Latest news with #C-PACER
Yahoo
03-03-2025
- Business
- Yahoo
Ayotte signs bill to speed up financing for energy-efficient developments
Gov. Kelly Ayotte signs Senate Bill 4, a bill to revamp the state's C-PACER program to allow for easier financing of energy-efficient housing developments on Thursday, Feb. 27, 2025. (Photo by Ethan DeWitt/New Hampshire Bulletin) In 2010, New Hampshire lawmakers passed a law intended to make it easier to finance and build apartment buildings with energy-efficiency systems. The mechanism — known as C-PACER — is widely popular; 40 states have passed similar programs, according to the advocacy group PaceNation. But 15 years after it passed in New Hampshire, no cities or towns here have implemented the financing tool, despite a high demand for housing. Observers say the New Hampshire program was poorly designed and unfeasible, putting too much logistical work onto towns. Now, the program is getting a revamp. On Thursday, Gov. Kelly Ayotte signed Senate Bill 4, which will replace the existing program starting in 2026 and put implementation into the hands of the New Hampshire Business Finance Authority. It was Ayotte's first bill signing since becoming governor, and one that some say could help speed up long-needed housing development. 'By making it easier for private sector partners to finance projects and removing the administrative burden on municipalities, we're taking an important step in the right direction to increase the supply of attainable housing for our growing workforce,' Ayotte said in a statement. C-PACER, which stands for 'commercial property assessed clean energy or resiliency' is meant to give developers and towns a way to work together to lower some of the costs to build new housing or upgrade existing housing. If a property owner is interested in adding energy efficiency improvements to new or existing property, they can use C-PACER to raise funding from private lenders. C-PACER allows those lenders to apply a special assessment lien onto the property, which then attaches to the property and must be paid off by any subsequent property owners. The idea: The energy efficiency upgrades will bring savings to the developer or property owner in the long run, and those expected savings ensure that they can pay off the loans they received through the C-PACER program. 'C-PACE effectively takes every energy component part of a building project, takes it out of the first mortgage and puts it in a second mortgage that has the equivalency of a, or the priority of a, municipal tax lien,' said New Hampshire developer Steve Duprey at a Jan. 9 Senate Commerce Committee hearing for Senate Bill 4, using an alternative acronym for C-PACER. That's helpful because it means the first mortgage is much easier to obtain, Duprey said. It means that payments for all of the energy pieces of a development can be spread out over a longer period of time — sometimes 30 to 40 years. And because the lien attaches to the property, lenders have a higher chance of recouping their investments. To Duprey, the law could be a significant tool to address New Hampshire's housing shortage. 'This will be one of the most effective things you can have, because it will reduce those down payments and allow developers — profit and not for profit — to generate more projects,' Duprey said. Both the 2010 law and the 2025 law require that towns opt in to the C-PACER program; they must adopt a resolution that explicitly authorizes this type of financing. But while well-intentioned, the 2010 law was unworkable for most towns, according to James Key-Wallace, executive director of the Business Finance Authority. 'Under the old law, C-PACE was asking all the municipalities in New Hampshire to do all the work, and each do it on their own,' Key-Wallace said in an interview Thursday. 'Each town had to develop and vet a list of qualified contractors (and) engineers, do all the billing for all the borrowers — the municipality had to chase down delinquent borrowers.' Effectively, Key-Wallace said, the towns had to act as lenders. 'Some small towns are just volunteers,' he said. 'It was an unreasonable ask.' This time around, Key-Wallace's agency is stepping in. The new law requires the Business Finance Authority to develop a C-PACER application process for developers to prove that the project really will bring about energy savings or environmental benefits, and that it 'provides a benefit to the public.' The law allows the BFA to contract with a private or governmental authority to carry out administration of the program. Should a city or town opt in to the program by passing the resolution, it may then designate one or more 'energy efficiency and clean energy districts,' where the C-PACER lending agreements are allowed. The municipality can make their entire town or city into a district if they desire. After that, if developers want to pursue C-PACER financing for an energy-efficiency project, a renewable energy project, or an environmental resiliency project, they can apply to the BFA. The developers must carry out engineering studies showing that the project is both feasible and effective at its goal. Then, with approval from the BFA, the municipality must sign off on a final financing agreement, at which point the special assessment lien is created. The municipality is responsible for collecting payments on the lien on behalf of the developers, but is allowed to outsource that task to a contractor. As Ayotte signed the bill, she was surrounded by major players who supported the bill, including the Business and Industry Association, the New Hampshire Municipal Association, and the New Hampshire Bankers Association. Kristy Merrill, president of the Bankers Association, said in an interview that the Bankers Association had pushed for guardrails for banks to be able to pull out of financing ahead of the final agreement. Those guardrails are included, she said. It is unclear how much take-up there will be among cities and towns for the C-PACER program. But Key-Wallace says he expects there to be pent-up demand now that the program has been retooled. Developers are interested, and they could lobby towns to follow suit. Key-Wallace says his department is ready to handle the administrative efforts. The BFA is tasked with helping businesses obtain a variety of loans, bonds, and financing mechanisms. In the coming weeks, the agency will produce a guidance document for municipalities and developers to learn more about how the new process works, Key-Wallace said, though towns can't move on it until next January. 'We expect a lot of interest,' he said.
