Multifamily buildings, especially those that are renter-occupied, present a tremendous opportunity for energy savings. However, the sector presents a unique set of challenges to efficiency investments leaving many multifamily customers underserved by energy efficiency programs. It is imperative that home energy rebate programs are specifically designed to target this sector. Beyond significant energy savings, comprehensive home energy upgrades in these buildings can lead to immediate bill savings and improved comfort for residents.
Recommendations for Program Administrators
ESTABLISH RELATIONSHIPS WITH THOSE THAT HAVE EXISTING KNOWLEDGE AND CONNECTIONS TO THE AFFORDABLE MULTIFAMILY SECTOR
Many diverse organizations are involved in multifamily housing that serve low-income groups and can be useful channels for reaching building owners. These include affordable housing providers and developers, multifamily and affordable housing trade organizations, state housing finance agencies, and Public Housing Authorities (PHAs). In addition to marketing and outreach, these stakeholders can play valuable roles in identifying potential projects, leveraging resources, and/or braiding funding (e.g., the Low-Income Housing Tax Credit (LIHTC), state and local grants) to move more comprehensive projects to implementation and achieve deeper savings. These groups often share an interest in energy efficiency as a means of keeping housing (including utility costs) affordable and sustainable and, therefore, should be viewed as strategic partners.
LEVERAGE PERIODS OF RECAPITALIZATION
Under the national Low-Income Housing Tax Credit (LIHTC) program, state and local LIHTC-allocating agencies issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to low-income households. LIHTC compliance periods (i.e., the duration of affordability restrictions) last approximately 15 years, and recapitalization time periods for LIHTC properties generally coincide with the end of that compliance period. At that time, the U.S. Department of Housing and Urban Development encourages the preservation and rehabilitation of the housing and encourages new investment in that housing to continue to maintain its affordability after the termination of LIHTC-related use restrictions.
Housing finance agencies can serve as a strategic entry point for program administrators to identify a pipeline of projects slated for recapitalization and rehabilitation and ripe for additional upgrade/retrofit incentives. During a recapitalization period, LIHTC properties may receive funds with new affordability restrictions, and Home Energy Rebates could drive investments in these properties to ensure energy costs stay affordable for property owners and residents.
ALIGN REBATES WITH HOUSING FINANCE PROCESS
A multifamily rehabilitation can take upward of 3 years when accounting for predevelopment through construction. To factor rebates into housing finance, developers/owners will need some guarantee that rebates will be reserved over this time for their project (i.e., options beyond point-of-sale). In addition, the Department of Energy encourages states to include staged incentive payments to ensure affordable multifamily housing owners can make timely payments to subcontractors throughout the retrofit process. Examples of a staged incentive payment program for multifamily housing owners include:
- The New York State Energy Research and Development Authority (NYSERDA) Multifamily Performance Program pays owners at a minimum of three milestones: scope of work finalized, 50% construction completed, and 100% construction completed.
- The New Jersey PSE&G Residential Multifamily Program provides progress payments and upfront incentives.
PROVIDE TECHNICAL ASSISTANCE AND SUPPORT TO MULTIFAMILY BUILDING OWNERS
States should consider providing direct technical assistance and project management services to multifamily building owners to facilitate the use of rebate funds in multifamily buildings—especially where there is a need for the braiding of resources, financing, and technical expertise to be deployed together. For example, one-stop-shop models can provide building owners access to integrated program services through a single point of contact. These models give building owners all the tools they need to evaluate and implement energy retrofits and make decisions based on cost, process, and funding opportunities. This model will also help facilitate the braiding of funding, helping to ensure that additional resources are combined and allocated to cover as much of the projects cost as possible including much needed health and safety improvements in conjunction with home energy upgrades.
ENSURE THAT BUILDING OWNERS INCORPORATE ENERGY EFFICIENCY MEASURES THAT PROVIDE DIRECT ENERGY SAVINGS TO TENANTS
By providing technical assistance and encouraging delivery mechanisms that braid resources and financing, the Department of Energy encourages states to ensure that electrification is coupled with deep energy efficiency. Doing so will cut energy waste and minimize energy burden and costs. In addition, such measures will improve housing quality, resident comfort, and overall affordability. Where possible, applicable rebates should be used for in-unit, common area, and whole-building energy-saving opportunities. The California Low-Income Weatherization Program (LIWP) provides higher incentives for measures that benefit tenants than measures that benefit owners. The LIWP program also requires all projects to install required in-unit measures, including low-flow aerators, duct sealing, and lighting upgrades.
BUILD AND STRENGTHEN MULTIFAMILY CONTRACTOR BASE
The contractor base for home energy upgrades serving multifamily buildings is limited. States should invest in growing this skilled workforce. They should also ensure that the networks of existing contractors coordinate their outreach and interactions with consumers to minimize confusion when there are multiple program offerings through different organizations that are applicable to multifamily building owners and residents.
WORK WITH UTILITIES ON ACCESS TO AGGREGATE WHOLE-BUILDING UTILITY DATA FOR MULTIFAMILY OWNERS
Building owners need streamlined access to building energy data to prioritize and make informed investment decisions. The Department of Energy encourages States to work with their utilities so that they provide building owners aggregated, whole-building energy data in an easily accessible and standardized format.
- High-Impact Programs Targeting Regional Multifamily Energy Savings Opportunities: Profiles of four multifamily utility efficiency programs and the successful approaches they have used to achieve high savings across the United States.
- Reaching More Residents: Opportunities for Increasing Participation in Multifamily Energy Efficiency for Cost-Effectiveness Screening: Summary of the challenges to program participation and identifies best practices that programs can use to reach and retain large numbers of multifamily participants.
- Building Decarbonization Solutions for the Affordable Housing Sector: A resource that describes the benefits, barriers, and strategies for decarbonizing buildings in the affordable housing sector.
- An Overview of Affordable Multifamily Programs: Best Practices and Context for Utilities: Best practices for utilities providing energy efficiency services to affordable multifamily customers.
- Closing the Gap in Energy Efficiency Programs for Affordable Multifamily Housing: A resource that examines programs that target affordable multifamily buildings, focusing on energy savings, spending, participation, and cost effectiveness.
- Making Naturally Occurring Affordable Housing More Efficient: Outreach to Upgrade: A paper discussing successful program models being implemented to make unsubsidized affordable housing more efficient and resilient.
- National Housing Preservation Database Mapping Tool: An interactive map to view affordable housing locations.