Babylon, NY: Creating Green Jobs through PACE

Authors: Daniel Sanchez, Green For All Sammy Chu, a member of Green for All's 2009 - 2011 Retrofit America's Cities Working Group, is a local leader in creating green jobs. With Sammy as director, Long Island Green Homes in Babylon, NY, uses Property Assessed Clean Energy (PACE) to drive demand for home energy upgrades. That program supports 50 full-time green jobs making homes more comfortable and saving money for homeowners. Reporter Stephen Lacey, of, caught up with Sammy at the Greenbuild Conference in Toronto. What follows are Sammy and Stephen's thoughts on green jobs, energy efficiency, and the future of PACE.
Babylon Steps Up the PACE of Green Jobs: "For Energy Reduction, Carbon Savings, and Green Jobs" by Stephen Lacey Sammy Chu knows that energy efficiency creates local jobs. He's seen it for himself. As director of Long Island Green Homes, a local financing program based around Property Assessed Clean Energy (PACE), Chu has seen the creation of dozens of new contractor positions that have helped his home town of Babylon, New York, invest millions of dollars in efficiency retrofits. Since the program started in 2008, Chu says it has brought $1.89 in value for every $1.00 invested through savings on energy bills — helping support hundreds of efficiency retrofits and support 50 full-time jobs. "These are local jobs that can't be outsourced," Chu explains in an interview at the Greenbuild Conference in Toronto. "And the value is felt right here, for both the customers and the contractors." The town's program was so successful, one contractor moved over to Babylon from the west coast to set up shop. And in 20 months, his outfit grew from one person to 27 employees.

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Long Island Green Homes has been able to leverage that demand to create career track job opportunities to workers that face barriers to employment by partnering with training programs to provide qualified workers to contractors as they ramp up their operations.
If that's not the most important story of all this, I don't know what is. We have a contractor that is adding employees, creating jobs, we have homeowners who are saving energy, and we are reducing carbon in our community, serving an extremely important public purpose for all of our constituents. We've been doing it, we continue to do it in Babylon…. And to the extent that Congress can validate what we've been doing and make this possible in other places, it would be terrific. But we're going to keep doing what we're doing because we know it's the right thing. And it's been very, very successful for job creation, for energy savings, and for carbon reduction. - Sammy Chu, Director, Long Island Green Homes
Under PACE programs, municipalities issue bonds to help pay for energy efficiency or renewable energy retrofits. The home or business owner pays the loan back through an increase in property taxes. However, the Babylon program operates a bit differently, with the fee assessed through the city's solid-waste program. (Very accurately, the city expanded the definition of "waste" to include energy waste.) Creating 50 jobs might not sound like much. But when you consider that PACE programs create about $10 million in gross economic output and 60 jobs for every $4 million spent in a locality, that adds up across the country. If we performed efficiency retrofits on only 1 percent of the homes around the U.S., hundreds of thousands of jobs could be created — all with no upfront cost to homeowners. Babylon has been a major success story in the residential PACE sector at a time when other municipalities have struggled in the last year. But those towns and cities haven't struggled because of poor program design. They've struggled because of the stranglehold that the nation's top mortgage lenders, Fannie Mae and Freddie Mac, have put on PACE. Last year, these lenders issued new restrictions on mortgages to homeowners participating in PACE programs. Under PACE, if a homeowner defaulted, the municipal loan would get paid back before the mortgage. That riled Fannie and Freddie, which argued that they should get paid back first. So, the Federal Housing Finance Agency instructed them to enforce very strict guidelines on homeowners receiving PACE loans, forcing many communities to halt their programs. That put a virtual freeze on this important economic driver. But Babylon has pushed on. Sammy hopes that the city's success will inspire other city officials and national political leaders to help re-ignite PACE. "If we all got up and actually spoke with one voice, they'd have to listen up. These are organizations that contributed to the financial collapse of this country, and now they're hindering new economic growth," says Sammy.

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