Congress Votes to Extend Energy-efficiency Tax Deduction for Two Years

The American Institute of Architects (AIA) issued the following statement on Congress’s two-year extension of the 179D tax deduction, which provides up to $1.80 per square foot for the design of energy-efficient buildings. Please attribute the statement to AIA President Russell Davidson, FAIA:

“As architects, we’d have preferred a longer-term extension. With this deduction expiring each year, it has been difficult for us to plan our finances, which in turn has limited the effectiveness of this key incentive for designing energy-efficient buildings.

“Nonetheless, we are pleased members of Congress have voted to extend this tax provision through 2016 as part of the comprehensive budget bill. In addition to providing a benefit to commercial building owners, the 179D deduction encourages federal, state and local government building owners, like public schools or state universities, to build energy-efficient buildings by offering a tax deduction to the designer of these buildings.

“By allowing government entities to transfer the tax deduction to designers of buildings that surpass industry efficiency standards, our profession is able to put in the extra time and effort needed to design the best buildings for our neighborhoods and communities, while government entities can better manage their bottom lines.

“Our 87,000 members strongly support this deduction as one way to encourage the design and construction of buildings that are energy efficient—and save taxpayer dollars in the process. We’d like to see it made permanent.”

Asking Many Questions Helps Property Managers Prepare Reroofing Budgets

Property managers are challenged with three basic decisions for their existing roof systems: Should they repair, maintain or replace their roof system? The proper execution of each phase of the roof condition will determine the longevity of a roof system. Every roof is different and requires detailed evaluation and analysis for budgeting and decision-making purposes.

The bottom line is: What is your desired outcome for your roof and what is your budget? How can you extend the life of your roofing asset and reduce the cost of ownership?

For the purpose of this discussion, we’ll focus on reroofing.

UNDERSTAND YOUR OPTIONS

If you decide to replace your roof, you have to analyze the expense of a new roof, as well as the total investment cost during the lifespan of the roof. Ask yourself these questions and work with your roofing contractor to better understand all options.

    ▪▪ What’s best for my roof, climate and budget?
    ▪▪ What do I want from my roof, other than no roof leaks?
    ▪▪ Should I prepare a one-year budget or a multi-year budget?
    ▪▪ Do I want energy-efficient solutions (improved R-values), daylighting solutions (reduce my electric bills, qualify for energy rebates) and/or safety enhancements (meet or exceed OSHA standards)?
    ▪▪ What operation, service or product is underneath my roof? Product and installation decisions are made differently for roofs over food-processing plants, semiconductor plants or hospitals, for example.
    ▪▪ What three things are most important for my new roof, other than price? (Roofing materials, manufacturer of product, weather, pollution, warranty, maintenance, aesthetics, contractor’s safety requirements, return on investment, energy efficiency, roof traffic or other concerns, for example.)
    ▪▪ What is the value of the roof system as a long-term cost of ownership and not just based on initial price?
    ▪▪ Can we reduce the capital budget by removing expensible items, such as labor for the removal of the existing roof and the cost for disposal of the old roofing materials?

DO YOUR RESEARCH

Work with your roofing contractor to prepare a comprehensive plan for reroofing. The National Roofing Contractors Association and Building Owners and Managers Association International also are excellent resources.

Have your contractor review the best options for your building related to insulation type and amount; drainage condition and requirements; roofing membrane type/thickness; and safety requirements, such as roof hatches, guard rails, skylight screens and walk pads. Look at the slope of the roof to avoid standing-water problems. Are your gutters, downspouts and drains properly sized for adequate water drainage?

Budget numbers should be based on actual costs using measurement tools and Roof Life Index (RLI) tools. When budgeting for a capital project, there can be changes between the time the budget is set and when the project is installed. Materials and/or labor prices can increase. Damage to a roof can increase due to age, weather or other circumstances. Work with your contractor to lock in pricing for repair work during the interim months until the reroofing project begins.

Consider a thermal scan to define the extent of any compromised insulation.

Review local and national building codes for R-value and wind-uplift requirements. Check with your insurance carrier to determine whether the roof replacement system meets its requirements for roof assemblies.

It takes research, planning and capital to install a new roof system. Your roofing contractor is an excellent partner in reviewing your roofing needs, your budget considerations and maximizing the investment in your roofing asset.