TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TAX CREDIT PROPERTIES

Transcription

1 STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES DANA BARTOLOMEI, NATIONAL HOUSING TRUST eergyefficiecyforall.org

2 ACKNOWLEDGEMENTS This report was created as part of the Eergy Efficiecy For All Project, a joit effort of the Natioal Housig Trust, the Natural Resources Defese Coucil, the Eergy Foudatio, ad Elevate Eergy. Thak you to The JPB Foudatio whose fiacial support has made this project possible. The strategies reflected i this report represet a momet i time. State Housig Fiace Agecies update their Qualified Allocatio Plas o a aual basis, ad, as part of that, may update their water ad eergy efficiecy policies or procedures. The Natioal Housig Trust will cotiue to track strategies HFAs are usig, ad make that iformatio available o PrezCat, our olie database of state ad local affordable housig preservatio policies. Please visit to view the most curret state strategies to icrease eergy ad water efficiecy i Low Icome Housig Tax Credit properties. Thak you to the may orgaizatios ad idividuals who provided iput ad expertise i their review of this report. These iclude Agelia Beso-Glaz, Elevate Eergy; Pat Colema, New Ecology; Jim Grow, Natioal Housig Law Project; ad Lidsay Robbis, Natural Resources Defese Coucil. Thak you also to NHT staff Laura Aberathy, Raisa Johso, ad Todd Nedwick. May thaks to Taja Bos for preparig the report for publicatio.

3 CONTENTS Itroductio Gree Capital or Physical Needs Assessmet Eergy ad Water Audits or Modelig Performace-based Requiremets ad Icetives Third-party Buildig Stadards Required Eergy Professioal Eergy ad Water Bechmarkig Water Coservatio Requiremets ad Icetives Coordiatio with Utility Eergy Efficiecy Programs Project-specific Utility Allowaces Reewable Eergy Icetives Coclusio ad Areas for Future Research...21 Edotes...23 Appedix A: Strategies States use to improve the eergy ad water efficiecy of LIHTC properties Appedix B: Gree Capital Needs or Physical Needs Assessmet Appedix C: Eergy Modelig, Aalysis or Audit Requiremets...27 Appedix D: Performace Requiremets ad Icetives...28 Appedix E: Third-party Buildig Stadards Appedix F: Eergy ad Water Bechmarkig Requiremets ad Icetives...31 Appedix G: Water Coservatio Requiremets ad Icetives...32 Appedix H: Coordiatio with Utility Eergy Efficiecy Programs Appedix I: Reewable Eergy Icetives...35 I 1 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

4 INTRODUCTION This report examies how state housig fiace agecies (HFAs) are usig the 9 percet Low Icome Housig Tax Credit Program (LIHTC) to develop ad preserve affordable retal housig that is eergy ad water efficiet. Through a review of Qualified Allocatio Plas ad additioal documets outliig HFA policies ad priorities, this report idetifies strategies HFAs are usig to maximize the eergy ad water efficiecy of low-icome housig, icludig: Gree Capital or Physical Needs Assessmets Eergy ad Water Bechmarkig Eergy ad Water Audits or Modelig Water Coservatio Requiremets or Icetives Performace-based Requiremets or Icetives Coordiatio with Utility Eergy Efficiecy Programs Third-party Buildig Stadards Project-specific Utility Allowaces Required Eergy Professioal Reewable Eergy Icetives I 2 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

5 Some of these strategies are more widely used tha others. For example, 33 HFAs require or icetivize properties to meet the criteria of a third-party buildig stadard, whereas oly six require or icetivize owers to bechmark the eergy ad water use of the property. Noetheless, this report cofirms that most HFAs are takig seriously the importace of esurig that LIHTC properties are eergy ad water efficiet. Ad, although there are some cocers about the impact of high efficiecy costructio o developmet costs, we ca expect the strategies idetified i this report to become more commo. This report was writte with a appreciatio of the time, research, public participatio ad foresight that goes ito the developmet of a Qualified Allocatio Pla (QAP). HFAs must use the 9 percet tax credit program to meet a diverse set of housig eeds, ad each QAP represets a delicate balace. Therefore, this report does ot rak QAPs, or assig value to ay of the strategies outlied. Each is a importat step toward more eergy ad water efficiet affordable housig. We hope this report will be a resource to HFAs as they cotiue to explore optios for maximizig the efficiecy of the properties they fiace. Advocates for sustaiable affordable housig should also fid the iformatio here useful as they cotemplate which policies to pursue to achieve their goals. The Role of Eergy ad Water Efficiecy i LIHTC Properties Maximizig the eergy ad water efficiecy of LIHTC properties is importat for several reasos. The LIHTC program is the largest affordable housig retal productio ad preservatio program i the atio, creatig or preservig more tha 2.2 millio affordable homes sice With a affordability period ofte loger tha 30 years, these properties must be built to high-quality stadards that stad the test of time. Reducig eergy ad water cosumptio is critical to maitaiig affordable housig. Accordig to multiple studies, the cost of eergy is the largest cotrollable, variable operatig expese i affordable multifamily housig. 1 I additio, water ad wastewater charges have bee icreasig at well above the Cosumer Price Idex (CPI) for may years. 2 Improvig the eergy ad water efficiecy of LIHTC properties lowers operatig costs, which ca free up capital for maiteace, repairs ad other improvemets. Reducig eergy costs may also stabilize or icrease property cash flow ad reduce loa default risk, thereby preservig affordable housig. Icreasig the eergy ad water efficiecy of LIHTC properties makes a sigificat differece for residets, as well. Low-icome households typically sped 7.2 percet of their icome o eergy bills; more tha two times that of the media household, which speds oly 3.5 percet o eergy bills. 3 Where eergy ad water are idividually metered, high eergy burdes ca have real cosequeces o a family s budget. Regardless of the meterig cofiguratio, eergy iefficiet housig icreases residets risk for developig serious egative health coditios, such as respiratory symptoms, asthma, cacer, ad cardiovascular disease. 4 Improvig eergy ad water efficiecy i LIHTC properties ca sigificatly improve idoor air quality 5 ad produce positive impacts o residets fiacial security, health ad well-beig. Eergy efficiecy ivestmets i low-icome multifamily housig ca also help states ad utilities reach their eergy savigs or carbo reductio targets. A recet study by Optimal Eergy foud sigificat eergy savigs potetial i the affordable multifamily housig sector. By 2035, the report estimates that eergy efficiecy programs i multifamily affordable housig could cut electricity usage by as much as 32 percet ad atural gas by as much as 24 percet. 6 I short, makig LIHTC properties more eergy ad water efficiet is a cost-effective way to reduce eergy cosumptio, maitai housig affordability, reduce pollutio, ad create healthier, more comfortable livig eviromets for residets. About the Low Icome Housig Tax Credit Program The LIHTC program is admiistered joitly by the U.S. Departmet of Treasury ad state housig fiace agecies (HFAs). There are two types of tax credit rates i the LIHTC program the 4 percet rate ad the 9 percet rate. 4 percet tax credits are awarded alog with private activity bods, ad subject to a private activity bod cap per state. 4 percet tax credits are more widely available ad ot subject to a competitive allocatio process. The amout of 9 percet tax credits a state ca allocate i a give year is limited based o a per capita formula authorized by Cogress. To allocate the 9 percet credits HFAs use a competitive process, with selectio criteria outlied i the HFA s Qualified Allocatio Pla (QAP) or similar documet. Developers who receive a allocatio of 9 percet credits sell these tax credits to corporatios to offset the corporatios tax liability. I retur, I 3 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

6 HOW THE LOW INCOME HOUSING TA CREDIT WORKS 7 $ 1 The U.S. Departmet of the Treasury issues tax credits to the states. QAP 2 States cotrol the type of housig, the locatio ad other characteristics to best serve their residets. State agecies write regulatios (called a qualified allocatio pla (QAP)) describig the selectio criteria that govers the competitio Housig developers compete for the tax credits. Developmets that best meet the selectio criteria outlied i the QAP are awarded the tax credits. Ivestors buy the tax credits. The sale results i equity to the developer to help fiace the developmet. The equity lowers the amout of moey that must be borrowed to fud costructio. The lower debt paymets allow the developers to charge affordable ret. developers receive equity to help cover the costs of preservig or costructig affordable retal housig. Apartmets created or preserved usig tax credits must be reted to households with icomes of o more tha 60 percet of the area media icome. Ret restrictios must remai i place for at least 30 years from the time the property is placed i service (i.e. whe the housig is ready to be occupied). Federal statute provides HFAs wide discretio i determiig how to allocate tax credits to address state ad local housig eeds. Sectio 42 of the Iteral Reveue Code requires each HFA to set forth selectio criteria i a Qualified Allocatio Pla (QAP). Sectio 42 does require QAPs to iclude three prefereces ad te other selectio criteria, icludig eergy efficiecy, but does ot defie how HFAs should evaluate these criteria. Affordable housig developers pay close attetio to the QAP whe evaluatig whether to pursue a developmet for a couple of reasos. First, the 9 percet LIHTC program is very competitive. I may states, applicatios for credits far exceed supply year after year. Thus, developers seek to maximize their chaces of securig fudig by esurig that the developmets they pursue adhere closely to the priorities of the housig agecy as laid out i the QAP. Secod, submittig a competitive applicatio for 9 percet tax credits requires sigificat ivestmet of capital ad staff resources. Developers pursuig 9 percet credits must demostrate that they have cotrol of the property to be eligible for a award. The acquisitio ad pre-developmet costs associated with pursuig a developmet ca be sigificat, ad developers must be cofidet that their applicatio will be competitive if they are goig to ivest scarce resources. 8 Aalytical Approach QAPs are the mai documet through which HFAs require or icetivize eergy or water efficiecy i LIHTC properties. The focus of this report is o two mai mechaisms i the QAP that guide allocatio decisios per state ad local housig eeds: threshold requiremets ad icetives (poits or prefereces). Threshold requiremets set forth the miimum stadards a proposal must meet to qualify for a allocatio of tax credits. Additioally, HFAs use poits or prefereces to rak applicats agaist each other, with the higher scorig applicatio receivig a allocatio of tax credits above a lower scorig applicatio. Although poits or prefereces are optioal, HFAs ca virtually esure that applicats meet certai criteria by assigig eough weight to the criteria that the applicatio has little chace of receivig a allocatio without complyig. 9 I additio to reviewig threshold requiremets ad icetives i QAPs, accompayig documets were also reviewed. These documets iclude gree I 4 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

