Net Zero Land Development
A clause which can be added to a development agreement between a municipality and a developer to promote net zero development.
What this clause does
This clause allows municipalities to require a developer to take specific measures to reduce greenhouse gas emissions that could otherwise occur with new development. Achieving net zero or near net zero objectives in land development will help the municipality achieve its overall sustainability goals.
Recitals
[Drafting note: The use of the capitalized term 'Property' here and elsewhere in this clause assumes that the term is defined in the main agreement. If not, a definition should be added to this clause.]
(A) The Municipality and the Developer (hereinafter collectively referred to as 'the Parties') intend that any future development of the Property should create a sustainable, resilient, and net zero community.
(B) The Parties have agreed on goals for development, construction, maintenance, and operation of the Property aimed at achieving sustainability, resiliency, and low Greenhouse Gas emissions.
Clauses
1. Net Zero strategy
1.1 In preparing and implementing plans for the Development, the Developer shall:
1.1.1 use all reasonable efforts to achieve the Objectives;
1.1.2 preserve Natural Capital during the Development process and in the use and occupation of the Property in the future; and
1.1.3 align its efforts with the US Net Zero Target.
1.2 In collaboration with the Climate Professionals, the Developer shall create a Net Zero model to measure the GHG emissions from the Development and demonstrate how the emissions will be reduced to Net Zero.
2. Declaration of Covenants
2.1 The Declaration of Covenants, Conditions, and Restrictions ('Declaration') for the Development, as required by [regulation], shall be filed with [recording agency] no later than [number] days after the execution of the Agreement and shall:
2.1.1 Incorporate by reference or explicitly state the Developer's obligations contained within this Agreement;
2.1.2 Include a Conservation Covenant protecting the Conservation Land in favor of the Municipality and prohibiting uses of the Conservation Land that would interfere with the Biodiversity Objectives; and
2.1.3 Include appropriate provisions for the ongoing care, maintenance, management, and operation of the property for which the Master Association is responsible, as required under section [●]. These provisions must establish a requirement for the Master Association to designate, from time to time, a member of the Master Association to serve as a contact person for communications with the Municipality.
[Drafting note: This section assumes that the main agreement provides for the establishment of a Master Association composed of the property owners within the Development. Users should substitute alternate terminology as appropriate.]
3. Climate Professionals
3.1 Subject to the approval of the [Developer OR Municipality], which approval may not be unreasonably withheld, delayed, or conditioned, the [Municipality OR Developer] shall from time to time employ such Climate Professionals as may be necessary to carry out the services contemplated by this Agreement.
3.2 The Developer shall pay all fees and costs due for the services of the Climate Professionals, and shall hold the Municipality harmless from all claims of the Climate Professionals for unpaid fees and costs.
4. Financial guarantee
4.1 Prior to beginning any site development, the Developer shall post a security in the form of [an unconditional letter of credit] or [other instrument] or [a cash deposit] to guarantee completion of the Initial Objectives, as described in Exhibit A to this Agreement. The face amount of the security instrument or the amount of the cash deposit shall be as established by the [City Engineer] or [other official], based on the following components:
4.1.1 an amount equal to [110 (one hundred and ten)] or [multiplier]percent of the total dollar amount of the Initial Incentives, as described in Exhibit B to this Agreement; and
4.1.2 an amount equal to [110] (one hundred and ten) or [multiplier]percent of the estimated cost to complete the physical components of the Initial Objectives.
4.2 The security instrument required under this section:
4.2.1 must meet the requirements of [municipal regulation];
4.2.2 may be collected on by the Municipality, in full or in part, if the Developer defaults on its obligations to meet the Initial Objectives on schedule, provided further that the Developer must replenish the security instrument as directed by the [City Engineer] or [other official] for any remaining Initial Objectives; and
4.2.3 will not be released until the Developer has fulfilled all of the Initial Objectives, as verified by the [City Engineer] or [other official], in consultation with the Climate Professionals.
4.3 The [City Engineer] or [other official] shall evaluate the amount of the security on no less than an annual basis. At the reasonable discretion of the [City Engineer] or [other official], the amount of the security:
4.3.1 may be reduced, based on the Developer's progress in fulfilling the Initial Objectives; or
4.3.2 may be increased, if the anticipated cost of fulfilling the Initial Objectives increases due to inflation or other factors.
