The Multiple Benefits of Federal Housing and Energy Programs

Energy Efficiency for All (EEFA) and the Environmental and Energy Study Institute (EESI) held a "101" briefing about federal programs that reduce housing and energy cost burdens for people in need. National policy experts who interact closely with state and local organizations provided an overview of key programs, including statutory authority and appropriations, and how they impact the lives of recipients. Panelists discussed how energy efficiency services result in lower home energy bills, which is critical for low-income families that spend a greater percentage of their income on energy.

 

HIGHLIGHTS

 

Khalil Shahyd, Senior Policy Advocate, Energy Efficiency for All (EEFA) and Resilient Communities Program, Natural Resources Defense Council (NRDC)

• Khalil Shahyd welcomed attendees on behalf of EEFA, a coalition of federal, state and local partners that promotes energy efficiency in affordable housing.

 

Ellen Lurie Hoffman, Federal Policy Director, National Housing Trust

• NHT’s mission is to preserve affordable housing. Preservation in this case refers to ensuring that the existing stock of affordable housing is maintained and periodically upgraded to prevent it from being torn down or redeveloped as market-rate housing.
• Energy efficiency is also a priority for NHT and why it's part of EEFA. Energy is the number one driver of housing costs.
• Project-Based Rental Assistance (PBRA), managed by the Department of Housing and Urban Development (HUD), is a public-private partnership that provides affordable housing for more than 1.2 million low-income households across the country.
  • Over half of PBRA households include someone with a disability or who is elderly.
  • Under PBRA and other federally-assisted housing programs, households pay 30percent of their income for rent, and the government covers the rest.
  • PBRA is a big percentage of HUD’s budget and requires annual appropriations from Congress to sustain long-term housing contracts. The latest government shutdown caused hundreds of contracts not to be renewed, creating uncertainty for owners and residents.
  • According to HUD, only 25 percent of eligible residents are served by federal rental assistance.
• The Low-Income Housing Tax Credit (LIHTC), managed by the Internal Revenue Service (IRS), was established by the Tax Reform Act of 1986 under President Ronald Reagan. It is the primary tool for the development of affordable multi-family rental housing and since 1986 has financed more than 2.8 million affordable apartments nationwide, at a rate of nearly 100,000 per year. These properties provide affordable housing for roughly 6.7 million low-income households.
  • Housing credits are a critical resource for preserving, rehabilitating, and building affordable housing. Periodic recapitalization is necessary every 10 or years to upgrade buildings, such as replacing roofs, windows and HVAC systems. The reinvestment and improved energy efficiency allows for continued long-term usage of properties with lower operating costs.
  • Energy efficiency reduces a household’s “energy burden” or the percentage of monthly income used to pay for heating, cooling and other energy use.
  • Housing tax credits are administered by the IRS and state agencies and allocated annually to all 50 states based on population. States award the credits to developers through a competitive bidding process.
  • Learn more about the Housing Credit program and how states prioritize their various housing needs by visiting NHT’s database, PrezCat.

 

Eric Behna, Policy & Communications Manager, National Association for State Community Services Programs (NASCSP)

• The Department of Energy’s (DOE) Weatherization Assistance Program's (WAP) mission: “To reduce energy costs for low-income families, particularly for the elderly, people with disabilities, and children, by improving the energy efficiency of their homes while ensuring their health and safety.”
• WAP is a federal, state, and local partnership and is the largest energy retrofit program in the nation. WAP is present in every county in the nation, throughout all 50 states, D.C., and 5 U.S. territories, serving all types of housing.
• WAP weatherization funds are authorized and appropriated by Congress. The program is overseen by state-level offices which provide quality assurance, leverage additional funds from utilities and other sources, and drive innovation in the program. The state offices contract with weatherization sub-grantees at the local level, including community action committees, energy efficiency nonprofits, and local governments.
• WAP has weatherized more than 7.4 million homes in the United States and plays a key role in addressing energy insecurity in the nation.
  • More than 25 million homes in the United States have reported energy insecurity and having to forgo food or medicine to pay energy costs or having to keep homes at unhealthy temperatures.
  • The DOE estimates that 30-40 million households in the nation are income eligible (earning up to 200 percent of the poverty level) for the program.
• Through WAP, every participating home gets an energy audit from a trained energy auditor who determines which measures will save the client and home the most energy and money (through better insulation, lightbulbs, HVAC equipment, and other measures) with a savings to investment ratio of one: improvements that will pay for themselves over the course of the program.
• WAP directly supports more than 8,500 jobs nationwide, as well as indirectly supporting many others through contractors and subcontractors.
• Energy benefits of the weatherization program include:
  • $283 annual savings for participating households
  • 18 percent annual savings on heating consumption
  • 7 percent annual savings on electricity consumption
• Weatherization also results in non-energy benefits:
  • An average $514 decrease in out-of-pocket medical expenses
  • Fewer hospitalizations and ER visits for residents with asthma
  • Fewer “bad” physical and mental health days
  • Fewer allergy and cold symptoms
  • Children missed fewer days of school
  • Total health and household-related benefits for each unit of $14,148
• DOE funding and research has pioneered energy efficiency technologies and building science techniques that are tested through WAP and have become standard for weatherization projects nationwide.
• WAP is funded by the DOE, the Low Income Home Energy Assistance Program (LIHEAP), and other sources—including funding leveraged from utilities, states, hospitals or health insurance companies, foundations, and others. States may use up to 15 percent of their LIHEAP funds for weatherization services. In 2017, 29 states leveraged nearly $255 million in flexible funding from utilities and other non-federal sources to maximize the program’s reach and effectiveness.
• WAP is a unique and special program that directly supports families and households through tangible, in-person help.

