Affordable Housing Retrofits

The Dutch developed a model for affordable housing called, EnergieSprong. It is a new standard for comfortable, energy efficient retrofits and new buildings with financial help from governments. They have teams in France, the UK, Germany and New York State.

The new business model is financed in two ways: through energy cost savings from tenants and by reduced maintenance and repairs costs for housing associations.

Old Model

New Model: In most markets (including the Netherlands) legislation needs to allow the conversion of the monthly energy bill into a so-called energy plan for the housing association.

For new homes to assist in the costs, there are income tax credits to incentivize adding in the green features. A little known fact is that U.S. public housing uses almost 40 percent more energy per square foot than privately owned housing. Leading to an ironic situation where, affordable housing is saddled with unaffordable energy bills. According to a McKinsey study four variables can narrow the housing-affordability gap by 20–50% by 2025.

One of the most cost-effective ways to save money in affordable housing is retro-commissioning, a systematic process of analyzing an existing building to improve comfort and energy efficiency by correcting for deficiencies in design, construction, equipment, and maintenance. Savings are not reaped from equipment replacements, but ensuring that existing systems are performing as designed. Meta-analyses done in 2001 and 2005 by Lawrence Berkeley National Laboratory showed that a $0.30 per square foot investment reduced energy consumption by a median of 16 percent, and had an average payback of 1.1 years, well under the two-year utility allowance adjustment period.

In NY RetrofitNY, inspired by Energiespprong, launches in 2017 and is an ongoing design/build competition for retrofits that can cut energy use by upwards of 70 percent. The organization identifies ways to finance retrofits based on long-term energy savings and addresses regulatory roadblocks. Unfortunately this process is complicated by the maze of multifamily energy efficiency programs that overlap and make eligibility confusing for building owners (see incentive map below).

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