1. 1 Energy Poverty: Effects on Housing and Household Wellbeing NLIEC 2005 June 15, 2005 Donnell Butler David Carroll Carrie-Ann Ferraro

2. 2 Organization of Presentation Introduction – 10 minutes Arizona Analysis – 20 minutes Phoenix Area Analysis – 10 minutes Local Area Analysis – 5 minutes Indicators of Wellbeing – 10 minutes Conclusion – 5 minutes Questions / Feedback – 15 minutes

3. 3 Purpose of the Project Furnish information about the energy needs of low-income households in Arizona to policymakers and program managers Explore the linkages among energy poverty, housing affordability, and household well being Demonstrate how existing data sources can be used to obtain useful information for policy formulation and program design

4. 4 Status of the Project Preliminary Report – Presented NLIEC Board with an overview of available information NLIEC Conference – Press conference and presentation Final Report – Additional details that are responsive to suggestions from NLIEC Board and conference attendees

5. 5 State Level Analysis Methodology

6. 6 Data Sources for Arizona 2000 Census Public-Use Microdata (PUMS) –5 Percent Sample has about 19,000 LIHEAP eligible records –Data available includes: Household Demographics: income and poverty level, presence of vulnerable members, race and ethnicity, languages spoken, household composition, employment, income program participation Housing Unit Characteristics: age of unit, unit type, home ownership Energy Data: Main heating fuel, energy expenditures

7. 7 Data Sources for Arizona 2002-2004 Current Population Survey, Annual Social and Economic Supplement (ASEC) –Statistical variances are too large for a single ASEC annual file to allow for a useful analysis for Arizona –Three-year average of 2002, 2003, and 2004 data used to estimate the FY 2003 LIHEAP eligible population –Data available includes: Household Demographics: income and poverty level, presence of vulnerable members, race and ethnicity, household composition, employment, income program participation

8. 8 Definitions LIHEAP Eligible/Low Income - 150% of HHS Poverty Guidelines (Arizona Standard) Energy Burden – Direct energy expenditures as a share of gross money income Energy Gap – Difference between client energy burden and any target burden

9. 9 Limitations Maximum Income Standard – Federal maximum income standard covers at least 50% more households Renters – About 15% of households pay for part or all of their energy through their rental payments Update – Information not yet updated for recent increases in energy prices and poverty

10. 10 State Level Analysis Findings

11. 11 Arizona Information Needs Policymakers and program managers need: –State-level cross-sectional data to understand current status for Arizona –State-level longitudinal data to understand trends for Arizona –National-level data to understand how those energy needs compare to households nationwide

12. 12 Number of Households Percent of All Arizona Households LIHEAP Eligible Households, 2000362,800 1 19.1% LIHEAP Eligible Households, 2003436,000 2 21.4% Arizona LIHEAP Eligible Households (2000 and 2003) 1 Source: 2000 Decennial Census PUMS 5 Percent Sample. 2 Source: Three-year Average of the CPS ASEC 2002-2004. Arizona LIHEAP Eligible Population

13. 13 Number of Households LIHEAP Eligible Households, 2003436,000 1 LIHEAP Recipient Households, 200318,600 2 Arizona LIHEAP Eligible and Recipient Households (2003) 1 Source: Three-year Average of the CPS ASEC 2002-2004. 2 Source: LIHEAP Household Reports FY 2004. Arizona LIHEAP Recipient Population

14. 14 Arizona LIHEAP Eligible Energy Expenditures Energy Expenditures for Arizona LIHEAP Eligible Households (1999) Source: 2000 Decennial Census PUMS 5 Percent Sample.

15. 15 Energy Burden Percent of total household income spent on total residential energy. At the national level, the median residential energy burden was 3 percent for all households and 10 percent for all low-income households in 2003.

16. 16 Arizona LIHEAP Eligible Energy Burden Energy Burden for Arizona LIHEAP Eligible Households (1999) Source: 2000 Decennial Census PUMS 5 Percent Sample.

17. 17 Energy Gap The dollar amount needed to reduce a customer’s energy burden to an amount equal to a specified energy burden percentage. At the national level, about $4.9 billion dollars in energy assistance would have been needed to ensure that no low-income household spent more than 15% of income on residential energy in 2003. The amount required to reduce residential energy bills to 25% of income was $2.7 billion.