7 buildig or eergy coservatio policies, desig ad costructio mauals, fudig applicatios, ad uderwritig guidelies. We idetified 10 commo strategies that HFAs use to esure that LIHTC properties take cocrete steps toward reducig eergy ad water use: 1 Gree Capital or Physical Needs Assessmets (GCNA or GPNA). A GCNA or GPNA combies a covetioal Capital or Physical Needs Assessmet with a eergy audit to evaluate the eergy ad water efficiecy eeds of a property Eergy ad Water Audits or Modelig. A eergy or water audit is a assessmet of the eergy ad/or water cosumptio of a buildig or buildigs, or a modeled simulatio to evaluate of cost-effective eergy ad water efficiecy ivestmets. Performace-based Requiremets or Icetives. A performace-based approach ivolves reducig eergy ad water cosumptio at a property by a certai percetage as compared to a pre-retrofit baselie. Third-party Buildig Stadards. Gree buildig stadards iclude certificatio systems established by idepedet third parties to evaluate the sustaiability of a buildig. Commo stadards iclude Leadership i Eergy ad Evirometal Desig (LEED), EarthCraft, Eterprise Gree Commuities, ad the Natioal Gree Buildig Stadard. Required Eergy Professioal. Developmet teams that iclude eergy cosultats or gree professioals to itegrate gree buildig, eergy ad water efficiecy throughout the plaig, desig ad costructio process. Eergy ad Water Bechmarkig. Bechmarkig is the process of trackig the eergy ad water cosumptio of a property ad comparig the buildig performace to other properties withi a portfolio, or to similar buildigs elsewhere. Water Coservatio Requiremets or Icetives. Requiremets or icetives for the istallatio of low-flow plumbig fixtures to avoid excessive water cosumptio ad associated utility costs. Coordiatio with Utility Eergy Efficiecy Programs. Direct coordiatio betwee HFAs ad utilities o eergy efficiecy program desig ad implemetatio. Or, requiremets or icetives to pursue utility-sposored or other eergy efficiecy related fudig to icorporate ito a applicatio. Project-specific Utility Allowaces. A utility allowace that more accurately reflects the reasoable eergy ad water use of residets at a specific property. Either a high-quality eergy cosumptio model or the use of actual cosumptio data if made available from the utility. Reewable Eergy Icetives. The icorporatio of reewable sources (solar, wid, or geothermal heat) to geerate eergy o-site to offset eergy use for commo areas or teat spaces. This report reflects approved QAPs ad accompayig documets as of Jue 1, The followig sectios provide iformatio o the umber of HFAs usig each strategy listed ad how they are beig applied differetly to ew costructio ad rehabilitatio properties. Examples from specific QAPs are highlighted to illustrate the mechaics of each strategy ad are preseted as iovative policies or procedures for HFAs to cosider as they explore optios for improvig the eergy ad water efficiecy of the affordable housig i their state. NEW CONSTRUCTION V. REHABILITATION HFAs recogize the iheret differeces betwee ew costructio ad rehabilitatio projects. Eergy efficiecy opportuities may be limited i a existig property. Accordigly, HFAs develop policies ad icetives that seek to strike a balace betwee promotig the highest levels of efficiecy ad supportig the preservatio of existig affordable housig. This may mea developig separate criteria for ew costructio ad rehabilitatio projects applyig for Housig Credits. Throughout this report, requiremets ad icetives for eergy ad water efficiecy are separated betwee New ad Rehabilitatio whe a give HFA has chose to differetiate betwee these developmet types i their QAP. I 5 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

8 1 GREEN CAPITAL OR PHYSICAL NEEDS ASSESSMENT The Capital Needs Assessmet (CNA) or Physical Needs Assessmet (PNA) is a assessmet to determie the cost to maitai a property over a specific period that icludes a evaluatio of all major buildig compoets ad systems to idetify ad pla upgrades ad estimate the associated costs. Almost all HFAs require rehabilitatio properties ad/or acquisitio rehab, adaptive re-use, or preservatio applicatios to coduct a CNA or PNA (Appedix B). Itegratig eergy ad water efficiecy audits or a evaluatio of future eergy ad water efficiecy upgrades ito a CNA or PNA ca help owers pla for upgrades ad provide expected costs of improvemets, with the additio of cost savigs for eergy ad water improvemets. Typically, CNAs/PNAs do ot require a evaluatio of potetial eergy ad water efficiecy upgrades. However, 12 HFAs require applicats to cosider eergy ad water efficiecy ad the impact o logterm operatig expeses whe coductig a CNA/ PNA, or couple the CNA/PNA with a eergy audit. For example, the Delaware State Housig Authority requires a Capital Needs Assessmet that must be I 6 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

9 The Vermot Housig Fiace Agecy (VHFA) highlights the importace of eergy efficiecy its Capital Needs Assessmet Guidace: 1 OPTIMUM ENERGY EFFICIENCY IS CRITICAL I today s escalatig ad volatile utility markets, properties must be as eergy efficiet as possible ad meet the highest stadards possible to assure log-term operatig sustaiability. Recommedatios o eergy ad utility efficiecy improvemets must be icluded as a essetial part of the CNA. VHFA, the Vermot Housig & Coservatio Board, ad the Vermot Departmet of Housig ad Commuity Developmet (DHCD) Eergy Stadards should be used as a frame of referece i achievig optimum eergy efficiecy. completed by a licesed architect ad iclude a eergy audit completed by a certified eergy rater. Other HFAs state that Capital or Physical Needs Assessmets should iclude eergy efficiecy as a cosideratio, but do ot expressly require a eergy audit or outlie criteria for assessig eergy efficiecy or water efficiecy upgrades. For example, the Georgia Departmet of Commuity Affairs requires, Whereas the PNA documets the existig coditios ad immediate physical eeds, the DCA Rehabilitatio Work Scope must iclude these cosideratios as well as future property marketability, durability, ad eergy efficiecy which will add to the residetial quality of life. I 7 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

10 2 ENERGY AND WATER AUDITS OR MODELING A eergy audit for rehabilitatio or eergy model for ew costructio is the first step to comprehesive eergy maagemet. Curretly, HFAs i 13 states require or ecourage LIHTC applicats to coduct eergy audits for rehabilitatio projects ad 8 HFAs require or ecourage eergy modelig aalysis for ew costructio (Appedix C). To meet these requiremets, the project developmet team must cosult a certified eergy efficiecy professioal for a eergy audit to idetify ad cosider all cost-effective eergy savigs opportuities to icorporate ito the scope of work. The Missouri Housig Developmet Commissio requires multifamily rehabilitatio projects with more tha 12 apartmets to coduct a eergy audit. A assessor or rater who is certified through the Buildig Performace Istitute (BPI), Residetial Eergy Services Network Home Eergy Ratigs System (RESNET), or ENERGY STAR must prepare the audit. The miimum stadard for eergy audits is ASHRAE Level 1. ASHRAE Level 1 audits are simple walk-through audits that idetify eergy coservatio opportuities, but do ot provide a cost aalysis. 11 Iterestigly, water ad wastewater charges have bee icreasig at well above the Cosumer Price Idex (CPI) for may years, 12 but oly three HFAs State of Nevada Housig Divisio, the Marylad Departmet of Housig ad Commuity Developmet, ad the Pesylvaia Housig Fiace Agecy icorporate water ito their audit requiremets. I additio, the Califoria Tax Credit Allocatio Committee icludes water as a optioal assessmet protocol uder its Existig Multifamily Assessmet Protocols. A water audit will examie all areas i which the property uses water (maiteace, mechaical systems, irrigatio ad other buildig processes) to help idetify operatios ad maiteace issues ad cosider water savigs opportuities that ca lower operatig costs i the log ru. THE MARYLAND DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (DHCD) requires a eergy ad water audit for rehabilitatio projects to idetify all cost-effective eergy coservatio ad water coservatio measures that ca be icorporated ito the project s scope of work. DHCD has developed a Multifamily Eergy Audit Guide that sets forth audit stadards. I additio, all eergy coservatio ad water coservatio measures idetified i the audit with a Savigs to Ivestmet Ratio of 2.0 or greater (meaig that for $1.00 ivested the property achieves $2.00 i savigs) must be icorporated ito the project s scope of work. I 8 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

