stimulus dollars just for renewable-energy aid.

The state plans to set aside $39 million from its $70 million share of the federal stimulus package to help residents, businesses, nonprofits, schools and government agencies summon electricity and heat from the sun and wind.

Funding is expected to start flowing for the program, if approved, in July.  The incentive program will be a great short-term solution for renewable energy development in Virginia.  Turns out, though, the long term prospects for a state funding to continue the incentive program are unclear:

That money runs out in September 2010, and Jurman, a self-described eternal optimist, acknowledges that he could still have trouble getting legislative backing then. . . .

Energy advocates worry about the consequences if the incentives disappear after merely a year.

“It looks like we’re going to grow very easily, but it’s not going to shrink easily,” said Peter Lowenthal, executive director of the Maryland-District of Columbia-Virginia Solar Energy Industries Association, which is advising the Virginia agency on the renewable-energy rebate program. “It will be a shot in the arm. People will get some training, so that’s a good thing. But it won’t really meet the goals of the stimulus in order to create permanent job growth.”

Are there better ways to setup renewable energy development incentive programs for Virginia?

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While we have all (or at least I have) been focusing on the federal stimulus and its effect on the green building industry, an interesting development occurred in Virginia that may impact the future of a statewide green building regulation.

In past posts, I highlighted Governor Tim Kaine's attempts to pass a statewide green building regulation.  As you may recall, in 2007, Governor Kaine indicated his preference for the LEED rating system and Energy Star in Executive Order 48.  In 2008, the Governor and the General Assembly crossed paths on the proper green building rating system for Virginia:  

The Governor’s original proposed budget in 2008 did not include green building provisions.  As part of the budget process, the Governor’s budget was sent to the General Assembly to undergo legislative amendments and the following provision, which includes Green Globes, was added:  “All new and renovated state owned-facilities . . . that are over 5,000 gross square feet shall be designed and constructed consistent with the . . . U.S. Green Building Council's LEED rating system or the Green Globes rating system.”  Governor Kaine vetoed the inclusion of Green Globes but the General Assembly overrode the veto.  

Based on the Governor Kaine's past work to exclude the Green Globes rating system, I was surprised by a portion of the Governor's State of the Commonwealth Address on January 14, 2009: 

"A few years ago, I issued an executive order requiring that all new state buildings be constructed to high energy-efficiency standards. Later, members of the General Assembly included similar language in the budget bill. That was a smart step in ensuring that the Commonwealth makes good energy decisions, and one that saves us money in the long run.

This year, I will ask you to ratify that approach again, by requiring in the Code of Virginia that all state and local government buildings meet either LEED or Green Globes standards for efficiency."

Did you see that shift in policy?  What do you think of Governor Kaine's new found support for the Green Globes standard? 

Photo:  Ouij

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As promised, below is the slideshow from last week's "Green in the Stimulus" presentation as part of Rutherfoord's Trends in Green Building seminar.  Unfortunately, I have not figured out how to synchronize audio files with a slideshow - maybe next time.

I had two goals when I created this presentation:

(1) Explain the green building provisions in the stimulus package.
(2) Convey how parties can prepare themselves now to take advanage of resulting green buiding opportunities. 

You can be the judge whether I succeeded.  The slides, by themselves, do not do the presentation justice.  If you are interested in hosting the "Green in the Stimulus" presentation for your company, please contact me at chris@greenbuildinglawupdate.com.  The presentation can be tailored to your specific state or region and industry. 

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Update:  For a rundown of green building provisions in the stimulus pacakge, see this post.

This week, in preparation for my "Green in the Stimulus" presentation, I have been providing what I hope is interesting and useful information about the stimulus.  Today we are briefly going to review a new website in Virginia, Stimulus.Virginia.gov, which is vitally important to anyone expecting to take part in Virginia projects resulting from the stimulus. 

According to Stimulus.Virignia.gov, the "website is a forum for citizens, localities, and others to submit project proposals to be considered when federal stimulus funds become available."  In its current iteration, the most interesting aspect of the website is the "Reports" section .  This section lists projects that have been submitted to the website by municipalities and individuals.

