The Climate Action and Outreach department of the city of Iowa City, in collaboration with the Neighborhood and Development Services staff, is proposing a pilot program to incentivize the construction of energy-efficient homes by local builders in the form of an $1,800 grant. An estimated 30-40 permits are issued annually for residential new construction in […]
The Climate Action and Outreach department of the city of Iowa City, in collaboration with the Neighborhood and Development Services staff, is proposing a pilot program to incentivize the construction of energy-efficient homes by local builders in the form of an $1,800 grant.
An estimated 30-40 permits are issued annually for residential new construction in Iowa City, and the grant is a means to incentivize residential construction that meets enhanced energy standards – this can include single-family residences, duplexes, and townhomes.
After talking extensively with home builders, realtors, area home energy raters and building inspectors, the Climate Action team suggested giving a small grant for homes that receive positive reports on their energy efficiency in lieu of rebates for permit fees.
Rebates cause more headaches
The advantage of grants instead of fee rebates means the program can provide a predetermined award amount that is easily accounted for in construction budgets, while easing administrative burdens on city staff.
“Of all the aspects of the proposed program, this received the most enthusiastic
support from builders,” said an Oct. 30 city memo. Last year’s observations indicated builders “lacked enthusiasm” for permit fee rebates. Additionally, administrative complexity related to the assessment of fees and lack of clarity as to how rebates would relate to these fees, as well as the need for verification of program compliance, provided additional hurdles.
According to Sarah Gardner, Iowa City climate action coordinator, the grants are dispersed in small enough amounts that it does not require individual votes from the city council, though the council is aware of it and supports it.
“It actually flows out of a priority project identified by the city council in the city’s strategic plan, so the mandate to develop it came from council. The program will draw upon the city’s prior emergency levy for climate projects to fund the grants,” she said, in an email to the CBJ.
Homebuilders Association promoting grant through Parade of Homes
City staff have been working closely with
the Homebuilders Association to develop the program, and the HBA is in turn helping to promote it.
“We’ll be presenting on the program to the HBA membership at a meeting on Dec. 12, and we’ve partnered with the HBA to promote the program through the Parade of Homes next year, in which the best scoring home will receive a special award,” said Ms. Gardener. “In addition, each time a permit is pulled for new residential construction next year, we’ll be mailing the builder information about the program to encourage participation.”
A usual HERS certification costs $600. The suggested $1,800 grant would not only pay for the certification but also give an extra $1,200 incentive. The goal is to make it simple for builders to get the grant, encouraging more builders to participate. This approach aims for broader involvement compared to a big rebate that might only benefit top-tier construction.
The pilot program will launch in January 2024 and run for the entirety of the year. "We’re hoping if it’s successful, we’ll be able to extend the program into future years," said Ms. Gardner.
The grants will be dispersed to builders who obtain a Home Energy Rating System (HERS) of 52 or better. HERS rates homes on a scale of 0-150, and the lower the HERS rating a home obtains, the more energy efficient it is.
To claim funding, builders must receive a HERS rating from a certified Home Energy Rater
anytime between project start and drywall installation, and submit HERS certification (and W9 if first-time applicant) to ClimateAction@iowa-city.org. Rewards are issued in two weeks' time or less.
