Transcript Greening America’s Buildings

Greening Affordable Housing
Short and Long Term Strategies
Presentation to Office of Affordable Housing Preservation
June 26, 2008
William C. Kelly, Jr.
President, Stewards of Affordable
Housing for the Future (SAHF)
[email protected]
Why Energy Conservation in Affordable
Housing is Important
• Utility and energy prices continue to rise
• HUD’s direct utilities spending is ~$5.3 bn/yr
• SAHF’s members spend about $70 million
annually on energy
• Green new construction is important, but 50% of
buildings we will have in 2030 have already been
built
• Could save 25+% on utilities in existing housing
A Snapshot
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OAHP’s initiative
NYSERDA
Enterprise Community Partners Green
“Weatherization”--a limited delivery model
Public housing ESCO program (117 PHAs)
Little data collection
Largely one project at a time
Getting the Field To Scale
• Develop owner expertise and commitment
• Gather and analyze data
• Craft a financing strategy
▫ Public resources used to leverage private capital
▫ Efficient execution
• Create a policy framework
▫ Incentivize owners and private investors
▫ Align incentives among owners, residents ,
utilities and housing subsidy providers
Leverage With Private Capital
• Much bank posturing, but few investments
• Need to create a new market
• Short term: more subsidy to lower risk until
results established
• Long term: lower subsidy level required
SAHF—Owner Expertise/Commitment
• SAHF members are outstanding owners, but
▫ No readily accessible/usable data at the home
office
▫ No material energy expertise on staff
▫ Only one had experts review utility bills
• Now, senior management focus
• NCR has hired a full-time expert/Mercy
consultant/others are in the market
SAHF--Owner Expertise/Commitment
• Mercy Housing: Schiff Residences
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Wind turbines generate 10% of building energy
Solar collectors preheat water for sinks and showers
Gray water and rainwater used in landscaping
Energy Star Appliances
22% less energy/16-18 year payback period
 National Church Residences: 28-property Ohio
porfolio
 Lighting retrofit costing $7,000 per property
 Energy cost reductions expected at $75,000 per year
 Payback period: about 2.5 years
SAHF--Owner Expertise/Commitment
• Preservation of Affordable Housing (POAH):
688 unit Massachusetts portfolio
 Assessed for full range of energy efficiency measures
 State funded solar at one property in Randolph and
potentially wind at another in Salem
 Advanced metering to control electric loads and
allow resale of excess peak capacity
 Randolph property:
 Cost of improvements: $58,000
 Saves projected: $11,000 annually
 Payback period: about 5.3 years
SAHF—Data Gathering and Analysis
• Data Collection and Analysis
 SAHF has contracted with energy firm LPB to gather
one year of historical consumption and bills and one
year going forward
 Aid in demonstrating success of conservation
improvements
 Inform business plan and policy
State Policy Framework--LIHTC QAPs
• Almost every state has a green incentive in their
LIHTC program
• At least 24 states have some type of threshold
environmental requirements
• At least 38 state QAPs grant points for
sustainable building practices, which may
include energy efficiency
• At least 4 states grant a non-numeric preference
to greener proposals
SOURCE: Tracy Kaufman, National Housing Trust
State Policy Framework--LIHTC QAPs
• Some states encourage green preservation by
offering separate scoring criteria
▫ Examples:
 North Dakota’s 2008 QAP includes a weighting
system so preservation properties earn more points
for each green criterion met
 Utah’s 2008 QAP has different thresholds for new
construction and preservation
 California’s 2007 QAP and Regulations also has dual
standards, and includes some point categories that
only preservation projects can qualify for
SOURCE: Tracy Kaufman, National Housing Trust
State Policy Framework--LIHTC QAPs
• Example: Massachusetts
▫ Of 20 design points (12 required), points for:
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Energy conservation measures above Code requirements
Compliance with EPA Energy Star standards
Selection of materials endemic to healthy interior
Mechanical ventilation promoting good air quality
▫ Other state incentives
 Income tax credit, sales tax exemption, and property tax
exemption for renewable energy
 Renewable Initiatives Grants, Small Renewable
Initiatives Rebate, and Green Communities Grants from
Massachusetts Technology Collaborative
SOURCE: Tracy Kaufman, National Housing Trust
State Policy -- Additional Incentives
43 State have other green building incentives:
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Net Metering
Income tax credits/deductions
Special property tax assessments
Sales tax exemptions
Green grant programs
Favorable loans for green developments
Renewable energy production incentives
Green rebates
Preference for green building permits
Utility rebates
SOURCE: Tracy Kaufman, National Housing Trust
Policy Ideas for 2009 and Beyond
• Use section 8 to cover part of the cost
 Existing authority under some programs
• Rep. Perlmutter’s Bill, HR 6078 (the “GREEN Act”):
Energy Difference Demonstration Program
HUD-funded energy increment
Investment repaid over improvement’s lifetime
Short term investment yields long-term financial benefit
Environmental and energy demand benefits accrue
quickly
 Demonstration up to 50,000 units
 Waiver of rules on tenant contribution to encourage
solutions to “split incentive” problem
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More Policy Ideas
• Energy conservation tax credit—a proposal
 30% tax credit for conservation improvements
 Equal to renewables credit
 Separate class of property, to reduce transaction
costs
• Cimate change (cap & trade) legislation
 Federal or state funds could be used to prime energy
efficiency lending/current bill (S. 2191 falls short)
 Affordable housing owners could sell credits
Still More Policy Ideas
• Energy Efficiency Loan Guarantee- Government certifies Energy Conservation
Investment Companies (ECICs)
 ECICs receive federal guarantee or right to issue
guaranteed debentures for loan pools
 ECICs make energy efficiency loans at reduced rates
and reduced paperwork
• Other grant or low-cost loan program
• State public benefit funds and utility programs
HUD’s Role Moving Forward
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Enormous program and financial stake
Build on OAHP’s pioneering work
Need more early experiences and data in 2008/9
Fast moving policy environment
HUD needs a seat at several tables (housing,
climate change, tax, transportation)
• Rapid ramp up in 2010 and beyond
• Foster a market in which owners, lenders, state
agencies, and utilities innovate and do most of
the work