11 3 PERFORMANCE-BASED REQUIREMENTS & INCENTIVES Eergy ad water audits for rehabilitatio or eergy modelig for ew costructio properties coicide icely with performace-based icetives that ecourage owers to pursue comprehesive retrofits. Performace-based icetives require owers to establish the eergy cosumptio of a property pre-retrofit or pre-costructio, ad istall eergy ad water coservatio features to achieve a percet reductio i eergy ad water cosumptio. DHCD requires a eergy ad water audit to idetify eergy coservatio measures. To icetivize owers to use the results of the audit to iform the scope of work ad improve the performace of the buildig, DHCD awards additioal poits to rehabilitatio projects that will result i overall eergy savigs of 20-30% above pre-retrofit levels as determied by the eergy ad water audit. DHCD does ot require or award poits for ew costructio properties that demostrate improved eergy performace. Eleve HFAs require or ecourage ew costructio properties to demostrate icreased eergy performace. Twelve HFAs icetivize developers ad owers to icrease the eergy efficiecy of a rehabilitatio property over pre-retrofit coditios. HFAs that iclude performace-based requiremets or icetives typically rely o a percet improvemet over pre-retrofit coditios or a reduced Home Eergy Ratig System (HERS) Idex Score, a atioally recogized system for calculatig a home s eergy performace created by the Residetial Eergy Services Network (RESNET). The Marylad Departmet of Housig ad Commuity Developmet provides a istructive example for rehabilitatio projects. As metioed, Similarly, the Califoria Tax Credit Allocatio Committee (CTCAC) requires rehabilitatio projects to demostrate a 10% improvemet above modeled eergy cosumptio of the buildig based o CTCAC Existig Multifamily Assessmet Protocols. CTCAC awards three poits to rehabilitatio projects that result i a 15% improvemet over pre-retrofit coditios or 5 poits for a 20% improvemet over pre-retrofit coditios as demostrated usig Califoria Eergy Commissio approved software. CTCAC awards poits to ew costructio projects that demostrate a percetage improvemet beyod the requiremets of 2013 Title 24, Part 6 of the Califoria Buildig Code; 3 poits for a 9% improvemet ad 5 poits for a 15% improvemet. Other HFAs award poits for improved eergy performace based o the HERS Idex Score. For example, the Kasas Housig Fiace Housig Resources Corporatio awards poits for a reduced HERS Idex Score o a tiered scale for both ew costructio ad rehabilitatio. A project achievig a HERS Idex Score of is awarded 10 poits; of is awarded 15 poits; ad of 70 ad below ca receive 20 poits. A house with a HERS Idex Score of 70 is 30% more eergy efficiet tha a stadard ew home. 13 For more iformatio o performacebased icetives ad requiremets see Appedix D. I 9 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

12 4 THIRD-PARTY BUILDING STANDARDS Thirty-three HFAs require or icetivize properties to meet the criteria of, or achieve certificatio through, a third-party stadard like LEED, Eterprise Gree Commuities, or EarthCraft (Appedix E). Some states have developed their ow stadards like the Evergree Sustaiable Developmet Stadards i Washigto or the Alaska Buildig Eergy Efficiecy Stadard (BEES). Of the 33, 14 HFAs require ew costructio projects to meet the madatory criteria, or the miimum level of certificatio of a third-party stadard. Of those, 11 states require both ew costructio ad rehabilitatio projects to meet miimum criteria. The Colorado Housig Fiace Agecy provides a istructive example. CHFA requires all applicats to meet Eterprise Gree Commuities requiremets: All applicats must agree to meet the 2011 or 2015 Eterprise Gree Commuities requiremets i order to apply for credits. Applicats must complete a Gree Commuities Self Certificatio Workbook ad score a miimum of 30 poits for acquisitio/rehab projects ad 35 for ew costructio projects, certifyig that the project will meet or exceed the Eterprise Gree Commuities requiremets or the equivalet of those requiremets for ew costructio or rehabilitatio as applicable. Eterprise Gree Commuities provides a compliace pathway for New, Substatial Rehabilitatio, ad Moderate Rehabilitatio i both sigle-family ad multifamily to accout for the differeces betwee property types. I 10 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

13 HFAs also ecourage higher levels of performace by awardig more poits for higher levels of achievemet. For example, the Idiaa Housig ad Commuity Developmet Authority (IHCDA) requires ew costructio buildigs to meet the miimum stadards established by LEED, Eterprise Gree Commuities or achieve a Broze ratig uder the Natioal Gree Buildig Stadard. IHCDA awards poits to ew costructio ad rehabilitatio properties that meet higher stadards, as see below. States are also begiig to award poits for more rigorous buildig stadards. Coecticut, Idaho, Illiois, Motaa, New Jersey, ad Pesylvaia award poits for Passive House. Illiois ad New Jersey also award poits for projects that achieve certificatio through the Livig Buildig Challege. THE INDIANA HOUSING AND COMMUNITY DEVELOPMENT AUTHORITY (IHCDA) 2016 QAP AWARDS POINTS FOR MEETING THIRD-PARTY STANDARDS CERTIFICATION POINTS LEED LEED Silver Ratig LEED Gold Ratig LEED Platium Ratig 1 poit 2 poits 3 poits Natioal Gree Buildig Stadard Silver Ratig Natioal Gree Buildig Stadard Gold Ratig Natioal Gree Buildig Stadard Emerald Ratig Natioal Gree Buildig Stadard 1 poit 2 poits 3 poits Eterprise Gree Commuities Eterprise Gree Commuities Certificatio Eterprise Gree Commuities (+10 over miimum) Equivalet uder ratig system accredited by the America Natioal Stadards Istitute 2 poits 3 poits Up to 3 poits HFAS HAVE STARTED TO INCENTIVIZE MORE RIGOROUS BUILDING STANDARDS PASSIVE HOUSE is a rigorous iteratioal buildig stadard developed by the Passive House Istitute to optimize a buildig s eergy performace through passive measures ad compoets such as isulatio, airtightess, heat recovery, solar gais, solar shadig ad icidetal iteral heat gais. 14 THE LIVING BUILDING CHALLENGE is a certificatio program that cosists of seve performace categories: place, water, eergy, health & happiess, materials, equity, ad beauty. Certificatio is based o actual, rather tha modeled or aticipated performace. 15 I 11 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

14 5 REQUIRED ENERGY PROFESSIONAL Affordable housig owers ad developers ca egage eergy cosultats or accredited gree professioals throughout the plaig, desig ad costructio process to idetify ad icorporate all cost-effective eergy ad water savigs opportuities ito the project s scope. There are varyig degrees to which HFAs require or icetivize developmet teams to cosult with a eergy or gree buildig professioal. Geerally, HFAs that require eergy audits, eergy cosultatios, or certificatio through a third-party gree buildig stadard will esure that owers ad developers cosult with a certified eergy professioal or gree-buildig professioal at certai poits of the plaig, desig ad costructio process, but few require a eergy professioal to be ivolved throughout. Four HFAs require eergy cosultats or gree professioals to be members of the developmet team or require project developmet staff to take specific traiigs to build capacity ad cosider eergy ad water efficiecy opportuities throughout the process. The Iowa Fiace Authority requires a eergy cosultat to be a part of the Qualified Developmet Team, ad applicats are ecouraged to egage the eergy cosultat prior to submittig the applicatio. The West Virgiia Housig Developmet Fud awards poits if oe of the pricipals has atteded gree buildig traiig. As a requiremet for achievig Sustaiable Developmet poits, the Idiaa Housig ad Commuity Developmet Authority requires a gree professioal be part of the desig team (separate from the project architect or egieer) ad the perso must sig off o all buildig certificatios that are committed to i the applicatio. The Coecticut Housig Fiace Agecy provides detailed iformatio regardig the role of the eergy cosultat throughout the plaig, desig ad costructio phases, 2015 Eergy Coservatio Guidelies. 1 Iitial Assessmet: Eergy Cosultats discuss goals (such as ENERGY STAR Certificatio) ad potetial EE/RE opportuities with Owers ad Property Maagers Eergy Audit: Eergy Cosultats perform a buildig study ad preset recommedatios, icludig possible utility icetives ad rebates. Solutio Desig: Eergy Cosultats develop a scope of work for competitive bid. Project Fiace: Eergy Cosultats ad Owers compare available optios ad secure fudig, icludig utility icetives ad rebates Competitive Procuremet: Eergy Cosultats solicit ad aalyze bids; Owers sig costructio ad icetive cotracts. Istallatio: Eergy Cosultats provide field observatio ad costructio cotract admiistratio. Icetives Acquisitio: Eergy Cosultats provide required test results, reports ad certificates to the utilities for release of icetives ad rebates. Post-project: Eergy Cosultats ad Owers may pursue ENERGY STAR Certificatio I 12 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

15 6 ENERGY AND WATER BENCHMARKING Bechmarkig is the process of trackig the eergy ad water cosumptio of a property o a o-goig basis ad comparig performace over time to similar properties, either withi a complex or portfolio, or compared to similar properties elsewhere. Bechmarkig the eergy ad water performace of a buildig helps buildig owers make data-drive decisios to improve operatios ad maiteace, idetify opportuities for upgrades, ad track ivestmets to see if measures have realized their expected savigs. For HFAs, bechmarkig ca help esure that the properties they ivest i stad the test of time ad iform future eergy ad water efficiecy policies ad priorities. The U.S. Departmet of Housig ad Urba Developmet (HUD) has committed to bechmarkig as a key tool to further its commitmet to creatig eergy-efficiet, waterefficiet ad healthy housig as part of a broader effort to foster the developmet of iclusive, sustaiable, ad resiliet commuities. Utility costs accout for roughly 21% of public housig operatig budgets ad a similar share i the assisted housig sector. HUD speds a estimated $6.4 billio aually to cover the costs of utilities i its public ad assisted housig programs. Bechmarkig ot oly helps buildig owers make decisios, but is critical for HUD to accout for utility expeditures, pla future budget eeds, offer targeted icetive programs ad techical assistace, ad verify the retur o these ivestmets. 16 I October 2016, HUD issued a otice statig that it was seekig approval from the Office of Maagemet ad Budget (OMB) to require owers of certai property types to provide HUD s Office of Multifamily Housig Programs with utility cosumptio metrics. 17 I 13 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

