Utilities in Federally Subsidized Housing
Total Page:16
File Type:pdf, Size:1020Kb
Utilities in Federally Subsidized Housing A Report on Efficiency, Utility Savings, and Consistency By Evan White Goldman School of Public Policy UC Berkeley Law at Boalt Hall June 2012 About the Author Evan White is a graduate student at UC Berkeley, completing his degree in Law & Public Policy from the Boalt School of Law and the Goldman School of Public Policy. After graduation he will be an Honors Attorney at the Consumer Financial Protection Bureau, in their Office of Fair Lending and Equal Opportunity. Before graduate school, he worked as the Fair Housing Director of Project Sentinel Fair Housing in northern California. During graduate school, he consulted on housing policy with the U.S. Department of Justice, the Office of Management and Budget, PolicyLink, the National Housing Law Project, and the City of Berkeley’s Housing Department. Acknowledgments The author would like to thank Larry Rosenthal for his invaluable guidance in this project, Ary Amerikaner, Sanaz Mobasseri, and Sean Tanner for their quantitative support, Sandley Chou for her collaboration, and Danielle Moultak, Chitrang Shah, and Shaheen Rashid for their helpful assistance. The author also wishes to thank Julie Guy and Lindsay Olson for their patience and support. Disclaimer The author conducted this study for the Housing Branch of the U.S. Office of Management and Budget as part of the program of professional education at the Goldman School of Public Policy, University of California at Berkeley. This paper is submitted in partial fulfillment of the course requirements for the Master of Public Policy degree. The judgments and conclusions are solely those of the author, and are not necessarily endorsed by the Goldman School of Public Policy, by the University of California, by the Office of Management and Budget, or by any other agency. Page | 1 Contents I. Introduction .................................................................................................................................... 5 Rising Costs ............................................................................................................................ 5 Small Enough to Ignore, Big Enough to Matter .................................................................... 6 The Challenge Ahead ............................................................................................................. 7 Roadmap of the Report.......................................................................................................... 8 II. Utility Costs, Programmatic Differences, and Incentive Structures ............................................ 10 Who Pays? ............................................................................................................................ 10 Programs Differ Greatly with Regard to Utilities ................................................................ 13 Public Housing ..................................................................................................................... 18 Tenant-Based Rental Assistance (TBRA) ............................................................................. 22 Project-Based Rental Assistance (PBRA) .............................................................................. 24 Possible Explanations for Per-Unit Cost Differences .......................................................... 28 Extent of Individual Metering ................................................................................. 28 Variations in Unit and Household Size ................................................................... 28 Differences in Housing Stock .................................................................................. 29 Methodological Variations: Consumption, Engineering, and Site-Specificity ........ 30 Different Regulatory Consumption Standards ........................................................ 31 Monitoring and Oversight ....................................................................................... 31 Important Takeaways ........................................................................................................... 32 III. Utility Allowances (UAs) ............................................................................................................ 35 Who Calculates UAs? ........................................................................................................... 35 Methodologies ...................................................................................................................... 37 Historical Consumption vs. Engineering Model ..................................................... 38 Outsourced vs. In-House .......................................................................................... 38 Specificity of Categorization .................................................................................... 39 Comparison Group .................................................................................................. 40 Consumption Threshold ......................................................................................... 41 Air Conditioning and Non-Allowable End-Uses ..................................................... 42 Cross-Validation ....................................................................................................... 42 Notice and Comment .............................................................................................. 42 Review and Revision ................................................................................................ 43 Historical Context ................................................................................................................ 45 Are UAs accurate? ................................................................................................................ 48 TBRA UAs Are Remarkably Inconsistent ............................................................... 49 TBRA UAs Are Probably Overestimated ................................................................ 52 Page | 2 IV. Current Policies Encouraging Behavioral Utility Savings .......................................................... 54 Potential Utility Savings in Behavioral Conservation .......................................................... 54 Energy Innovation Fund ...................................................................................................... 56 Updating HUD’s Utility Schedule Model ........................................................................... 56 Energy-Efficient Utility Allowances (EEUAs) ...................................................................... 57 V. Potential Cost-Saving Solutions in Utility Conservation ............................................................ 58 Reduce Overestimated Utility Allowances ........................................................................... 58 Site-Specific Utility Allowances ................................................................................ 58 Revise HUD’s Utility Schedule Model .................................................................... 61 Increase Monitoring ................................................................................................. 63 Harmonize Calculation Methods for Utility Allowances: Align Regulations ...................... 65 Consumption Standard ........................................................................................... 65 Air Conditioning ..................................................................................................... 67 Revisions and Annual Review ................................................................................. 67 Harmonize Calculation Methods for Utility Allowances: Publish Guidance ...................... 68 Define “Reasonable Consumption” and “Typical/Normal” ................................... 68 Specify Acceptable Calculation Methodology ......................................................... 69 Implement Behavioral Interventions in Master-Metered Properties ................................... 70 Behavioral Initiatives ................................................................................................ 70 Submetering (and Individual Metering) .................................................................. 71 Eliminate Utilities from HUD’s Budget .............................................................................. 74 VI. Conclusion ................................................................................................................................. 76 Appendices ....................................................................................................................................... 77 Appendix A: Estimating Owner-Paid Utility Costs in TBRA .............................................. 77 Appendix B: HUD Regulations Concerning Utility Allowances ........................................ 78 Public Housing ......................................................................................................... 78 Tenant-Based Rental Assistance (TBRA) ................................................................. 79 Multifamily & PBRA ............................................................................................... 80 Rural Housing Service ............................................................................................. 82 Low Income Housing Tax Credit (LIHTC) ............................................................. 82 Appendix C: Utility Allowance Dataset ..............................................................................