Hawaii Green Building Law

One of the 240 LEED for Neighborhood Development (LEED ND) pilot project recently opened at the Fort Shafter Army base on Oahu. If all goes as planned, the Simpson Wisser neighborhood will receive LEED-ND certification in spring of 2010. Read Press Release.

The United States Green Building Council (USGBC) says its proposed LEED ND rating system:

“encourages smart growth and new urbanist best practices, promoting the location and design of neighborhoods that reduce vehicle miles traveled and communities where jobs and services are accessible by foot or public transit. It promotes more efficient energy and water use—especially important in urban areas where infrastructure is often overtaxed.”

The USGBC touts LEED ND in a White Paper entitled “Guidance to Local and State Governments” as a tool policy makers can use to evaluate current policies and practices, to implement “structural incentives” such as density and height bonuses, expedited and fast‐track permitting, and conditioning of the sale of publicly‐owned land, and to implement “financial incentives” (grants, tax credits, reduced permitting or impact fees, etc.) that would leverage market forces to encourage sustainable development.

The White Paper wisely discourages straightfoward mandating of LEED ND as not all locations will be able to meet prerequisites of the rating system.

The utility of the LEED ND rating system to policy makers remains to be seen. A municipality requiring LEED ND credentials for new neighborhood developments would likely chill development investment and face legal challenges.

Within LEED ND neighborhoods, what incentives or requirements, if any, would be in place to encourage energy efficient living at the individual household level?

Could green lifestyles be mandated at the neighborhood level through bylaws and restrictive covenants?

The United States Green Building Council (”USGBC”) recently accounced its publication of the “Green Office Guide: Integrating LEED Into Your Leasing Process.” At first glance, the guide appears to be targeted towards addressing the tenant’s perspective. According to the USGBC:

This new publication is designed to help office tenants and their service providers (lawyers, brokers, consultants, design professionals) integrate LEED early into the leasing process. It is written to provide critical background content as well as functional tools (including lease language and site selection checklists) that can be used throughout the transaction.

The Chapters of the USGBC Green Leasing Guide are as follows:
SECTION 1 – Why Green the Leasing Process?
1.1 How Buildings Affect the Environment and Tenants
1.2 Primer on LEED®

SECTION 2 – Greening the Leasing Process
2.1 Environmental Strategies for the Leasing Process
2.2 Implementing Environmental Strategies at Renewal and in New Space Searches
2.3 Greening the Lease
2.4 Best Practices for LEED for Commercial Interiors Project Management, Design and Construction
2.5 Implementing Environmental Strategies Under Existing Leases

SECTION 3 – Tools for Greening the Leasing Process
3.1 LEED for Commercial Interiors Scorecard
3.2 Basic Environmental Impact Questionnaire
3.3 Sample Criteria for Qualifying Project Team Professionals
3.4 Sample Green Building RFP Questions
3.5 Building Questionnaire for Tenants Seeking LEED for Commercial Interiors Certification
3.6 Sample Lease Provisions
3.7 Sample Environmentally Preferable Purchasing Policy for Tenant Operations

Several other organizations have published information regarding negotating and drafting a green lease including BOMA’s Green Leasing Guide and the California Sustainability Alliance’s Green Leasing Toolkit. While these are all helpful resources, green building and green leasing involve unique issues. The parties to the lease must be aware of the sustainability issues related to the property and should tread lightly as careful drafting is required to address green building issues. Prior to entering such a lease, both landlords and tenants should seek counsel from an attorney experienced in green building issues.

So far this year, 83 projects in Hawaii have applied for LEED certification from the U.S. Green Building Council, compared to 48 applications in all of 2008, and 35 applications in 2007. Nine Hawaii projects have actually received LEED certification this year.

The increase in Hawaii applications is in pace with the overall rise in green building throughout the nation. According to a recent study, there is an increase in the perceived value of green building among architects, engineering firms, contractors and owners over the last three years, especially as related to financial benefits. The study noted that the benefits include:

Decreases of 13.6% in operating costs from green building (up from 8.5% in 2005, a 60% increase);
Increases of 10.9% in building values from green (up from 7.5% in 2005, a 45% increase);
Increases of 9.9% in ROI from green (up from 6.6% in 2005, a 50% increase)

Other findings of the report include:

77% of the industry expects revenues to grow as a result of green building;
Education is posing a tremendous opportunity for green building, with architects, engineers and contractors reporting that the largest share of their green work in 2013 will be from the education sector;
Nearly two-thirds of the industry report that publicity is a major reason for going green, up from only 44% in 2005. This growth signifies how much more attention green is now getting from the media;
Green building products are becoming more common in use.

