Massachusetts Adopts New Energy Code & Stretch Energy Code

The Board of Building Regulations and Standards (BBRS) voted in July to adopt several changes to the energy provisions of the existing building code (8th edition). The BBRS adopted the next edition of the International Energy Conservation Code (IECC 2015) as the base energy code in non-stretch code communities and adopted a new stretch energy code (approximately 15% more energy efficient than the current base energy code), which will automatically take effect in existing stretch code communities without a vote by the city or town.

NAIOP was pleased that the BBRS did not advance the solar rooftop readiness or electric vehicle readiness requirements that had been proposed (and opposed by NAIOP), but disappointed that a new stretch energy code was adopted.

A concurrency period will run from August 12, 2016 – January 1, 2017 which allows persons seeking building permits to submit plans and other required documents that conform to either the energy provisions in effect prior to August 12, 2016, or the amended energy provisions effective August 12, 2016, but not a combination of the two. Beginning January 2, 2017, all building permits and submitted documents must conform to the amended energy provisions only.

Public hearings on the next (9th) edition of the building and energy codes are expected this fall. NAIOP will continue to advocate on behalf of the industry on these important issues.

NAIOP Mourns the Loss of Frank Wuest

NAIOP, its leadership, and its members all Wuest_Frankmourn the loss of Frank Wuest, a long time friend, past President, and avid supporter of NAIOP. We will miss his friendship, enthusiasm for life, and his upbeat attitude. To his family and friends, we give our deepest sympathies.

Frank Wuest died on Saturday, August 13, while participating in a fundraising swim in Narragansett Bay, Rhode Island. An avid and skilled swimmer, Frank was 56 years old, a native of Greenwich, CT, graduate of the University of Connecticut and Harvard Business School, and was President of Marcus Partners, having established a successful career in real-estate investment and development.

Passionate about Boston, its people, and its landscape, Frank loved leading the development of vibrant, mixed-income, mixed-use communities. His work included well known developments such as University Park at MIT and Radian in the Leather District of Boston, which he completed while at Forest City Enterprises, where he was for many years president of the Boston office and Head of the Science + Technology Divisions. He served on both the executive committee and board of directors of A Better City as well as the international advisory board of Harvard Business School’s Real Estate Academic Initiative. Mr. Wuest was the Vice Chair of the Advisory Board of the Boston District Council of the Urban Land Institute (ULI) and was a past President and long time member of the Board of Directors of the Massachusetts Chapter of NAIOP, the Commercial Real Estate Development Association. His kindness, intelligence, generosity, and quick smile will be missed greatly.

Frank became a committed long-distance swimmer in 1998, and was a beloved member of the Cambridge Masters Swim Club at Harvard. He was the recipient of many awards including United States Masters Swimming (USMS) Long Distance All Star, USMS Individual All-American, and many USMS Top-10 swims. Earlier this summer, Frank completed a 10,000M swim for time and was the top male finisher in the annual Charles River Swim.

Frank inspired those around him to do their best. A champion of family and time together, he never let a summer go by without a family reunion. He is survived by his wife, Lyn Duncan; two children, Sam Wuest and Allie Wuest and their mother MJ Vigneau; two stepchildren, Micki Duncan and Elias Duncan; his parents Gail and Frank Wuest of Connecticut, two brothers, Kirk of California and Chris of Connecticut, and his sister Avery Horne of Connecticut.

Funeral Mass and Life Celebration

A funeral mass will be held Saturday, August 20 at 11:00 am at St. Paul Church, 29 Mt. Auburn St., Cambridge, MA. An event celebrating Frank’s life will be held immediately following the mass at the Harvard University Murr Center. Because there is no parking at St. Paul Church, parking will be provided at the Harvard Stadium lot next to the Murr Center at 65 North Harvard St, Boston, MA 02163. Shuttle buses will provide transportation between the Murr Center and St. Paul Church before and after the service.

Immediately following the funeral Mass a luncheon reception and celebration will be held at the Harvard University Murr Center Hall of History, adjacent to the parking noted above.

In lieu of flowers, donations can be made to the Frank C. Wuest Memorial Fund, established through Fidelity’s Charitable Gift Fund. Details can be found below.

——————————————————————————————————————————

Frank C. Wuest Memorial Fund
Make checks payable to:
The Fidelity Charitable Gift Fund
Memo:  The Frank C. Wuest Memorial Fund, Giving Acco
unt #1098999

Checks need to be able to be drawn on a US Bank and should be in US Dollars.
We cannot accept cash like instruments (bank checks, cashier checks, money orders, postal orders, etc.)

