Leaking energy and money from affordable housing

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