Municipal Toolkit for the Public Sector
Annexes
Annex 1 - Examples of Existing Regulation Promoting Green Buildings
1. Examples of mandatory regulation in the field of sustainable construction.
Resolution 549 of 2015, issued by the Ministry of Housing, City and Territory of Colombia, establishes mandatory parameters and guidelines for all constructions in the country and provides guidance for water and energy savings in buildings.
The Sustainable Building Code approved by the Provincial Government of Jakarta in Indonesia, through the Governor’s Decree No. 38/2012 (Pergub 38/2012), also establishes a series of mandatory aspects for all new constructions in this city.
2. Examples of national policies and regulations that promote sustainable buildings.
a. Colombia
In Colombia, the National Government, through the National Planning Department (DNP), issued CONPES Document (National Council for Economic and Social Policy) No. 3919, approving the National Policy on Sustainable Buildings. Its Action Plan seeks to develop a financial incentive program for households and builders of sustainable buildings, which implies strengthening the Green Mortgages and the Green Builder Line, with access to preferential interest rates for building green, through the National Savings Fund and FINDETER. It also suggests that territorial entities review other types of incentives at the local level, which may help to promote the construction of housing with sustainability criteria and other buildings, such as tax exemptions, reduction in processing times and increase in buildability, among others. Likewise, Decree 1077 of 2015 of the Housing, City and Territory Sector of Colombia, in its Chapter 1 of Title 7 of Part 2 of Part 2 of Book 2, of the referred decree, states that the National Government, through the Ministry of Housing, City and Territory, will promote that municipalities and districts establish incentives for the implementation of sustainable construction measures.
b. Peru
In Peru, the Ministry of Housing, Construction and Sanitation approved Supreme Decree 022-2016-VIVIENDA, which states that buildings that are constructed under energy and water efficiency parameters, that increase the free area with vegetation, and that are located in urban areas, will receive a Height Bonus, provided they comply with the corresponding technical and legal requirements and according to a certification of international sustainable building standards, thereby authorizing municipalities to grant this type of technical incentives.
3. Examples of tax exemptions to encourage sustainable construction
a. National Laws and Resolutions
Law 27467, Budget of Expenditures and Resources of the National Administration 2019, through which the Government of Argentina grants tax discounts related to the purchase of environmentally friendly technologies.
Resolution No. 196-2020 of the National Mining and Energy Planning Unit of Colombia, which approved a VAT exclusion (19%) and income tax deduction (25%) for project design services and technical solutions that are energy efficient.
b. Subnational Decrees
Decree 29,100 of November 9, 2017 of the Municipality of Salvador de Bahia in Brazil, which grants a discount of up to 10 % of the Urban Property and Land Tax (IPTU), to property owners who adopt measures that stimulate the protection, preservation and recovery of the environment. As well as a discount in the Otorga Onerosa para Construir, a fee to be paid for this concept for those construction projects, which wish to build over the established limits and comply with sustainability conditions. Ordinance No. 314-00-CMPP of the Provincial Municipality of Piura in Peru approved a 30% discount on the payment of taxes, for a period of two years, for projects of social interest that are certified as sustainable.
Revenue Law No. 28712/LXIII/21 of the Municipality of Zapopán of the State of Jalisco, Mexico, for fiscal year 2022 has established a temporary reduction in the payment of fees for the use of basic infrastructure, building licenses, construction supervision, among others, for projects that obtain EDGE or LEED certification.
The Central Bank of Indonesia increased the loan-tovalue ratio by 5% for properties that are certified as green.
c. Municipality of Guatemala
By Agreement COM-12-2022 of April 28, 2010, the municipality approved a 25% discount on the construction permit fee to reduce environmental impacts, if a sustainability certification is presented.
Annex 2 - Thematic Guide for the Development of the Technical Legal Support Report
The following are some of the minimum contents that could be included in the technical-legal support report:
1. Background
a. Make reference to the development plans, strategic plans, land use planning or any other strategic planning document, if there is something related to Sustainable Urban Development or Environment or Land Use Planning, particularly if they seek sustainable development. Title 7 of Part 2 of Part 2 of Book 2, of the referred decree, states that the National Government, through the Ministry of Housing, City and Territory, will promote that municipalities and districts establish incentives for the implementation of sustainable construction measures.
b. Outline any technical assistance and/or training they have received from a donor such as the IFC of the World Bank Group or other entity.
2. Legal Basis
a. International:
An international agreement or commitment signed by the country related to environmental care or global warming mitigation, or any other related to sustainable building, such as the Paris Agreement, or the Advancing Net-Zero Program of the World Green Building Council (WGBC), the country’s climate commitments to 2030 and 2050 in relation to “Net-Zero Carbon” buildings20. The latter commitment was established and signed at the international level in 2018, post Paris Agreement21.
b. National, Metropolitan and Local:
National and territorial norms, policies or plans should be mentioned, including local ones, linked to the thematic of the reference, with the purpose of demonstrating their linkage or alignment to these. For example, the Regulation of Territorial Conditioning and Sustainable Urban Development in Peru, approved by Supreme Decree 022-2016-VIVIENDA, and, likewise, the referred Decree 1077 of 2015 Housing, City and Territory Sector of Colombia, in its Chapter 1 of Title 7 of Part 2 of Part 2 of Book 2, National Government, Environment or Climate Change Laws22.
3. Technical Substantiation
In the body of the report itself, it is recommended to refer to national or international best practices of incentives, such as those mentioned in this guide, or those compiled in the Policy Pathway Green Building in Emergent Market, published by the IFC in 202023. Likewise, other examples to those mentioned in the text and references to the first sustainable ordinances of the most important Peruvian municipalities in the country can be found on the EDGE website.
