Problem DescriptionCapital costs for investing in comprehensive and integrated resilient infrastructure systems are significant, but the benefits are often diffuse, accruing diverse direct and indirect beneficiaries from across sectors. Facing shrinking budgets, cities need ways to motivate resilience investments on private properties and support private investment in public goods. While often the savings of these investments are real for private buildings, the challenge of financing privately owned resilient infrastructure systems is capturing those savings and turning them into viable cash flows. Structuring a pooled fund to leverage existing federal, state or local grant funds to support investment in building and system retrofits offers an alternative solution for attracting private capital.
The City of San Francisco established a pooled fund to address earthquake vulnerabilities due to soft-story buildings. Through this fund, selected contractor(s) would work with property owners and manage the building retrofit process from design through construction. Applying this same approach to water-related building retrofits, the contractor could then sign performance contracts to recoup their investment plus interest, including an obligation by property owners to pass-through energy and/or water savings, and an agreement with the City and/or utility to ensure a regular payment scaled to savings accruing to the system as a whole. A pooled fund would go beyond providing financing to help streamline the retrofit process and reduce transaction costs to increase project uptake.
- Elle Hempen, re:focus partners
Solution StageOne of the 7 stages of an innovation. Learn more
|STAGE||SPECIALIST SKILLS REQUIRED||EXAMPLE ACTIVITIES||RISK LEVEL AND HANDLING||FINANCE REQUIRED||KINDS OF EVIDENCE GENERATED||GOAL|
|Generating ideas2||Ideation and facilitation of creative thinking|
|A clear account of change or likely causation, supported – but not overly constrained – by evidence||An idea or set of ideas to develop and test|