‘A Terrible Irony’ - Affordable Housing, Unaffordable Energy

‘A Terrible Irony’ - Affordable Housing, Unaffordable Energy

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Editor’s Note:
In Oakland, buildings account for 56 percent of the city’s carbon emissions that drive climate change. That’s slightly higher than the state average of 50 percent. Nationally, buildings make up slightly more than two-thirds of greenhouse gas emissions, making the sector a key area to achieve emissions reductions. In the past few years, several pilot projects have highlighted the benefits of bringing solar and energy efficiency upgrades to affordable housing, including public housing. In the second part of a two-part series, Oakland Local reporter Eric K. Arnold explores the benefits of energy efficiency and renewable energy for low-income residents, as well as the challenges to more widespread adoption.

Read Part 1

OAKLAND, Calif. –Tassafaronga Village, a mixed-use housing development in East Oakland, isn’t your average affordable housing project.

During a site visit, assistant manager Wendy Ruiz and maintenance worker Edgar Valencia proudly show off the building’s roof: Rows and rows of solar panels – 145 in all -- efficiently harness energy from the sun.

So far, the solar investment is reaping big energy cost savings. The monthly electricity costs to light common areas such as hallways for the entire housing project, Ruiz says, is about $25 for 137 affordable housing units and $12 for 20 market-rate townhouses. The panels require “very low maintenance,” Valencia adds. Although residents pay for individual utility use, the bills are very low, about $10-$15 monthly, Ruiz says.

Tassafaronga is the jewel in the crown of the city’s affordable housing -- a model for sustainable development that uses less electricity from the grid, has a lighter carbon footprint and provides benefits to residents and the wider community. While the model has proved effective—Tassafaronga has won numerous sustainability awards—state and federal budget cuts have derailed efforts to further green affordable housing stock in Oakland and other cities, leaving developers scrambling to find new funding sources.

The case for energy efficiency in affordable housing

Energy efficiency is particularly critical in affordable housing developments, says Jeremy Hays, chief strategist for state and local initiatives at Green For All, an environmental advocacy group. According to Hays, apartment buildings built before 1970 use 55 percent more energy than those built after 1990.

Oakland has some 8,800 units of affordable housing, not including the 3,300 units of public housing overseen by the Oakland Housing Authority (OHA), a city agency that administers federally-subsidized public housing programs and develops affordable housing throughout the city. Many of OHA’s properties were built decades ago, and are in need of rehabilitation.

A 2013 study by the Rocky Mountain Institute found that energy costs for federally-subsidized affordable housing are almost 40 percent higher than energy costs for private homes, and 10 times greater than government investment in energy efficiency. This leads, the study found, to “a terrible irony: affordable housing saddled with unaffordable energy bills.”

The disparity means that higher energy costs are passed down to property owners and low-income tenants.

In both affordable housing and public housing units, tenants receive federal subsidies, known as Section 8 vouchers. Tenants generally contribute 30 percent of their monthly income toward rent and utilities, and pay utilities directly, receiving a utility allowance, which is supposed to be adjusted annually or when rates rise more than 10 percent.

Low-income residents spend 12 percent of their annual income on utility bills – four times the amount that the average American spends, according to Green for All.

Furthermore, affordable housing owners, including public housing agencies and non-profit real estate developers, are constrained by rising utility bills; energy consumption in the United States has steadily increased nearly every year since 1985, a trend that shows no signs of reversing.

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Image: A view of Tassafaronga Village, a mixed-use housing development in East Oakland.

As utility bills continue to rise, “we’ll continue to lose affordable housing,” Hays says, unless the amount spent on utilities can be reduced.

“Every time you reduce your energy bill, you build in some safety for yourself around increased cost,” he noted.

According to the U.S. Green Building Council, energy efficiency saves 30 to 40 percent of consumption at little to no additional cost—a significant number, considering that buildings account for 75 percent of U.S. electricity use and 36 percent of natural gas use.

Because it creates a win-win situation—lowering utility costs while benefitting the environment—utilizing renewable energy and energy efficiency has become a growing trend in the affordable housing field.

“Energy efficiency and green building will help the building and its systems last longer, which provides positive health benefits to residents and lasting benefits to the neighborhood in terms of blight reduction,” says Carlos Castellanos, director of Real Estate Development at the East Bay Asian Local Development Corporation (EBALDC), a non-profit affordable housing organization, which has developed more than 1,900 residential units.

Building affordable housing to a green standard

Built at a cost of $75 million dollars—a figure which includes not only building and construction costs, but environmental clean-up of neighborhood brownfields—Tassafaronga was the last large public housing development in the city to undergo what OHA’s Bridget Galka calls a “complete rehabilitation.”

