Letter to The Honorable Edward J. DeMarco, Acting Director, Federal Housing Finance Agency
Letter
Today, Congresswoman Doris Matsui (CA-05) issued a letter in response to the most recent display of uncertainty by the Federal Housing Finance Agency (FHFA) in their handling of the Property Assessed Clean Energy (PACE) program -- a program funded by the American Recovery and Reinvestment Act (ARRA) which could have provided thousands of good American jobs and helped meet our nation's energy efficiency goals -- if properly enacted.
Congresswoman Matsui's most recent letter, sent today, was addressed to Mr. Edward DeMarco, the Acting Director of FHFA, in response to the letter FHFA issued Friday and their follow-up announcement made today regarding the future of the PACE programs. According to Mr. DeMarco, FHFA will not implement any assessments made after July 6, 2010. That means that only about 1,000 PACE mortgages in the nation will be backed by FHFA; and the very real opportunities for communities, utilities and homeowners to benefit from the promise that the PACE programs is still a step away from being actualized.
On July 6th, FHFA issued a statement indicating that they were going to shut down all PACE programs. That has created a myriad of problems for local municipalities and governments throughout the country, including the Congresswoman's hometown of Sacramento, California. Like many communities, PACE programs had been well thought out, planned for, but were not yet implemented before being halted by the FHFA announcements. Under FHFA's most recent guidance, these governments are now uncertain whether the backing of the Federal government -- through FHFA -- will be there as they start to implement these programs.
Despite receiving strong support from Congress, the White House, and State and local governments, FHFA has refused to implement the PACE program at its intended levels. Congresswoman Matsui has sent several letters to the White House and the FHFA, co-sponsored legislation to reinstate the program, and has had continued conversations with stakeholders at every level to try to work together to convince FHFA to make good on its promises to American homeowners.
"As a Member of Congress who has been heavily involved in the stakeholder meetings to resolve the uncertainty surrounding the PACE program, I strongly believe your actions are not warranted at this time, as negotiations are still ongoing," Matsui wrote. "I strongly urge FHFA to immediately reengage in good faith negotiations with the Administration, Congress and relevant federal regulators to restore PACE financing programs in a timely manner."
The PACE program has been designed to allow homeowners an opportunity to make energy efficient improvement to their homes, which would in turn help clean energy businesses sell more of their energy efficiency products, expand their manufacturing operations and hire new workers. If enacted as designed, homeowners would see the economic benefit of reduced utility bills and added equity to their homes. Participating communities across the country would have seen an increase in new, high-paying jobs in the clean energy economy. However, FHFA has continually halted the programs' ability to be enacted by voicing uncertainty around the program. As a result, businesses and homeowners have been put on hold, and America is losing an opportunity to create several thousand jobs in the clean energy sector.
"Federal agencies should be working to support and implement PACE financing, not looking for ways to stop it," added Congresswoman Matsui. "I and many of my colleagues do not accept that this as the final word. We will continue to explore all options to restore the PACE financing program. It has been clearly shown that the PACE program can create jobs while helping homeowners and businesses become more energy efficient."
August 31, 2010
The Honorable Edward J. DeMarco
Acting Director
Federal Housing Finance Agency
1700 G Street, NW
Washington, D.C. 20552-0003
Dear Acting Director DeMarco:
I am writing to express my deep concern regarding the Federal Housing Finance Agency (FHFA) letter released last Friday. I am equally concerned with the guidelines that FHFA released today regarding the current commitments of PACE assessments up to July 6, 2010. As a Member of Congress who has been heavily involved in the stakeholder meetings to resolve the uncertainty surrounding the PACE program, I strongly believe your actions are not warranted at this time as negotiations are still ongoing. Moreover, I am deeply concerned that FHFA staff, as a result of your recent actions, will not have an incentive to try to resolve the uncertainty surrounding the PACE programs. I strongly urge FHFA to immediately reengage in good faith negotiations with the Administration, Congress and relevant Federal regulators to restore PACE financing programs in a timely manner.
PACE financing programs are critical components in achieving long-term energy independence and making our nation a leader in the global clean energy economy. My home district of Sacramento, California is well positioned to be a leader in manufacturing energy efficiency technologies, and PACE financing programs are critical components to achieving these energy efficiency goals. As I have mentioned in our meetings, many homeowners and businesses understand this straightforward program. They are willing to participate in the program because the simple nature of its financial assessment structure makes purchasing energy efficiency home improvements more affordable than other financing means. PACE programs will allow local clean energy businesses to sell more of their energy efficiency products and expand their manufacturing operations or facilities and hire new workers. Homeowners will see the economic benefit of the PACE program in their reduced utility bills and in added equity in their homes.
Moreover, the PACE program is about jobs; and our national goals of creating hundreds of thousands of new, good paying jobs in the clean energy economy. At a time when our nation's construction unemployment rate is above 25 percent, PACE programs have proved to be a true job creator. According to the latest estimates, for every 100,000 homes that are retrofitted, with an average expenditure of $10,000, more than 10,000 jobs would be created. Home energy retrofits and installations are American jobs that cannot be outsourced to any other country.
In California, PACE programs are expected to create more than 21,000 jobs, leveraging more than $1 billion in local investment throughout the State. In Sacramento, the PACE program's initial phase is expected to create more than 700 jobs and leverage more than $170 million in economic output, according to a recent report by the Center for Strategic Economic Research. In addition, the study found that this work could also generate close to $11 million in State and local taxes from economic activity, a measure which Sacramento County and the State of California desperately need during this time of economic challenges. Furthermore, estimates from a local energy provider, Sacramento Municipal Utility District, suggest that, on an annual average basis, Sacramento households could see net cost savings totaling nearly $1.9 million all while reducing strains on the energy grid. In short, the PACE program will have a positive impact on the Sacramento region, the State of California, and our national economy.
The Obama Administration has demonstrated strong support for the PACE financing programs. Shortly after FHFA's decision to halt the PACE program on July 6th, I, along with 59 of my colleagues, including House Speaker Nancy Pelosi, sent a letter to the President urging his unwavering support and timely assistance in restoring the PACE program. Since that letter, the Administration has reaffirmed their strong commitment to preserving the PACE program. Since that letter, the Administration has reaffirmed their strong commitment to preserving the PACE program in their letter released on July 27th. Moreover, as part of the American Recovery and Reinvestment Act (P.L. 111-5), Congress included the $150 million in funding specifically to support PACE financing programs, making it the law of the land. Your July 6th letter effectively challenged that law and put in jeopardy funding allocated to municipalities and states to implement and promote PACE financing programs. Your action forced the State of California to move to preserve the $30 million in ARRA funding intended for the PACE program, including nearly $2 million for Sacramento County. However, I was very pleased that the California Energy Commission, during its meeting on July 29th, reaffirmed its strong support for the PACE program, urged FHFA to restore the program, and indicated its intent to immediately implement the PACE program once it is restored.
Again, I am deeply concerned by the letter you released on Friday indicating that the FHFA will not continue to seek a resolution to the issues surrounding the PACE program, and your announcement today regarding the current commitments of PACE assessments. I and many of my colleagues will not accept this as the final word and will continue to seek a resolution that meets the needs of all stakeholders. I urger you to immediately reengage in negotiations with the Administration, Congress, and relevant regulatory agencies to work to restore the PACE financing programs. I will continue to work with my colleagues to resolve the uncertainty surrounding the PACE program and explore all options to restore the PACE financing programs. I look forward to your reengagement in this process to ensure that our efforts to reinstate the program are implemented in a timely manner.
Sincerely,
Doris O. Matsui
Member of Congress
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