I have skimmed this list and was amazed to see that the very first project was a school seeking LEED certification. 

Do you realize the opportunity that Stimulus.Virginia.Gov, along with FedBizOpps.gov, provide?  Through these two websites, you can inventory all of the potential projects you would want to bid on and begin preparing for these projects now.   Plenty of other states have similar stimulus websites (Ohio and Michigan, for example) so these actions aren't limited to Virginia. 

How do you prepare for these projects now?  What are the risks that have to be accounted for and what should your contracts look like?  You will have to come to my presentation on Tuesday to find out!  (Or check back on my website when I make my slideshow, and possibly the video of the presentation, available).

Related articles:

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Last week, we talked about the William & Mary Environmental Law Review Symposium "It Ain't Easy Building Green."  Today, I am going to try yet another new blog trick and make my slideshow available from the Symposium. 

If you have any questions or would like to discuss any of the slides in detail, just post a comment and I will be sure to respond.  If your company or organization would be interested in hosting this or a similar presentation, please contact me (chris@greenbuildinglawupdate.com). 

So what do you think? 

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[Green Building Law Update is achieving another first:  our first guest post!  Christopher G. Hill is a Virginia construction attorney and recently started a legal blog, Construction Law Musings.  I first met Chris through Twitter and I appreciate his willingness to discuss green building legal issues.]

Aside from the governmental impetus to learn green building techniques, two factors require that Virginia contractors learn to build green.  These two factors are simply 1.  project owners want green buildings and 2.  those contractors that do not keep up with the “greening” of construction are likely to fall behind and struggle to stay afloat in today’s economy.

Project owners want green buildings for many reasons.  Owners want to be seen as environmentally friendly and civic minded.  Additionally, and possibly more importantly, owners save money (both initially and over time) by building green.  As an example, use of integrated green building methods requires less up front costs for irrigation piping and the like and leads to use of less than one quarter of the water that a non-green building uses according to a recent study.  Lower water usage means lower operating costs.  Couple these factors with tax incentives and the like provided by the government and the benefits of green building to owners are obvious.

Because of the environmental benefits and cost savings inherent in a green building approach, contractors versed in green building can sell their services more readily than those that do not.  First of all, a “green” contractor will be among a limited set of contractors to whom an owner seeking green certification for its building will look.  Second of all, if an owner asks you for input, you can sell him or her on the benefits of your services over a comparable non-“green” contractor.  In both of these instances, being knowledgeable in green construction and its benefits will serve your business well.

As always, be sure to consult with a legal professional regarding the contract requirements on such a project before bidding on the job to avoid headaches at the end of the project.  As with any new area of business, you are better off anticipating issues rather than responding to them.   

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Last week, we discussed a law in Virginia that prohibits municipalities from creating green building codes or mandates.  In short, Dillon's Rule only grants to municipalities those powers that are explicitly granted by the state.  The Virginia Code has specifically granted the power to create a building code to the state; municipalities, on the other hand, can create zoning ordinances. 
 
Recently, I had the pleasure of sitting down to speak with Joan Kelsch, Environmental Planner for Arlington County, about the Arlington County green building programs.  Arlington County has taken advantage of the opportunity to create zoning ordinances by promulgating two programs that stimulate the development of green building projects:  (1) a Site Plan Program; and (2) a Bonus Density Program. 

Lets start with the Site Plan Program.  According to Kelsch, in Arlington County "green building policies are technically voluntary but site plan projects do allow Arlington County to ask for specific proffers from developers."

What is a site plan project?  A site plan is a large project that requires a special exception to the zoning ordinance in order to be built.  Because site plans require an exception to the zoning ordinance, Arlington County is able to require specific green building requirements, including:

(a) LEED™ Accredited Professional
(b) LEED™ Scorecard.
(c) LEED™ Tracking.
(d) Construction Waste Management.
(e) Energy Star Appliances.

