Reduce, Reuse, Retrofit: PACE For Sustainable Urban Development
The most sustainable building is one already built. Echoing the classic sentiments of “reduce, reuse, recycle,” there is immense value in reusing and retrofitting historic and existing buildings, rather than building from the ground up. However, existing building retrofit and renovation can often come with challenges that lead to higher costs. Commercial Property Assessed Clean Energy (C-PACE) financing helps offset these challenges by covering the cost of the building upgrades that breathe life back into an older building. PACE finances many standard upgrades to existing buildings because naturally, these upgrades result in a more energy efficient building. And the best part: PACE financing is attractive because of its fixed interest rate over a long term (up to 30 years).
“Around 40% of the world’s raw materials are used to construct buildings, and more than 60% of global carbon emissions are created by the built environment. ”
To address the climate crisis, we need more sustainable buildings. Around 40% of the world’s raw materials are used to construct buildings, and more than 60% of global carbon emissions are created by the built environment. Numerous cities have pledged commitments to reach net zero carbon by 2030. In response, many local legislators and building codes focus on developing green, new buildings. However, building net-zero new buildings will only get us part of the way there. The Boston Climate Action Plan (2019) states that 85% of floorspace that will exist in 2050 has already been built, and to reach carbon neutrality, four out of five buildings in the city will need to implement deep energy retrofits and electrification by 2050. Renovating existing buildings to be more sustainable helps make greener, more attractive, livable cities.
However, renovations and building green often come with a cost. C-PACE provides long-term, fixed-rate financing without out-of-pocket expenses. In the case of building renovation, C-PACE can cover upgrades that save energy such as new windows, upgraded HVAC, and high-efficiency lighting. In some states, C-PACE covers seismic upgrades, which are typically costly but integral to maintaining the structure of historic buildings. In Portland, Oregon, PACE Loan Group funded a seismic upgrade at KEX Portland, a concept boutique hotel developed from a landmark building. Instead of being razed, the resulting site now holds a sustainable, chic, and historic hotel without the developer raising millions in equity or coming out of pocket.
Developers and building owners can use C-PACE to create sustainable buildings that keep the unique character of their past. In bustling, metropolitan areas, retrofitting existing buildings is key to developing building sustainable cities.