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LINC in the News
Greenbuild 2014: Financing Green Retrofits for Affordable Housing
Multi-Housing News Online, October 24, 2014
By Mike Ratliff, Senior Associate Editor

New Orleans — The inherent complexities of the affordable sector make financing green retrofits at affordable properties particularly demanding task. Yet our industry has some very creative professionals that are turning to numerous sources to make federally assisted properties more efficient. A Greenbuild panel titled “Financing Green Retrofits for Affordable Housing: A Polyphonic View” examined the challenges and emerging solutions on Thursday in New Orleans.

From left to right: Darien Crimmin, WinnDevelopment; Rebecca Schaaf, Stewards of Affordable Housing for the Future; Jeffrey Greenberger, Affordable Community Energy Inc.; Hunter Johnson, LINC Housing.

There are four major challenges, one of which is accessing capital, says Darien Crimmin, vice president of energy and sustainability at WinnDevelopmnet.

“If you walked into a bank to finance a retrofit for affordable housing, they would laugh at you and you would leave without a loan,” Crimmin says. He adds that there are some mission driven banks sprouting up to fill the gap, but landing capital is no easy task. Money can end up coming from a number of sources like Fannie Mae’s new Green Preservation Plus execution option, state utility assistance programs, multifamily energy efficiency programs and weatherization rebates.

Concerns over returns are another barrier. There are three factors at play here: worries over whether or not savings will materialize; utility rate volatility (i.e. natural gas has dropped 20 percent over the last five years); and concern over the ‘R’ factor, which is this case stands for Residents.

“We have seen the utmost efficient buildings in the world with their lights left on and their windows wide open in winter,” Crimmin adds.

The third major challenge is regulatory and utility barriers, adds Rebecca Schaaf, vice president of the energy division at Stewards of Affordable Housing for the Future. Taking on debt is precluded in some properties. The split incentive of owners taking the risk while residents reap the savings is another struggle. HUD is trying to address the problem.

“Rents are set on budgets. If owners reduce their own utility costs, that means a reduction in budget and thus savings on rent that are ultimately passed on to HUD,” Schaaf says. “Well HUD is now offering options for owners through the Better Buildings Challenge to access those savings.”

Schaaf also addressed the fourth big hurdle, which in human resources. Some owners just don’t have the expertise on staff. Having an energy manager is often not enough.

“Third parties are a great way to bring in expertise and resources without having to hire,” she adds.   Continue »