Regular Mail Address:                                       Overnight Delivery Address:
Fidelity Charitable Gift Fund                        Fidelity Charitable Gift Fund
Mail zone:  KC1D                                               Mail zone KC1D-FCS
P.O. Box 770001                                                100 Crosby Parkway
Cincinnati, OH 45277-0053                           Covington, KY 41015-9325

Questions?
If you have any questions about the donation process, please call Fidelity Charitable Gift Fund at 1-800-952-4438 or visit www.FidelityCharitable.org. Please reference “The Frank C. Wuest Memorial Fund”, Giving Account #1098999.

The Fidelity Charitable Gift Fund is a 501c-3 tax-exempt organization. Its federal Tax Identification Number is 110303001.

Legislative Wrap-Up

Around 12:30AM on August 1, 2016, the Massachusetts Legislature wrapped up its work for the 2015 – 2016 legislative session. There was a flurry of activity in the final hours of the session. For the remainder of 2016, the Legislature will meet in informal session, but during those sessions bills need the unanimous approval of the limited number of members attending to be approved. Any member of the Legislature can prevent any bill from advancing simply by objecting.

This session NAIOP played offense and defense on a wide range of bills – with a number of significant victories. The following is an end-of session update on some of the bills NAIOP pursued this session:

Economic Development Bill Includes NAIOP Priorities
One of the final bills passed at the end of the session was the Economic Development Bill, H.4569 An Relative to Job Creation & Workforce Development. The bill included a number of provisions supported by NAIOP that will encourage economic activity in Massachusetts including:

  • Extends (from 6 months to 12 months) the period of time within which an applicant must begin construction following the issuance of a building permit or special permit or otherwise be subject to subsequent amendments to local ordinances. Extends (from 2 years to 3 years) the life of a special permit if construction has not commenced.
  • Increases the total number of projects allowed per community under the I-cubed program from 8 to 10 projects.
  • $45 million for the depleted Brownfields Redevelopment Fund.
  • Creates a new starter home program as part of Chapter 40R. Communities that establish a starter home district will be eligible for incentive payments from the state. The program encourages the production of densely located, smaller, single family homes, with a requirement that at least 20% of the homes in the district be affordable to and occupied by households with incomes at or below 100% of AMI.
  • $500 million for MassWorks, which gives municipalities and other public entities grants to support public infrastructure, economic development and job creation.
  • $15 million for a Site Readiness Fund, which will be administered by MassDevelopment and will promote site assembly, site assessment, pre-development permitting and other pre-development and marketing activities. These activities may enhance a site’s readiness for commercial, industrial or mixed-use development.
  • $15 million for an Innovation Infrastructure Fund, which will make grants and loans available to municipalities, private property owners, and business operations for design, construction and improvement of buildings and for equipment to spur innovation and entrepreneurship across the state, including co-working spaces, innovation centers, maker spaces, and artist spaces.
  • $45 million for the Transformative Development Initiative. The TDI Fund makes equity investments in major development projects in Gateway Cities. The fund also supports needed technical assistance for these municipalities.
  • $15 million for the Smart Growth Housing Trust Fund. This funds incentive payments to communities that create dense residential or mixed-use smart growth zoning districts in accordance with the Smart Growth Zoning Overlay District Act.
  • $25 million for the Workforce Housing Production Program.  The pilot program will supplement the Housing Development Incentive Program (HDIP) to encourage redevelopment of underutilized buildings in Gateway Cities.
  • Makes important reforms to the EDIP program
  • Reforms the Urban Center Housing Tax Increment Financing Zone (UCH-TIF), which authorizes cities and towns to utilize tax increment financing to encourage increased residential growth, affordable housing, and commercial growth.
  • Reforms the Housing Development Incentive Program (HDIP), which offers developers a state tax credit for substantially rehabilitating properties for lease or sale as multi-unit market rate housing in Gateway Cities, to now include new construction, as well as rehabilitation of existing structures. The bill further increases the maximum allowable credit under the program from 10% of qualifying expenses to 25% of qualifying expenses.

The Governor did veto a section of the bill opposed by NAIOP that would have created Community Benefit Districts. The proposed language created uncertainty and confusion and would have imposed fees on commercial, residential and non-profit property owners.  NAIOP applauds the Governor and the Legislature for their work on this very important bill.

Energy Bill – NAIOP Objections Removed, Commercial PACE Adopted
Another bill that emerged from conference committee on Sunday, July 31 was the energy bill, H.4568, An Act to Promote Energy Diversity. NAIOP was pleased that all of the sections the organization opposed were removed from the final bill. Those sections included: the Climate Adaptation Management Plan, which went well beyond planning and contained subjective and far reaching language that could have had extremely negative consequences for the Massachusetts economy; electric vehicle requirements as part of the building code; and mandatory energy inspections prior to the sale of a home and the creation and use of a mandatory energy score.  The legislature did adopt Commercial PACE, which is supported by NAIOP and creates a financing mechanism for energy efficiency improvements in commercial properties.

