Energy Efficiency in Housing U.S. Perspectives

Energy Efficiency in Housing U.S. Perspectives Kurt G. Usowski, Ph.D. Deputy Assistant Secretary for Economic Affairs U.S. Department of Housing and Urban Development

Economic Case for Energy Efficiency Regulation in Housing

o Don’t Prices Work?  

Information problems Incentive incompatibility o Landlord/renter o Subsidized housing

 Externalities o What are the appropriate policy remedies?

Energy Efficiency in Affordable Rental Housing

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Low-Income Housing Tax Credit (LIHTC)

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Credits compensate equity investors reducing debt Gross rents controlled to area median income Competitive allocation process by states Energy efficiency a required allocation factor by statute ~50,000 new or rehabilitated units annually

States design their own energy efficiency allocation factors

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Threshold requirements Competition points Use one or more approaches

Approaches to Energy Efficiency in LIHTC

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Green Capital of Physical Needs Assessment (rehab)

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Energy and Water Audits (rehab) or Modeling (new)

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Assess or model current consubmption to evaluate costeffective improvements

Performance-based requirements or incentives (rehab)

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Determine capital needs that would improve energy and water efficiency

Reduce consumption by a certain percentage compared to preretrofit levels

Third-Party Building Standards

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LEED; EarthCraft; Enterprise Green Communities; National Green Building Standard

Approaches to Energy Efficiency in LIHTC

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Required Energy Professional – part of design team

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Benchmarking against other similar properties Water conservation requirements/incentives

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Coordination with Utility Energy Efficiency Programs

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Potential additional source of capital Demand reduction investments by service provides

Project –specific utility allowances

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Installation of low-flow plumbing fixtures

Owners collect higher percentage of gross rent

Renewable Energy Incentives