As previously stated, developers’ expectations as to the end product of green buildings are high. At the same time, each building’s performance, cost savings and return on investment is often unpredictable. The unpredictability coupled with the high expectations create a breeding ground for potential litigation. All stakeholders must address the risks and liabilities of building green before starting construction.

Under a new Colorado law, homeowners may obtain loans for solar equipment payable to a third party. The new law opens up the option for homeowners to lease solar equipment rather than buy it.

Under solar leases, homeowners typically pay a solar-leasing company a one-time installation fee, plus monthly bills for the electricity. Often the solar installer owns the system and is responsible for operating and maintaining it.

Solar leases are another option in greening buildings. It is important, however, for all parties to a solar lease to understand and document the duties and obligations of each party.

According to a study of college sustainability conducted by the Sustainable Endowments Institue, the University of Hawaii received a “C” grade.

The study rated colleges in nine categories: Administration, Climate Change & Energy, Food & Recycling, Green Building, Student Involvement, Transportation, Endowment Transparency, Investment Priorities and Shareholder Engagement. The University of Hawaii received its highest grade (”B”) in the Adminstration category which the study reports:

The assistant vice chancellor for financial and physical management is in charge of campus sustainability and of building design and performance. The campus also employs an energy manager. The campus facilities planning board is responsible for review and approval of sustainability projects. The chancellor’s office has established a sustainability website.

The University of Hawaii received a “C” grade in the green building category. The report states:

As per state law, all new projects must meet LEED Silver standards at a minimum. Facilities has committed to implementing sustainable engineering practices and adopting relevant energy efficiency standards. A new dorm, Fraer Hall, is the first LEED-certified building on campus, and three projects are seeking to meet or exceed LEED Silver standards.

Hawaii’s requirement that all new projects must meet LEED silver standards may boost the University’s ranking over time as more sustatinable buildings will be constructed. In addition, the upcoming City and County of Honolulu rail project will provide additional transportation options to incorporate into the University’s sustainability efforts. Nevertheless, as pereviously discussed, all state projects could be severely hampered by budget constraints and furloughs. These contraints could negatively impact future sustainability ratings.

The top rated college campuses include the University of North Carolina at Chapel Hill, Pacific Lutheran University in Oregon, Stanford University, University of Colorado and Arizona State University.

I previously posted on the prospect that LEED projects, owned by the State of Hawaii could risk decertification due to budget cuts and improper maintenance.

We’re one step closer.

Hawaii public school teachers (in the face of State budget cuts) agreed to shut down the Hawaii public school system for 17 Fridays beginning in October. Furlough Fridays (as they are referred to in Hawaii) could have a drastic impact on the State’s LEED certified buildings.

Hawaii law requires all major state renovation or construction projects be designed and built to meet LEED silver or Green Globes standards. Several new state building projects have achieved LEED certification, including buildings on public school campuses and buildings that are part of the University of Hawaii system. The budget cuts and Furlough Fridays could prevent the State from providing adequate maintenance to these green buildings.

At this point, a project can be de-certified if it fails to provide ongoing monitoring data. The USGBC has not yet stated what will happen if a building’s energy and/or water usage is higher than projected, which could occur if a building is not properly maintained. Nevertheless, even if a project achieves LEED certification, funding issues could prohibit the state from keeping up with the USGBC’s minimum program requirements.

A colleague of mine (also a LEED-AP, Esq.) found a post on Green-Buildings.com posing the question…is the LEED exam more difficult than state bar exams?

The article recognizes that:

[W]ith green building quickly becoming written into law across the United States, real estate attorneys, investors, construction and operations professionals are finding that understanding green building may be critical to ensuring that client sustainability goals are achieved.

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Understanding the nuances of sustainability law requires constant study as more law firms add “LEED AP” to their credentials and launch practice groups focused on green businesses.

If you’re reading this post, you probably know that I am an attorney and a LEED-AP. In fact, the law firm that I am with has several attorney/LEED-APs [shameless plug]. It’s difficult to draw comparisons between the respective difficulties of the LEED exam vs. the bar–they are two completely different tests that require different approaches.

While it is difficult to compare the tests, attorneys that become LEED-APs demonstrate that they are dedicated to both the law and helping their clients understand sustainability and the regulations surrounding green building.

Washington D.C. is pondering a new incentive to promote sustainability. The proposal authorizes a grant of $3000 to people who work in D.C. who relocate from their suburban homes into the city, where their commute would demand less energy.

The proposal is part of the D.C. Department of the Environment’s stimulus application for the U.S. Department of Energy’s State Energy Program.

At this point, it is not clear how whether $3000 is enough for people to relocate or how successful the grant program will be. However, creative incentive programs are key to guiding sustainability efforts.

