(Washington, DC -- September 24, 2024) -- A coalition of leading sustainable building organizations has released a detailed agenda for the next administration, aimed at helping commercial buildings recover from the current downturn and better prepare for the future.
Following a global pandemic, the commercial real estate sector is grappling with a growing number of challenges. High interest rates, declining occupancy rates, and soaring insurance and construction costs have placed significant pressure on property owners and developers.
These issues have resulted in widespread financial strain, not only in large urban centers but also in rural communities, leading to shrinking tax revenues and struggling business districts. At the same time, increasing climate threats present risks to real estate owners, insurers and lenders that are destabilizing commercial real estate finance and insurance markets.
While local governments and private sector leaders are taking steps to address some of these issues, the federal government has a critical role to play in revitalizing the commercial real estate sector. Regardless of party, the next administration can implement policies that strengthen the sector’s resilience and enhance environmental sustainability, public health, and U.S. economic competitiveness.
Specifically, the agenda calls for expanding the Sec. 48E Clean Electricity Investment Tax Credit (ITC) to cover energy efficiency investments. The ITC currently covers only electricity-generating technologies, such as on-site solar, even as energy efficiency is widely viewed as a foundational solution to energy and climate challenges. This expansion would drive significant economic activity in retrofitting buildings to be more energy efficient and provide parity under the tax code for energy efficiency as the ITC transitions to a technology-neutral structure in 2025 while reducing demand on the grid and accelerating our ability to meet clean energy targets.
Additionally, the agenda calls for tax incentives for office-to-residential conversions to address the high office vacancy rates and a strong need for more housing. It also offers a suite of initiatives to help construction markets transition to low-embodied carbon materials and improve indoor air quality, among other provisions.
The U.S. Green Building Council (USGBC), New Buildings Institute (NBI), Institute for Market Transformation (IMT), and Carbon Leadership Forum (CLF) collaborated to develop the recommendations. We strongly urge presidential campaigns to consider these policy solutions as part of their economic platforms.
U.S. Green Building Council
“These policy recommendations outline steps the next administration can take to help struggling downtowns overcome current challenges and emerge better prepared for the future,” said Peter Templeton, president and CEO of USGBC. “This means buildings that are more resilient in the face of disasters, offer healthy indoor air quality, and incorporate energy efficiency, sustainable materials and clean energy technologies that generate fewer carbon emissions and lower operating costs.”
Institute for Market Transformation
"At this critical time, federal investment to improve building performance, efficiency, and resilience can protect health and the environment, decarbonize our buildings, enhance productivity, prepare us for the future, and create jobs at every skill level,” said Alex Dews, CEO at IMT.
New Buildings Institute
“The policy agenda outlined for commercial buildings will provide timely support to both the new and existing building stock. These federal actions are an imperative towards economy-wide decarbonization, especially in the face of building resilience against extreme weather events, while saving on energy cost and lowering emissions, and enhancing health and comfort for inhabitants,” said Susan Stratton, CEO of NBI.
Carbon Leadership Forum
"Federal investments in the building sector have the potential to make buildings a part of the climate solution while improving health and quality of life in communities across the U.S. Continued federal leadership in advancing innovation and data used to measure the emissions of buildings and products will be critical in positioning the US as a competitor in the global market for low-embodied carbon construction materials," said Megan Lewis, program director at the Carbon Leadership Forum.
Read the full policy brief here.