SystemVision: Where Building Science Meets Affordable Housing
An in-depth look at the only guaranteed affordable-housing program in the nation
Building science efforts applied to the residential construction industry to date have largely helped those who can purchase high-performance options to lower energy bills and increase comfort. Occupants of affordable housing are often neglected due to these additional costs, which is unfortunate since low-income residents include some of the most vulnerable members of our society, such as families with children and senior citizens. These people need affordable, comfortable and healthier places to live as much as anyone. This article will present ideas for higher-quality affordable housing by sharing successes and challenges from the SystemVision program administered by Advanced Energy in North Carolina.
Over the years, many affordable and low-income housing projects have been built throughout US without much consideration for tighter envelopes, ventilation, or other health, energy and comfort measures. When these projects do require increased building performance, contractors who bid on them often do so without knowing the standards, which sometimes causes them to under-bid. This can make it difficult to pass inspections conducted by HERS Raters or other third-party auditors.
Basic living costs such as utilities make up a considerable portion of the total income for low-income residents. These people need higher-performing homes more than anyone, not only to save money, but to live comfortably and improve air quality. Children and seniors are especially sensitive to the effects of an unhealthy and uncomfortable living environment on their respiratory systems. In addition, healthy homes offer the potential save occupants money in medical expenses and reduce the burden on our healthcare system.
A model that works
One affordable-housing program that has shown positive results is SystemVision. Operated by Advanced Energy in Raleigh, N.C., since 2001, it includes participants across the state. Currently, SystemVision is the only guaranteed-energy and comfort program for affordable housing in the nation. It has roots in the Build Back Better campaign that Advanced Energy conducted after the devastating floods left by Hurricane Floyd in 1999.
For almost two years, Advanced Energy taught builders and local officials how to dry and safely renovate flooded homes, and how to build high-performance, low-energy new homes when the buildings could not be saved. This experience showed that affordable-housing builders and developers were looking for ways to improve the quality of their houses and make them more affordable, prioritizing energy efficiency. They needed clear standards, technical assistance with modifying construction processes and, of course, a financial incentive. Greater comfort and better indoor air quality became a positive side effect of building more energy-efficient homes.
In 2002, the North Carolina Housing Finance Agency became the major partner in SystemVision, providing the program with access to more than one-third of the affordable units built in the state. More importantly, NCHFA committed the financial incentive builders and developers needed to participate. Today, that partnership has resulted in the construction of over 5,125 affordable high-performance homes. (The current rate of construction is approximately 300 per year.) Statewide, more than 60 affordable-housing developers participate in SystemVision, including Habitat for Humanity affiliates, local governments, community development corporations and a host of nonprofit organizations. According to Advanced Energy, an analysis of energy billing data in 2008 showed that the average savings per home was approximately 15% of the total bill, or about 30% of heating and cooling compared to code-built homes.
More than 80 percent of the homes financed by NCHFA through its community-based homebuyer assistance loan pool programs are SystemVision certified. NCHFA provides gap financing to low-income homebuyers through special mortgage products. The term “gap financing” refers to a short-term loan to meet an immediate need until sufficient funds to finance the longer-term financial need can be secured. Through SystemVision, NCHFA also provides a $3,500 to 4,500 reimbursement to nonprofits and local governments for each home developed through the loan pools that meets SystemVision guidelines. Homes that receive a second approved green-building certification are eligible for an additional $1,000.
Issuing the guarantee
Using RESNET-approved software, Advanced Energy conducts a plan review on each house plan to estimate energy usage for heating and cooling. For two years, Advanced Energy guarantees the energy required to heat and cool the building will not exceed this usage, which generally falls between $25 and $35 per month. If a home exceeds its guaranteed usage at the end of the year — which is rare — Advanced Energy pays the homeowner the difference.
Advanced Energy also guarantees the comfort of the homeowner for two years. Comfort is defined as a temperature differential of no greater than plus or minus three degrees from the thermostat location to the center of any conditioned room within the zone. Should a comfort question arise, an Advanced Energy agent — either staff or a trained local contractor — will evaluate the situation. If one or more of the trades are determined to be responsible, they will pay to remedy the situation. If the program is found to be responsible, Advanced Energy bears the costs of remediation.
SystemVision standards are derived from national standards developed by Advanced Energy for Masco’s Environments for Living program, and represent a blend of state-of-the-art performance and real-world requirements for the homebuilder and trades. Standards cover airtightness and framing, ventilation and moisture management, insulation and windows, HVAC sizing, installation and duct tightness, pressure balancing, combustion safety and appliances. As building codes are updated, SystemVision evaluates and revises program standards to stay ahead of codes.
One clear lesson that Advanced Energy has learned in almost two decades of helping builders build high-performance homes is that most builders need substantial technical assistance to make required changes to their purchasing, construction and warranty processes. Through SystemVision, Advanced Energy operates an ongoing training program that ensures newly enrolled builders have access to a local infrastructure of subcontractors and raters who can help them meet the standards. Advanced Energy staff works closely with new builders to ease the transition and then turns over the relationship to that local infrastructure as quickly as possible.
Quality control, training and technical assistance are purposefully blurred throughout the course of planning and construction, with Advanced Energy staff and local infrastructure involved at every step. Advanced Energy also provides a statewide database to help raters perform the quality control functions required by SystemVision and ENERGY STAR. Having a small number of experts working to improve standards, processes and training materials is a large part of what makes this program successful. Builders fill out a concise checklist before inspections and send it to their inspector or HERS Rater. The inspector uses the same checklist while on-site. Processes like this help keep everyone on the same page.
Like most programs, funding is the largest hurdle. North Carolina is fortunate to have the NCHFA as a funding partner, but those funds can only go so far. Other stakeholders can also benefit from contributing to affordable-housing programs. Energy Efficiency for All, a collaborative project between several national energy and housing stakeholders, has published several documents that explain various ways utilities can get involved with affordable housing. Regulators typically require energy-saving measures from utilities to some degree, and it makes sense to target the residential sector to shift or shave peak consumption. Utilities could partner with existing affordable-housing efforts to help fund initiatives and increase success.
Health insurance providers represent another possible stakeholder. As previously stated, a healthier home for a low-income resident typically can result in fewer trips to the doctor or hospital, resulting in fewer payouts from health insurance companies. However, many affordable-housing residents do not have health insurance. This could open up an opportunity to partner with other government funding sources outside of HUD that focus more on health.
The main frustration that arises when it comes to improving performance in affordable housing is profit, or lack thereof. At this point, it is not a large income generator for bidding contractors and subs. To be successful, it typically requires careful, deliberate program management and coordination by people who truly care about outcomes for participants and understand the economic and societal advantages of high-performance affordable housing. The focus must remain on the occupants’ quality of life. To push the movement forward, program managers must think outside the box when it comes to finding partners to help fund a building-science-based affordable-housing program and make it work for everyone involved. Fortunately, SystemVision offers a tried-and-true certification model with nearly two decades of success in bringing the benefits of building performance to those who need it most.