San Francisco Kicks Off Green Loan Program for Property Owners

Dees Stribling, Contributing Editor

San Francisco–The city of San Francisco has officially launched GreenFinanceSF, a program to provide loans to property owners, including any qualified multifamily property in the city, for environmentally friendly improvements. Among other improvements potentially covered by the program are solar panels, double-paned windows, solar water heaters, geothermal heat pumps, and low-flow toilets and shower heads.

The lending program is unusual in that loan attaches to the property, allowing owners to pay it back over time via a special line item on the property tax bill. The program is structured through a new citywide Mello-Roos Special Tax District; owners apply to join the district and, if approved, file documents authorizing the levy of a special tax against their property.

If the owner sells the property, the balance of the loan becomes the responsibility of the new owner. The special tax payment period will generally match the expected useful life of the projects, so the property doesn’t owe taxes after the expected gain in energy or water savings disappears.

“San Francisco’s green financing program will help property owners overcome the large up-front costs of major environmental improvements to their buildings,” San Francisco Mayor Gavin Newsom said in a statement. “These improvements will save property owners money on monthly utility bills, increase property value, and will help the city meet its aggressive greenhouse gas reduction goals.”

Residential and commercial buildings of all sizes are eligible. Project qualification criteria for residential properties focus primarily on the scope of projects proposed, the property’s tax and mortgage payment history, and the value of the property relative to its outstanding debt. Commercial properties may be subject to other criteria.

The city has compiled a list of contractors and energy auditors that participants in the program may use. One of the program’s objectives is to establish a ready supply of workers skilled in the energy and water projects common to San Francisco building types, with linkages to workforce development programs in an effort to grow the city’s green economy.