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Less Is More: Transforming Low-Income Communities Through Energy Efficiency on the Cover, from Left: U.S 20 15 Less Is More: Transforming Low-Income Communities Through Energy Efficiency On the cover, from left: U.S. volunteer Sumner McCallie cuts insulation for Habitat for Humanity Mongolia’s Blue Sky Build in 2010. Second from left: Volunteer Kurt Newton, from Trinity, Colorado, helps to rehabilitate the home of the Csapó family in Vac, Hungary, as part of Habitat for Humanity Hungary’s thermal insulation program. Third from left: Double-paned windows help conserve energy in the 29 houses built for Habitat Mongolia’s Blue Sky Build. At right: Dan Santa Lucia, 57, a volunteer from Habitat for Humanity Trenton, installs insulation in one of the many homes in Ocean Beach, New Jersey, damaged by Superstorm Sandy in 2012. Background photo: Morguefile, Inset photos, left to right: ©Habitat for Humanity/Mikel Flamm, Ezra Millstein, Mikel Flamm, Bob Longino Cover page photo: Jessica McGowan Shelter Report 2015 Less Is More: Transforming Low-Income Communities Through Energy Efficiency habitat for humanity Numerous experts in the energy and housing sectors were consulted throughout the writing international and researching of this report. We’re especially grateful to Jeffrey Genzer, counsel to the National Association of State Energy Officials; Dr. Lowell Ungar, senior policy adviser for the American Council Jonathan Reckford for an Energy-Efficient Economy; and Rodney Sobin, director of research and regulatory affairs for the Chief Executive Officer Alliance to Save Energy, for their thoughtful and insightful review of the report. Mike Carscaddon We also are grateful for the numerous Habitat staff members who helped make the Shelter Report Executive Vice President of possible, especially Adam Smith, Brinda Moody, Christopher Ptomey, Derrick Morris, Elisabeth Gehl, International Field Operations Kevin Gobble, Michael Sutton, Pam Campbell and Piper Hendricks. Dan Petrie We also wish to thank the many Habitat-affiliated organizations for contributing examples and for their Congressional Relations Associate Director enduring partnership as we serve more communities in need. Primary author and researcher: This publication was generously supported by the RZ Foundation and the U.S. Green Building Council. Brad Penney Habitat for Humanity International is a nonprofit, ecumenical Christian housing ministry that seeks Contributing Writer to eliminate poverty housing and homelessness from the world and to make decent shelter a matter of Phil Kloer conscience and action. Government Relations Headquarters and Advocacy Office 270 Peachtree St. NW, Suite 1300 1424 K St. NW, Suite 600 Atlanta, GA 30303 USA Washington, DC 20005 800-HABITAT 229-924-6935 202-628-9171 fax 202-628-9169 [email protected] habitat.org [email protected] 270 Peachtree St. NW, Suite 1300 Atlanta, GA 30303 USA 800-HABITAT 229-924-6935 habitat.org Foreword 3 Jonathan Reckford, CEO, Habitat for Humanity International Introduction 4 1 Why energy efficiency matters 6 The “invisible resource” Table of U.S. ranks 13th in energy efficiency 2 Energy burden on low-income America 12 Raising the baseline Contents Manufactured homes are least efficienct Vulnerabilty to rate hikes Multifamily offers high return on investment Split incentives and lack of financing are key barriers On-bill financing The potential of PACE Increasing public awareness 3 Existing federal and state resources 18 Department of Energy and the Weatherization Assistance Program Department of Housing and Urban Development Low-income housing tax credits Department of Agriculture States are leading the way Social impact bonds 4 Going beyond the financial benefits 24 Health Economic growth Community reinvestment 5 Energy efficiency in the 21st century 28 Public private partnerships Integrating technologies Engaging financial institutions 6 Conclusion and recommendations 32 Recommendations © Habitat for Humanity International/Mikel Flamm U.S. volunteer Sumner McCallie cuts the insulation for a house during the 2010 Blue Sky Build in Mongolia. Over 100 inter- national volunteers from the USA, Hong Kong, Australia, New Zealand, Korea, Philippines, Nepal, Great Britain and Thailand joined hands with local volunteers and home partner families to help build 29 houses. The 4.69-acre housing site will have its own water well provided by partner World Vision, and electricity from the local government. SHELTER REPORT 2015 | LESS IS MORE: TRANSFORMING LOW-INCOME COMMUNITIES THROUGH ENERGY EFFICIENCY Foreword A home’s long-term affordability depends on more than just a into the future. We do this by using the best construction reasonably priced mortgage. Americans spend more than $230 products and services available to build energy-efficient homes billion annually