Pennsylvania Marcellus Shale Development and Housing Funds Eagle Ford Consortium Conference April 22, 2014 Bryce Maretzki, PHFA

Source: Pennsylvania Department of Environmental Protection The Shale Gas Boom

Stages of Shale Gas Development Relating to the Local Housing Market Initial influx of energy industry workers Effects: Increases county population and demand for temporary housing (mostly hotels if available) Full-scale drilling operations begin Effects: Further increases population and demand shifts to include medium- term rental housing Mature well field management and maintenance Effects: Demand shifts to include long-term residential housing for energy industry workers moving their families to the area in addition to potential new housing demand from the now-established local workforce Source: Ohio State University, Michael Farren

Source: U.S. Census Bureau, 2000 Decennial Census and 2011 American Community Survey 5-Year Estimates. Analysis Region

Results Summary 1)A 1% increase in shale development employment share is associated with a 0.5% increase in county population. 2) The number of single-unit residential building permits approved showed strong and consistent correlations across all specifications. Each shale gas well drilled was associated with ~2.5 additional housing permits approved. Source: Ohio State University, Michael Farren

Act 13 (2012) – How it Works “Impact Fee” on natural gas wells – $224 million in $630 million since 2012 Levied on price of gas (on market exchange) and age of well - 15yrs Revenue shared – counties, municipalities, state agencies – 60% for Counties – many uses including affordable housing – 40% Marcellus Shale Legacy Fund

Funds for Housing Comes from “Impact Fee” (Act 13, 2012) – $8.7 million (2013), $7.9 million (2012) – Base allocation: $5 million annually – Surplus Allocation from six counties Address housing needs in impacted counties Deposited into Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund – aka “State Housing Trust Fund” At least 50% of funds must go to “rural” counties

State Housing Trust Fund Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund Act 105, 2010 No funding stream Requires at least 30% of funds for households below 50% of median area income Wide range of housing activities Annual plan and reporting

Principles of Investment Maximize resource leveraging Address greatest need Foster partnerships Effective and efficient Equitable and Transparent Comprehensive Approach

Impact 59 projects funded (78 applied) $16.7 Million awarded ($32M requested) $160 Million in leveraged funds 484 new rental units 490 rehab, repair homes 518 households w/rental assistance 272 homes for future development (acquisition/demolition) 42 new single family homes