by Dave Townsend and Byron DeLear
Missouri is now in a position to lead on one of the most successful public-private partnerships and economic drivers in recent memory. As one of the early state adopters of the Property Assessed Clean Energy program, also known as “PACE,” the Show Me State has the most successful and diverse PACE programs in the Midwest, creating good-paying jobs and upgrading infrastructure without public spending. Perhaps most noteworthy is the fact that PACE programs in Missouri are available for both commercial property owners and homeowners — one of only three states in the U.S. to do so.
What makes PACE innovative, is that it provides 100% financing for critical infrastructure upgrades without negatively impacting public budgets. It also makes it easier for home and building owners to make smart investments that reduce their energy use, cut pollution, save on utility bills and treat the idea of renewable energy as an aspect of good asset management, not merely a “lifestyle choice.”
Through Missouri PACE, property improvements such as high efficiency heating and cooling systems, LED lighting upgrades, solar panels, high efficiency doors, windows, and even energy efficient roofing can be financed over longer terms (up to 20 years) with special property assessments. These kinds of improvements are popular with property owners because they typically pay for themselves through savings—and PACE makes it possible for these upgrades to be installed today, rather than tomorrow.
Missouri PACE has proven to be good public policy. Energy technology is always evolving and reaching higher levels of efficiency each year. But where state budgets may be overburdened, PACE programs solve the problem of improving infrastructure by paying for the investment with private capital. In Missouri, we’ve all grown accustomed to seeing these advances in the transportation sector with higher fuel efficiency standards locked in by a combination of market incentives (better gas mileage) and government mandates such as CAFE (Corporate Average Fuel Economy) standards and regulations. However, expanding government mandates concerning energy standards for homes and buildings may not be feasible. Through PACE, property owners benefit by upgrading their properties, lowering their utility bills, and increasing the value of their homes and businesses; while Missouri benefits by increased energy independence, lower stress on the energy grid, and a safer, higher quality of housing and buildings stock. Simply put, PACE allows for the updating and modernization of our private sector infrastructure without increasing government mandates and spending.
It’s no doubt that real estate will be positively impacted by the Missouri PACE program and there are many reasons for Missouri real estate professionals to also embrace PACE. The program has already been instrumental in refreshing some of our aging housing stock. In fact, with nearly 40 percent of all owner-occupied homes in the country being built in 1969 or prior, PACE is providing an opportunity for these aging homes to be brought up to current efficiency standards, raising property values, and improving local real estate markets. Property improvements that are financed through the program are required to pay for themselves through energy savings and other economic benefits. This allows for homeowners to enjoy upgrades now while payments are offset by savings. And, to ensure the viability of the program, only responsible homeowners who are up to date on property taxes, have no bankruptcies, and no involuntary liens of more than $1000 are eligible to participate in the program. Real estate professionals benefit from being able to assist sellers to obtain higher resale value for homeowners during transactions. This in turn benefits the sellers, the agents through higher commissions, and the purchasers. Educated and energy-conscious consumers of the future will seek out properties that offer the benefits of these improvements.
Missouri’s PACE programs are also putting people to work. It’s part of a statewide effort that has seen an over 5 percent clean energy job growth – more than three times that of Missouri’s overall economy. With $50 million in direct economic activity, more than 750 good-paying Missouri jobs have been made possible by our state’s PACE programs—all without using a single tax payer dollar for project financing.
Through job growth, improved infrastructure and home improvement projects, PACE has proven to be an innovative tool in addressing the critical needs of Missourians. Ultimately, it’s imperative we continue to adopt effective programs like PACE if we want to stay competitive, innovative, and keep our economy moving forward.
Dave Townsend is with RE/MAX Results and has over 28-years of real estate experience in Missouri and is active with the St. Louis Association of Realtors and Missouri Realtors.
Byron DeLear is Central Regional Executive – Midwest for Ygrene Energy Fund, a leading national PACE provider. DeLear has designed and administers PACE programs in Missouri and Arkansas.
For more info: There are several active PACE programs in Missouri serving different areas including Set the PACE St. Louis for City of St. Louis property owners; Missouri Energy Savings Program for St. Louis County; and two programs covering areas around the state: Show Me PACE and the Missouri Clean Energy District.