Efficiency in the Lifecycle of Affordable Housing Juliana Williams Washington State Housing Finance Commission June 15, 2016

Value of Efficiency Maintain or improve quality of affordable housing Lower utility costs for tenants Operational savings for property owners Protect against future utility rate volatility Reduced environmental impact

Efficiency Tools for the Stages of a Building Design Building Codes Mandatory Standards Energy Consumption Modeling Maintenance Sustainable Energy Trust Loans Utility Allowance Acquisition/ Rehab

Design Washington State Energy Code on a path to reduce energy building consumption 70% by 2031, relative to 2006. Evergreen Sustainable Development Standard required for all Commission and Housing Trust Fund financed projects since 2009. Based on Enterprise Green Communities, but adapted for Washington. Added 2 points to 9% LIHTC allocation for using an Energy Consumption Model. -Washington State Energy Code updated approximately every 3 years. -ESDS. Projects may choose how to meet ESDS, and some of those pathways may not include additional energy efficiency measures. 9% and 4% -Other states have added points for voluntary green building standards such as LEED, Passive House, Earth Advantage, etc. We have not pursued this yet, due to our aggressive green building requirements in Washington, but we may consider it in future rounds. -ECM – if conducted prior to construction, can allow the developer to identify additional cost-effective conservation measures. Additionally, can lead to more accurate utility allowances (stretch LIHTC credits). Still in the implementation stage, need to figure out underwriting comfort and timing (before construction v. before Placed in Service).

Maintenance Sustainable Energy Trust $8.5 million revolving loan fund finances energy efficiency, water efficiency and renewable energy projects. Issue up to $1 million per borrower Up to 10-year repayment period Interest rates typically between 2-4% Minimum 10% improvement in efficiency -Commission allocated $7 million to the fund in 2011 out of our Program Investment Fund -Up to $1 mill per borrower – may be able to partner with other lenders for larger projects -Up to 10-year repayment period – intended to provide immediate positive cash flow. -Interest rates tied to level of efficiency achieved. -Important to note that we finance water efficiency upgrades – often only source of funding for such projects -WeGoWise reporting.

Sustainable Energy Trust Loan Borrower: Plymouth Housing Group Project: St. Charles Hotel Location: Seattle Electricity, natural gas and water efficiency upgrades Average annual operational savings: $14,000 Utility Consumption decreased 16% $90,100 loan, 7-yr term On-bill repayment with Seattle City Light Once a hotel, the historic St. Charles is located in Pioneer Square, Seattle’s oldest neighborhood. In 2004, renovation was completed on the St. Charles where many modern updates were made,. The St. Charles features: 64 single unit apartments Former lobby entrance to the Seattle Opera House was preserved during renovation

Sustainable Energy Trust Maintenance Sustainable Energy Trust On-bill repayment with certain utilities Utility partnerships on outreach Revised Utility Allowance guidelines to simplify the process for Actual Usage and Energy Consumption Modeling methods Issued RFQ to develop list of approved Energy Modeling Consultants. -Rely on diverse ecosystem of contractors, consultants and utilities to support project scoping and planning. -need to do better job of targeting near-year 15 properties. -Considering issuing guidance on incorporating solar projects into the Utility Allowance.

Acquisition/Rehabilitation Mandatory sections of the Evergreen Sustainable Development Standard Otherwise, light touch

Contact me! www.wshfc.org Juliana Williams Senior Sustainable Energy Analyst Juliana.Williams@wshfc.org (206) 254-5359 www.wshfc.org