I just finished a conference call with The White House announcing President Obama’s Plan for Better Buildings: a plan to create tax credits for commercial building energy reductions similar to that called for by Architecture 2030 in the “CRE Solution”.
The White House plan calls for the current commercial buildings efficiency tax deduction of $1.80 per square foot, known as Section 179D, to be changed to a tax credit (this is roughly equal to the 179D amendment of $3 to $4.50 per square foot deduction called for by Architecture 2030).
90% of all commercial buildings are small (under 25,000s square feet), most are single establishment occupied (81%) and many are owner-occupied;
$1.4 trillion in commercial real estate (CRE) loans are coming due over the next few years;
fifty percent (50%) of these loans are underwater, CRE property values are down 40% and a large percentage of building owners cannot refinance; and
since many small community banks, which hold most of these loans are failing,
it is important that a commercial tax credit be made transferable, meaning a building owner can sell or transfer the credit in order to make the efficiency renovation.
Many of you, including architects attending AIA Grassroots this week in Washington, DC, have contacted us seeking information about the CRE Solution. This new development provides an important opportunity for you to educate your Congressional representatives about the President’s plan.