‘Green’ Improvements Can Preserve Affordable Housing
Energy-efficiency improvements play an important role in preserving affordable workforce housing, said Freddie Mac, McLean, Va.
“Green improvements to multifamily housing can help address the twin challenges of housing affordability and environmental stewardship,” said Steve Guggenmos, Vice President of Multifamily Research and Modeling at Freddie Mac. “There are a variety of cost-effective energy- and water-efficiency improvements that can be made to workforce housing to generate real savings for tenants while reducing the environmental impact of the multifamily housing stock.”
Guggenmos said the firm analyzed data from its Green Advantage program, which provides financing incentives to apartment owner borrowers who agree to reduce energy and water consumption by at least 30 percent. It found “significant reductions” in energy and water consumption in energy-efficient rental units–reductions that allow tenants to save nearly $300 annually due to reduced utility costs, he said.
The white paper, 2019 Analysis of Green Improvements in Workforce Housing, also found apartment tenants can save $80 per unit per year under the 30 percent consumption savings threshold. Annual cost-savings projections exceed $132 million, or $62,800 per loan per year on average.
Water improvements could save 6.1 billion gallons of water per year and energy improvements are projected to save almost 2.8 billion kBtu per year, Freddie Mac said.
The Freddie Mac Multifamily Green Advantage program has provided nearly $60 billion in financing through loans purchased on 583,000 rental units. The financed properties are garden-style apartments that are 34 years old on average. The report noted 85 percent of financed units are affordable to households earning the area median income or less.