4.4 The Municipality may use funds collected from the security for any of the following purposes:
4.4.1 to complete or repair defects in infrastructure or public improvements related to fulfillment of the Objectives;
4.4.2 to progress Carbon Insetting or Carbon Offsetting relating to the Development or elsewhere in the City;
4.4.3 to promote Carbon Capture by planting trees [or preserving peat bogs and other wetlands]; or
4.4.4 to carry out any similar or analogous activity that would offset or balance the resulting Development’s carbon footprint and help ensure achievement of the Net Zero Objectives.
[Drafting note: This section contemplates that financial security will be required to guarantee fulfillment of the Initial Objectives but not for the Ongoing Objectives. Users may add language to require security for fulfillment of the Ongoing Objectives as well if the incentives alone are not sufficient.]
5. Rights of third parties
The Municipality may assign its rights under this Agreement, including the rights to monitor the Developer's performance of its obligations, to one or more third parties. The Developer may assign its rights and obligations under this Agreement to the Master Association or other third parties, subject to the Municipality's consent and the assignee's written agreement to be bound by the Agreement. Otherwise, a person who is not a party to this Agreement will not have any rights to enforce any term of this Agreement.
Exhibit A
Objectives
[Drafting note: This exhibit should provide specific details of the measures to be completed in meeting the Community Objectives, the Green Transport Objectives, and the Net Zero Objectives, as defined in the Agreement. If preferred, the three categories of objectives may be shown in separate exhibits. Objectives should be further categorized as:
Initial Objectives – the objectives the Developer must meet as the property is under development. Fulfillment of these objectives is tied to the Initial Incentives (see Exhibit B).
Ongoing Objectives – the objectives the Development must meet on an ongoing basis upon completion of the Development. Fulfillment of these objectives is tied to the Ongoing Incentives (see Exhibit B). Parties other than the original Developer may be responsible for achieving these objectives. Covenants that run with the land may delegate this responsibility.
Local governments should also establish methods for measuring success in meeting the Objectives and determining that a default has occurred. Where appropriate, Initial Objectives should include a target date. Ongoing Objectives should state a measurement time period or frequency, for example, whether an inspection will be conducted quarterly or a report filed annually. Tables or charts may be useful in setting various benchmarks. For example, the following components could be set out in tabular form for the Community Objectives:
Community Objectives
Community Land:
Initial Objective: Specific areas designated in each required Community Land category.
Verified by: Approved plat showing designated areas as committed.
Ongoing Objective: Community Land preserved and maintained as required.
Verified by: Onsite inspection.
Housing Diversity
Initial Objective: Variety and mix of housing options to be included in Development identified. Specific percentage or number of units designated as affordable housing.
Verified by: Approved plat showing locations of various housing options, building permits, final inspections, and public offerings to target audiences. Recorded covenants binding property owner and successors to maintaining affordable housing commitments, including eligibility requirements and limits on sale price or monthly rental cost, and preserving other housing options as identified in the recorded plat. [Verification required for any initial or ongoing tax credits.]
Ongoing Objective: Housing options maintained as required.
Verified by: Tax appraisals showing type and use of housing units. Affidavits from Developer or successors supporting maintenance of affordable housing commitments. Monitoring by employees of the Municipality or independent third parties.
Co-Working Space
Initial Objective: Commitment to designated square footage amount or percentage of total office space as co-working space.
Verified by: Co-working space is built out as committed. Recorded covenants binding property owner to maintain space for co-working.
Ongoing Objective: Original co-working space is maintained or replaced with new co-working space.
Verified by: Onsite inspection.
Single-use plastic
Initial Objective: Written program establishing realistic methods for minimizing or eliminating the sale and use of single-use plastics in commercial and institutional facilities within the Development.
Verified by: Evaluation and approval of program by Climate Professionals.
Ongoing Objective: Program remains in place and implementation continues. Single-use plastic use is minimized and, where possible, eliminated. Alternatively, program is adjusted as needed to meet goals.
Verified by: Statistics showing uses of alternatives to single-use plastics, verified by Climate Professionals.