Zoning Legislation – Defeated
NAIOP was extremely pleased that the House did not take up the zoning bill that was passed by the Senate. S. 2311, An Act Promoting Housing and Sustainable Development, was supported by planners and environmental groups and strongly opposed by the real estate and business groups in the state, as well as the Mass Municipal Association. The legislation would have added expense and delay to the land development process in Massachusetts.

Wage Bill – Defeated
NAIOP and a coalition of business groups were also glad to see that the House did not support another problematic bill passed by the Senate, S.2207 An Act to Prevent Wage Theft and Promote Employer Accountability. The bill would have affected all businesses, including anyone involved in construction and development. It was a radical proposal that went far beyond what other states have done. It did not target wage cheaters. Instead, it would have targeted and punished the companies who contracted with them, even if the companies knew nothing or had no way of knowing about any wage violations.

Water Banking – Defeated
Finally, NAIOP brought together a coalition of organizations to defeat H. 657, An Act Providing for the Establishment of Sustainable Water Resource Funds. The bill would have provided communities with the authority to create water banks – essentially an impact fee that unfairly targeted new development and focused on environmental mitigation and water conservation measures rather than water infrastructure upgrades or capacity issues.

Special thanks to all NAIOP members who provided input and expertise on the wide range of issues NAIOP pursued this session. NAIOP will now begin drafting its legislative agenda for the 2017 – 2018 session by meeting with members to determine how to best advance the goals of the industry.

Update from Beacon Hill

Formal sessions for the 2015-2016 legislature will end on Sunday, July 31. Since many legislators attended the Republican National Convention last week or the Democratic National Convention this week, a lot of action and major votes are expected this weekend as formal sessions will be held on Saturday and Sunday. NAIOP has been actively lobbying on a number of important bills and will continue to do so through the final moments of the session on Sunday night.

Much of NAIOP’s advocacy has been devoted to fighting bills that would do harm to the industry and discourage economic development. Among those bills are the zoning and wage theft bills, which were both passed by the Senate. NAIOP has been working to educate members of the House on the serious consequences these bills would have on economic development if passed.

This weekend the Legislature is expected to pass a number of bills that are now in conference committee and are priorities for both the House and Senate including: the ride-hailing industry bill; a municipal government reform bill; the non-compete legislation; an omnibus energy bill; and an economic development bill.  NAIOP has weighed in on the energy bill by supporting the positions of organizations like AIM on the procurement issues, while also supporting PACE language, and opposing the climate adaptation management plan (CAMP) language, as well as mandatory energy scoring and energy audit requirements. A letter to conference committee members was sent last week highlighting our concerns with the most problematic sections of the bill.

NAIOP is also advocating for the inclusion of language in the economic development bill that was included in the House version. Specifically, NAIOP supports important changes to I-cubed, increased funding for MassWorks and the creation of a new starter home program.

In short, there is one thing that is certain about the final hours of the legislative session – absolutely nothing is certain. Stay tuned for future updates from Beacon Hill.

Senate Energy Bill to Require Home Energy Audits & Labeling

Tomorrow the Senate will be voting on its version of an energy bill that passed the House in early June. The bill includes a new requirement that single family homes, multifamily properties with less than 5 units, and condominiums must undergo an energy audit prior to the property being listed for sale. The results of the audit would need to be disclosed when the property is listed. The bill also requires the Department of Energy Resources (DOER) to establish a home energy rating and labeling system, which would be based on, but not limited to, a property’s energy consumption, energy costs, and greenhouse gas emissions. The property’s energy rating and label would also need to be disclosed. In addition, DOER would track and publicly report the number of home energy audits conducted and energy ratings and labels issued.

NAIOP has serious concerns with the impact this could have on the housing market, particularly in low-income communities where homeowners may not have the means to make upgrades and properties would be potentially devalued with a low score/label. NAIOP supports the Mass Save program and believes that incentives, not penalties, will do more to address energy efficiency in the Commonwealth.

A number of concerning amendments to the bill have also been filed. Amendment #8 is the climate change legislation that was passed by the Senate earlier this year. NAIOP is strongly opposed to this language due to the confusing and vague language it contains and the substantial adverse impact it would have on development. It would require all “commonwealth certificates, licenses, permits, authorizations, grants, financial obligations, projects, plans, actions, and approvals for any proposed projects, uses, or activities in and by the commonwealth” to be consistent “to the maximum extent practicable “with a yet to be developed climate plan. Clearly, this language could delay and potentially halt countless public and private projects.

