Last week, Green Building Law Update highlighted Portland’s innovative green building regulation that includes a "Feebate" system to encourage green building development.  According to this OregonLive article, City Commissioner Dan Saltzman unveiled a previous version of the green building program nearly one year ago at the USGBC’s Greenbuild event in Chicago.  The reception in Portland to the previously proposed policy was not good: 

Upon returning home, however, a firestorm of resistance singed the commissioner and nearly torched the entire policy. Saltzman retreated, forming committees — adding the Realtors and homebuilders who were left out of initial discussions — to rework the policy.  

The final Portland green building program removed regulations for owners of existing homes.  Despite the removal of residential requirements, opposition still remains: 

The policy has already laid bare a rift among the larger Portland real estate players, mirroring a division apparent nationwide. The nation’s biggest commercial developers have caught onto the green-building trend and often brag about their energy efficiency strides and certification plaques. . . .  

But Earth-friendly standards for homebuilders have been slower to develop. Certification programs are more varied, and the residential industry remains hostile to government requirements — even if the rules promise rebates for compliance.

Dave Nielsen, chief executive officer of the Home Builders Association of Metropolitan Portland, said Saltzman is rushing to impose new rules without assessing their potential impact. Buyers of new homes might or might not recoup the higher price they pay for energy efficiency measures, Nielsen said.

"They have no clue in terms of what the costs are to do this and what the value will be, to the consumer or the value of the home," Nielsen said. "They’re just trying to be first to something, and it’s crazy."

Based on Mr. Saltzman’s quotes, residential developers are concerned about the additional costs associated with "green" homes.  As suggested by the CoStar Group Study published in early 2008, commercial green building projects result in increased profits and sales.  The residential "green" market has not developed to the extent of the commercial "green" market.  As a result, governments wishing to create a market for "green" residential projects should create incentives for green home developers.  Whether Portland’s "Feebate" is the proper incentive structure for such a program remains to be seen. 

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