Exhibit B
Incentives
[Drafting note: This exhibit should provide specific details of the incentives to be provided by the Municipality for meeting the Objectives.
Incentives may be broken down into:
- Initial Incentives, such as waivers of fees normally charged in connection with new development and construction. The Developer would be the most likely beneficiary of these incentives, although they may also be passed down to other parties.
- Ongoing Incentives, such as tax credits or utility discounts. The Developer may be the beneficiary of some or all of these incentives, to the extent the Developer remains involved in the ownership and operation of the Development. These incentives may also benefit the Master Association or individual property owners who play a part in fulfilling the Objectives.]
Definitions
[Drafting note: Capitalized terms relate to either a defined term in this clause or a defined term in the main agreement that this clause is designed to be inserted into. Since terminology may vary, users may substitute alternate terms consistent with the terminology they use in the main agreement.]
Biodiversity Objectives means a plan for the Development that will maintain, monitor, and [improve] or [ensure no net loss of] the genetic, species, and ecological diversity on the Property in accordance with [the EnviroAtlas Biodiversity Metric of the United States Environmental Protection Agency] [other biodiversity framework].
Carbon Capture means the removal of carbon dioxide from the atmosphere, using measures that are technically feasible and reasonably practicable for the type and scale of development.
[Drafting note: Currently, feasible carbon capture strategies are limited. Unless new technologies become feasible and available, the parties may need to limit acceptable carbon capture methods to planting trees and preserving other natural features that remove carbon from the atmosphere.]
Carbon Insetting means measures to verifiably reduce carbon emissions that would otherwise occur on the Property.
Carbon Offsetting means the purchase of a quantity of carbon credits from a project that has been verified in accordance with [insert name of standard or the United Nations Framework Convention on Climate Change clean development mechanism], in order to compensate for the emissions from the Development.
Climate Professionals means the environmental consultants who:
(a) specialize in the creation, evaluation, implementation, and measurement of net zero targets; and
(b) provide consultation, evaluation, and verification services in connection with the Development, as provided in this Agreement.
Community Garden means land designated in the Development for use as a shared space to be made available to individuals living within the Development for growing:
(a) fruits and vegetables; or
(b) flowers and other plantings that attract pollinators.
Community Land means part or parts of the Property designated as being for the benefit of the community, and to be held in community ownership, following the completion of the Development, including:
(a) Community Gardens;
(b) Conservation Land;
(c) Community Energy Land; and
(d) Open Spaces.
[Community Energy Resources means land, appurtenances, and facilities designated in the Development for the creation of renewable energy as part of a Community Energy Program.
Community Energy Program means the production of electricity generated from the Community Energy Land either:
(a) for use in the Development's common areas and elements; or
(b) to be sold to residential, commercial, or institutional users, either within the Development or otherwise.]
[Drafting note: Omit the above two definitions if a community energy program will not be required.]
Community Objectives means the following, as more fully set out in Exhibit A to this Agreement:
(a) designating areas of land for use as Community Land;
(b) creating structures and governance for the co-ownership and stewardship of Community Land;
(c) maximizing Housing Diversity;
(d) enabling and encouraging use of Co-Working Space at the Development;
(e) carrying out a program to minimize or eliminate the sale and use of single-use plastics in commercial and institutional facilities; and
(f) such additional objectives as the Parties may agree to in writing.
Conservation Covenant means a covenant to do or not do something on a defined area of land for a conservation purpose.
Conservation Land means land designated in the Development to be maintained in or returned to its natural state in order to achieve the Biodiversity Objectives. Conservation Land includes all wetlands within the Property as identified on [map].
Co-Working Space means a shared workspace with access to shared office equipment, furnishings, facilities, amenities, and services for persons who are self-employed or working remotely.
Developer means the Development's original developer and its successors and assigns.
Development means the buildings, infrastructure, site amenities, and other improvements to be created on or at the Property pursuant to the Planning Approval.
Embodied Carbon means the carbon emitted through the production and delivery of building materials used in the Development.
EV means a vehicle that uses one or more electric motors for propulsion and obtains all its power from an electric battery.
EV Charging Capacity means electrical infrastructure capacity sufficient to support the requirements of EV Parking Spaces.
EV Parking Spaces means spaces specifically designated for charging EVs.
