Retrofitting Rental: Energy Savings and Multifamily Housing October 26, 2012

Energy Savings and Multifamily Housing Retrofitting Rental: Energy Savings and Multifamily Housing Michael Bodaken 2

Many national, state & local partners The National Housing Trust (NHT) is advancing innovative models to preserve and green multifamily affordable rental properties. Convening forums to engage utilities in select states: CO, IL, MD, MI, MN, OH, PA and RI Identify and overcome barriers; share best practices to achieve housing and energy goals Many national, state & local partners Our Approach Our approach to building the partnerships, understanding and capacity to make the needed shifts in attitude, regulation and practice in order to advance innovative partnering and financing models to preserve and green multifamily affordable rental properties includes these seven components: 1. Team up with effective partners. The Trust has subcontracted out with ACEEE and National Consumer Law Center to develop both a top level conceptual approach while working on the ground with energy advocates who have developed deep relationships with the state utilities and public utility commissions. 2. Develop a framework for screening potential state targets. An evaluation of potential state targets would include, but is not limited to, the strength of the state’s commitment to energy efficiency, our relationships with key state housing and energy stakeholders, the effectiveness of the state’s utility regulatory body, and the size and age of the housing stock (See exhibit 1 for a preliminary analysis of the select state’s commitment to energy efficiency). 3. Engage local energy advocates who have the trusted relationships with the utilities and their respective utility regulator/commission. 4. Initiate a convening process in each state to build the needed relationships and dialogue between the players – energy advocates, affordable housing providers, the housing finance agency, and key utilities. 5. Jointly identify current barriers to developing a coordinated financing model as well as harness our collective knowledge to posit solutions to these barriers. 6. Provide technical advice to ensure optimal program design and implementation based on best practices in existing utility, housing and energy efficiency programs. 7. Connect relevant stakeholders across state lines through regular webinars to share challenges and solutions. 3

CNT and CIC’s ENERGY SAVERS program stands alone as model multifamily energy efficiency program. One-stop shop model overcomes barriers to improving energy efficiency in multifamily buildings Large impact, with more than 9,000 affordable apartments retrofitted to date Has saved 2.3 million therms of natural gas and nearly 6.3 million kWh of electricity Energy Savers has leveraged more than $9.2 million in grants and low-cost loans to cover the cost of energy efficiency improvements. Our Approach Our approach to building the partnerships, understanding and capacity to make the needed shifts in attitude, regulation and practice in order to advance innovative partnering and financing models to preserve and green multifamily affordable rental properties includes these seven components: 1. Team up with effective partners. The Trust has subcontracted out with ACEEE and National Consumer Law Center to develop both a top level conceptual approach while working on the ground with energy advocates who have developed deep relationships with the state utilities and public utility commissions. 2. Develop a framework for screening potential state targets. An evaluation of potential state targets would include, but is not limited to, the strength of the state’s commitment to energy efficiency, our relationships with key state housing and energy stakeholders, the effectiveness of the state’s utility regulatory body, and the size and age of the housing stock (See exhibit 1 for a preliminary analysis of the select state’s commitment to energy efficiency). 3. Engage local energy advocates who have the trusted relationships with the utilities and their respective utility regulator/commission. 4. Initiate a convening process in each state to build the needed relationships and dialogue between the players – energy advocates, affordable housing providers, the housing finance agency, and key utilities. 5. Jointly identify current barriers to developing a coordinated financing model as well as harness our collective knowledge to posit solutions to these barriers. 6. Provide technical advice to ensure optimal program design and implementation based on best practices in existing utility, housing and energy efficiency programs. 7. Connect relevant stakeholders across state lines through regular webinars to share challenges and solutions. 4

Lower utility costs preserve affordability Realize energy savings Improving the energy efficiency of multifamily housing provides significant benefits to both tenants and utilities. Benefits to Tenants Benefits to Utilities Lower utility costs preserve affordability Realize energy savings Improved health and safety Economies of scale in multi-unit bldgs Our Approach Our approach to building the partnerships, understanding and capacity to make the needed shifts in attitude, regulation and practice in order to advance innovative partnering and financing models to preserve and green multifamily affordable rental properties includes these seven components: 1. Team up with effective partners. The Trust has subcontracted out with ACEEE and National Consumer Law Center to develop both a top level conceptual approach while working on the ground with energy advocates who have developed deep relationships with the state utilities and public utility commissions. 2. Develop a framework for screening potential state targets. An evaluation of potential state targets would include, but is not limited to, the strength of the state’s commitment to energy efficiency, our relationships with key state housing and energy stakeholders, the effectiveness of the state’s utility regulatory body, and the size and age of the housing stock (See exhibit 1 for a preliminary analysis of the select state’s commitment to energy efficiency). 3. Engage local energy advocates who have the trusted relationships with the utilities and their respective utility regulator/commission. 4. Initiate a convening process in each state to build the needed relationships and dialogue between the players – energy advocates, affordable housing providers, the housing finance agency, and key utilities. 5. Jointly identify current barriers to developing a coordinated financing model as well as harness our collective knowledge to posit solutions to these barriers. 6. Provide technical advice to ensure optimal program design and implementation based on best practices in existing utility, housing and energy efficiency programs. 7. Connect relevant stakeholders across state lines through regular webinars to share challenges and solutions. Easy access to customers through housing networks Improved comfort 5

