Tax breaks, code updates touted for energy efficiency

October 6, 2008
| By Diane Ivey |
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LANSING — As part of an initiative to jump-start the faltering construction industry, the Michigan Association of Home Builders wants the state to give tax breaks to people who remodel their homes or businesses to increase energy efficiency.

The tax incentives, up to $10,000 per commercial or industrial building and $3,000 per home, are designed to tie in with other green energy efforts in the state, said Rep. Steve Bieda, D-Warren, who is sponsoring two bills promoting green renovations.

Co-sponsors include Reps. Kathy Angerer, D-Dundee; Paul Condino, D-Southfield; James Marleau, R-Lake Orion; Coleman Young, D-Detroit; Marc Corriveau, D-Northville; and Andy Meisner, D-Ferndale.

"We want to be proactive about where the economy is going," Bieda said. "We want to promote and encourage the construction of energy-efficient buildings. We want to help develop an industry and position Michigan as its leader."

However, an energy expert at the Michigan Environmental Council says more up-to-date building efficiency codes would be better for the environment and save money for homeowners and business owners. An upgrade to building codes was proposed in 2005, but the association sued the state in an attempt to block the changes from passing in the Legislature, according to David Garr, energy program director for the Michigan Environmental Council.

"We are three years behind where we should be in upgrading these codes," he said.

The number of home building permits in the state is at a 26-year low, according to association chief executive officer Bob Filka. And the industry has lost more than 60,000 jobs in the last three years, he said.

"We aren't looking for a handout," Filka said. "What we are saying is, give Michigan homeowners and consumers a break. Give them an incentive and a reason to invest in and improve their homes."

But Garr said tax breaks for energy-efficient remodeling should be part of a "larger workhorse," namely, revised building codes.

"Michigan has abysmal building codes," Garr said. "We are well behind the curve, but it's something we can change.

"We know how to make buildings that are cost-effective and efficient, and this will become more important as fuel prices rise and energy expenditures increase," he said.

"We should act now and bring our codes up to speed."

Bieda agrees. "It's something that could help as we develop tax incentives," he said.

Homes should be built to environmentally stable construction standards, as defined by the U.S. Green Building Council, Bieda said. Homeowners and business owners would need to have their construction sites inspected by an accredited professional.

More than 85 percent of homes in the state are more than 20 years old, Filka said. Many don't have adequate furnaces and water heaters or proper insulation, he added.

Tax incentives can be useful, Garr said, but they should be provided within legislation adopting modernized building codes.

Efficiency codes regulate insulation, roofing, walls, ceilings and glass to ensure proper heating, air conditioning and ventilation, he said.

Bringing the codes up to date means saving money for consumers, Garr said, because it would help ensure they're not running bigger electrical equipment than they need, or living in a drafty house where expensive heat simply escapes out the windows.

"There's no excuse for not building efficient homes," he said.

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