Guest Post by Nate Kline, publisher of GreenBldgBlog.com.

I’m not even talking about the energy savings, cost savings and environmental benefits though.  I’m going to focus on tax credits. A number of places have mandated green roofs under certain circumstances; Toronto, Tokyo and Switzerland to name a few. Another approach that’s often more agreeable to building owners and developers is the voluntary opportunity to receive tax credits.

The program I’m most familiar with and closest to home is the New York State incentive passed by the state legislature last year. It offers building owners in New York state cities with a population of one-million plus (i.e. New York City only) a tax credit equal to $4.50 per ft2 when they install a green roof. Generally, this would cover about 25% of the costs (materials, labor, installation and design) associated with building a green roof. The one-year property tax credit is capped at $100,000 and the green roof must have at least two inches of growing media and cover at least 50 per cent of available rooftop space.

The environmental benefits of the legislation are measurable, according to Dr. Paul S. Mankiewicz, Gaia Institute Executive Director, and board member of the New York City Soil & Water Conservation District. “Each 10,000 square foot green roof can capture between 6,000 and 12,000 gallons of water in each storm event. The evaporation of this rainfall will produce the equivalent of between a thousand and two thousand tons of air conditioning, enough heat removal to noticeably cool ten acres of the City.”

Just think what it would be like if all rooftops supplemented the green space in New York or your city. Despite its massive size and positioning as the heart and lungs of New York City, Central Park only covers 843 acres or 1.32 mi2 (3.4 km2). Meanwhile, Manhattan contains over 950,000 buildings spread over the island’s 22.96 mi2 (59.5 km2). Certainly streets, parks and other non-roof structures take up some space but all those roofs could create a network of green space that is multiples of Central Park’s size.

There are variety of other existing and proposed programs around the U.S.A. This is likely not an exhaustive list so feel free to comment and provide links to additional information.

Existing Programs

Chicago: Developments with green roofs receive fast track permitting and the city provides a number of favorable financing options. A grant program offers up to 50% of the cost or $100,000, whichever is greater and the green roof must cover 50% of the net roof area of the building.

Los Angeles: Beginning on July 1, 2002, all City of Los Angeles building projects 7,500 ft2 (700 m2) or larger were required to meet LEED “Certified” standards. Green roofs can contribute several LEED points.

Minneapolis: They charge stormwater usage fees to commercial and residential property owners based the amount of impervious surface area on the building. However, buildings that improve stormwater management, such as by installing a green roof, receive a 50% credit against these fees.

Philadelphia: Provides “a credit against the Business Privilege Tax of 25% of all costs actually incurred to construct the Green Roof, provided that the total credit shall not exceed $100,000.” The green roof must cover 50% of the rooftop or 75% of eligible rooftop space.

Portland: Over 20 years ago, Portland added a floor area ratio (FAR) bonus to its building code. This is one of my favorite incentives because the economics are so positive. Builders get permission to build extra square footage (either up or out) by employing favored practices and the value of that square footage allows them to recoup additional construction costs and even generate greater profits alongside the green benefits. This FAR bonus allows developers three extra square feet per square foot of green roof that covers a minimum of 60% of the roof. Portland also offers a grant reimbursement up to $5 per square foot to help reduce stormwater infrastructure, a stormwater fee offset, and requires city-owned facilities to have 70% eco-roof coverage.

San Francisco: Like Chicago, they also provide expedited permits for green buildings. The Green Building Ordinance implemented in 2008 sets standards for CO2 emissions, energy usage, reducing stormwater runoff, and usage of recycled materials in newly constructed urban residential and commercial buildings. Green roofs reduce CO2, energy usage and stormwater runoff and often contain recycled materials.

Seattle: Like Portland, provides an FAR bonus. In 2008, buildings were allowed to begin collecting and reusing stormwater in their buildings (which can be aided by green roofs). Lastly, the Green Factor program requires green space/planted areas in certain building zones, thus encouraging green roof construction.

Washington, D.C.: The Chesapeake Bay Foundation is using a $300,000 settlement from the D.C. Water and Sewer Authority to provide green roof grants that incentivize building owners to improve stormwater management in the Anacostia River watershed area. Individual grants fund up to 20% of the green roof’s capital cost.

Proposed Programs

Boston: City Council introduced legislation to provide a one-time tax incentive of $5 per ft2 up to $100,000 to residents and business owners who install green roofs.

Pennsylvania:
Proposed a personal income tax credit to incentivize people and small businesses to construct green roofs. The credit would cover 25% of the construction and maintenance costs up to a maximum of $100,000 per year for up to 6 years.

U.S.A: The Clean Energy Stimulus and Investment Assurance Act provides a variety of tax credits and incentives; section 506 provides a 30% tax credit to residential and commercial property owners who undertake new or retrofit green roof projects provided 50% of the roof area is covered.

© 2009, Nate_Kline. All rights reserved. Do not republish.

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Author: Nate_Kline (1 Articles)

Nate Kline is a consultant and the publisher of GreenBldgBlog.com. He is particularly adept at financial and strategic analysis and has developed recent expertise in green building/renewable energy. Knowledgeable in many other industries, Nate has done sales and marketing for small businesses and startups and worked on large transactions both as an advisor and as a principal. Formerly, at Fortress Investment Group, he specialized in evaluating, acquiring and managing the groups’ transportation investments (5 deals worth over $9 billion). Before this, he worked on mergers & acquisitions at Merrill Lynch, completing several domestic and international transactions worth $15 billion. Nate graduated concurrently with a B.S. in Finance and a B.A. in Economics with Honors as a Schreyer Scholar from Pennsylvania State University in 2003. In 2008, Nate co-founded the Lions on Wall Street Alumni Society and serves on its Board of Directors.