Yahoo
28-02-2025
- Business
- Yahoo
Ayotte signs first bill to promote more housing
Feb. 27—A bill that could reduce upfront costs for housing developers by carving out the energy portion with special financing became the first one Gov. Kelly Ayotte signed into law Thursday. New Hampshire will join 36 other states that legally allow developers to deploy Commercial Property Assessed Clean Energy and Resiliency agreements (C-PACER). "Housing is our most critical economic issue, and this legislation is another tool in our toolbox to help bring even more housing development to New Hampshire. I was glad to sign SB-4 to create a C-PACER program in our state," Ayotte said in a statement. "By making it easier for private sector partners to finance projects and removing the administrative burden on municipalities, we're taking an important step in the right direction to increase the supply of attainable housing for our growing workforce." State Sen. Dan Innis, R-Bradford, who is chairman of the Senate Commerce Committee, was the lead sponsor of the bill (SB 4). "(C-PACER) is designed to help new housing projects by reducing the upfront costs through financing developments and freeing up capital for other projects," Innis said. Both House Speaker Sherman Packard and Senate President Sharon Carson, both R-Londonderry, joined in on celebrating the legislation becoming law. "This bill is not just about building housing, it's about strengthening our economy and providing long-term solutions that benefit all Granite Staters," Packard said. Eligible spending includes energy-efficient upgrades, building insulation, cost-effective renewable energy and water conservation measures, officials said. While housing is the primary focus, any commercial property can use C-PACER, including manufacturing plants, office buildings, retail buildings and multifamily housing projects. The legislation had universal bipartisan support. It cleared the state Senate, 24-0. The House passed it on a voice vote. Sen. Tara Reardon, D-Concord, a retired executive with the New Hampshire Community Loan Fund, joined Innis in writing the bill. "Innovation and creativity in financing is crucial for housing development, particularly in a housing crisis," Reardon said. Starting Jan. 1, C-PACER will replace a law on energy efficiency and clean energy districts that state officials said proved to be unworkable. Energy spending becomes similar to a tax lien James Key-Wallace, executive director of the Business Finance Authority, said the existing law requires every participating town to write its own documents, run its own programs and do its own billing. Under the new reform, the BFA will serve as the central administrator to allow municipalities to take advantage of the voluntary option at no cost. Each city and town must decide to opt in to the program. The existing law required the provider to file a mortgage, Key-Wallace explained. Under thes plan, the financing for the energy part of the project is part of the developer's tax bill that is repaid over time. Currently, 22 states have active programs converting hundreds of millions a year in energy spending into capital investments to make projects more affordable, Key-Wallace said. Steve Duprey, a former Republican state chairman and Concord developer, said during a recent hearing that this will make projects more feasible for builders. With a $10 million project, Duprey said a lender might ask the developer to come up with $3 million as a down payment and finance the other $7 million in a first mortgage. With a $2 million energy portion of the project separated out, this would lower that mortgage to $5 million and make the energy spending like a tax lien, Duprey said. "As a result, a builder may only need to put down 15 to 20 percent," Duprey told Innis's committee. Duprey called it the "best tool to increase the amount of housing" and both profit and non-profit developers could make good use of it. A broad coalition of groups backed the bill, including the New Hampshire Homebuilders, New Hampshire Realtors, Clean Energy N.H., the N.H. Lodging & Restaurant Association, the N.H. Municipal Association and the New Hampshire Business and Industry Association (BIA). BIA officials announced a press conference for Tuesday to unveil the Housing Supply Coalition of 20 member groups that will outline their issue agenda for the 2025 legislative session. klandrigan@