Amendment #68 would mandate electric vehicle charging stations. NAIOP does not believe the building code is the right place to advance the growth of specific technologies or sectors of the economy.

Following the Senate’s vote, the bill will go to conference committee where members will have to agree to compromise language. That version of the bill would then need to go back to the House and Senate for a vote before the end of the session on July 31.

NAIOP Supports Privatization of MBTA Services

Yesterday, NAIOP testified at the MBTA Fiscal and Management Control Board meeting to urge the Board to support the proposed privatization of MBTA services allowed under Chapter 46 of the Acts of 2015. As one of the organizers of the Coalition for a World-Class Public Transit System, NAIOP supported the passage of this important legislation in response to the MBTA’s complete shutdown last winter.

Many of the T’s operational impediments have originated from the inability to efficiently manage many of the non-core services. By looking at the privatized options for some of these services, the MBTA can focus on those operations of greatest value throughout the organization.  Utilizing all the tools that are available to the Board at this time is critical to balancing the operating budget and achieving necessary efficiencies.

At the hearing, NAIOP urged the Board to stay on course. There has been, and will continue to be, considerable pushback. However, getting the T back on sound financial footing and increasing the system’s reliability, should be the top priorities.

NAIOP thanks the members of the Board for all the good work they have done and their tireless commitment, focus, expertise and long-term vision to fix the T once and for all.

ViewPoint: A new stretch energy code is not justified

This OpEd appeared in the Boston Business Journal on June 3, 2016.

In March 2015, Governor Charlie Baker signed Executive Order 562, initiating a comprehensive review process for all regulations. Only those regulations which are mandated by law or essential to the health, safety, environment, or welfare of the Commonwealth’s residents would be retained or modified, making Massachusetts a more efficient and competitive place to live and work.

Agencies must demonstrate, in their review, that there is a clearly identified need for governmental intervention; the costs do not exceed the benefits; a regulation does not exceed federal requirements; less restrictive and intrusive alternatives have been considered and found less desirable; and the regulation does not unduly and adversely affect the competitive environment in Massachusetts.

Based on these specific criteria, the business community is concerned that the Board of Building Regulations and Standards (BBRS) is currently considering a new Stretch Energy Code as it develops the 9th edition of the statewide building code. Besides the fact that this Stretch Code undermines the statutory requirement that there be a uniform State Building/Energy Code, there is no good reason for it. This proposed energy code is unnecessary and fails the regulatory review standards, and the Baker Administration and the BBRS should not advance it.

The Stretch Energy Code was originally adopted in May 2009, despite strong opposition from the business community.  The code required commercial and residential construction in those communities that voted to adopt it to be approximately 20% more energy efficient than the statewide code. The new stretch energy code would require a 15% increase in energy efficiency over the current code. The Stretch Code has caused confusion among local building inspectors and developers.  Due to this and several other reasons, a new version of the Stretch Energy Code has never been adopted, even when the statewide code changed.  In fact, at the close of the Patrick Administration, the BBRS voted not to advance a new draft of the Stretch Energy Code.  However, in April 2015, this decision was reversed.

Massachusetts is already the most energy efficient state in the nation, with the most aggressive energy efficiency targets.  Furthermore, Massachusetts will be one of only a handful of states in the nation to adopt the 2015 International Energy Conservation Code (IECC) statewide.  Since the Green Communities Act requires the adoption of the latest IECC (every three years), the Commonwealth’s position as a national leader in energy efficiency will be ensured even without a Stretch Code.  Anything beyond that is overly burdensome and creates a significant competitive disadvantage for Massachusetts.

It is important to note that there is no statutory requirement to adopt or update a Stretch Energy Code.  There is no mention of it in any statute, and it is only the Department of Energy Resources’ (DOER) policy that encourages the creation of this code.

According to DOER, the changes to the Stretch Code would take effect automatically in stretch code communities without any local vote.  Many municipalities had no idea they would be subject to an automatic upgrade.

The business community continues to support a uniform statewide building and energy code.  We believe a new Stretch Energy Code is unnecessary, will hinder economic development, and would impose an unfair and difficult burden on local building officials and the construction industry.  We urge the Baker Administration and the BBRS to eliminate the Stretch Energy Code, once and for all, and acknowledge the latest version of the IECC as the only energy code in Massachusetts.

David Begelfer is the CEO of NAIOP Massachusetts, the Commercial Real Estate Development Association.