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Pinellas considers clean-energy loan program to entice affordable housing

The Property Assessed Clean Energy program has been disastrous for some homeowners. Could it actually work for builders?
Solar panels purchased through the Property Assessed Clean Energy program are shown in Ruskin in 2019. Pinellas County, unlike some others in Tampa Bay, has never had a much-decried residential program, but commissioners are considering whether expanding its commercial program would be a boon to affordable housing.
Solar panels purchased through the Property Assessed Clean Energy program are shown in Ruskin in 2019. Pinellas County, unlike some others in Tampa Bay, has never had a much-decried residential program, but commissioners are considering whether expanding its commercial program would be a boon to affordable housing. [ LUIS SANTANA | Tampa Bay Times ]
Published Jan. 20

In a bid to attract developers for affordable housing, Pinellas County could expand a program meant to encourage builders to invest in energy-saving features or ones that improve resiliency to climate change.

County commissioners on Thursday directed staff to bring back more information on possible changes to its Property Assessed Clean Energy program. It currently allows companies to finance upgrades like efficient air conditioning and solar panels through an assessment on annual property tax bills rather than a conventional loan.

Residential versions of the program, in Florida and elsewhere in the country, have become infamous for saddling unexpected homeowners with insurmountable property tax bills, as a 2020 Tampa Bay Times investigation documented.

Pinellas, concerned about repercussions for homeowners, declined to launch a residential program when it established an ordinance in 2017. But it has quietly had a commercial version since then — so quietly that, in five years, nobody has used it, Assistant County Administrator Kevin Knutson said at a work session last week.

Knutson and county commissioners said they’ve heard from developers that an expansion to the program could be a boon for affordable housing because the financing would allow for contractors to be paid more quickly for installing features that could save money in the long run. Developers of affordable housing can’t get these property assessment loans under the current county rules, which consider even large, multifamily buildings to be residential projects.

Commissioners were intrigued but said they need to be sure there aren’t pitfalls, given the reputation of the residential counterpart.

“I really want the staff to do their homework and do some due diligence, because I know about the bad things that happened in residential,” Commissioner Kathleen Peters said in an interview. “I think we have to take a serious look at options that we have to help make sure people can live here.”

Property Assessed Clean Energy is a state program, but it can only be used in counties that allow it by ordinance. The county has a nominal role in the collection process, since the loans are paid off through property tax bills. Other than that, the county just publishes a report for every loan under the program.

The money comes from a private lender, two of which are approved for the program in Pinellas, Knutson said. Though paying it off is ultimately on the owner of the finished property, an expanded program would benefit contractors and subcontractors, said Steve Cona III, president of Associated Builders and Contractors’ Florida Gulf Coast chapter. The financing means they’d be compensated early on for the features they install, rather than waiting until the project is finished, which would in turn make those projects more desirable to work on.

“Normally, contractors subsidize most of the construction, because they have to pay for materials in advance,” he said. The lending model “eases their burden.”

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The county would need to draw a line carefully, said Commissioner René Flowers, so the program isn’t accessible to a single-family home with a garage apartment, for example. County Attorney Jewel White said the county needs to find out whether the loans, considered liens on the property, could wind up being a burden on affordable-housing tenants rather than landlords.

And staff still has to figure out how commercial programs have worked elsewhere, if they’ve worked at all, Knutson said in an interview. Though other Florida counties have commercial programs, he couldn’t find examples of them being used for apartment construction. That may be because commercial builders have access to other sources of capital.

But the legal and financial expertise developers have would also make them less vulnerable to the kind of predatory loans that turned off Pinellas in 2017 and led Hillsborough County to scrap its residential lending program in 2020.

“Let’s protect folks who don’t have those resources and may be taken advantage of, but allow the program to go forward with people who do have those resources,” he said.