In states where utilities have designated MF programs, per capita spending on multifamily housing varies from $4 to as high as $73. Our Approach Our approach to building the partnerships, understanding and capacity to make the needed shifts in attitude, regulation and practice in order to advance innovative partnering and financing models to preserve and green multifamily affordable rental properties includes these seven components: 1. Team up with effective partners. The Trust has subcontracted out with ACEEE and National Consumer Law Center to develop both a top level conceptual approach while working on the ground with energy advocates who have developed deep relationships with the state utilities and public utility commissions. 2. Develop a framework for screening potential state targets. An evaluation of potential state targets would include, but is not limited to, the strength of the state’s commitment to energy efficiency, our relationships with key state housing and energy stakeholders, the effectiveness of the state’s utility regulatory body, and the size and age of the housing stock (See exhibit 1 for a preliminary analysis of the select state’s commitment to energy efficiency). 3. Engage local energy advocates who have the trusted relationships with the utilities and their respective utility regulator/commission. 4. Initiate a convening process in each state to build the needed relationships and dialogue between the players – energy advocates, affordable housing providers, the housing finance agency, and key utilities. 5. Jointly identify current barriers to developing a coordinated financing model as well as harness our collective knowledge to posit solutions to these barriers. 6. Provide technical advice to ensure optimal program design and implementation based on best practices in existing utility, housing and energy efficiency programs. 7. Connect relevant stakeholders across state lines through regular webinars to share challenges and solutions. *Only Includes programs designated for multifamily. 6

Partnering with existing energy efficiency programs Success stories…. Partnering with existing energy efficiency programs MD utilities contribute to existing retrofit programs NHT and DTE Energy in MI partnering to provide utility incentives and low-interest financing Creating “One-Stop-Shops”- National Grid in RI Massachusetts’ utilities Removing financial and other obstacles- Xcel and CenterPoint Energy in MN are providing enhanced rebates for equipment upgrades in Low Income MF PSE&G in NJ provides incentives up to 80% of retrofit costs and low interest loans for remainder Our Approach Our approach to building the partnerships, understanding and capacity to make the needed shifts in attitude, regulation and practice in order to advance innovative partnering and financing models to preserve and green multifamily affordable rental properties includes these seven components: 1. Team up with effective partners. The Trust has subcontracted out with ACEEE and National Consumer Law Center to develop both a top level conceptual approach while working on the ground with energy advocates who have developed deep relationships with the state utilities and public utility commissions. 2. Develop a framework for screening potential state targets. An evaluation of potential state targets would include, but is not limited to, the strength of the state’s commitment to energy efficiency, our relationships with key state housing and energy stakeholders, the effectiveness of the state’s utility regulatory body, and the size and age of the housing stock (See exhibit 1 for a preliminary analysis of the select state’s commitment to energy efficiency). 3. Engage local energy advocates who have the trusted relationships with the utilities and their respective utility regulator/commission. 4. Initiate a convening process in each state to build the needed relationships and dialogue between the players – energy advocates, affordable housing providers, the housing finance agency, and key utilities. 5. Jointly identify current barriers to developing a coordinated financing model as well as harness our collective knowledge to posit solutions to these barriers. 6. Provide technical advice to ensure optimal program design and implementation based on best practices in existing utility, housing and energy efficiency programs. 7. Connect relevant stakeholders across state lines through regular webinars to share challenges and solutions. 7

The Energy Savers Model: A partnership between CIC and CNT Energy A one-stop energy efficiency shop for owners of multifamily buildings that offers: Energy Analysis Cost-effective energy-saving recommendations Low-cost financing through our partner, Community Investment Corporation Connect with utility offers and rebates Construction Oversight Track building performance to ensure savings Peter: One-stop-shop A partnership between CNT Energy, a nonprofit energy efficiency business and CIC, a Community Development Financial Institution 8 8

What are the benefits? Increased cash flow Average 30% energy savings Savings of $10,000/year for a typical 24-unit building Tenant comfort and retention Improved HVAC systems: higher efficiency, better maintenance, longer life