on home energy. and by improving the efficiency of homes through weatherization services. Low-income households typically face the greatest energy burden. Families in these communities often live in older Every dollar low-income families save on energy usage can homes that lack adequate insulation and energy-efficient go toward their home mortgages or other necessities. Habitat appliances. Often they also have outdated heating and cooling was a pioneer in demonstrating that healthy, energy-efficient systems that can contribute to health and safety issues. Low- homes aren’t only for the wealthy. We have partnered with income families spend more than 17 percent of their incomes thousands of families whose total cost of ownership is lower © Habitat for Humanity/Ezra Millstein on household energy, while other households spend on average even if they pay a slightly higher mortgage. We have built net just 4 percent. Most energy efficiency benefits do not reach this zero Habitat homes, but our standard and belief is that every population, and more attention must be given to support the family should have a healthy, energy-efficient place to live. energy needs of distressed communities. Still, too many families face the challenge of energy costs that The federal government has tried to address this challenge are excessive compared with their overall incomes. We will through effective programs such as the Weatherization bring energy efficiency to everyone only through innovation, Assistance Program, which has weatherized millions of reform and bipartisan support. By becoming an advocate for homes occupied by low-income families. However, there is low-income families and affordable, sustainable housing, you still a substantial need for more innovative approaches in the can bring us closer to a world where everyone has a decent residential market to adequately address the energy needs of place to live. underserved families. We need more cutting-edge initiatives at the state level, such as the programs in Maine and California, In partnership, and more public-private partnerships between utility companies and local governments, such as Energy Smart in New Orleans. Jonathan T.M. Reckford Habitat for Humanity has recognized the importance of CEO, Habitat for Humanity International integrating energy efficiency into our work and has increased the efficiency and durability of our homes to ensure that families live in healthy environments that will be affordable 3 SHELTER REPORT 2015 | LESS IS MORE: TRANSFORMING LOW-INCOME COMMUNITIES THROUGH ENERGY EFFICIENCY Introduction Audrey Spann still lives in the same 100-year-old row house ization upgrades to their current homes. Spann is one of many in Philadelphia that was her parents’ home and her birthplace. people whose lives have been enhanced by residential energy The house suffered from a combination of factors common efficiency.i Unfortunately, those who would benefit the most to older buildings, such as a complete lack of insulation and from efficiency in their homes are often the least able to make significant deterioration, including a broken water heater. the necessary upgrades. Before Spann applied for significant repairs and upgrades through Habitat for Humanity’s Weatherization and Home This report unpacks this paradox. Many of our fellow Repair program, she was boiling water in her kitchen and citizens face energy costs that are excessive compared with carrying it upstairs for her bath. their overall incomes, yet they cannot afford to invest in the energy efficiency measures that would reduce their energy Weatherization helps reduce the waste of heated or cooled air cost burden. Families nationwide are often forced to choose by sealing and insulating a home, and improves the comfort, between necessities such as food or medications and paying ventilation, indoor air quality and energy efficiency of the their energy bills to heat and cool their homes.ii Private and home. Habitat performed dozens of repairs and upgrades public resources are available to help Americans like Audrey to Spann’s home, including installing a new roof, adding Spann, but these resources reach only a small percentage of insulation, caulking doors and several windows, replacing underserved households. some windows entirely, cleaning and sealing air ducts, removing mold and lead paint from the basement, and The numbers tell the stark reality. Across America, 45.3 million installing a new water heater and stove. people are living in poverty,iii and all of these families are struggling with the cost of energy in some way. Low-income “It’s such a blessing,” Spann said. families spend anywhere from 17 percent to more than 50 Energy efficiency means using less “Before I got the insulation, (the percent of their incomes for household energy, while other
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