18. 18 Arizona LIHEAP Eligible Energy Gap Energy Gap for Arizona LIHEAP Eligible Households (1999) Number of Households Energy Gap (in Millions) Households with Energy Burdens Greater than 5% 266,700$222.1 M Households with Energy Burdens Greater than 10% 166,000$128.4 M Households with Energy Burdens Greater than 25% 68,500$57.0 M 2000 Source: 2000 Decennial Census PUMS 5 Percent Sample.

19. 19 Arizona Energy Assistance Energy Gap (in Millions) 1 FY ’04 LIHEAP Benefits 2 FY ’04 Supplement Resources 3 Shortfall Households with Energy Burdens Greater than 5% $222.1 M$ 5.7 M$16.4 M$200 M Households with Energy Burdens Greater than 10% $128.4 M$ 5.7 M$16.4 M$106 M Households with Energy Burdens Greater than 25% $57.0 M$ 5.7 M$16.4 M$ 35 M 1 2000 Decennial Census PUMS 5 Percent Sample. 2 FY 2004 LIHEAP Grantee Survey for FY 2004. 3 LIHEAP Clearinghouse: http://www.liheap.ncat.org/Supplements/2004/supplement04.htmhttp://www.liheap.ncat.org/Supplements/2004/supplement04.htm

20. 20 Arizona LIHEAP Eligible Vulnerable Group Members Number of Households Percent of Households Households with Vulnerable Group Members Household with Elderly (Age 60 or older)154,10035% Household with Nonelderly Disabled64,37515% Household with Young Child117,20027% Households with No Vulnerable Group Members Households with No Vulnerable Groups119,50027% Arizona LIHEAP Eligible Households with Any Vulnerable Group Members (2003) Source: Three-year Average of the CPS ASEC 2002-2004.

21. 21 Arizona LIHEAP Eligible Linguistic Isolation Linguistically Isolated Arizona LIHEAP Eligible Households (2000) Source: 2000 Decennial Census PUMS 5 Percent Sample.

22. 22 LIHEAP Eligible – 363,000 in 2000 to 436,000 in 2003 Energy Burden – Average almost 10% of income 1999 Energy Gap – $222 million for 5% burden target 2003 Energy Assistance – $22 million from all sources Vulnerable households - 73% of LIHEAP eligible households have a vulnerable household member Spanish language isolation – 15% of LIHEAP eligible households do not have a household member who speaks English “very well”. Arizona LIHEAP Eligible Summary of Findings

23. 23 Metropolitan Area Analysis Methodology

24. 24 Data Sources for Phoenix 2002 American Housing Survey (AHS) Phoenix Metropolitan Area Sample –Metropolitan Area Sample has about 650 LIHEAP eligible records –Estimates are not available at the state level from the national AHS sample –Several Metropolitan Areas are surveyed each year –Phoenix was most recently surveyed in 2002 & 1994

25. 25 Data Sources for Phoenix 2002 American Housing Survey (AHS), Phoenix Metropolitan Area Sample (continued) –Data available includes: Household Demographics: income and poverty level, presence of vulnerable members, race and ethnicity, household composition, Housing Unit Characteristics: unit type, home ownership, housing adequacy, housing costs Energy Data: Main heating fuel, energy expenditures, heating and cooling equipment

26. 26 Definitions and Limitations Shelter Burden – Direct housing expenditures as a share of gross money income Phoenix-Mesa Metropolitan Area –Maricopa and Pinal Counties Limitations similar to state level data

27. 27 Metropolitan Area Analysis Findings

28. 28 Phoenix Information Needs Phoenix policymakers & program managers need: –Information related to demographic characteristics and energy needs of low-income households –Information on the relationship between energy needs and other low-income needs, including housing, to promote the integration of programs aimed at assisting low-income households

29. 29 Number of Households Percent of All Phoenix Households LIHEAP Eligible Households, 2002203,80017.5% Phoenix LIHEAP Eligible Households (2002) Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample. Phoenix LIHEAP Eligible Population

30. 30 Phoenix LIHEAP Eligible Energy Burden Energy Burden for Phoenix LIHEAP Eligible Households (2002) Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample.