16 Several HFAs have take a leadership role i promotig bechmarkig for LIHTC properties. The Illiois Housig Developmet Authority, New York City Housig Preservatio & Developmet, ad the Pesylvaia Housig Fiace Agecy require properties to bechmark eergy ad water use (Appedix F). The New Jersey Housig ad Mortgage Fiace Agecy (NJHMFA) ad Rhode Islad Housig award poits for projects that commit to bechmarkig ad the Alaska Housig Fiace Corporatio awards poits for projects that commit real-time eergy moitorig. For example, NJHMFA awards poits to applicats that commit to collectig data from 75% of residets ad uploadig commo area eergy usage data to EPA Portfolio Maager. The Illiois Housig Developmet Authority s (IHDA) 2016 Stadards for Architectural Plaig ad require owers to bechmark properties for a miimum of five years ad provide IHDA access to the data: Collect ad moitor project performace data o eergy, water, ad, if possible, healthy livig eviromets for a miimum of five years. Allow IHDA access to that data. For sub-metered projects, property ower /developer must agree to collect utility release forms from a percetage of residets to track actual utility data of a sample of homes. The followig table idetifies the percetage of residets for which the property ower /developer must collect ad track utility data, as based o the project size i total umber of uits. Number of uits / Percetage of uits 0 25 uits / 50% uits / 25% 100+ uits / 15% Provide IHDA with access to the performace data aually for a five-year period through the IHDA Utility Release Form submitted prior to fial closig ad /or the EPA s Portfolio Maager accout iformatio to help populate its database iteded to collect atioal iformatio o gree affordable housig. Multifamily buildig data ca be tracked ad aalyzed usig EPA s Portfolio Maager tool: The Portfolio Maager Overview is a iteractive eergy maagemet tool that allows the project team to track ad assess eergy ad water cosumptio across its etire portfolio of buildigs i a secure olie eviromet. I 14 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

17 7 WATER CONSERVATION INCENTIVES OR REQUIREMENTS The opportuities for water efficiecy improvemets, ad associated savigs i water ad wastewater charges, are substatial. Faie Mae s recet aalysis of eergy cosumptio i multifamily housig foud that the least efficiet properties use over six times as much water per square foot as the most efficiet properties (twice the spread of eergy cosumptio across the same data set). 18 Where water is idividually metered, water efficiecy ivestmets ca have a positive impact o residets fiacial security. Where water costs are paid for by the buildig ower, as is more commo, improvig water efficiecy is aother opportuity to reduce operatig costs. The most commo strategy HFAs use to promote water efficiecy is requirig or ecouragig the use of low-flow plumbig fixtures. 26 HFAs require or icetivize low-flow showerheads, lavatory faucets, ad toilets for ew costructio properties ad 24 HFAs require or icetivize these fixtures for rehabilitatio to avoid uecessary water cosumptio ad its associated utility costs. Of those, 9 specifically referece EPA WaterSeselabeled products for ew costructio ad rehabilitatio. 19 Fixtures that meet the performace criteria for water efficiecy set by the U.S. Evirometal Protectio Agecy s WaterSese program achieve water savigs while beig o more expesive to purchase ad istall tha less efficiet products. 20 Recogizig that WaterSese products cost o more tha stadard water fixtures, the North Carolia Housig Fiace Agecy requires all plumbig fixtures i both ew costructio ad rehabilitatio projects to be EPA WaterSese labeled. For a full set of the specificatios required by HFAs that ecourage water coservatio, please refer to Appedix G. I additio to the HFAs that specifically require low-flow fixtures, 10 HFAs require ew costructio projects ad 9 require rehabilitatio projects to meet a third-party stadard that icorporates water coservatio criteria to varyig degrees, as outlied below. WATER CONSERVATION CRITERIA IN THIRD-PARTY BUILDING STANDARDS 21 Eterprise Gree Commuities 2015 WaterSese-labeled fixtures, if available, are madatory for New, Substatial Rehab, ad Moderate Rehab. EarthCraft Multifamily LEED v. 4 BD+C, BD+ C Homes ad MF Lowrise, ad BD+C Multifamily Midrise EarthCraft Certified, Gold ad Platium levels require fixtures to meet Natioal Eergy Policy Act low-flow stadards. WaterSese labeled fixtures are required for Platium ad optioal for Certified ad Gold. All ewly istalled fixtures that are eligible for labelig must be WaterSese-labeled. ICC 700 Natioal Gree Buildig Stadard (NGBS) Poits are available for water efficiecy measures, icludig low-flow water fixtures for both New ad Rehabilitatio projects. WaterSese-labeled products are ot specified. I 15 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

18 8 COORDINATION WITH UTILITY ENERGY EFFICIENCY PROGRAMS Utility spedig o eergy efficiecy has icreased sigificatly i the past decade. Fudig for such programs was roughly $7.7 billio i May utilities have efficiecy programs desiged to help owers of affordable housig ivest i efficiecy repairs ad improvemets. Icreasigly, i a time of costraied housig resources, HFAs are begiig to look for ways to help owers ad developers access these utility eergy ad water efficiecy programs ad icetives. Oe such method is by ecouragig or requirig applicats to idetify utility-sposored, local, regioal, or federal eergy efficiecy rebate or icetive programs for which the property is eligible. Miesota Housig, the Coecticut Housig Fiace Authority, the Marylad Departmet of Housig ad Commuity Developmet, the Utah Housig Corporatio, the Iowa Fiace Authority, the Pesylvaia Housig Fiace Agecy ad the Wiscosi Housig ad Ecoomic Developmet Authority all require or icetivize coordiatio with utility-sposored eergy efficiecy programs. I 2015, Miesota Housig adopted a eergy rebate aalysis requirig developmets receivig tax credits or deferred fudig from Miesota Housig to pursue utility, local, state or federal eergy icetives to be icorporated ito the fiacig pla of the developmet. HFAs i other states have worked directly with utilities to develop ad implemet utility-fuded programs aimed at icreasig the eergy efficiecy of affordable housig. I New Jersey, PSE&G developed its multifamily retrofit program i collaboratio with the New Jersey Housig ad Mortgage Fiace Agecy to esure the program met the uique eeds of the multifamily affordable housig sector ad to market the program to owers. The Residetial Multifamily Housig Program provides owers with a free ivestmet grade audit ad upfrot iterest-free fiacig or grat icetives to cover the cost of eergy efficiecy improvemets. PSE&G has already made more tha 10,000 apartmets more eergy efficiet ad expects to complete upgrades at a additioal 10,000 apartmets durig the ext several years. 23 HIGHLIGHTS OF PSE&G RESIDENTIAL MULTIFAMILY HOUSING PROGRAM 24 Free o-site eergy audit with audit report Resources are provided for whole-buildig retrofits Three-step paymet process to elimiate the buildig ower s eed to fud the capital ivestmet before the project begis: 1. Executio of cotract 2. Job 50% complete 3. After fial ispectio PSE&G offers guidace ad techical assistace for solicitig cotractor bids Owers have the optio of repayig the zero iterest loas through eergy savigs o their utility bill with a 10-year repaymet period for NJHMFA fiaced properties. I 16 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

19 MINNESOTA HOUSING S 2015 RENTAL HOUSING DESIGN AND CONSTRUCTION STANDARDS OUTLINE THE REQUIREMENTS OF THE ENERGY REBATE ANALYSIS ENERGY REBATE ANALYSIS All projects receivig tax credit allocatio or deferred fudig from Miesota Housig shall provide a Eergy Rebate Aalysis (ERA). A B At the applicatio phase, submit a prelimiary/draft explaatio of eergy rebates beig cosidered with estimated rebate amouts. Prior to closig/loa commitmet submit a fial ERA as follows: 1 Prepared by a third-party etity with o idetity of iterest to the developer, borrower, or ower of the developmet property. The third-party etity may be a Licesed Architect, Licesed Egieer, Needs Assessor, HERS Rater, or other etity deemed qualified by Miesota Housig to provide this service. 2 The ERA should be o the letter head of the etity it was prepared by ad shall iclude cotact iformatio ad date it was prepared. 3 The ERA shall iclude a list of eligible utility compay, local, regioal, state, or federal rebate programs. 4 The ERA shall iclude recommedatios of applicable rebates to be icluded with estimated rebate amouts or estimated tax credit amouts. 5 Iclude calculatios, eergy models, or other techical data to support recommedatios. 6 Iclude letters, program data iformatio, or other documetatio from utility providers to support oted programs 7 If reewable eergy strategies are proposed, a cost-beefit aalysis shall be icluded. The Marylad Departmet of Housig ad Commuity Developmet (DHCD) admiisters the Multifamily Eergy Efficiecy ad Housig Affordability-EmPOWER (MEEHA-EmPOWER) program, which is fuded by the state s ivestorowed utilities ad regulated by the Marylad Public Service Commissio. DHCD, ad HFAs geerally, are uiquely positioed to deliver utility fuded programs targeted to the affordable housig sector because of their ability to streamlie project executio. Through the MEEHA-EmPOWER program, DHCD provides loas ad grats with flexible terms for the purchase ad istallatio of eergy coservatio measures. Fudig is available to two types of projects. Pipelie Projects, those seekig DHCD retal housig fiacig ad MEEHA-EmPOWER fudig ca submit oe applicatio to DHCD for all of their fiacig requests. No-Pipelie projects seekig fudig oly for eergy efficiecy improvemets are also eligible to participate. 25 While a HFA admiisterig a utility-sposored eergy efficiecy program is exceedigly rare, HFAs ca still bridge the gap betwee affordable housig owers ad utilities. HFAs have existig relatioships with owers ad ca help provide utilities with a reliable pipelie of eergy efficiecy retrofit projects. I additio, HFAs ca work with utilities to esure resources cotiue to be available to multifamily affordable housig ad that icetives ad rebates are structured to meet the uique eeds of the sector. I 17 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

