State and Local Governments: Turning Economic Recovery Funding into Gold with the “14x Stimulus” Plan

Contact: Kristina Kershner or Peter Chapman, 505.988.5309,        
kershner@architecture2030.org, chapman@architecture2030.org
Annie Strickler, annie.strickler@iclei.org, 510.844.0699 x328

As state and local governments look for the most effective way to invest their economic recovery dollars, a new plan that multiplies the impact of this funding fourteen-fold has been unveiled by Architecture 2030 and its partners ICLEI – Local Governments for Sustainability USA, RESNET, and Veterans Green Jobs. Called the ‘14x Stimulus’, the plan leverages each $1 of federal stimulus money spent to generate $14 of private spending, create 14 times the number of jobs, reimburse the federal government $3, and return $1 to state and local coffers.

How it works
The plan proposes using state and local funding from the American Recovery and Reinvestment Act (ARRA) to create a local mortgage buy-down program that offers reduced mortgage interest rates contingent upon renovating or building to meet specific energy reduction targets. To qualify for the program, a homeowner is required to invest a minimum amount in efficiency measures, creating demand for construction jobs and generating much-needed private spending. The cost of the efficiency upgrades is added into the mortgage, but, because of the lower interest rate, the homeowner’s monthly mortgage payments are significantly lower. The homeowner also benefits from lower monthly energy costs. Given that the private building sector represents 93% of total U.S. building stock while the public building sector represents only 7%, the potential is tremendous.

More information is available at: http://www.architecture2030.org/14x_stimulus/14x_stimulus.html.

“We could have called it the Midas Touch Stimulus Plan. We don’t know of any other plan offering this level of return on investment,” said Edward Mazria, Executive Director of Architecture 2030. “There are few opportunities that come along that allow us to so effectively leverage taxpayer dollars to address several major crises at once, but this is definitely one. We cannot afford to let this opportunity slip through our fingers.”

It is the plan’s ability to generate large amounts of private spending that so effectively leverages each stimulus dollar. For example, if a city or county invests $1 million of its stimulus dollars and $1 million in additional state stimulus matching funds ($2 million total), the plan would generate $28 million in local private spending and create 434 new jobs. The federal government would be paid back $6 million in new taxes, triple its investment, with an additional $2 million in new tax revenue going into city, county and state coffers.

In addition to encouraging households to get off the sidelines and into the renovation and home-buying market, the plan provides other significant benefits: reduced risk of mortgage failure, increasing home values, more disposable income for homeowners, jobs to those who will pay federal taxes, a new market for material and product manufacturers, and dramatically reduced home energy consumption and greenhouse gas emissions. The result is that, with a single solution, the US can address the economic crisis, move the country toward energy independence and begin to tackle climate change.

The plan is a state/local version of Architecture 2030’s Two-Year, Nine-Million-Jobs Investment Plan. The effectiveness of the national plan in creating jobs and private spending prompted Architecture 2030 and its partners to propose a public/private partnership to strategically focus stimulus dollars that will enable a full-scale building industry revival while simultaneously addressing energy and greenhouse gas emissions reductions.

“Local and state governments have been the laboratories for climate and energy solutions and now have the opportunity to be the engine of economic recovery, jobs creation, and energy efficiency,” said Michelle Wyman, Executive Director of ICLEI-Local Governments for Sustainability USA. “The ‘14x Stimulus’ plan continues the tradition of making smart investments in our communities to the benefit of the entire country.”

The partners are encouraging local governments to include the “14x Stimulus” plan in their ARRA proposals and that they request matching funds from the states to multiply the impact. More resources will be available in the coming weeks to assist with these efforts.

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Architecture 2030 is a 501(c)(3) nonprofit organization working to achieve a dramatic reduction in the global-warming-causing greenhouse gas emissions of buildings by changing the way they are designed and constructed by galvanizing and collaborating with the key players in the Building Sector, Architecture 2030 is. In addition to developing and issuing the highly successful 2030 Challenge, Architecture 2030 has also published several important works, including ‘Nation Under Siege’, a seminal study revealing the devastating effects on the US of just one meter of sea level rise. www.architecture2030.org

ICLEI - Local Governments for Sustainability USA is a membership association of local governments committed to advancing climate protection and sustainable development. ICLEI’s mission is to build, serve, and drive a movement of local governments to advance deep reductions in greenhouse gas emissions and achieve tangible improvements in local sustainability. Since its inception in 1990, ICLEI has grown to include over 1,000 local governments throughout the world, more than 550 of which are in the United States. www.icleiusa.org.

RESNET, the Residential Energy Services Network, is a membership 501(c)(3) organization dedicated to ensuring the success of the building energy performance certification industry, setting standards of quality, and increasing the opportunity for ownership of high performance buildings. RESNET members produce Home Energy Ratings, help builders reach energy efficiency goals (like Energy Star), and work with  project managers to ensue that “as built” matches “as specified.” www.natresnet.org.

Veterans Green Jobs is a 501(c)(3) nonprofit organization developing an unprecedented national initiative to offer creative and concrete solutions for three of the most urgent issues of our time: rebuilding a sustainable green economy; reversing deteriorating environmental conditions and climate change threats; and reengaging our nation’s nearly 2 million military service veterans who need meaningful new careers. The Veterans Green Jobs Academy™ provides job training and placement opportunities for military veterans in the emerging green industries. Veterans Green Jobs connects veterans with a wide range of complimentary resources to assist with establishing civilian careers. www.veteransgreenjobs.org.