Clean Energy for Low Income Communities: Multifamily Housing Retrofits

Low-income multifamily housing retrofit work generally requires different energy efficiency and solar program strategies than those used for low-income single family homes. Partners in the U.S. Department of Energy’s Clean Energy for Low-Income Communities Accelerator (CELICA) identified the following key considerations for low-income multifamily programs:

 

  1. Financing limitations: Utility subsidy requirements from federal programs may limit ability to capture savings from energy measures. In addition, financing structures, typically with multiple sources of funding and limited cash reserves for projects, may create complications for approving projects.
  2. Owner and resident split incentives: There are inherent “split incentives” between building owners and residents where improvements require building owner action but primarily benefit tenants.
  3. Impacts on low-income residents: The varied utility payment structures for different types of low-income multifamily housing may limit the ability to directly benefit residents and building owners.

Based on CELICA Partner experience, all of these factors need to be considered when designing low-income energy programs that hope to engage multifamily building owners and benefit renters.

CELICA Program Models

Below are program design options for low-income multifamily housing energy retrofits explored with CELICA partners.

Interventions during refinancing and renovation events to drive low-income multifamily housing energy retrofits

As described in the CELICA Promising Practice: Leverage Refinancing and Renovation Events to Drive Low-income Multifamily Housing Energy Retrofits, the State of Massachusetts partnered with the Local Initiatives Support Corporation in Boston to administer the Green Retrofit Initiative. In this initiative, the Local Initiatives Support Corporation and its community development financial institution partners provide matching grants for investment-grade energy audits to affordable housing developers approaching refinancing and renovation projects. Incentives for energy efficiency and renewable energy measures are then offered based on the audit results.

Partnerships with state housing finance agencies and local housing providers to support energy retrofits to federally-subsidized low-income multifamily housing

There are additional issues to consider within subsidized housing when incentivizing tenants to engage in energy efficiency and renewable energy retrofits and ensuring that the tenants benefit from these projects. The CELICA Promising Practice: Incorporate Energy Efficiency and Renewable Energy Standards as a Criterion in Low-Income Housing Tax Credit Applications has addressed some of these challenges. Nearly a dozen states are doing this already.

Incentivizes for building owners to invest in solar installations on low-income multifamily housing

The California Solar on Multifamily Affordable Housing program, as featured in the CELICA Issue Brief: Reducing Energy Burden for Low-income Residents in Multifamily Housing with Solar Energy provides an example of how a state can structure a program to incentivize solar developers and low-income multifamily building owners to install solar PV and ensure tenants benefit from solar energy technologies.