In 2008, Honolulu was ranked as having the worst traffic drive times in the United States. Heavy traffic has not provided a significant deterrent to get Honolulu drivers out of their cars. Incentives, like the D.C. initiative may help reduce congestion, curtail urban sprawl, encourage mass transit use and create a more sustainable city.

Kamehameha Schools received approval from the Hawaii Community Development Authority to proceed with its master plan for 29 acres in Kakaako.

The proposed development includes a 25,000-square-foot plaza along Auahi Street, a 400,000-square-foot Asia Pacific Research Center to house biotech companies and labs and up to 2,750 residences in high-rises, townhomes and lofts.

Kamehameha Schools has touted that one of its goals related to the proposed development is to practice ethical, prudent and culturally appropriate stewardship of land and resources. According to the Master Plan Application submitted by Kamehameha Schools, it is envisioned that Kakaako will become “the most desirable and sustainable urban place in Hawaii to work, live, visit, learn and play.” Through the achievement of these aspirations, a host of public and private benefits will result including:

• The creation of a vibrant living environment with energized street life and active open spaces.
• The expansion of open space opportunities and connections between parks.
• New living options that are close to places of work and provide convenient access to recreational amenities, shopping and cultural
events.
• Enhancement of the image of the city and its urban environs.
• Approximately 550 new reserved housing units to alleviate affordable housing conditions statewide.
• A commitment to and investment in sustainable development in the urban core.
• A community that is pedestrian-friendly and designed to reduce traffic and vehicle use islandwide.

The City and County of Honolulu’s planned rail line is slated to connect with the project with a transit station identified for part of Kamehameha Schools land.

A group of US senators, including Hawaii senator Daniel Akaka recently introduced the Livable Communities Act, a bill that would provide $4 billion to help cities and states pursue transit-oriented development, bicycle and pedestrian infrastructure, and other green transport projects.

The first proposed grant authorizes $400 million over four years for the implementation of regional plans that integrate sustainable housing, transportation, and community development. The second grant program spreads $3.75 billion over three years to assist localities in making their plans materialize, from affordable housing to bike-ped access.

According to Senate Banking, Housing, and Urban Affairs Committee Chairman Chris Dodd’s website, the Livable Communities Act will:

Create competitive planning grants that towns and regions can use to create comprehensive long-term plans that integrate transportation, housing, land use, and economic development.

Create challenge grants that towns and regions can use to implement these long-term plans through investments in public transportation, affordable housing, complete streets, transit-oriented development, and brownfield redevelopment.

Establish a federal Office of Sustainable Housing and Communities at the Department of Housing and Urban Development to administer and oversee the Livable Communities grant programs;

Establish a federal Interagency Council on Sustainable Communities that will include representatives from the Department of Housing and Urban Development, the Department of Transportation, the Environmental Protection Agency, and other federal agencies to coordinate federal sustainable development policies.

Under the current version of the proposed act, the amount awarded under the grant program to an eligible entity that represents all or part of a metropolitan statistical area with a population of 500,000 or more, such as Honolulu, may not exceed $5,000,000. In determining whether to award a grant, the proposed Office of Sustainable Housing will evaluate whether the proposal:

(1) furthers the creation of livable communities;

(2) demonstrates the technical capacity of the eligible entity to carry out the project;

(3) demonstrates the extent to which the consortium has developed partnerships throughout an entire micropolitan or metropolitan statistical area;

(4) demonstrates a commitment to–

(A) sustainable development;
(B) location-efficient and transit-oriented development;
(C) developing new capacity for public transportation and increasing ridership on public transportation;
(D) providing affordable, energy-efficient, and location-efficient housing choices for families of all ages, incomes, races, and ethnicities;
(E) creating and preserving long-term affordable, energy-efficient, and location-efficient housing for low-, very low-, and extremely low-income families;
(F) revitalizing communities, neighborhoods and commercial centers supported by existing infrastructure;
(G) monitoring and improving environmental quality, including air and water quality, energy use, greenhouse gas emissions, and the redevelopment of brownfields; and
(H) coordinating the provision of transportation services to elderly, disabled, and low-income populations;

(5) demonstrates a plan for implementing a comprehensive regional plan through regional infrastructure investment plans and local land use plans;

(6) promotes diversity among the geographic regions and the sizes of the population of the communities served by recipients of grants under this section;

(7) promotes economic benefits;

(8) demonstrates that a Federal grant is necessary to accomplish the project proposed to be carried out;

(9) has a high quality overall; and

(10) demonstrates such other qualities as the Director may determine.

The Livable Communities Act could provide another source of funds to assist in the City and County of Honolulu’s proposed rail project and the associated transit-oriented development that is sure to follow. Nevertheless, the recently introduced Act still has a long road ahead of it.