Incentivizing Energy Conservation through Resident Engagement and Utility Allowances
Jamaica Plain Neighborhood Development Corporation (JPNDC) was founded in 1977, with a mission of promoting equitable development and equal opportunity in the community through affordable housing, organizing, and economic opportunity initiatives that improve the lives of low-to-moderate income people and create a better community for all.
Since joining the Better Buildings Challenge, JPNDC has taken a comprehensive approach to reducing its portfolio-wide energy consumption, including customized resident engagement strategies. Pondview is an individually-metered property where the property management firm has historically paid the electricity bills, resulting in residents being unaware of their energy use even though it was factored into their rent. JPNDC recognized that this arrangement disincentivized residents from conserving energy and decided to transition Pondview to a HUD-approved utility allowance structure where residents would pay their own utility bills.
Before setting the baseline of “reasonable” energy consumption that would be the foundation for Pondview’s utility allowances, JPNDC made an effort to normalize energy consumption at the site through physical building upgrades, resident education, and a “resident energy challenge.”
Pondview Apartments includes four contiguous buildings in a U-shaped configuration. JPNDC acquired the property in 1999, which includes 60 affordable units with common electricity metering and individual meters for in-unit energy consumption. Despite the in-unit metering, JPNDC’s property management firm had always paid monthly utilities and factored average utility costs into rent. JPNDC determined that it could reduce energy consumption at the property by transitioning monthly utility bills to residents, but knew from proactive community engagement that transparent communications and resident education would be critical for gaining buy-in.
Of Pondview’s 60 units, 56 are on HUD’s Housing Assistance Program (HAP) contract and the remaining units have residents with mobile vouchers, which dictates that the allowable rent burden for residents is set at 30 percent of their adjusted gross household income. To transition utility bills to residents, JPNDC would have to work with its lender and HUD to calculate appropriate utility allowances for each bedroom size and deduct utility allowances from contract rent to determine gross rent. In addition, the sum of utility allowances and the energy cost for the common areas would have to fit within the property’s budget structure.
To obtain HUD’s approval, housing providers must use a comparable building in the region as a reference for setting an appropriate utility allowance for their property. JPNDC could not find a comparable building for Pondview, so HUD agreed to set the property’s utility allowances based on its energy consumption over the previous year as documented in Wegowise, JPNDC’s third-party benchmarking provider. JPNDC agreed to this methodology but did not want to set Pondview’s utility allowances unfairly using a baseline year during which residents had no awareness of their utility consumption. Thus, as a first step they attempted to normalize resident energy consumption by educating them about the process, implementing physical building upgrades, and hosting energy competitions. The goal of this approach was to be as fair as possible to residents, while establishing a baseline of reasonable energy consumption for Pondview.
JPNDC relied heavily on resident trust to complete this transition; the property manager at Pondview had 20 years of experience with the residents and community, which helped facilitate communication and implementation. Because utility costs had always been included in residents’ rent, management was cognizant that paying an individual bill for the first time could present as an additional expense despite being an accurate representation of actual energy costs. JPNDC and management explained the reasons for the utility bill transition from the beginning, emphasizing that they were not taking anything away, but were instead allowing residents to pay utility bills based on actual energy consumption rather than an estimated amount. Most residents appreciated the opportunity to control their costs by conserving energy. JPNDC and Pondview’s property manager educated residents about basic energy efficiency and conservation behaviors such as turning off air conditioning when windows are open.
Energy Efficiency Upgrades
The property manager explained that JPNDC was making numerous energy efficiency upgrades at the property to establish a fair baseline before adjusting utility allowances and transitioning bills to residents. In total, JPNDC obtained $283,000 of building upgrades from Action for Boston Community Development (ABCD) including LED light bulbs, boiler replacements, and a roof-mounted array of solar tubes connected to the domestic hot water system which covers 50-60 percent of Pondview’s hot water needs.
The Pondview Resident Energy Challenge
JPNDC designed the “Pondview Resident Energy Challenge” to help residents understand the connection between behavior and energy use and to further increase buy-in through transparency and hands-on education. JPNDC advertised the challenge with bilingual flyers and announcements, encouraging participation by offering a gift card to the top-2 energy savers in each bedroom category as well as recognition in an upcoming newsletter. Using a utility data tracking platform, JPNDC compared residents’ weather-normalized energy consumption in summer 2018 to their energy consumption in 2017. JPNDC will announce the top energy savers at a resident meeting in summer 2019.
JPNDC is currently analyzing Pondview’s 2018 energy consumption following the physical buildings upgrades, resident education, and resident energy challenge efforts. If Pondview’s 2018 energy consumption appears to be reasonable and fair, JPNDC will use the data to set utility allowances with HUD.
HUD’s requirements for federally-assisted housing state that households should pay no more than 30 percent of their adjusted monthly income for “rent,” which includes shelter and the costs for reasonable amounts of utilities. The amount that a housing provider determines is necessary to cover households’ reasonable utility costs is the utility allowance. Click here to learn more about HUD’s utility allowance policy.
JPNDC’s approach to resident outreach focused on transparency and fairness. The staff hosted three resident conversations in April and May 2018 to explain how federal requirements would be applied evenly across the resident population. The outreach efforts were enhanced by the property manager’s established 20-year relationship with residents.
About one-third of Pondview’s residents are non-native English speakers, so JPNDC published all outreach materials in both English and Spanish. JPNDC posted visually-appealing flyers throughout the property to explain the goals of the utility allowance transition and to remind residents that paying for utilities separately did not represent an additional expense because it had always been factored into rent.
View examples of JPNDC’s outreach collateral in the Tools section.
Tools & Resources
JPNDC provided outreach collateral to Pondview residents in both English and Spanish as part of the utility bill transition.
JPNDC will measure the success of this initiative by its ability to contain utility costs within Pondview’s budget structure in pursuit of achieving their BBC goal of 20% reduction in energy intensity, ensuring the property’s long-term financial sustainability. If the resident energy initiative was successful, its utility data tracking platform should demonstrate a significant energy reduction in summer 2018 compared to summer 2017 due to physical building upgrades, resident education, and the resident energy challenge. JPNDC will monitor residents’ continued engagement with energy efficiency by recording attendance at evening meetings.
The goal of this process was to determine a “reasonable” level of energy consumption at Pondview in a way that was transparent and fair with residents, but also fit within the property’s budget structure. The ultimate outcome of this project will be transitioning individual unit utility bills entirely to residents, which will reinforce the connection between behavior and energy use. The property has already seen some energy saving results, but a full analysis will be completed in summer 2019. JPNDC will continue to work with residents to educate them on ways to reduce their consumption and save money on their bills. Under the utility allowance structure, Pondview’s budget line item for electricity will be reduced to reflect the sum of its utility allowances and a fair estimate of common area energy costs. JPNDC’s goal is to implement utility allowance adjustments in 2019, but if 2018 energy consumption ends up being higher than expected, JPNDC will host another resident energy challenge before setting the allowances.
Jamaica Plain Neighborhood Development Corporation implements physical building upgrades, resident education, and an energy challenge to establish a baseline for utility allowances and transition utility bills to residents.
Residents at Pondview Apartments did not pay their own utility bills directly, disincentivizing them from conserving energy and running counter to JPNDC's energy reduction goals
JPNDC implemented physical building upgrades, resident education, and an energy challenge to establish a baseline for utility allowances and transition utility bills to residents
Residents have a better understanding of the connection between their behavior and energy use and JPNDC plans to implement utility allowances in 2019 or 2020