Fossil Fuels mean coal, oil, natural gas, or other hydrocarbon-containing fuels formed underground and derived from the remains of plants and animals.
Greenhouse Gasses (GHGs) mean the natural and anthropogenic gasses that trap thermal radiation in the Earth’s atmosphere. GHGs are specified in Annex A to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC).
Green Transport Objectives means but is not limited to the following, as more fully detailed in Exhibit A to this Agreement:
(a) including car-sharing facilities and spaces at the Development;
(b) minimizing the number of [non-electric] cars, vans, or other vehicles owned or operated for private use [with a target of no more than [number] [non-electric] vehicles per 100 (one hundred) inhabitants in the Development];
(c) maximizing EV Parking Spaces and minimizing non-EV car parking spaces in the Development;
(d) maximizing Pedestrian Zones;
(e) maximizing bicycle storage facilities;
(f) maximizing footpaths and ways or lanes for bicycles [and scooters];
(g) maximizing the use of public transportation for commuting by the residents of the Development and persons working at the Development; and
(h) using advanced data analytics to predict transportation requirements, [needs for shared mobility, such as rented scooters], and the need for new public transportation hubs and other facilities as required.
Housing Diversity means a range of housing options, of which at least [number] percent are designated as Affordable Housing, as defined in [statute] or [municipal code section] or [other authority].
[Drafting note: This definition anticipates referring to a separate definition for Affordable Housing in state or local law or elsewhere. Alternatively, a definition of Affordable Housing for the purposes of this clause may be included.]
Incentives means the fee waivers, tax credits, or other incentives provided to the Developer or its successors in interest in return for meeting the Objectives, as more fully described in Exhibit B to this Agreement.
Natural Capital means the natural resources and environmental features in and around the Property, including the geology, soil, air, water, and all living things.
Net Zero means a state of balance between the volumes of GHG produced from all operations on the Property and GHG removals, accomplished through Carbon Insetting or Carbon Offsetting projects.
Net Zero Objectives means the following, as more fully detailed in Exhibit A to this Agreement:
(a) maximizing the proportion of Zero Net Energy Buildings;
(b) using construction materials with the lowest Embodied Carbon reasonably available;
(c) maximizing self-generation of renewable energy in the Development;
(d) minimizing the use of heating and hot water technologies that rely on Fossil Fuels or produce GHGs;
(e) [establishing a Community Energy Program to supply renewable energy to the Development;]
(f) maximizing Carbon Capture at the Development;
(g) minimizing the use of energy by the Development by using a smart grid, demand-side energy management, and other technologies;
(h) prioritizing the use of electricity from renewable energy sources over all other types of fuel in the Development;
(i) complying with applicable energy efficient building, housing, and property maintenance codes; and
(j) maximizing EV Charging Capacity for all EVs.
Objectives means the Net Zero Objectives, the Green Transport Objectives, and the Community Objectives, as more fully described in Exhibit A to this Agreement.
Open Space means:
(a) public open space, such as outdoor public recreational facilities, play areas, land reserved for social or communal use, and arboretums and landscaped areas;
(b) school sports grounds and playing fields; and
(c) parkland and woodland (including but not limited to any areas of land required for landscaping buffer areas and noise buffer areas).
[Drafting note: Users may alter this definition as appropriate to add or omit uses. Some users may prefer to limit open space to passive uses. Exhibits may also be useful in further refining permitted uses and objectives for open space.]
Pedestrian Zone means areas of the Development reserved exclusively for pedestrian [and bicyclist] use and where motor vehicles are prohibited.
Planning Approval means formal approval to proceed with the plan for the Development, as granted by the [Planning Commission OR other board].
US Net Zero Target means the US Government’s target of achieving net zero GHG emissions by no later than 2050, as established in 2021 and adopted in 'The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050.'
Zero Net Energy Building means a residential or commercial building that uses clean renewable resources to generate energy onsite in a quantity equal to or greater than the total amount of energy consumed onsite on an annual basis.
[Drafting note: This definition is adapted from guidance provided by the Massachusetts Department of Energy Resources (see What is a Zero Net Energy Building?). Users may prefer to substitute other terms, such as zero carbon housing, low-energy buildings, or renewable energy buildings.]
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