20 9 PROJECT-SPECIFIC UTILITY ALLOWANCES Where teats pay for some or all utilities i LIHTC properties that do ot receive HUD or USDA Rural Developmet subsidies, 26 the maximum et ret that a ower receives is equal to gross ret mius a utility allowace. Most owers base utility allowaces o a local Public Housig Authority (PHA) schedule, which is i tur based o the typical costs of utilities paid by eergy-coservative households i the locality, usig commuity cosumptio data for housig of similar size ad type. This method is ofte chose because it is authorized by the IRS, but also easy ad iexpesive. Such PHA schedules are ofte a iaccurate measure of actual cosumptio at LIHTC uits, which ted to be ewer ad more eergy-efficiet tha the rest of the retal housig stock available to voucher holders. Project-specific utility allowaces more accurately reflect the reasoable eergy ad water use of residets at a specific property, i cotrast to those derived from a schedule or other meas that do ot reflect the particular property. Project-specific utility allowaces ca be calculated through either a highquality eergy cosumptio model or a aalysis of the project s actual teat cosumptio data. Eergy Cosumptio Model (ECM): A egieerigbased method that provides a estimate of reasoable cosumptio, takig ito accout specific buildig ad uit characteristics affectig cosumptio icludig uit size, buildig orietatio, desig ad materials, mechaical systems, appliaces ad locatio. 27 I 18 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

21 Actual Teat Cosumptio Data: A aalysis of actual cosumptio based o a represetative sample of teat cosumptio data or utility bills. The ower or regulatory agecy must still select the appropriate data poit for determiig reasoable cosumptio, whether average or aother data poit. The use of actuals ca oly be used after a project has bee i operatio for 12 moths or more. Verificatio. I some cases, HFAs may lack the capacity or expertise to verify the accuracy of project-specific utility allowaces, whether calculated usig a eergy cosumptio model or by a samplig of actual cosumptio data. Verifyig the accuracy of utility allowaces is critical to shield residets from improper ret icreases. Project-specific utility allowace policies ad practices that accout for cost-savigs from eergy upgrades ca ecourage buildig owers to make ivestmets that optimize buildig performace. This is because ivestmets ca be recouped through icreases i the et ret a ower receives without icreasig the teat s overall housig costs (i.e., teats are held harmless as the reductio i a teat s allowace are offset by the teat s eergy cost savigs). The icrease i ret reveue ca be reivested to improve property coditios or residet services. However, there are barriers to implemetig projectspecific utility allowaces, icludig: Access to data. Rules vary by state ad utility with regard to accessig ad aalyzig cosumptio data for teat-metered uits. I additio, obtaiig idividual utility release forms from teats ca be time-cosumig ad admiistratively burdesome. Upfrot costs. Uder IRS rules, the eergy cosumptio model requires owers to hire qualified professioals to perform the required aalysis. Assemblig a represetative sample of reliable cosumptio ad cost data ad calculatig the resultig allowaces ca also take time ad expese. Model quality ad applicatio. A eergy cosumptio model must iclude the proper iputs ad be applied correctly to accout for buildig ad uit characteristics, desig ad materials, mechaical systems, appliaces, locatio ad utility rates which affect the resultig allowace. Market coditios. I markets where projects are ot chargig maximum allowable rets due to soft market coditios, reducig the utility allowace may ot result i higher et rets, possibly elimiatig this mechaism for owers to recoup ivestmets i eergy efficiecy or reewables. Despite these challeges, most HFAs allow developers to use the eergy cosumptio model or to calculate utility allowaces based o actual cosumptio data. Two HFAs go further, either by requirig developers to use oe of these methods or by providig icetives for developers to adopt a particular method. There is o solid estimate of how may projects are usig project-specific utility allowaces i states where they are optios. Further research is ecessary to uderstad owers decisios regardig utility allowace methodologies. I 2014, the Arizoa Departmet of Housig bega requirig properties with ew LIHTC awards to calculate their utility allowaces usig a projectspecific utility allowace. Projects that receive a ew allocatio of tax credits must work with a certified Residetial Eergy Services (RESNET) rater calculates the utility allowaces. The RESNET rater uses o-site data to establish a baselie Home Eergy Ratig System (HERS) Idex Score o the existig property coditios, the works with the developer to idetify cost-effective eergy improvemets that will help the property ear poits i the QAP. After costructio, the eergy model is updated ad a fial HERS ratig ad utility allowaces are calculated for the property. I subsequet years, owers must calculate utility allowaces usig actual cosumptio data. The Washigto State Housig Fiace Commissio (WSHFC) awards two poits for properties that use a Eergy Cosumptio Model to calculate utility allowaces, I a effort to ecourage buildig owers to make all eergy savig ivestmets that optimize a buildig s eergy efficiecy ad for teats to coserve eergy usage. A idepedet licesed egieer or other qualified third party approved by the WSHFC is required to calculate the utility allowace. I 19 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

22 10 RENEWABLE ENERGY INCENTIVES Eight HFAs award poits to ew costructio or rehabilitatio projects that icorporate reewable eergy to offset residetial or commo area eergy load. The requiremets HFAs set forth for reewables vary by reewable eergy systems allowed (solar photovoltaic, solar thermal, wid power, or geothermal, etc.) ad whether reewable eergy systems are required to offset a miimum level of eergy load, either commo area load or teat load, ad the percetage required. Please refer to Appedix I for a descriptio of these eight HFAs criteria for icorporatig reewable eergy ito LIHTC properties. The Califoria Tax Credit Allocatio Committee (CTCAC) is the oly HFA that requires a rehabilitatio project to achieve eergy efficiecy poits before it is eligible to pursue poits for reewable eergy. Improvig the eergy efficiecy of a buildig before istallig a reewable eergy system will save project costs by reducig the size of the system eeded to offset eergy load. For ew costructio, CTCAC awards poits for eergy efficiecy with reewable eergy systems that provide the followig percetage of project teats eergy loads Califoria Tax Credit Allocatio Committee regulatios require the followig offsets to ear poits: OFFSET OF TENANTS LOAD LOW-RISE MULTIFAMILY HIGH-RISE MULTIFAMILY 20 percet 3 poits 4 poits 30 percet 4 poits 5 poits 40 percet 5 poits For rehabilitatio, projects that receive poits for eergy efficiecy 28 may be awarded poits for committig to developig, ad/or maagig, their project with oe or more of the followig: Projects shall iclude either: a b c Photovoltaic (PV) geeratio that offsets teat loads; or PV that offsets either 50 percet (50%) of commo area load (if the combied available roof area of the project structures, icludig carports, is isufficiet for provisio of 50% aual commo area electricity use, the the project shall have osite reewable geeratio based o at least 90% of the available solar accessible roof area); or Solar hot water for all teats who have idividual water meters. I 20 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

23 11 CONCLUSION AND AREAS FOR FUTURE RESEARCH Icreasig the eergy ad water efficiecy of LIHTC properties ca help maitai affordable housig, reduce pollutio, ad create healthier, more comfortable livig eviromets for residets. After a review of QAPs ad accompayig documets outliig requiremets, policies ad priorities, it is clear HFAs are lookig to improve the eergy ad water efficiecy of the properties i which they ivest. However, more research is eeded to evaluate which of these strategies are most successful ad to idetify ways to broade the applicatio of these strategies to other HFA-supported housig. Specific areas of further research iclude: calculatios, ot oly helps owers improve operatios ad maiteace ad prioritize ivestmets, but ca iform HFA policies ad priorities. More work should be doe to uderstad how HFAs that require or icetivize bechmarkig are usig the data that is collected, ad whether this data is beig used to help owers of poor performig buildigs access resources or techical assistace that will help them make eergy ad water upgrades. Evaluate the effectiveess of the strategies employed by HFAs to improve the eergy ad water efficiecy of the properties they fiace. Some research has bee doe to evaluate specific strategies. For example, The Impact of Eergy Efficiet Desig ad o LIHTC Housig i Virgiia evaluates the effect of the Virgiia Housig Developmet Authority s QAP eergy efficiecy scorig criteria. 29 More research should be doe to uderstad the impact these strategies have o buildig performace, affordability, ad residet health ad comfort. A evaluatio of how these strategies apply to differet buildig types (ew costructio, substatial rehab, moderate rehab, ad adaptive reuse) could also lead to further refiemet of these strategies. Data drive approaches. Access to eergy cosumptio ad cost data, either through bechmarkig the eergy ad water use of a property or through utility allowace Eergy ad water efficiecy i 4 percet tax credit properties. This report focuses o the competitive 9 percet LIHTC program. However, more ad more HFAs are seekig to use 4 percet tax credits to preserve affordable housig. More research should be doe to uderstad the extet to which projects seekig 4 percet credits are subject to the same eergy ad water efficiecy requiremets as projects receivig a allocatio of 9 percet credits. Strategies should be explored to icorporate eergy ad water efficiecy ito these properties. HFAs, housig, ad eergy efficiecy advocates should cotiue to explore optios to maximize the eergy ad water efficiecy of LIHTC properties. To that ed, The Natioal Housig Trust will cotiue to track strategies HFAs are usig, ad make the iformatio available o PrezCat ( our olie catalog of state ad local affordable housig preservatio policies ad tools. Hopefully, this report ad future trackig will serve as the basis for more research ad coversatio about the eormous beefits of eergy ad water efficiecy i affordable housig ad how best to deliver results. I 21 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

