CHPC launched the GREEN program in response to the systematic exclusion of assisted low income rental properties from federal, state, and investor-owned utility funded weatherization and energy retrofit programs. Each year, three California State agencies are charged with overseeing energy efficiency program funding.

Background:

California's population of 38 million is housed in approximately 13.5 million dwellings of which close to 5,761,000 are rental apartments. Approximately 10% of California’s rental apartments are guaranteed to be affordable to a small number of low income households through various federal subsidy programs overseen by HUD, USDA, and Treasury. The majority of these federally subsidized rentals qualify for low-income energy programs.

California leads the nation in designating resources to increase energy efficiency in its residential buildings, with more than $1 billion available annually in investor owned utility funding for this purpose and another $250 million in state-controlled federal stimulus funding. Unfortunately, most of these programs systematically exclude the properties that need energy retrofits the most--federal and state assisted housing. 

Most energy retrofit programs are designed for single-family homes, then applied to other types of housing. This presents numerous programmatic and technical barriers that ultimately prevent owners of assisted rental housing from leveraging funds to make much-needed capital repairs.

The result:

• Assisted rental developments do not get much-needed repairs.
• The state’s lowest income households do not benefit from a reduction in utility bills or a more comfortable living environment.
• The federal and state governments miss numerous opportunities to leverage funding sources for repairs that they will likely be responsible for in the future.
• Funds are used to install measures in homes that have no long-term affordability covenant.
  

Green Rental home Energy Efficiency Network

Most energy retrofit programs are designed for single-family homes, and then applied to other types of housing. This presents numerous programmatic and technical barriers that ultimately prevent owners of assisted rental housing from leveraging funds to make much-needed capital repairs.

To address these critical issues, CHPC convened The Green Rental home Efficiency Network (GREEN). GREEN is a statewide coalition of mission driven and service organizations across California to work collaboratively for the inclusion of multifamily rental housing as a priority in Federal and State funded energy efficiency programs. GREEN also works to improve the regulatory and administrative provisions to enable a higher rate of green retrofits to public and privately owned assisted housing in California.

Energy Efficiency Program Summary

The California Department of Community Services and Development (CSD) administers the Weatherization Assistance Program (WAP), a federal program managed by the Department of Energy (DOE) that provides no-cost weatherization services to low-income families. It also administers the Low Income Home Energy Assistance program (LIHEAP). LIHEAP assists low income customers with their heating and cooling costs.

The California Public Utilities Commission (CPUC) oversees the Energy Savings Assistance program (ESAP) as well as various rebate programs and a newer Whole House Retrofit Program.  Funded by rate payers through a line item on all private utility company gas and electric bills, ESAP provides approximately $300 million per year to utility company certified contractors who solicit energy retrofit opportunities from households earning less than 200% of the federal poverty level.

The California Energy Commission (CEC) directly administers the State Energy Program (SEP), a federal program that is typically funded at less than $50 million nationwide, SEP received $3.1 billion through ARRA in 2009.  California’s allocation is $226 million, of which it allocated $95 million to various grantees, including some who focus on serving multifamily housing.

The CEC also administers the Energy Efficiency and Conservation Block Grant (EECBG) program.  Funded for the first time under ARRA, EECBG provides funding to local and state government agencies, Indian tribes, and territories to develop and implement projects to improve energy efficiency and reduce fossil fuel emissions in their communities.  California received $351 million in EECBG funds.  Of this amount, approximately $300 million is being awarded to local government and tribal entities with the remainder being made available by the CEC through various RFPs.

Barriers and Recommendations

 Many barriers prevent owners of low-income housing from accessing these funds.

1. BARRIER: Traditionally, agencies administering retrofit funds have required each participating household to individually qualify, provide confidential data, and permission to do the retrofit work, creating unworkable administrative burdens for owners wanting to retrofit whole rental buildings.

RECOMMENDATIONS: (1) Provide categorical income eligibility to federally and state assisted rental housing properties where more than 66% of the tenants are already income-qualified. (2) For federally and state assisted rental properties not already categorically eligible, create a standard streamlined process for owners and providers to document the income eligibility of their whole property and be added to a separate eligibility list at an agency level.

2. BARRIER: Existing programs generally favor paying for specific prescriptive measures designed for single family homes rather than whole-building, performance-based measures that provide the greatest return as determined by actual energy audits.

RECOMMENDATIONS: (1) Adopt a performance-based incentive model where owners and providers are rewarded for implementing the energy efficiency measures that will be most beneficial and cost-effective in multifamily buildings. (2) Adopt a whole building energy audit protocol for multifamily buildings.

3. BARRIER: Only contractors certified by the Agencies may deliver energy retrofit services but only 6 out of 48 are qualified to work on multifamily housing.

RECOMMENDATION: Conduct extensive outreach to contractors with substantial experience in federally and state assisted rental housing construction and make it easier for them to become certified to do energy retrofit work.

4. BARRIER: Many traditional weatherization providers lack experience working on larger rental buildings with more sophisticated systems and are unaccustomed to coordinating their work closely with building owners.

RECOMMENDATION: Authorize larger rental housing owners meeting certain minimum thresholds to hire certified contractors to work on their own buildings.

5. BARRIER: Some agencies have ruled that retrofit funds cannot be spent on heating and cooling systems, which is where much of the potential energy savings could come from in larger rental buildings.

RECOMMENDATION: Include the cost of energy efficiency upgrades to heating and cooling systems (but not the cost of replacing the basic systems) on the list of eligible measures.

For more information: Ross Nakasone at (415) 433-6804 ext. 310 or rnakasone@chpc.net.

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