 

Katrina Metzler, Executive Director, National Energy and Utility Affordability Coalition (NEUAC)

• The Low Income Home Energy Assistance Program (LIHEAP) is a block grant established by Congress in 1981 that enjoys bipartisan support. LIHEAP is the primary federal funding source for energy affordability that helps families meet their immediate heating and cooling needs.
• Nearly 6 million households were served in 2017. Congress appropriates funds annually. However, as a block grant, LIHEAP differs from entitlement programs—funds don’t increase with need. So as fuel prices go up, LIHEAP serves fewer households with constant funding. Key is that only 1 in 5 eligible households are served, demonstrating the enormous gap in meeting energy needs through LIHEAP.
• The energy burden (the percentage of household income spent on energy bills), is much higher for low-income households. LIHEAP exists to make energy affordable even at the lowest incomes.
  • The average family served by LIHEAP makes $1,667 per month, compared to the national average of $5,000 per month. If an energy bill is $250 a month, the low-income household has an energy burden of 15 percent, compared to only 5 percent for the average American household.
• LIHEAP helps low-income homes meet their energy costs, assists when households face an energy crisis, funds low-cost weatherization measures, and provides education services for households on how to reduce the need for energy assistance.

 

Michael Furze, Assistant Director, Energy Division, Washington State Department of Commerce

• Washington’s Department of Commerce is a “swiss-army knife” for communities. The Weatherization Plus Health program (Wx+H) is a pilot program that helps families whose homes are unsuitable for typical Pacific Northwest conditions: homes that are drafty, cold, moldy, leaky, damp, and claustrophobic with non-ventilated wood stoves.
• Wx+H focuses on providing low-income homes with weatherization upgrades that lead to better energy efficiency, energy savings, and home comfort.
• The benefits of Wx+H are difficult to quantify, but doing so is important to help secure future funding and educate legislators. Wx+H is seeking to track health benefits and is tailored to each household’s individual needs. There are two phases:
  • Basic Weatherization: new heating systems or repairs, increased ventilation, air sealing, and low-cost measures like CO monitors and programmable thermostats.
  • Weatherization Plus Health: Education on energy and healthy homes, client support tools—HEPA-filtered vacuums, green cleaning kits, mattress covers, humidity gauges—and additional measures including duct cleaning, hard surface flooring, or roofs, repairs, mold abatement, and plumbing.
• Initial results of the Wx+H program are promising. The Pierce County Healthy Homes Case Study found that one year after Wx+H, 65 percent of homes reported respiratory improvement, 70 percent reported quality of life improvement, and there were 4 fewer urgent care visits, 15 fewer ER visits, and 6 fewer hospital admissions.

 

According to a 2016 study of America’s largest cities by EEFA and the American Council for an Energy-Efficient Economy (ACEEE), the median low-income household spent 7.2 percent of its income on energy, twice as much as the median for all households (3.5 percent). The energy burden is even greater for rural households. Another EEFA/ACEEE report indicates that rural households have a median energy burden of 4.4 percent and that rural low-income households are even worse off, shouldering a median energy burden of 9 percent. When monthly bills for electricity and fuel take a large bite out of small paychecks, residents are often forced to choose between heating/cooling and other necessities like food and medicine. But high energy burdens are not simply a result of low incomes and/or high energy prices. Homes with inefficient appliances, lighting, and heating/air-conditioning systems as well as air leaking through roofs, walls and windows, use more energy and cost more to operate even if utility rates are low.

Reducing home energy use per square foot can lower utility bills and lighten the energy burden for low-income households; improve health, comfort, and quality of life; and reduce environmental impacts. EEFA/ACEEE studies have found that the U.S. Department of Energy’s Weatherization Assistance Program, which retrofits single-family homes for those living at or below 200 percent of the federal poverty level, saves families an average of $283 per year. In addition, affordable-housing developers rely on the Low-Income Housing Tax Credit (LIHTC) to build and preserve energy-efficient, multi-family affordable housing. For the lowest income households, rental assistance from HUD, and the Low Income Home Energy Assistance Program (LIHEAP) from the U.S. Department of Health and Human Services, provide critical lifelines.