24 I 22 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

25 ENDNOTES 1 Natioal Housig Trust, Parterig for Success: A Actio Guide for Advacig Utility Eergy Efficiecy Fudig for Multifamily Retal Housig, America Water Works Associatio (AWWA) & Raftelis Fiacial Cosultats, Ic., 2014 Water ad Wastewater Rate Survey, AWWA, pp Drehbol, A. ad Ross, L Liftig the High Eergy Burde i America s Largest Cities: How Eergy Efficiecy Ca Improve Low Icome ad Uderserved Commuities. Retrieved April 27, 2016 from the%20high%20eergy%20burde_0.pdf. 4 Hilary Thomso, Sia Thomas, Eva Sellström, ad Mark Petticrew, Housig Improvemets for Health ad Associated Socio-Ecoomic Outcomes: Cochrae Database of Systematic Reviews (2010) DOI: / CD pub2 5 R. Grat ad A. Brito. Chroic Illess ad School Performace: A Literature Review Focusig o Asthma ad Metal Health Coditios. A Childre s Health Fud Moograph (2010) 6 Optimal Eergy, Affordable Multifamily Eergy Efficiecy Potetial Study, commissioed by Natural Resources Defese Coucil, Jauary, 2015, located at efficiecy-potetial. 7 Abt Associates ad Natioal Housig Trust. How Ca the Low Icome Housig Tax Credit Program Most Effectively be Used to Provide Affordable Retal Housig Near Trasit?, July Ibid. 9 While most states use competitive scorig criteria to rak QAPs ad allocate credits, HFAs have discretio to fud priority projects that are viewed by the agecy to meet a pressig state or local housig eed regardless of applicatio rak. 10 Vermot Housig Fiace Agecy, Vermot Housig & Coservatio Board, ad Vermot Departmet of Housig ad Commuity Developmet. Capital Needs Assessmet (CAN) Guidace, Retrieved from developers/cna%20-% 11 Baechler MC A Guide to Eergy Audits. PNNL-20956, Pacific Northwest Natioal Laboratory, Richlad, WA. Retrieved from: PNNL pdf 12 America Water Works Associatio (AWWA) & Raftelis Fiacial Cosultats, Ic., 2014 Water ad Wastewater Rate Survey, AWWA, pp RESNET (.d.) Home Eergy Ratig. Retrieved from: reset.us/eergy-ratig. For multifamily, the Eergy Ratig Idex is calculated usig a coditioed floor area weighted average of the Eergy Ratig Idex Values from all dwellig uits; or the weighted average of the Eergy Ratig Idex from all values dwellig uits based o the uit distributio; or the largest Eergy Ratig Idex of all dwellig uits i the buildig, as approved the authority havig jurisdictio. Please see Iterpretatio Request: Applicatio of ANSI/ RESNET to Multifamily Buildigs. Retrieved from: Ratig_Iterpretatio_v_fial_pub.pdf 14 New York Passive House (NYPH) (.d.). What is Passive House? Retrieved from: 15 Iteratioal Livig Future Istitute (.d.) Livig Buildig Basics. Retrieved from: Day Notice of Proposed Iformatio Collectio: Eergy Bechmarkig, 81 Fed. Reg. 192 (October 4, 2016). Federal Register: The Daily Joural of the Uited States. Web. 4 Oct Ibid 18 Faie Mae, Trasformig Multifamily Housig: Faie Mae s Gree Iitiative ad ENERGY STAR for Multifamily. Sept p EPA WaterSese specificatios: toilets: 1.28 gallos per flush, lavatory faucets 1.5 gallos per miute; showerheads 2.0 gallos per miute. 20 See, for example, Califoria Eergy Commissio, Staff Aalysis of Lavatory Faucet Appliace Stadards, Docket Number 15- AAER-05, p. 5, July 24, 2015, PublicDocumets/15-AAER- 05/TN205513_ T152718_ Staff_Aalysis_of_Lavatory_Faucet_Appliace_Stadards.pdf. The commissio cocluded that there was o icremetal cost betwee a 1.5 GPM faucet ad a 2.2 GPM faucet, based o studies coducted by the ivestor-owed utilities ad verificatio through a retail price search showig o premium for the more efficiet products (p. 6). The commissio reached a similar coclusio regardig showerheads durig a separate rulemakig later i Differet models of plumbig products may vary widely i price, but these differeces are attributable to style, fiish, material, ad features urelated to flush volume or flow rate. 21 Please see the sectio o third-party stadards for further discussio of how HFAs are icorporatig third-party gree buildig stadards ito QAPs 22 Berg, W.; Nowak, S., et al. The 2016 State Eergy Efficiecy Scorecard Retrieved from: scorecard 23 PSE& G. Eergy Efficiecy: PSE&G is ivestig almost $400 millio i eergy efficiecy, puttig people to work ad helpig lower eergy bills Retrieved from: pseadg/eergyefficiecy/idex.jsp 24 Bryat, Elaie ad Righof, Susa., The Collaborative Program Desig ad Delivery Strategies Behid the Developmet, Regulatory Approval, ad Successful Implemetatio of PSE&G s Residetial Multifamily Housig Program. Retrieved from 25 Marylad Departmet of Housig ad Commuity Developmet. Multifamily Eergy Efficiecy Improvemet Programs, Retrieved from: Pages/EergyEfficiecyWeatherizatio.aspx 26 I LIHTC properties that do receive HUD or RD subsidies, the utility allowace for all ret-restricted uits is determied uder the applicable HUD or RD program rules, which geerally require project-specific allowaces based upo average actual cosumptio ad cost. 26 C.F.R (2016). 27 Califoria Housig Partership Corporatio ad Natioal Housig Law Project. A Affordable Housig Ower s Guide to Utility Allowaces, Retrieved from: uploads/2016/04/ua-guide_april-2016web.pdf. 28 CTCAC sectio 10325(c)(6)(D) Rehabilitatio Projects: The project will be rehabilitated to improve eergy efficiecy above the modeled eergy cosumptio of the buildig(s) based o existig coditios. I the case of projects i which eergy efficiecy improvemets have bee completed withi five years prior to the applicatio date pursuat to a public or regulated utility program or other govermetal program that established existig coditios of the systems beig replaced usig a HERS Rater, the applicat may iclude the existig coditios of those systems prior to the improvemets. The project must udergo a eergy assessmet that meets the CTCAC Existig Multifamily Assessmet Protocols. The report documetig the results of the Assessmet must be submitted usig the Sustaiable Buildig Method Workbook s CTCAC Existig Multifamily Assessmet Report Template. Poits are awarded based o the buildig(s) percetage decrease i estimated Time Depedet Valuatio (TDV) eergy use (or improvemet i eergy efficiecy) post rehabilitatio as demostrated usig the appropriate performace module of Califoria Eergy Commissio (CEC) approved software: Improvemet Over Curret 15 percet 3 poits 20 percet 5 poits 29 Virgiia Ceter for Housig Research at Virgiia Tech. The Impact of Eergy Efficiet Desig ad o LIHTC Housig i Virgiia, Retrieved from: eergy-efficiecy-affordable-housig/ I 23 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

26 APPENDI A: STRATEGIES STATES USE TO IMPROVE THE ENERGY AND WATER EFFICIENCY OF LIHTC PROPERTIES Alabama Gree Capital Needs Assessmet/ Physical Needs Assessmet Eergy Audits or Modelig Performacebased Requiremets or Icetives Third-party Gree Buildig Stadards Required Eergy Professioal Water Coservatio Utility Coordiatio Eergy ad Water Bechmarkig Projectspecific Utility Allowaces Alaska Arizoa Arkasas Califoria Colorado Coecticut Delaware Florida Georgia Hawaii Idaho Illiois Illiois-Chicago Idiaa Iowa Kasas Ketucky Louisiaa Maie Marylad Massachusetts Michiga Miesota Mississippi Missouri Motaa Nebraska Nevada New Hampshire New Jersey New Mexico New York NYS HCR NYC HPD North Carolia North Dakota Ohio Oklahoma Orego Pesylvaia Reewable eergy I 24 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

27 APPENDI A: STRATEGIES STATES USE TO IMPROVE THE ENERGY AND WATER EFFICIENCY OF LIHTC PROPERTIES Gree Capital Needs Performacebased Gree ad Water Utility Third-party Eergy Eergy Required Water Assessmet/ Audits or Eergy Professioal vatio Coser- Physical Requiremets Buildig Bechmarkig Coordiatio Modelig Needs or Icetives Stadards Assessmet Rhode Islad South Carolia South Dakota Teessee Texas Utah Vermot Virgiia Washigto Washigto, D.C. West Virgiia Wiscosi Wyomig Projectspecific Utility Allowaces Reewable eergy All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 25 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

28 APPENDI B: GREEN CAPITAL NEEDS OR PHYSICAL NEEDS ASSESSMENTS Arizoa Florida Georgia Gree C/PNA Property Type Stage Submitted Rehabilitatio ad Adaptive Re-use Rehabilitatio, Acquisitio ad Rehab Rehabilitatio, Adaptive Reuse, ad Historic Preservatio Applicatio Credit Uderwritig Review Applicatio Illiois Rehabilitatio Applicatio Illiois-Chicago All Miesota Optioal Rehabilitatio Applicatio Missouri Rehabilitatio Applicatio Nebraska Rehabilitatio Applicatio Nevada Acquisitio/Rehabilitatio Applicatio Pesylvaia Teessee Vermot All projects Ay curretly occupied residetial housig developmet Adaptive Reuse, Preservatio or Rehabilitatio Prelimiary at Stage 1 Applicatio Fial at Stage 2 Applicatio Applicatio New /Adaptive Reuse/Gut Rehab: Prior to 8609 Issuace All others: Prior to Reservatio All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 26 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