In addition, Arlington County is also incentivizing green building development through its Bonus Density Program.  Under the Bonus Density Program, projects larger than zoning would normally permit are allowed if the developer promises to achieve a specific LEED certification level. 

We will be looking at Arlington County's Bonus Density Program in more detail, in part, because the enforcement mechanism involves a four-letter word that has created problems in Washington, D.C. (hint: bond).

Related Links: 

• Virginia Green Building Regulations:  Avoid the Building Code (GLBU)
• Green Building Regulations in Virginia:  Zoning In (GBLU)
• Environmental Services (Arlington)
• Green Building Incentive Program (Arlington)

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I hope you survived the dramatic cliffhanger from Monday.  Now, time to answer the question, how do Virginia cities and counties regulate green building if they cannot adopt a building code? 

Such a dramatic pause for such a mundane answer:  zoning ordinances. 

The Virginia code specifically delegates to the municipalities the right to create zoning ordinances:

“The planning commission of each locality may, and at the direction of the governing body shall, prepare a proposed zoning ordinance including . . . a text setting forth the regulations applying in each district.”

Under the Dillon Rule, the state creates the building code at the state level but cities and counties can create zoning ordinances at the local level. 
Local governments have recognized the opportunity to regulate green building through zoning ordinances.  You may remember this great quote from a previous post:

“Arlington County is deliberately pushing the limits of state law to insist on green standards for development. . . . Arlington pioneered green building standards through its planning and zoning . . . process.”

Next week, we will examine Arlington County's green building regulations.  In the meantime, I have something very special for Friday.

Related links: 

• Virginia Code 15.2-2285
• Going Green (Va. Lawyers Weekly) 

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This past weekend, I spent a lot of time preparing a slideshow for the William & Mary Environmental Law & Policy Review Symposium, "It's Not Easy Being Green."  As you may recall, I will be presenting on green building regulations in Virginia.  Guess what we are going to discuss on Green Building Law Update this week?  That's right, green building regulations in Virginia. 

Hold on, stay with me. Virginia is actually a very interesting state for developing green building regulations. 

As you may recall, in the past, a reader asked how a Virginia city or county can regulate green building with the Dillon Rule in place.  The Dillon Rule essentially says this: 

"Municipal corporations have only those powers that are expressly granted . . . ." 

“The Board is hereby directed and empowered to adopt and promulgate a Uniform Statewide Building Code. Such building code shall supersede the building codes and regulations of the counties [and] municipalities . . . .”

• Have a Beer With Green Building Law Update (GBLU)
• Dillon Rule Hampers Green Building Efforts (GBLU)
• The Rules of Statutory Construction (Virginia1774)
• Virginia Code 36-98
• Arlington Green Building

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In continuing our week of epiphanies, here’s another one that struck us here at Green Building Law Update:  should governments consider getting out of the green building certification process? 

Yes, I realize this epiphany is out there and that practically every state has implemented some sort of green building regulation.  Over the past few months, we have profiled green building regulations in D.C., Virginia, Indiana and Maryland, to name a few.  But the more I think about these regulations, the more I become concerned that governments should not mandate certification, particularly of public projects.

Apparently, I am not the only one with these concerns.  For example, this article cites an Evanston, Illinois official that is concerned with certification cost:

At the meeting, Evanston residents spoke about the Green Building Ordinance, which was drafted by the Evanston Environment Board. . . .  Ald. Lionel Jean-Baptiste (2nd) cited the need to look closer at the cost of the ordinance.

"It's difficult in this current economic climate for anyone to build," he said. "We need to look more into the cost, and have greater discussion at the committee level." 

And here is another example, this time a LaCrosse, Wisconsin official voicing concern over the costs for green building certification:

“When I think about all this discussion about certification and not certification, I think we’re going to do all this good stuff so let’s just declare it a green building and go home,” Supervisor John Medinger said during the Law Enforcement Center Construction Committee meeting this week. “We say it’s a green building. Who says it isn’t? I don’t mean to diminish this, but I’m trying to see what we’re going to get with this $161,000.”

