America spends approximately $1.4 billion on public housing energy payments every year. To put that into perspective, that’s equal to:
- 15.3 percent of the annual budget of the U.S. Environmental Protection Agency
- 79.4 percent of U.S. investment in energy-efficiency programs and renewable energy research
- the operating expenses of the U.S. Agency for International Development
- 50 times as much as we spend on National Public Radio.
Yet multi-family public housing projects, on average, waste 40 percent more energy than the typical U.S. home. To put it simply, our public housing buildings are leaking our money.
If we made affordable housing 25 percent more efficient, we could use the dividends to double the current federal budget for building energy-efficiency research and generate greater future energy savings. But we can go even further.
There are case studies showing that some of our oldest buildings can be 50 percent more efficient. This energy efficiency comes none too soon, because energy conservation codes are demanding more energy efficiency more quickly than ever before in American history.
The Department of Housing and Urban Development (HUD) and the 3,300 public housing authorities (PHAs) that develop and operate public housing are on the hook for (at least a part of) the utility bills of all 1.1 million public housing units. In traditional apartment rentals, energy efficiency is hampered by the curse of split incentives – the landlord builds and owns the apartments, but the tenant pays the energy bills.
However, in the case of public housing, the landlord (the PHA, with support from HUD) is responsible for putting up the building and for paying the utility bills, removing the split-incentives barrier. So, why is there still inefficiency within our portfolio of public affordable housing units? This is one of the questions RMI seeks to answer with the Residential Energy Efficiency Leaders (REEL) working group.
This group is composed of 10 PHAs dedicated to bringing superefficiency to public housing. Members have signed a commitment to identify impediments and solutions to increased energy-efficiency, meet regularly to discuss relevant topics, and share resources and ideas freely. REEL Working Group members include: Albany Housing Authority, British Columbia Housing, Boston Housing Authority, Denver Housing Authority, Home Forward (Portland Housing Authority), Housing Authority of the City of El Paso, Minneapolis Public Housing Authority, San Antonio Housing Authority, Seattle Housing Authority, and Tacoma Housing Authority.
Through the leadership of these PHAs, RMI is identifying roadblocks to efficiency and investigating innovative solutions from our working group members and other PHAs. Together, the group will identify an aggressive, yet achievable energy-efficiency goal that can show the public housing sector that efficient design is not only possible, but also profitable.
Next page: A tale of two cities
Corey: Thanks for a thoughtul
Corey: Thanks for a thoughtul look into this. I'm head of the National Housing Trust. HUD's total annual energy bill now is over $7 billion (this includes public housing, privately owned Section 8 and 202 housing, etc). This consitutes approximately 20% of HUD's annual appropriation. It is in all of our interest to get this cost reduced. The Trust is working with leaders like Ismael Guerrero at the Denver Housing Authority and large nonprofit owners of Sectoin 8 stock to a)work on the split incentive issue where the tenant pays the utilities and the owner is not fully encouraged to undertake the retrofit and b) engage with local utilities who quite frequently have not developed programs targeting affordable, multifamily stock. It's in all of our interest to reduce the energy consumption in rental housing, improve the living enviroments for poor households who live in this housing, and save the Federal Government billions of dollars. For those who haven't read it, recommend "Up the Chimney" by Charlie Harak at the National Consumer Law Center who talks about how we are wasting taxpayer funds by not taking on energy efficiency in a bigger way in HUD public or assisted housing. In any event, I am optimistic that articles like yours and Charlie's and our own engagement will produce positive results. Again, thanks for writing this important piece.
One incentive question: How
One incentive question: How is the property management fee calculated by HUD? Would efficiency measures reduce that fee? If so, the property manager would have a disincentive to increase energy efficiency.
This approach toward energy
This approach toward energy saving thinking is a praise worthy attempt. The more we'll use solar energy, the more the gain will be. The gain for the environment, gain for reducing cost. Keep the process up.
A big issue is the tenant -
A big issue is the tenant - they have little incentive to watch energy use. If the resource is free to them, they wont care what they use. Last winter, a writer interviewed puiblic housing resident who said the cold weather made it hard to maintain 78 degrees inside her home. 78 degrees??
So I would argue a huge issue is education and shared sacrifice of the tenants
So i agree and there's more.
So i agree and there's more. The "system" doesn't allow for the PHA's to be incentivized and this has been known for many years if not ever since the 40's, even Harvard did a study for HUD to show this back in 03 and still no solution to date; so it isn't very high up there on anyones priority list! I say skip over this and lets go for the biggest bang for the buck, turn public housing and all over to the non profits (Churches and the like, who do a much better job at this) and put all the cost to own & operate these PHA's into sustainable energy and independance and be done with it!