29 APPENDI C: ENERGY MODELING, ANALYSIS OR AUDIT REQUIREMENTS New Rehabilitatio/ Preservatio Icludes water (Y/N) Stadard Refereced Auditor Certificatio Refereced Arizoa RESNET Home Eergy Rater (HERS) Califoria Optioal Coecticut ASHRAE Level II (recommeded) Delaware BPI For eergy modelig ad utility data aalysis: Califoria Associatio of Buildig Eergy Cosultats (CABEC) Certified Eergy Plas Examier (CEPE)-Res CEPE ID for 3 stories or less ad No Res CEPE ID for 4 stories or more ad Whole House Rater. For Whole buildig eergy assessmet: HERS Whole House Rater, BPI Multifamily Buildig Aalyst, GreePoit Rater for Existig Multifamily Professioal Egieer's licese i the State of Coecticut, CEM, BPI, RESNET HERS, or Eergy Star Georgia Iowa BPI, RESNET Home Eergy Rater (HERS), or equivalet HERS rater, certified eergy rater (existig buildigs) Kasas Marylad Missouri Motaa Ecouraged Ecouraged Nevada New York City HPD Miimum ASHRAE Level 1 RESNET/BPI ad performed by a DHCD listed Qualified Eergy Auditor BPI, RESNET or ENERGY STAR Nevada Housig Divisio cotracts with a qualified eergy compay BPI or aalyst provided by Co Ediso's eergy efficiecy icetive program Pesylvaia BPI Certified Multifamily Buildig Aalyst Wiscosi Focus o Eergy o-cost eergy audit All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 27 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

30 APPENDI D: BUILDING ENERGY PERFORMANCE REQUIREMENTS AND INCENTIVES New Required Poits Stadard Required Poits Stadard Rehabilitatio/Preservatio Arizoa Poits for each HERS Idex poit reductio below the baselie HERS Idex Score of 67 Threshold: 15% improvemet over pre-reovatio as verified by a RESNET certified HERS rater Poits: Oe poits for each HERS Idex poit reductio below baselie Califoria Percetage improvemet beyod the requiremets of 2013 Title 24, Part 6 of the Califoria Buildig Code: 9% improvemet=3 poits; 15% improvemet=5 poits Threshold: 10% improvemet above the modeled eergy cosumptio of the buildig based o CTCAC Existig Multifamiliy Assessmet Protocols Poits: Improvemet over curret coditios based o the buildig's percetage i estimated Time Depedet Valuatio (TDV) eergy use, or the performace module of Califoria Eergy Commissio (CEC) approved software: 15% improvemet=3 poits 20% improvemet =5 poits Coecticut Gut/Rehab ad New : Modeled Eergy Star Home v. 3.0 HERS Idex below 52, or Eergy Star Multifamily High Rise eergy cost savigs greater tha or equal to 23% over ASHRAE Stadards Mior, Moderate or Substatial Rehabilitatio: Projected reductio i eergy cosumptio greater tha or equal to 33% Delaware For 100% electric uits/ buildigs HERS Idex Score of 55 or less (without solar PV) For uits/buildigs usig gas: HERS Idex Score of 45 or less (without solar PV) For 100% electric dwelligs/buildigs: HERS Idex Score of 65 or less (without solar PV) For dwelligs/buildigs usig gas: HERS Idex Score of 55 or less (without solar PV) Idaho HERS Idex Score below 70 HERS Idex Score below 100 Illiois 10% improvemet over ASHRAE or HERS Idex Score below 75 5% improvemet over ASHRAE or HERS Idex Score below 75 Iowa HERS Idex Score below 62 Exceed IECC 2012 by 8% or more Kasas Threshold: HERS Idex Score of 100 Poits: Tiered scale HERS Idex Score of 85-78= 10 poits; 77-71=15 poits; 70 ad below=20 poits Tiered scale HERS Idex Score of 85-78= 10 poits; 77-71=15 poits; 70 ad below=20 poits or Rehab or Historic Coversio exceeds the requiremets of the IECC Marylad 20-30% improvemet over baselie as determied by DHCD's required eergy audit Nevada New Mexico HERS Idex Score below 85 10% above the 2006 IECC Code as determied by REM-Rate Aalysis or equivalet eergy use aalysis. Pesylvaia Achieve Eergy Star v. 3.0 ad reduced HERS Idex Score of 60 or less without solar PV for 100% electric dwelligs/ buildigs or 50 or less without solar PV for dwelligs/ buildigs utilizig gas Achieve Eergy Star v. 3.0 ad reduced HERS Idex Score. Substatial Rehab: HERS Idex Score of 70 or less without solar PV for 100% electric buildigs or 60 or less without solar PV for dwelligs with gas. Moderate Rehab: HERS Idex Score of 80 or less without solar PV for100% electric dwelligs buildigs or 75 or less for dwelligs utilizig gas South Dakota HERS Idex Score below 60 HERS Idex Score below 60 I 28 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

31 APPENDI E: THIRD-PARTY BUILDING STANDARDS Alaska Required New Rehabilitatio/Preservatio Refereced Stadards Poits Preferece/ Goal Required Poits Preferece/ Goal Alaska Buildig Eergy Efficiecy Stadard (BEES) Differet Requiremets New v. Rehab Arizoa LEED Califoria LEED, EGC, GreePoit Rated Program Colorado EGC Florida LEED, NGBS, Florida Gree Buildig Certificatio Georgia EarthCraft, LEED Hawaii LEED, NGBS Idaho Illiois Illiois-Chicago LEED, NGBS, EGC, Passive House LEED, EGC, NGBS, Passive House, Livig Buildig Challege City of Chicago Sustaiable Developmet Policy Idiaa LEED, NGBS, EGC Louisiaa LEED Marylad LEED, NGBS, Gree Globes, EarthCraft Michiga MSHDA Affordable Gree Stadard, EGC, LEED Miesota Miesota Gree Commuities Mississippi NGBS Missouri EGC, LEED, NGBS Motaa Passive House New Jersey New Mexico New York City HPD EGC, NGBS, Climate Choice Homes Program/Eergy Star Tier 3 Participatio, Livig Buildig Challege, Passive House LEED, EGC, NGBS, Build Gree NM, MFA Gree Buildig Criteria EGC North Dakota LEED, EGC, NGBS Ohio EGC, LEED, NGBS Orego EGC, Earth Advatage Homes, LEED Pesylvaia EGC, Passive House Teessee EGC Texas EGC, LEED, NGBS Utah EGC, LEED All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 29 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

32 APPENDI E: THIRD-PARTY BUILDING STANDARDS Vermot VHFA gree buildig desig stadards, LEED, EGC Virgiia EarthCraft, LEED Washigto Washigto, D.C. Required New Rehabilitatio/Preservatio Refereced Stadards Poits Preferece/ Goal Required Poits Evergree Sustaiable Developmet Stadard EGC Wiscosi Preferece/ Goal Wiscosi Gree Built Home Stadard Differet Requiremets New v. Rehab All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 EGC-Eterprise Gree Commuities LEED- Leadership i Eergy ad Evirometal Desig NGBS- ICC 700 Natioal Gree Buildig Stadard I 30 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

33 APPENDI F: ENERGY AND WATER BENCHMARKING REQUIREMENTS AND INCENTIVES Required Poits Laguage Alaska Poits are awarded to projects that commit to a Real-time Moitorig device with the capacity to export data for retrieval ad aalysis by the Alaska Housig Fiace Corporatio. Illiois Projects must collect ad moitor project performace data o eergy, water ad, if possible, healthy livig eviromets for a miimum of five years, ad allow the Illiois Housig Developmet Authority access to that data. For sub-metered projects, property ower /developer must agree to collect utility release forms from a percetage of residets to track actual utility data of a sample of homes. New Jersey Poits are awarded to participats i the New Jersey Housig ad Mortgage Fiace Agecy s (NJHMFA) Eergy Bechmarkig Iitiative. I order to qualify for these poits, the applicatio shall iclude a copy of the completed ad siged letter of itet from the developer to NJHMFA. For the ext three years, the applicat shall esure that at least 75 percet of the teats have active utility release forms (or provide documetatio of the efforts to obtai such forms) ad commo area utility data shall be reported. Commo area utility data shall be uploaded ito EPA Portfolio Maager. New York City HPD Pesylvaia Applicats receivig allocatios from the New York City Departmet of Housig Preservatio ad Developmet (HPD) must agree to New York City s Local Law 84 (LL84) ad HPD s Bechmarkig Protocol, icludig usig a firm that has a EPA ENERGY STAR Portfolio Maager Automated Bechmarkig System parter desigatio. The Pesylvaia Housig Fiace Agecy cotracts with a third-party etity to moitor the utility cosumptio of projects. Rhode Islad Poits are awarded to projects that commit to sig up with a Utility Bechmarkig Service (UBS) for all utilities icludig teat-paid utilities. The costs for the UBS should be reflected i the applicat's operatig expeses. All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 31 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