With the state facing a $3 billion shortfall, Medinger said the county will take a hit and can’t afford to spend money that brings no return.

These officials represent a minority view that government’s should not mandate green building certification due to the associated costs.  But Mr. Medinger drives home the point:  what are governments getting out of certification? 

Green building certification is primarily a marketing tool used to sell a building.  Green building strategies can most definitely be incorporated without obtaining certification and the results can still be confirmed through commissioning.  What benefits are cities and states getting when their public buildings are deemed certified?

Related links: 

• Cost concerns may clash with green ordinance draft (Daily Northwestern)
• Several commissioners object to price tag for LEED certification (LaCrosse Tribune)
  
• Can state budgets support green building? (GBLU)

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Now that our discussion of Southern Builders v. Shaw Development is over (whew!), Green Building Law Update is going to take the rest of the week to answer some reader questions.  The first question comes from Erica: 

How should a locality located in a "Dillon Rule" state, such as Virginia, go about establishing a mandatory green building program?

Good question Erica.  Lets get everyone on the same page first.  What exactly is the Dillon Rule?  The Dillon Rule is a peculiar rule that basically limits a city’s rulemaking ability so that the city can only make rules when expressly granted by the state: 

“This rule provides that municipal corporations have only those powers that are expressly granted, those necessarily or fairly implied from expressly granted powers, and those that are essential and indispensable. When a local ordinance exceeds the scope of this authority, the ordinance is invalid."

The Dillon Rule is upheld in Virginia, which means that cities are not allowed to create their own building codes.  Virginia Code section 36-98 states “the Board is hereby directed and empowered to adopt and promulgate a Uniform Statewide Building Code. Such building code shall supersede the building codes and regulations of the counties, municipalities and other political subdivisions and state agencies.”

What does this have to do with green building?  We have previously highlighted the Virginia legislature’s disagreement over green building regulation.  While the Virginia legislature continues to disagree as to the proper green building rating system, Virginia cities are watching cities all around them pass green building regulations.  

So how does a Virginia city get around the Dillon Rule so it can enact green building regulations?  My first instinct was building codes, but clearly that is not an option.  What other states use the Dillon Rule.  Indiana?  Indiana!  And Indiana recently imposed green building regulations!  How did that happen?  Stay tuned…

Related Links

• Virginia Debates Green Building (GBLU)
• Governor's Mansion Goes Green (GBLU)
• Going Green (Virginia Lawyers Weekly)

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Last week, we discussed the Virginia General Assembly’s attempts to pass green building legislation in 2008. Virginia Governor Tim Kaine was also forced to weigh in on his preferred green building rating system in 2008.  Previously, in 2007, Governor Kaine indicated his preference for the LEED rating system in Executive Order 48: 

“All agencies and institutions constructing state-owned facilities over 5,000 gross square feet shall be designed and constructed consistent with the U.S. Green Building Council’s LEED rating system (including the use of Virginia forest products with alternate certifications) or the United States Environmental Protection Agency/Department of Energy’s ‘Energy Star’ rating.”

The Governor’s original proposed budget in 2008 did not include green building provisions.  As part of the budget process, the Governor’s budget was sent to the General Assembly to undergo legislative amendments and the following provision, which includes Green Globes, was added:  “All new and renovated state owned-facilities . . . that are over 5,000 gross square feet shall be designed and constructed consistent with the . . . U.S. Green Building Councils LEED rating system or the Green Globes rating system.”  Governor Kaine vetoed the inclusion of Green Globes but the General Assembly overrode the veto. 

The debate over green building rating systems continues to play out in Virginia and other states across the country.  GBLU looks forward to monitoring the 2009 Virginia legislative session and further green building legislation.  Virginia’s choice of a green building rating system will have a significant impact on the Virginia cities due to a peculiar statewide rule, which we will discuss next week.

Related Articles: 

More Green Building Legislation May Be Imminent for Garden State (gbNYC)

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