Originally built in 1964, during the Johnson administration, Tassafaronga’s existing 87 units of low-rise public housing were dilapidated and run-down, exacerbated by jagged cracks and fissures that exemplified the term “concrete jungle” and created seismic safety issues to boot. On top of that, the site’s soil was highly contaminated by petroleum and pesticides. The neglected, blighted area became a haven for crime, prostitution and drug dealing.

After applying for a federal grant from the Environmental Protection Agency and creatively tweaking its financing model—leveraging Section 8 vouchers to qualify for a bank loan—OHA demolished the existing structures, with Galka serving as project manager for the revitalization effort.

In 2010, Tassafaronga opened, offering 157 mixed-income units—a combination of market-rate and affordable housing—covering 7.5 acres. The project has two major panel systems: rooftop solar (which powers common electrical systems), and solar water heaters. In addition to solar energy, Tassafaronga boasts energy-efficient windows, lighting and boiler systems. Other green measures include recycled building materials, low-flow toilets, rainwater-catchment drains, and paint that releases fewer toxic chemicals.

Tassafaraonga attained LEED Platinum status—the highest certification level possible—from the U.S. Green Building Council for Environmentally Sustainable Development. Completing the project “really bumped up [OHA’s] status as far as being super energy-efficient,” Galka said.

Sustainability as a community model

The development of Tassafaronga Village highlights how sustainability features in affordable housing can transform neighborhoods, when combined with holistic urban planning and community-oriented development.

Numerous studies have examined the impact of blight reduction on crime in neighborhoods. A 2011 study from the University of Michigan noted “Beautifying and maintaining” vacant or blighted property “can be an effective crime prevention strategy.”

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Image: A meber of the group Acta Non Verba works in a recently opened community garden adjacent to the Tassafaronga housing complex.

In 2011, the Acta Non Verba Youth Urban Farm Project, a youth-run sustainable urban gardening project adjacent to the redeveloped property, opened on a city-owned plot in a neighborhood known for violent crime, drug dealing, and prostitution.

Today, the farm grows sunflowers, cotton, and organic vegetables. It also produces cheese and spaghetti sauce that is sold onsite. In addition to mitigating the “food desert” syndrome common in inner-city neighborhoods by providing a source of fresh produce, revenue from the farm goes into an education fund for its youth workers.

As Acta Non Verba Founder and Executive Director Kelly Carlisle noted, “on top of beautifying the community within the so-called bad part of town, we’ve also allowed elders and youth to consider what they’re eating.”

Further catalyzing East Oakland’s transformation, in 2011, a new public library opened up on 81st Avenue, just down the street from Tassafaronga Village. Rounding out the neighborhood is Acorn Woodland Elementary, an award-winning K-5 school also on 81st Ave., which opened in 2006 and houses a preventative care clinic onsite.

While the use of sustainability features in Tassafaronga Village isn’t solely responsible for the neighborhood’s transition from eyesore to community model, it’s unlikely the City of Oakland would have redeveloped the land used for the farm had the housing development not been rehabilitated and re-envisioned as the centerpiece of an uber-green urban planning project.

Budget cuts jeopardize future green projects

Despite the benefits of energy efficiency investments in affordable housing, financial hurdles hinder greater efforts on this front. Even though sustainability and green living models have been established in the affordable housing sector, Galka says, budget constraints limit what agencies like OHA can presently do.

For instance, Tassafaronga’s funding included $12 million from Oakland’s Redevelopment Agency. Yet that sum was locked in prior to the statewide elimination of Redevelopment Agencies in 2012. After redevelopment funding was cut, developments in the pipeline required a larger percentage of OHA funds than in previous years. The federal Housing and Urban Development department has also slashed its public housing budget.

The affordable housing sector has also been heavily impacted by mandatory sequestration due to federal budget cuts. As the San Jose Mercury News reported, OHA faces $11 million in cuts due to sequestration in 2013, which could result in the loss of a significant amount of Section 8 vouchers. That’s critical to projects like Tassafaronga, which leveraged federal housing subsidies to qualify for some $23 million in bank loans—nearly one-third of the project’s total budget.

“The reduction of affordable housing funds makes it challenging to pay for energy-efficient features,” Castellanos said.

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In the past, federal funds have helped to defray up-front costs, he says, but “the long-term savings over operations that sustainable features yield doesn’t always communicate well to politicians who are trying to reduce budgets at all levels.”

The challenges which lie ahead for affordable housing are clear: Although increased investment in energy efficiency can lower energy costs for low-income residents, reduces power consumption, provides health benefits, and results in long-term cost savings for property owners, unless new funding sources are secured, the ability of affordable housing developers to provide future sustainability features remains in jeopardy.

This work was supported by a 2013 New America Media Energy Reporting Fellowship in collaboration with SoundVision Productions’ Burn: An Energy Journal.
 

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