Thursday, March 4, 2010

Benefits of "Greening" Subsidized Housing Strong Given Tight Budget Outlook

The release of the Administration’s FY 2011 Housing and Urban Development (HUD) budget request marked the start of what will be an unusually challenging budget season for affordable housing programs, given mounting concern about the deficit. In such a tight fiscal environment it’s important to use available funds as cost-effectively as possible and to look for resources outside the regular HUD budget to help meet housing needs. Efforts to improve energy-efficiency in subsidized housing offer opportunities on both fronts.

HUD spends about $6 billion a year on utility subsidies, close to a fifth of the amount it spends on rental assistance. Subsidized housing, like the majority of older housing, tends to use energy inefficiently. This is true not just for large developments with public housing and other project-based subsidies, but also for the single-family and small multi-family rentals where most families with Section 8 housing assistance vouchers live. Energy-efficiency improvements could generate very large savings, cutting energy costs by 20 percent or more in some buildings.

“Greening” initiatives could also direct new resources to subsidized housing. Last year’s economic recovery package made available $600 million for energy-efficiency improvements in public housing and $250 million for other subsidized housing. Congress has also considered adding more funds through jobs legislation this year. In addition, the House and the Senate Environment and Public Works Committee have passed climate change bills that would fund subsidized housing efficiency improvements by setting aside some proceeds from auctioning “cap and trade” allowances to help control greenhouse gas emissions.

In each case, the funds would not only generate important environmental benefits, but also help preserve needed subsidized housing at a time when resources are hard to come by.

Will Fischer is a policy analyst for the Center on Budget and Policy Priorities.

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