The short session ended with one little success for people trying to start a PACE program in Asheville. PACE stands for, among other things, Property Assessed Clean Energy. The program, as implemented in Sonoma and Boulder counties, allows local governments to loan sums to households for green retrofits. The loans would then be repaid with a special assessment added to the homeowner’s property tax bill. These programs have since been suspended in Sonoma and Boulder.
After Asheville city council directed staff to design a pilot PACE program, Fannie Mae and Freddie Mac, the government-chartered organizations that buy and sell over half the nation’s mortgages, announced they would have nothing to do with properties holding a PACE lien. They claimed the liens would legally take precedence over mortgages should a homeowner default, and by taking out a senior lien, a person would be defaulting on his mortgage.
This came as grim news to President Obama, who had just asked for $150 million in porkulus to go toward PACE programs. The word this morning was that Henry Waxman and Barney Frank would try to resolve things, and just four hours ago, it was announced that California is suing Freddie and Fannie.
Back to the state level, Asheville and four other local governments hoped to pass legislation this short session to get rid of some of the local hangups with PACE programs. Although the efforts were not completely successful, the legislature did manage to waive the state’s requirement for soliciting competitive bids for PACE projects. Other concerns will be brought up in the 2011 long session. City Attorney Bob Oast explained the national issues do not trump the local program. For example, Asheville can identify another way for paying back the loans than liens.
