Upgrade the Efficiency of Affordable Housing in Your Portfolio

Improving the energy efficiency of affordable housing creates economic, environmental, and public health benefits. Because low-income residents spend a disproportionate percentage of their income on energy costs, improving the energy efficiency of affordable housing not only helps lower household expenses, but can make homes more comfortable and healthy to live in, and can contribute to your local energy or greenhouse gas reduction strategies. There are a number of strategies for local governments to support energy efficient affordable housing in new construction, major renovations, and retrofits to existing housing, including single and multifamily housing. Opportunities include mayoral executive initiatives, local government resolutions, local development agency standards or requirements, local government planning processes, incentives for developers, specialized grants and loans, fee waivers, and local ordinance variances. For minimum energy code or performance standards for affordable housing, see Strategy 2. Adopt Model Residential Building Energy Codes and Performance Standards.

Financing vehicles include energy performance contracts, federal home loans, federal government grants, property assessed clean energy (PACE) financing, low-income housing tax credits, and refinancing incentives such as those available through Fannie Mae’s Green Preservation Plus program or Freddie Mac’s Multifamily Green Advantage program. << Back to Main Page

TOOLS

Low-Income Energy Affordability Data (LEAD) Tool: DOE created the LEAD Tool to assist partners with understanding their LMI community characteristics. This can be utilized for low-income and moderate-income energy policy and program planning, as it provides interactive state, county and city level worksheets with graphs and data including number of households at different income levels and numbers of homeowners versus renters. It provides a breakdown based on fuel type, building type, and construction year. It also provides average monthly energy expenditures and energy burden (percentage of income spent on energy).

RESOURCES

Evaluating Energy Efficiency Potential in Low-income Households: A Flexible and Granular Approach: This 2019 DOE and NREL study uses a new approach to evaluating energy efficiency potential that provides a more accurate, granular, and flexible estimate of the cost-effective energy efficiency potential in households of various income ranges. The study estimates that energy efficiency packages tailored to maximize net present value could result in an estimated $13 billion per year in energy cost savings, or $670 per year, for average single-family households with income less than 200% of the federal poverty level.

Energy Efficiency Financing for Low- and Moderate-Income Households: Current State of the Market, Issues, and Opportunities: This DOE report offers state and local policymakers, state utility regulators, program administrators, financial institutions, consumer advocates and other low-to-moderate income (LMI) stakeholders with an understanding of:

The relationship between LMI communities and financing for energy efficiency, including important considerations for its use such as consumer protections;
The larger programmatic context of grant-based assistance and other related resources supporting LMI household energy efficiency;
Lessons learned from existing energy efficiency financing programs serving LMI households; and
Financing products used by these programs and their relative advantages and disadvantages in addressing barriers to financing or to energy efficiency uptake for LMI households.

Energy Savings Performance Contracting Guidelines for Developing, Staffing, and Overseeing a State Program: These DOE guidelines provide state and local governments with information, best practices, and resources on how to develop an energy savings performance contracting (ESPC) program, which could be used to retrofit affordable housing or other properties.

EPA Local Government Climate and Energy Strategy Series: Energy Efficiency in Affordable Housing – A Guide to Developing and Implementing Greenhouse Gas Reduction Programs: This guide focuses on how local governments can take an active role in improving energy efficiency in affordable housing units they own and develop, and advance energy efficiency in affordable housing owned and developed by other public and private entities, such as community development corporations (CDCs) and public housing authorities (PHAs). It provides information on the benefits of improving energy efficiency in affordable housing, expected investment and funding opportunities, and case studies.

ENERGY STAR for Affordable Housing: This website provides information for planning energy efficiency improvements in affordable housing, including resources for new and existing construction, efficient products, and related programs.

Multifamily Green Rehabilitation Resource Guide: This guide, developed by the International Center for Appropriate and Sustainable Technology (ICAST), was designed to help property owners, managers and energy service companies understand how to overcome market barriers in performing energy and water retrofits on multifamily affordable housing (MFAH). It outlines the “specific performance of cost-effective green rehab measures that can be applied to MFAH properties, and also addresses how to engage the owners of affordable housing properties, overcome barriers such as ‘split-incentive’, educate MFAH residents, and find innovative solutions that can preserve MFAH properties using a sustainable market-based approach.”

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LOCAL GOVERNMENT EXAMPLES

Boston, MA:
A partnership between the City of Boston, Boston Housing Authority (BHA), and Action for Boston Community Development (ABCD) invested nearly $25 million in energy saving equipment and materials across BHA’s housing developments, resulting in $24 million in energy cost savings since 2006. Energy upgrades included the installation of high efficiency boilers, furnaces, and domestic hot water systems; air source heat pumps; attic and sidewall insulation; air sealing; LED lighting upgrades; variable frequency drives; and solar thermal projects. This partnership, along with BHA’s energy saving performance contract, resulted in BHA reducing its greenhouse gas emissions by 25% four years ahead of its goal.
Philadelphia, PA:
The City of Philadelphia and Philadelphia Housing Authority (a municipal authority that works in partnership with the city government) have several initiatives underway to improve the energy efficiency of affordable housing, both in publicly owned and in subsidized, privately owned buildings. Most notable are a $100-million energy performance contract to improve energy efficiency in all units owned by the Philadelphia Housing Authority, and the city’s 10-year, $1 billion Philadelphia Energy Campaign, which includes a goal to retrofit 25,000 low-income residences. For additional details, see the complete case study (pages 37-39).The Philadelphia Energy Authority implements many of the initiatives described above on behalf of the city. More information on their initiatives underway can be found on the Philadelphia Energy Authority’s Affordable Residential webpage.

Toledo, OH:
The City of Toledo, through its Department of Neighborhoods, contributed to the funding of the Cherry Legacy Homes project, an ENERGY STAR in affordable housing project implemented by NeighborWorks Toledo Region. ENERGY STAR-certified homes were constructed on in-fill lots in the Cherry Legacy neighborhood. The homes were designed to allow for aging-in-place, with at least one bedroom and bathroom on the first floor. Homes can be rented at an affordable price for fifteen years with an option to buy at the end of the rental period. To provide affordable housing to those with the greatest need, the maximum household income is capped at 60 percent of the area median income. For more information, view the complete case study

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