Journal of Property Management - January/February 2010

IN SESSION

althOuGh enerGy and cliMate chanGe leGislatiOn tOOk a Backseat tO healthcare deBates in late 2009, Congress will focus again this year on passing legislation to reduce greenhouse gas emissions.

In June 2009, the U.S. House of Representatives passed H.R. 2454, the American Clean Energy and Security Act.

The original draft would have: ( 1) required energy audits for all buildings and homes, ( 2) mandated buildings be labeled with an energy rating, and ( 3) the label be disclosed at time of lease and/or sale.

IREM lobbied against these provisions and instead asked Congress to support positive incentives for retrofitting buildings with energy-efficient improvements, such as those included in H.R. 1778 by Rep. Peter Welch (D-VT). This proposal was later approved as an amendment to H.R. 2454.

Additionally, the approved House bill does not require audits; limits labeling to new construction only; and prohibits the EPA from regulating commercial buildings

enerGy, cliMate chanGe reFOrM, PriOrities FOr cOnGress aGain

under the Clean Air Act. Overall, the real estate provisions in the version passed were much more favorable to the commercial real estate industry.

On November 5, 2009, the Senate Environment and Public Works Committee passed a similar climate bill, calling for a 20-percent cut in greenhouse gas emissions from 2005 levels by 2020. This bill still needs to be presented and voted on by the full Senate. If the Senate passes its own version of an energy and climate bill, a House-Senate conference committee will be held to reconcile differences between the two bills.

IREM and NAR will continue to work with members of Congress to ensure the provisions in any energy/

climate change legislation remain favorable to the commercial real estate industry.

The U.S. Department of Treasury announced that five private investment funds will invest $3.07 billion in the department’s long-awaited program to purchase toxic real estate-related assets.

Under the Public Private Investment Program (PPIP),
the Treasury will match the $3.07 billion investment dol-
lar for dollar. Additionally, the federal government will
provide debt financing, which will increase the purchas-
ing power of all five groups to $12.27 billion. The five
firms investing in PPIP are BlackRock Inc., Wellington
Management Co., AllianceBernstein, TCW Group and
Invesco Ltd.
PPIP, a government program aimed at purchasing
soured assets that have contributed to the tight credit
market, has gotten off to a slow start since it was
announced earlier this year. Nonetheless, the five firms
participating in the program will help banks sell toxic
real estate assets, including commercial mortgage-
backed securities (CMBS), which is an encouraging sign
for the commercial real estate industry.