31. 31 Shelter Burden Percent of total household income spent on total housing costs (including residential energy costs). Affordable housing (HUD definition): “housing for which the occupant is paying no more than 30 percent of his or her income for gross housing costs, including utilities”. Some researchers have defined severe shelter burden more conservatively as a household that spends 50 percent or more of their income on shelter costs.

32. 32 Shelter Burden for Phoenix LIHEAP Eligible Households (2002) Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample. Phoenix LIHEAP Eligible Shelter Burden Number of Households Percent of All Phoenix Households Shelter Burden Less than 50%98,50048.3% Shelter Burden 50% or Greater105,40051.7%

33. 33 Energy Burden when Shelter Burden is 50% or Greater for Phoenix LIHEAP Eligible Households (2002) Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample. Phoenix LIHEAP Eligible Shelter Burden of 50% or Greater

34. 34 Energy burden distribution is similar to Arizona. 52% of Arizona LIHEAP eligible households experience severe shelter burden. Energy burden has a substantial impact on housing affordability. Phoenix LIHEAP Eligible Summary of Findings

35. 35 Neighborhood Level Analysis Methodology

36. 36 Neighborhood Data Sources 2000 Census Summary File 3 (SF3) –Data is limited to entire population; does not offer estimates of LIHEAP eligible population –Data available includes: Household Demographics: income level, age of householder, race and ethnicity, languages spoken, household composition, income program participation Housing Unit Characteristics: age of unit, unit type, home ownership Energy Data: Main heating fuel

37. 37 Neighborhood Data Sources 2000 Census Special Tabulations –Estimates of the LIHEAP eligible population can be obtained from the Census Bureau for small areas, including Census Blocks, Block Groups, and Tracts –Data available includes: Household Demographics: income and poverty level, presence of vulnerable members, race and ethnicity, languages spoken, household composition, employment, income program participation Housing Unit Characteristics: age of unit, unit type, home ownership Energy Data: Main heating fuel, energy expenditures

38. 38 Neighborhood Data Needs Local program managers need local-level information about the population in their communities in order to: –Effectively implement programs –Target outreach initiatives –Improve integration of energy assistance programs with other programs designed to assist low-income households

39. 39 Indicators of Wellbeing Analysis Methodology

40. 40 Indicators of Wellbeing Data Sources Effects of Energy Poverty on Housing and Household Wellbeing 2003 National Energy Assistance Survey of LIHEAP Recipients: –Sponsored by NEADA –Survey instrument is publicly available –Interviewed a nationally representative sample of over 2,000 LIHEAP-recipient households from 20 states –Documented the choices that LIHEAP-recipient households make when faced with unaffordable home energy bills

41. 41 Limitations Survey Response Challenges: –Relying on Respondent Memory –Response bias (e.g., prideful responses) –Inability to control response situation Population –Having received benefits, LIHEAP recipients might be better off than LIHEAP eligible

42. 42 Indicators of Wellbeing Analysis Findings

43. 43 Indicators of Wellbeing Housing Problems Source: 2003 National Energy Assistance Survey. Housing Problems Experienced by LIHEAP Recipient Households (2003)

44. 44 Indicators of Wellbeing Household Wellbeing Sacrifices to Wellbeing by LIHEAP Recipient Households (2003) Source: 2003 National Energy Assistance Survey.

45. 45 Indicators of Wellbeing Effects on Health Source: 2003 National Energy Assistance Survey. Health Problems Experienced by LIHEAP Recipient Households (2003)

46. 46 Indicators of Wellbeing Summary of Findings In the last five years, due to their energy bills: –28% of respondents reported that they missed a rent or mortgage payment. –22% of respondents reported that they went without food for at least one day. – 38% of respondents reported that they went without medical or dental care. –21% of respondents reported that they became sick because their home was too cold

47. 47 Using existing data sources, one can develop a broad array of information about the energy needs of low- income households. –All data used for this presentation are publicly available. Data is available to explore linkages among energy poverty, housing affordability, and household wellbeing. Information can be used by policymakers and program managers to make effective decisions related to program design, operations and evaluation. Conclusion

48. 48 Energy Poverty: Effects on Housing and Household Wellbeing NLIEC 2005: June 15, 2005 Donnell Butler (donnell-butler@appriseinc.org) David Carroll (david-carroll@appriseinc.org) Carrie-Ann Ferraro (carrie-ann-ferraro@appriseinc.org) http://www.appriseinc.org/ Phone: 609-252-8008