December 17, 2021 - From the December, 2021 issue

ARUP Report on Building Decarbonization & Affordable Housing

With buildings responsible for 43 percent of carbon emissions in Los Angeles, reaching the ambitious climate goals set by the City will require significant building electrification. However, with energy saving programs targeted at single-family homes and market-rate housing, the benefits often fail to reach low-income residents or those in multi-family buildings. TPR excerpts below this recent report from Arup and NRDC on the complex relationship between decarbonizing buildings and creating and preserving affordable housing in Los Angeles. The report, co-authored byArup Associate Principal Heather Rosenberg (pictured),  Brittany Moffett,  Ioni Papaioannou, and Jayant Sharma of Arup, the report calls for both to be addressed in tandem to secure a resilient future for the city. Find the full report online, here


Heather Rosenberg

"Decarbonization can be leveraged to drive investment into existing affordable housing to improve performance and keep units fit for purpose in a changing climate"

Report at a Glance

Introduction
Mitigating GHG emissions and actively protecting existing affordable housing are two urgent needs for the City of Los Angeles with a complex relationship with one another. 

New approaches are needed to not only include affordable housing in decarbonization efforts but also to leverage decarbonization investments in ways that support and preserve affordable housing.

 • Los Angeles has set ambitious decarbonization goals. Building electrification is an essential piece of that strategy.

 • There are significant short- and long-term benefits of building decarbonization for occupants, owners, and communities, such as improved indoor and outdoor air quality, enhanced safety and resilience, and lower utility bills. 

• Yet, decarbonization can have unintended consequences for residents of affordable housing. Affordable housing is a complex sector with many unique challenges and preservation of existing affordable housing is essential for the future of Los Angeles.

 • Centering affordable housing in decarbonization policy development can yield better results in terms of societal benefits and market transformation. New approaches are needed to not only include affordable housing in decarbonization efforts but also to leverage decarbonization investments in ways that 
What is the State of Affordable Housing in Los Angeles?

Even before COVID-19 struck low-income communities, costing many their lives, health, and jobs, LA was suffering from an affordable housing crisis. In simple terms:

• Not enough of the existing housing stock is affordable.

• The existing multifamily housing stock is aging, with backlogs of deferred maintenance. Not only are rising rents and expiring covenants reducing the availability of affordable housing, but when future climate impacts and other hazards like earthquakes are factored in, available units are becoming less fit for purpose (i.e., less safe, healthy, and comfortable to live in).

• Energy burden across Los Angeles was felt intensely before COVID-19 and is disproportionately concentrated in low-income communities and communities of color. More families were brought into utility debt or further into utility debt during COVID-19.

• Programs to improve the quality or energy performance of residential buildings are largely targeted to market rate or single-family housing. Benefits therefore often do not reach households that are low-income, renters, or in multifamily buildings.

• There is a significant need to not only build new affordable housing, but also to protect and retrofit existing units in ways that improve habitability, reduce household expenses, and support a healthier environment.

• Any policies that affect the residential market must therefore be carefully considered and designed to directly support affordable housing and low-income households.
What are the implications of electrification on affordable housing? 

We conducted a targeted analysis of two unit types across two building vintages, for a total of four building typologies, to evaluate implications of decarbonization retrofits (specifically electrification measures) for both tenants and building owners.

• We found that energy consumption was reduced across all scenarios through the electrification retrofit, resulting in operational cost savings. The greatest savings were seen for the older (1980 era) higher density (62-unit) building.

• To accommodate all-electric appliances and equipment, base building electrical systems are likely to require upgrades.

• The upfront cost of electrification in this study was found to exceed routine end-of-life equipment replacement.

• If passed onto tenants, these upfront costs will exceed operational savings from efficiency, resulting in a net cost increase for tenants.

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• There are benefits to implementing retrofits in a phased approach (readying the base building, upgrading the common areas, and then doing unit-by-unit retrofits).

Policy & Program

 The affordable housing sector faces a unique and complex set of barriers to implementing decarbonization. To be effective, decarbonization must be deeply entwined with the biggest challenge of the sector: affordable housing preservation.

• Programs should be designed with the combined goals of decarbonization, affordability protection, and retrofits to keep housing safe, healthy, and fit-for-purpose in a changing climate.

• Stakeholders (both those with deep technical knowledge and those with lived experience) must be at the table to ensure program design repairs—rather than perpetuates—cycles of racism and disenfranchisement.

• Mandates are needed to force implementation but should be leveraged to protect housing affordability and prevent burdening tenants.

• A wide range of technical, financial, regulatory, and administrative tools must be customized to address the specific challenges and vulnerabilities of the sector and increase

• Funding and financing for retrofit programs currently comes from a wide range of sources targeting narrow interventions that don’t meet the needs of affordable housing. Aggregating both financing and service delivery is needed to make implementation accessible.

• Streamlined, targeted deployment should occur at the neighborhood scale in collaborationwith community-based organizations (CBOs) to specifically address community needs.

Conclusion
Affordable housing is an essential component of resilient communities and must be protected and expanded to address the multiple crises this sector is facing in LA. Preservation of existing affordable housing should be a dimension of policies and programs.

• Efficiencies associated with electrification upgrades in affordable housing are likely to result in small energy cost savings, particularly in older buildings. However, these savings will likely not be sufficient to offset first costs and there is a risk they will be passed on to tenants.

• Both climate change and the housing crisis pose existential threats to LA, and both must be addressed with utmost urgency. Affordable housing should be included in future decarbonization mandates but will need targeted and comprehensive programs and support to prevent displacement and other unintended consequences. If not addressed in tandem, the goals of affordable housing preservation and decarbonization will be in conflict. Addressing these challenges together poses greater opportunity than addressing either one alone. 

• Lack of funding, limited access to capital, the complexity of financing structures, backlogs of deferred maintenance, and other challenges make affordable housing least likely to transition by market forces alone. Sector stakeholders must be included in the policy design process to avoid perpetuating the cycle of disenfranchisement.

• Decarbonization can be leveraged to drive investment into existing affordable housing to improve performance and keep units fit for purpose in a changing climate. Policy approaches are needed to support social equity, such as:
→ displacement and rent increase protections,
→ tools to expand the pool of regulated affordable housing and support alternative ownership, and
→ wealth-building opportunities for tenants.

• The LA Retrofit Accelerator provides a strong vehicle to aggregate funds and accelerate deployment. Work is needed to more comprehensively integrate the range of challenges and opportunities associated with affordable housing.
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Continue reading the full report online, here
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© 2022 The Planning Report | David Abel, Publisher, ABL, Inc.