Data on sustainable buildings registered in the Latin American region or in the country could also be included. Mainly, mention and support the scope of application of the regulation, that incentives will be granted, verification mechanisms (certifications and other mandatory measures that could be included such as waste segregation, setbacks, parking lots and others), in particular disclose the benefits for the Municipality, developers and promoters, as well as neighbors and society in general.
Finally, the Conclusions and Recommendations should be specified, proposing the approval of regulations that promote green buildings.
Annex 3 - Good Practices and Example in the Development and Implementation of a Regulation to Promote Sustainable Buildings
District of San Borja, Lima - Peru
Ordinance No. 610-MSB, as amended by Ordinance No. 623-MSB (April, 2019), offers incentives for residential projects in areas delimited according to the regulation.
Incentives:
Zone-based height bonus for one or two additional stories, if the project is certified. As well as reduction of the minimum size of the real estate unit and number of parking spaces from the second sustainable project that integrates natural resources and optimization within the design and construction process.
Achievements:
More than 1000 certified units in the district covering 125,000 m2 (according to EDGE). Utility savings generated by these units are estimated at US$387,000 each year.
Highlights:
This was the first ordinance to offer building incentives for residential projects in Peru. Public officials received training on key aspects of the regulation, as well as sessions on EDGE and LEED certification, conducted by IFC in collaboration with the Peruvian Sustainable Building Council (Peru GBC).
District of Miraflores, Lima - Peru
Ordinance No. 510-MM of 2019 and subsequent amendments, offering incentives for residential, commercial and office projects.
Incentives:
Up to an additional 25% of the total roofed area and other buildability benefits, according to the requirements established in the ordinance.
Achievements:
More than 39 projects certified in the first year of the ordinance, achieving utility savings for residents and tenants of approximately US$350 (according to EDGE).
Highlights:
This ordinance was the first in Peru to offer incentives for residential, commercial, and office buildings through a single regulation. The municipality opted to establish an additional % of build-ability, instead of bonuses in floors, as well as a reduction in the minimum area of the real estate unit and the number of parking spaces.
Piura Province, Piura - Peru
Ordinance N° 314-00-CMPP (June, 2021) offers incentives for residential, commercial and industrial projects.
Incentives:
Reduction of the attention period for construction license applications, height bonus of up to two stories, depending on the location of the project, and tax benefits in the payment of taxes for a period of two years for social housing.
Highlights:
This is the first ordinance in Peru to offer a variety of incentives, including tax incentives.
Salvador de Bahia, Brazilc
The Municipality of Salvador, in Bahia, Brazil, has created through Decree No. 29,100 / 2017 the Green IPTU24 the Sustainable Certification Program with tax benefits, as an incentive for sustainable building constructions, applicable to projects to build, expand or renovate for residential, commercial, mixed, institutional and industrial use.
The Decree was created as a form of regulation of Article 5 of Law 8,474 / 2013, which approves the possibility of granting a discount of up to 10% in the IPTU to owners who adopt measures for the protection, preservation and restoration of the environment. The Decree also points out that the Building License process is days for developments requesting the Green IPTU, as opposed to normal developments that have a longer analysis time.
Likewise, this municipality complemented the Green IPTU incentive with an incentive through the Otorga Onerosa25, which grants discounts of 25 % to 40 % for buildings that have a market certification or the Sustainability Seal, created within the scope of the Sustainability Program of the Municipality.
Results Achieved:
As of 2022, twelve projects have joined the program, and about 76 are in the process of applying for these incentives.
Annex 4 - Content for the Training of Municipal Officials in the Implementation of a Regulation for the Promotion of Sustainable Buildings
It is essential to train public officials involved in the chain of evaluation and approval of permits on the new regulations. A trained public official will be able to provide good service to developers and builders who require information, so that they can take advantage of the benefits of the new regulations.
The key information that the public official must have to manage the implementation of the regulation includes all the additional documents that the citizen must present, as well as the instances and opportunities in which they must be presented.
According to good practices of Peruvian regulations, these are:
Affidavits:
Submit them during the delivery of the preliminary project, since no certification offers an official accreditation of the registration of the project before any certifier, or together with the request for approval of the project, specifying the voluntary nature of compliance with the stipulations of the regulations to benefit from the incentives approved and submission to the obligations derived from them. It can also be attached to the building permit application to guarantee the start and completion of the certification process that gives the option to access the incentives.
Preliminary Certification:
Must be included as part of the building permit dossier in order to grant the incentive.
Final Certification:
At the end of the work, by means of the final certification of the project, for the conformity of the work or completion of the work.
It is also suggested to invite the Sustainable Construction Councils or other civil society entities, or academia, to offer training sessions on the different certifications so that the public official knows the standards and the process to grant them.
20 https://www.worldgbc.org/advancing-net-zero/whole-life-carbon-vision.
21 https://www.worldgbc.org/thecommitment.
22 Some countries have set targets related to sustainable buildings in their Nationally Determined Conditions (NDCs), which should be kept in reference.
23 https://edgebuildings.com/wp-content/uploads/2020/06/IFCs-Green-Buildings-Policy-Pathways.pdf
24 Property Tax on Urban Property and Land (IPTU).
25 The Granting of the Right to Build is a prerogative that allows the owner of a property to build above the basic limit of the coefficient of use established for the construction and that makes it possible to increase the amount of square meters and height of the constructions, through payment to the Mayor’s Office for this permit. It is the responsibility of the Mayor’s Office to establish in its Master Plan the zones where it is possible to use this instrument.