Paying our nation's home utility bills this winter
By Carlos Martín :: December 19th, 2013
As the temperature drops, most of us brace ourselves and accept that winter means spending more on home energy costs. But, sadly, this seasonal price shock uptick can literally leave many low-income households in the cold. For many reasons, the utility bills of families in publicly assisted housing should worry us all.
At last count, annual spending on utilities in all US public and assisted housing totaled $7.1 billion, the equivalent of one-sixth of the annual budget for the US Department of Housing and Urban Development (HUD). $2 billion of that sum are annual utility bills for public housing units alone, and these costs are largely covered by the federal government. At the same time, there is a backlog of over $20 billion in outstanding repairs and improvements in public housing units. That price tag will only increase as this housing continues to age.
These are enormous sums, but we can chip away at them. Energy-related investments give money back over the long run by reducing energy bills from 10 to even 50 percent. For example, investments of about $4 billion in basic energy and water improvements in public housing units now could pay for themselves in just 12 years.
The best option for decreasing our national home energy bill is simply to invest in energy efficient retrofits, but funds to support capital and operating costs have been slashed. Without capital funding for these investments, there can be no savings to housing authorities and developers and US taxpayers down the road.
Recent programs like HUD’s Green Retrofit Program for Multifamily Housing, the Multifamily Energy Innovation Fund, and Public Housing Capital Fund Competitive Grants were a good start. Public housing authorities and assisted housing developers put these funds to great use, from basic weatherization to full-scale energy retrofits and, in some cases, the installation of solar and other renewable sources.
For example, the Cambridge Housing Authority is shaving off $1 million a year—or half–of its electricity bill because of these federal resources. Campaigns to increase residents’ energy-conserving behaviors are helping, too. But future capital funding must be strengthened, especially in public housing, to match current needs and reduce future demand.
Earlier this month, HUD and the US Department of Energy (DOE) announced an expansion of the Better Buildings Challenge to include partners in the multifamily residential sector. These partners have committed to reducing energy consumption by at least 20 percent over 10 years. Programs like this mean landlords, tenants, and taxpayers save money. It’s a win-win-win.
It’s clear that assisted housing developers and managers know what it means to do more with less, but they have hit a wall. They must be given the resources to “do more” now—like pay for energy-efficient capital improvements—to make do with increasingly scarce public funding. The need for these investments will exist well beyond this winter.
The Assisted Housing Initiative is a project of the Urban Institute, made possible by support from Housing Authority Insurance, Inc. (HAI, Inc.), to provide fact-based analysis about public and assisted housing. The Urban Institute is a non-profit, nonpartisan research organization and retains independent and exclusive control over substance and quality of any Assisted Housing Initiative products. The views expressed in this and other Assisted Housing Initiative commentaries are those of the authors and should not be attributed to the Urban Institute or HAI, Inc.
Photo by Flickr user Vansgirl12, used under Creative Commons license (CC BY-NC-SA 2.0)