Green building

Why Go Green?

Incentive programs fuel energy-efficient developments.

Federal, state, and local governments are giving commercial real estate developers and owners many reasons to consider going green, mostly in the form of financial and tax incentives.

The U.S. Energy Act of 2005 provides a number of incentives for sustainable features in both new construction and retrofitted properties. For a summary of these benefits, see CIRE, March/April 2006 Tax Watch. The federal government also offers specific business tax incentives and select mortgage programs for qualified energy-efficient projects. Visit the Commercial Building Tax Deduction Coalition at for an overview of several federal programs.

State tax incentive programs vary widely, with approximately 26 states offering some form of renewable energy tax breaks, according to, a database of state renewable-energy incentive programs. Other state incentives for commercial real estate projects include rebates, grants, and loans.

Many states and local communities encourage, and in some cases, require new developments to meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design standards. Washington, Michigan, and California have passed legislation requiring all government-funded projects to follow LEED guidelines, according to the USGBC. In addition, many counties and cities nationwide including Chicago, Atlanta, Los Angeles, San Francisco, and Seattle require LEED certification on new municipal projects. Private developers in these areas are not required to meet energy-efficient standards for their projects.

Jennifer Norbut

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