Progress to date Over 28,000 Units Audited 9,500 Units Retrofitted 2.3 mil gas therms saved 6.2 mil kWh electricity saved 374 Jobs created

How to help owners pay for it Two thirds of owners self-finance One third take advantage of low-interest loan Standard second mortgage, underwriting takes energy savings into account Loan fixed at 3%, variable term, average of 7 years. Utility Rebates 11

Leveraging Resources Lending: 78 Loans $8.3 M total Average loan is $105,000 Average loan per unit is $3,000 12

Case Study: Colonial Park Apartments Energy Savings: Projected Energy Savings: 43% Actual Energy Savings; 48% (1st year) Annual Cost Savings: $123,060/year Projected Simple Payback: 4.9 years 13 13

Scope of Work New Energy Star rated appliances & Exhaust Fans New Energy Star light fixtures New energy efficient boilers New energy efficient hot water heaters Added wall and attic insulation, sealed bypasses Built in 1970 Originally 320 units (studios and 1 bedrooms) Now 240 units (added 2, 3 and 4 bedrooms) 14 14

Colonial Park Apartments Actual Usage before and after rehab Natural Gas Usage September 2010 was 1331.92 therms Natural Gas Usage September 2012 was 642.61 therms 48% reduction 15

Colonial Park Apartments After the rehab 16

Colonial Park Apartments After the rehab 17

Thank You Anne Evens CNT Energy anne@cntenergy.org 773-269-4045 19

Case Study: 4305 W. Augusta Energy efficiency improvements: 1/2/2019 Case Study: 4305 W. Augusta Energy efficiency improvements: Air sealing Roof cavity insulation Steam pipe insulation Steam balancing of heating system High efficiency hot water heater CFL’s in units Projected Savings: 33% natural gas 16% electricity $3,220/year 4.6 years simple payback 14-unit brick building Natural gas fired steam boiler 20

Share of Units in 5+ Unit Buildings, Northern Illinois, 2010 Prepared by Institute for Housing Studies at DePaul University Source: U.S Census Bureau, American Community Survey 2010 1-Year Estimates

Tenure by Building Type, Northern Illinois   Single Family 2 to 4 Units 5+ Units Other (Mobile, RV, etc.) Total Owners 1,937,125 136,512 222,656 32,389 2,328,682 Renters 250,675 327,152 575,517 8,578 1,161,922 2,187,800 463,664 798,173 40,967 3,490,604 % Renters 11.5% 70.6% 72.1% 20.9% 33.3% Prepared by Institute for Housing Studies at DePaul University Source: U.S Census Bureau, American Community Survey 2010 1-Year Estimates

Tenure by Building Type, Cook County   Single Family 2 to 4 Units 5+ Units Other (Mobile, RV, etc.) Total Owners 812,428 117,166 187,688 11,769 1,129,051 Renters 110,188 258,790 419,557 4,549 793,084 922,616 375,956 607,245 16,318 1,922,135 % Renters 11.9% 68.8% 69.1% 27.9% 41.3% Prepared by Institute for Housing Studies at DePaul University Source: U.S Census Bureau, American Community Survey 2010 1-Year Estimates

Tenure by Building Type, Chicago   Single Family 2 to 4 Units 5+ Units Other (Mobile, RV, etc.) Total Owners 264,215 88,033 112,114 1,618 465,980 Renters 53,179 211,826 281,212 2,385 548,602 317,394 299,859 393,326 4,003 1,014,582 % Renters 16.8% 70.6% 71.5% 59.6% 54.1% Prepared by Institute for Housing Studies at DePaul University Source: U.S Census Bureau, American Community Survey 2010 1-Year Estimates

Documented Energy Savings A partnership between CNT Energy, a nonprofit energy efficiency business and CIC, a Community Development Financial Institution 25

Energy Savers Results Confirmed natural gas savings are weather normalized and based on at least 12 months of pre and post retrofit data with actual meter reads Mean savings is 28.3% Mean saved per unit per year is 246 therms Mean savings per building is 9,504 therms Mean units per building is 44 units Navigant has been retained to conduct a third party review of Energy Savers results. 26

Installation of Cost Effective Measures 27

Qualifying for Existing Electricity and Natural Gas Rebate Programs Sample Building 28

Cost Effective Measures in last 2-3 months from the Energy Savers Pipeline Processed rebates for 199 units to date, totaling nearly $5,800 in rebate dollars with another 15 buildings in progress, totaling 233 units and nearly $116,000 rebate dollars. Total project estimated savings are 40,403 therms. Referred 1,314 units to multi-family direct install programs. Collaborated with Franklin Energy to conduct audits for over 1,800 units