Green Affordable Housing:

HUD Has Made Progress in Promoting Green Building, but Expanding Efforts Could Help Reduce Energy Costs and Benefit Tenants

GAO-09-46: Published: Oct 7, 2008. Publicly Released: Oct 7, 2008.

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Rising energy prices and concerns about the environment have fueled interest in "green building"--resource-efficient construction and maintenance practices that reduce adverse impacts on the natural environment. The Department of Housing and Urban Development (HUD), spends an estimated $5 billion on energy costs annually in its affordable housing programs and has recently taken steps to reduce its energy costs. GAO was asked to review (1) HUD's efforts to promote energy efficiency in its programs and the use of performance measures, (2) potential costs and long-term benefits of green building in HUD's affordable housing programs, and (3) lessons learned elsewhere that HUD could use to promote green building. GAO reviewed HUD program documents and studies on green building, interviewed HUD officials and industry representatives, and made site visits to locations that use green building practices.

HUD has taken steps to promote energy efficiency by providing information, training, and technical assistance, but its efforts have limitations. HUD has also provided some financial incentives to promote green building, including energy efficiency, for public housing and for a small segment of the multifamily properties HUD supports. Additionally, HUD has developed some performance measures to track the progress of its energy efficiency efforts. However, HUD has not begun requiring energy-efficient products and appliances in its public housing properties, as required by statute. HUD has also not implemented major energy efficiency updates to the building code for manufactured housing in more than a decade. Without such requirements and updates, public housing authorities may be spending more on utility expenses than is necessary and manufacturers may lack an incentive to build energy- efficient manufactured homes. Green building practices can increase up-front costs but may also provide long-term benefits, including financial, environmental, and health benefits. But the benefits in rental housing may not go to the party incurring the up-front costs, potentially discouraging the use of green building practices in a significant segment of affordable housing. HUD has partnered with others to develop a utility benchmarking tool for identifying savings in public housing, but only for the public housing portfolio. Utility benchmarking is often used to assess energy consumption and to help identify properties that could improve their energy efficiency. HUD does not collect the data needed to understand its current utility costs or future savings possibilities in some parts of its multifamily housing portfolio. HUD officials told GAO that developing a utility benchmarking tool for this portfolio would be helpful but could be costly to HUD and property owners. However, a 2003 study by Harvard University--and funded by HUD--found that collecting consumption data in insured privately owned multifamily housing would not be unreasonably burdensome. Without such a tool, HUD cannot fully understand the utility costs for over 1.6 million units in its portfolio and may be missing opportunities to reduce utility expenses for some properties. HUD has focused its attention on incentives that encourage energy efficiency but has few financial incentives, such as those used by states, to encourage other green building practices such as water conservation. Many state and local governments have used financial incentives to promote the development of green affordable housing. For example, in the scoring systems for some competitive funding, applicants are awarded additional incentive points for energy and nonenergy green building practices. Without financial incentives for nonenergy green building, HUD is likely missing opportunities to make its affordable housing more resource efficient and environmentally friendly.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The regulation that would require the use of energy-efficient products and appliances for public housing has not been completed, as of August 2013.

    Recommendation: In order to better promote green building practices, the Secretary of HUD should direct the appropriate program offices to ensure completion of the regulation that would require the use of energy-efficient products and appliances for public housing as directed by the Energy Policy Act of 2005.

    Agency Affected: Department of Housing and Urban Development

  2. Status: Closed - Not Implemented

    Comments: Energy efficiency updates to the HUD Manufactured Housing Code have not been implemented, as of August 2013.

    Recommendation: In order to better promote green building practices, the Secretary of HUD should direct the appropriate program offices to proactively work with Department of Energy (DOE) to expeditiously implement energy-efficiency updates to the HUD Manufactured Housing Code.

    Agency Affected: Department of Housing and Urban Development

  3. Status: Closed - Not Implemented

    Comments: Updates to the handbooks were not completed as of August 2013, or completed in a timely fashion.

    Recommendation: In order to better promote green building practices, the Secretary of HUD should direct the appropriate program offices to ensure that updates to handbooks are regularly completed in a timely fashion to provide more current guidance on energy-efficient and other green building practices.

    Agency Affected: Department of Housing and Urban Development

  4. Status: Closed - Implemented

    Comments: HUD has worked with DOE, EPA, Fannie Mae and industry reprasentatives on a strategy to develop common data inputs and reporting standards for multifamily properties that could lead to developing a commonly accepted multifamily benchmarking tool. HUD has been supporting Fannie Mae's work with EPA to develop multifamily ENERGY STAR index score, which is expected to be completed in the first quarter of 2014. Once this score is in place, HUD's Office of Multifamily Housing plans to work with EPA to explore benchmarking opportunities for its assisted and insured properties.

    Recommendation: In order to better promote green building practices, the Secretary of HUD should direct the appropriate program offices to consider working with DOE's Oak Ridge National Laboratory and Environmental Protection Agency (EPA) to develop a utility benchmarking tool for multifamily properties.

    Agency Affected: Department of Housing and Urban Development

  5. Status: Closed - Implemented

    Comments: Beginning in fiscal year 2009, HUD has generally increased the number of points awarded for energy efficiency as well as non-energy green building standards through its competitive grant programs.

    Recommendation: In order to better promote green building practices, the Secretary of HUD should direct the appropriate program offices to assess whether the single-point incentive awarded for energy efficiency is sufficient to stimulate higher levels of energy efficiency for its competitive grant programs and consider providing nonenergy green building incentive points for these programs.

    Agency Affected: Department of Housing and Urban Development

 

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