DOB Also Issues New PACE Rules
The Climate Mobilization Act also set up a brand-new financing program, known as Property Assessed Clean Energy (PACE). This program is designed to allow building owners to take out long-term, fixed-rate loans to pay for energy efficiency upgrades. These loans will be paid back through an assessment on the property’s tax bill assessed over the life of the improvement.
As long-time readers of this Client Advisory will know, the PACE program has suffered multiple delays and false starts in the three years since it was introduced. The latest reboot occurred last month. It includes new guidance for borrower and site eligibility and other aspects of the process, as well as approved forms of loan documents. There is hope that the program will finally take off and provide a new source of financing to NYC buildings as they strive to meet their CMA targets.
There remain serious limitations on the PACE program, in that it is not available for new construction and is not a feasible option for most condominiums. The loans also require consent by existing mortgage lenders, which consent will not necessarily be forthcoming. We will continue monitoring to see if the program is able to address some of these issues.