34 APPENDI G: WATER CONSERVATION REQUIREMENTS AND INCENTIVES Alabama Required Poits Arizoa New Prefereces/ Goal Rehabiliatio/Preservatio Laguage Required Poits Prefereces/ Goal WaterSese labeled water closet, faucets (bathroom ad kitche) ad showerheads. Required: toilets 1.28 gpf, showerheads 1.75 gpm, kitche faucets 2.0 gpm, bathroom faucets 0.5 gpm. Poits: toilets dual flush or 1.1 gpf or less toilets throughout the project. Arkasas Showerheads 2.5 gpm Florida Georgia Idiaa Iowa WaterSese labeled products or required maximum flow rates: showerheads 2.0 gpm or faucets 1.5 gpm Toilets 1.28 gpf, shower heads 2.0 gpm, kitche faucets 2.0 gpm, bathroom faucets 1.5 gpm Ultra-low flush (</=1 gal per flush) or Dual Flush toilets WaterSese toilets 1.28 gpf (dual flush toilets do ot qualify); showerheads 1.5 gpm, kitche faucets 1.5 gallos bathroom faucets 1.0 gpm; showerheads use 1.5 gpm or less Kasas Showerheads 2.5 gpm Maie Marylad Massachusetts Michiga Mississippi Motaa Toilets 1.6 gpf or dual flush, showerheads 2.0 gpm, faucets 1.0 gpm, urials 1.0 gpf or waterless WaterSese labeled products i all uits ad ay commo facilities. Code-madated water coservatio regulatios: toilets 1.6 gpf, low-flow devices, etc. ad advaced water coservatio measures that go beyod state/local regulatios; WaterSese labeled fixtures, or the followig specificatios: toilets 1.28 gpf, Showerheads 2.0 gpm, kitche faucet 2.0 gpm, or lavatory faucet 1.5 gpm Must use at least of oe (1) high efficiecy toilet or dual flush per uit. Desig ad product selectio exceeds applicable eergy codes i performace. Examples iclude low flow fixtures, or dual flush or compostig toilets. Laguage I 32 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

35 APPENDI G: WATER CONSERVATION REQUIREMENTS AND INCENTIVES Nevada New Hampshire New York State HCR North Carolia North Dakota Required: showerheads 2.0 gpm, bathroom faucets 1.5 gpm. Poits: WaterSese toilets or comparable devices. Shower heads 1.5 gpm, kitche faucets 1.5 gpm, bathroom faucets 0.5 gpm, toilets 1.3 gpf, with a 250 gram solid waste removal capability miimum. Toilets 1.6 gpf; showerheads 2.0 gpm; kitche faucets 2.2 gpm; bathroom faucets 1.5 gpm. Projects are ecouraged to iclude WaterSese labeled products. WaterSese labeled bathroom faucets, showerheads ad toilets. Poits withi gree buildig criteria for water-coservig fixtures: toilets 1.28 gpf, showerheads 2.0 gpm, kitche faucets 2.0 gpm ad bathroom faucets 1.5 gpm Oklahoma Showerheads 2.5 gpm South Carolia South Dakota Teessee Texas Virgiia West Virgiia Wyomig Required Poits New Prefereces/ Goal Low-flow showerheads, kitche ad bathroom faucets, ad toilets WaterSese qualified faucets, toilets/urials, ad showerheads WaterSese labeled faucets, shower heads, ad toilets ad use of at least of oe (1) high efficiecy or dual flush toilet per uit WaterSese labeled toilets, bathroom faucets, showerheads, ad kitche faucets. WaterSese faucets, showerheads, ad toilets. Poits for Sub-metered Water Expese Showerheads 2.5 gpm, ad each showerhead ad faucet has a aerator istalled. Required average flow rates: lavatory faucet < 2.00 gpm, showers < 2.00 gpm per stall, toilets < 1.30 gpf, toilets are dual flush or meet WaterSese specificatios All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 gpm- gallos per miute gpf- gallos per flush I 33 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES Rehabiliatio/Preservatio Laguage Required Poits Prefereces/ Goal Laguage WaterSese toilets or comparable devices.

36 APPENDI H: COORDINATION WITH UTILITIES Coecticut The Coecticut Housig Fiace Agecy (CHFA) requires applicats to submit a Eergy Coservatio Pla that icludes iformatio o the applicat's efforts to secure other eergy efficiecy-related fudig, icludig utility-sposored icetive commitmets ad local, state ad federal icetives. CHFA also provides a coordiated outlie of the CHFA plaig, desig ad costructio process, with the Coecticut Eergy Efficiecy Fud (CEEF) process for awardig eergy icetives through the state's electric utiliites. Florida Iowa Florida Housig admiisters the Multifamily Eergy Retrofit Program (MERP) revolvig loa fud to fiace eergy efficiecy improvemets idetified i a eergy audit for each eligible property. The Iowa Fiace Authority icludes utility compay rebates for eergy efficiecy measures i the calculatio of Total Project Costs. Marylad The Marylad Departmet of Housig ad Commuity Developmet admiisters the Multifamily Eergy Efficiecy ad Housig Affordability-EmPower (MEEHA-EmPower) program, which is fuded by the state's ivestor-owed utilities. Through the MEEHA-EmPower program, DHCD provides loas ad grats with flexible terms for the purchase ad istallatio of eergy coservatio measures. Miesota Miesota Housig requires all projects receivig tax credits or deferred fudig from Miesota Housig to provide a Eergy Rebate Aalysis. The estimated rebate will be cosidered a source used to size tax credit ad deferred loa awards. New Jersey PSE&G ad the New Jersey Housig ad Mortgage Fiace Agecy partered to develop a multifamily retrofit program that provides owers with a free ivestmet grade audit, ad upfrot iterest-free fiacig or grat icetives to cover the cost of eergy efficiecy improvemets. Orego Orego Housig ad Commuity Services allows 9% LIHTCs to be combied with various other public ad private resources icludig the Low Icome Weatherizatio Program (LIWP). Pesylvaia The Pesylvaia Housig Fiace Agecy requires applicats to submit a Eergy Rebate Aalysis icludig a prelimiary/draft explaatio of all eergy rebates that may be available for the project with estimated rebate amouts must be submitted with the applicatio. The estimated rebate amouts are cosidered a source ad used to size tax credit awards. Rhode Islad Rhode Islad Housig awards poits for projects udertakig substatial rehabilitatio that demostrate a ability to surpass Tier II stadards uder Natioal Grid's program guidelies. Natioal Grid's Tier II Stadards require a 25-44% improvemet i eergy performace. Utah For projects withi the Rocky Moutai Power or Questar service area, the HERS rater will help prepare eergy rebate documetatio for submittal, ad assist the applicat i workig with utility represetatives. Vermot The Vermot Housig Fiace Agecy icorporates Efficiecy Vermot Eergy Stadards as part of its Gree Buildig ad Desig Stadards. Efficiecy Vermot is Vermot's eergy efficiecy utility. Wiscosi The Wiscosi Housig ad Ecoomic Developmet Authority awards poits for submissio of a letter from Focus o Eergy statig that the applicat has met with Focus o Eergy staff to review the proposed developmet for possible eergy savigs ideas OR provide evidece that Focus o Eergy has coducted a o-cost eergy audit for a existig multifamily buildig listed o the applicatio. Focus o Eergy is Wiscosi utilities' statewide eergy efficiecy ad reewable eergy resource program. All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 34 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

37 APPENDI I: RENEWABLE ENERGY INCENTIVES New Rehabilitatio Alaska Arizoa Califoria Laguage Poits are awarded for icorporatig solar thermal eergy, geothermal eergy, or solar photovoltaic eergy ito the project desig ad operatios. 8 Poits awarded to ew costructio or rehabilitatio projects for oe or multiple reewable eergy systems large eough to off-set 10% of estimated residetial aual eergy load. 4 poits for a 5% off-set, or 1.5 poits if the site is desiged, egieered ad wired to accommodate the istallatio of solar PV i the future. 4 poits for oe or multiple reewable eergy systems large eough to off-set 50% of commo area eergy load. New ad Adaptive Reuse projects: Poits are awarded for eergy efficiecy with reewable eergy that provides the followig percetages of project teats' eergy loads: 20% low-rise 3 poits, high-rise 4 poits; 30% low-rise 4 poits, high-rise 5 poits; 40% low-rise 5 poits. Rehabilitatio projects are eligible for poits for reewable eergy if they receive poits for eergy efficiecy ad iclude either: photovoltaic (PV) geeratio that offsets teat loads; or PV that offsets either 50% of commo area load (if the combied available roof area of the project structures, icludig carports, is isufficiet for provisio of 50% of aual commo area electricity use, the the project shall have osite reewable geeratio based o at least 90% of the available solar accessible roof area); or solar hot water for all teats who have idividual water meters. Coecticut Marylad Massachusetts Poits awarded based o the umber of Sustaiable Desig Measures (SDM) provided ad idicated i the plas, specificatios, Eergy Coservatio Pla, ad/or other support documets. 3 sustaiable desig measures= 3 poits, 2 sustaiable desig measures = 2 poits, 1 sustaiable desig measure = 1 poit. Of the four possible Sustaiable Desig Measures, oe is a reewable eergy system. The project must iclude a roof-top, buildig, or ladscape itegrated Photovoltaic (PV) system providig 33% of site lightig eergy requiremets, or a ENERGY STAR-qualified cetral geothermal HVAC system. Poits awarded to ay project utilizig alterative eergy (solar, geothermal, etc.) for ay of the followig: water heatig ad coolig, lightig, or electric geeratio for commo area or teat uits. Poits awarded to projects that iclude ay of the followig types of reewable eergy i the plas ad specificatios: wid eergy, statioary fuel cells, hydro-electric power, solar photovoltaics, solar thermal collectors (hot water), ladfill gas. Nevada Poits awarded for the istallatio of reewable eergy sources (e.g., photovoltaics, wid power). Projects that offset the total estimated electricity demad by 5% (4 poits), 5-10% (6 poits), 10-15% (8 poits). Virgiia Poits awarded for ay solar thermal system that meets at least 60% of the developmet's domestic hot water load. All appedices reflect approved QAPs ad accompayig documets as of Jue 1, 2016 I 35 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

38 I 36 I STATE STRATEGIES TO INCREASE ENERGY AND WATER EFFICIENCY IN LOW INCOME HOUSING TA CREDIT PROPERTIES

39 eergyefficiecyforall.org

40 eergyefficiecyforall.org