1. Affordable Energy and the Consolidated Plan Process Roger D. Colton Fisher, Sheehan & Colton Public Finance and General Economics Belmont, Massachusetts June 2005

2. The HUD Consolidated Plan l Identifies affordable housing needs. l Discusses housing market. l Identifies barriers to affordable housing. l Identifies and ranks action steps.

3. Starting Point: Home Energy Burdens l Shelter burdens affordable at 30% of income. l Utility costs affordable at 6% of income (20% of shelter costs).

4. Home Energy Affordability Gap l County-by-county calculation of home energy burdens by Federal Poverty Level. l To the extent that burdens are above 6%, they do not result in sustainable housing costs.

5. Home Energy Burdens at 30% of Area Median Income

6. Impact of price changes

7. Gas bills: weather and prices

8. Impact on affordable housing development l Tenants can pay less rent; OR l Developer pays more of the energy costs. Either way, development supports less debt financing.

9. Affordable Payments Adjusted for Utility Bills

10. Affordable Purchase Prices Adjusted for Utility Bills

11. Reduced Sales Price: Colorado Counties

12. Reduced Affordable Units: Colorado Counties

13. Recommended Action #1 Homeownership and rental units developed as either new construction or substantial rehabilitation by grantees or participating jurisdictions should be developed to Energy Star standards.

14. HUD Recommendation Include following in any Request for Proposals or procurement process: “All new buildings and gut rehab shall be designed to meet the National Energy Five Star efficiency performance standard of 86. All procedures used for this rating (86) shall comply with National Home Energy Rating System guidelines.”

15. The Efficiency Standard Each five percent increase in efficiency results in one point on the Energy Rating above 80. A home that is built to meet the 1993 Model Energy Code has a rating of 80. A home that is five percent more efficient has a rating of 81. A home that is 30% more efficient has a rating of 86 and qualifies as an Energy Star Home.

16. Quantifying the Effective Impacts of Efficiency Investments l Cash flow l Net Present Value Svgs l Reduced interest rates l Reduced sales price l $160 - $270 l $2800 - $4300 l 0.31% - 0.45% l $3700 - $5500

17. Things that just don’t fit l 2.5% of HUD-insured mortgages failed because of high energy prices. /a/ l Value of home increases $20 for each $1 of energy efficiency investment. /b/ /a/ Metrostudy Corp. (1976). An Analysis of the Contribution of Energy Price Changes to HUD-Insured Mortgage Failures, Federal Energy Administration. /b/ 1999 Appraiser Journal

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