Low Income Housing Tax Credit Refinance Program Announced
June 4, 2011
“FHA AND FANNIE MAE ANNOUNCE GREEN REFINANCE PLUS TO PAY FOR ENERGY-EFFICIENT UPGRADES IN AFFORDABLE APARTMENT BUILDINGS”
Yesterday HUD Secretary Shaun Donovan introduced a program called “Green Refinance Plus” targeting the refinancing of Low Income Housing Tax Credit Projects. This program’s focus is on energy conservation renovation, a major operational expense, for building owners and/or their tenants-occupants and offers a refinance option, that in this era of tight mortgage money, is a big, big issue.
One Common Sense inclusion was a statement that “Property owners will be able to select the energy- efficiency upgrades that make the most economic sense for their properties.” Government sponsored programs have been know to arm twist property owners into making decisions that aren’t economically feasible, in exchange for financing, while limiting rents that can be paid, creating a cash flow nightmare for property owners. One of the reasons projects opt out of the LIHTC program after the mandatory period.
It mentions a “Green Physical Needs Assessment” to be completed by a qualified provider. Here comes the sticky wicket, “Who qualifies to be a Provider?” In this world of Green Experts, many may state they are qualified, but are they? What will be the determining factor of qualifying providers? There are many starry eyed, Green Experts out there who have no knowledge of cost or practicality in application, and even less knowledge of building. Without some common sense the goals of the program may never be obtained, to the detriment of affordable housing, families and Redevelopment Agencies.
One can only hope that the goal of having this assessment identify property improvements that “reduce energy and operating costs” while giving the borrowers choices for the greatest energy savings for their investment actually is what is implemented and results.
Don’t get me wrong. I believe this is a fantastic move on behalf of the government. I work with LIHTC projects daily. I believe in them. I believe affordable housing options in the this country are sorely overlooked, while being absolutely necessary. Everyone can’t afford a White Picket Fence, 2 kids, a lawn and a house.
There is one thing that this initial program announcement does not mention. One mandatory item missing in most program announcements or grant awards, the education of the occupant and owner. You can put in the greatest, most energy efficient, sustainable building items, but they are only as good as the people who use them daily. I see some of the most practical applications implemented in Affordable Housing and yet occupants continue to move a thermostat up and down; continue to run AC with doors open; try to keep a house at temperatures exceeding 80 degrees in the winter and the main reason is–”They just don’t know any better.” We can continue to give grants, subsidies, free money and make great improvements, but the greatest improvement may be in the education of people living and working in energy efficient, healthy, Green houses and buildings.
The Human Factor: Zero Energy Buildings(ZEB) and Common Sense
June 2, 2011
A blog on Building Green.com regarding people and the creation of Zero Energy Buildings(ZEB) really started me thinking about some personal experience, our results and how to apply some Common Sense to what we learned.
About 3 years ago we completed a 3 Bedroom Modular Home certified to Energy Star–EarthCraft House Virginia Standards for an Inner City Affordable Housing(CHODO) program.
We were interested to see what kind of energy it used relative to a home built strictly to the “Building Code.” In other words would it use less energy? To accomplish this for the first year of occupancy we paid the owner $100/month for original copies of their energy bills. If the home used less than a $100/month they made money, if more, the $100 supplemented the bill. We were expecting energy bills in the neighborhood of $50-60/month, with a spike above $100.00 in Air Conditioning Season.
Without getting into boring details, the house didn’t use less energy, it used more. Personally I was flabbergasted. My theory of building was disproved. As a HERS rater, engineer, builder I was out to prove this was the only way to build “Affordable Housing.” What had we done wrong?
Nothing! That’s right, we had done nothing wrong in trying to construct an energy efficient, affordable, modular home within a strict budget. What we hadn’t figured on was the occupants.
The home owners were a military family. They were originally from a very warm environment. They liked a warm house in winter, and a cold house in summer. They pushed the heat pump high in the winter, forcing the back up strip heat to engage, and spin the old electric meter. In the summer they cranked that dial down into the 60′s.
Now another factor kicked in. The family had 2 young children and a third one born shortly after moving in. That meant lots of loads of wash. This meant lots of electric hot water and dryer usage. You factor in all of those issues and the electric usage was way above projections.
For me it proved a point that all affordable housing providers, including for-profit, non-profit and government agencies should be doing after they build these homes: Secure the monthly utility bills. It should be mandatory in any type of project using grants or government funds helping to build a project to an energy efficiency standard. It should be mandatory for any homeowner/renter receiving subsidies or grants or any type of financial help to allow them to afford living there.
Why? We need feedback and documentation to see where the rubber meets the road between projections and reality. We need it to educate the occupants using some good old fashioned common sense.
The recent posting on BuildingGreen called:”Net-Zero Does Not Live by Design Alone: The Human Factor”by Paula Melton gives a realistic viewpoint regarding the creating of Zero Energy Buildings(ZEB) and how people, occupants, are the wild card between the projections and the reality. This posting makes a lot of common sense, something sorely lacking in the majority of Never-Never Land projections. It should be read by anyone working on a Zero Energy Building Concept.