Center for American Progress

Energy Efficiency Begins at Home: Federal Housing Programs Must Go Green
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Energy Efficiency Begins at Home: Federal Housing Programs Must Go Green

Congress can help Americans tap our nation’s largest source of energy resources—wasted heat and electricity in our homes, offices, and factories.

“How many ‘……’ does it take to change a light bulb?” This old standard is an amusing way to make light-hearted social commentary about New Yorkers, Californians, psychiatrists, and many other subcultures. But today, changing the light bulbs in our homes and workplaces is no joke.

Innocent as they seem, our houses and the buildings we work in are pollution giants. The combined use of electricity and heat in buildings is the single largest consumer of energy and source of global warming pollution in the U.S., using 32.4 percent of our total power.[i] Greenhouse gas emissions from our housing stock fly under the media radar, even though residential electricity was responsible for 885.7 million metric tons of carbon dioxide emissions in 2005. Commercial building emissions from electricity were even higher.[ii]

Efficient use of electricity not only reduces emissions from our homes but also generates financial savings for families. Installing various household goods and appliances that are Energy Star-qualified by the Environmental Protection Agency and the Department of Energy can save hundreds of dollars on energy bills.[iii] Energy-efficient compact fluorescent bulbs, for example, use at least two-thirds less energy than regular incandescent light bulbs, last 10 times longer, and only need replacement every seven years.[iv]

Advocates of energy efficiency say it takes a worldwide civilian campaign to simply change a light bulb. But this simple act is only the beginning of what the American people can do to tap our nation’s largest source of energy reserves—the wasted heat and electricity in our homes, offices, and factories.

That’s why it is time for us to take energy efficiency to heart and home. For years, experts have considered energy efficiency the low-hanging fruit of clean energy policy, but we have harvested only a small portion of potential energy savings. We must instead make efficiency at home our “first fuel.”

California’s experience in the past 30 years makes clear that prioritizing energy efficiency can drastically lower residential energy use. In the 1970s, the state set a series of “energy-performance standards” on appliances and homes. With Title 24 of the California Code of Regulations for new building construction, the state established a set of guidelines for residences and commercial space that were regularly updated and have since been imitated worldwide.

As a result, per capita electricity consumption in California is at least 40 percent lower than in the rest of the United States.[v] The average California household spends $719 annually on electricity, paying 12 cents per kilowatt hour.[vi] In Texas and Florida, the average household pays 25 percent less per kilowatt hour but spends at least $1,300 annually because of higher consumption.[vii]


California’s example demonstrates that government has a pivotal role in encouraging energy efficiency in our built environment. Ultimately, policies that fail to capture energy efficiency are a financial burden for American families, while conservation reaps a double dividend of savings for consumers and protection for the environment.

Congress should craft meaningful policies to promote energy savings where they strike an intimate chord—in our homes and our pocketbooks. Federal housing and lending programs provide significant opportunities to help lower- and middle-income families use less energy and reduce our nation’s skyrocketing demand.

Modifications to housing programs can lead the way on nationwide initiatives to save money on electric bills, minimize greenhouse gases, and reduce the overall cost of federal programs. Encouraging energy efficiency through lending policies promotes wise environmental and economic investments. This practice also allows energy efficiency to reach private lending practices and expands lending to a broader range of income groups.

By redirecting federal housing policy to support energy efficiency, we could support broad-based market transformation in the building and construction industry, improve our neighborhoods, create jobs, and take a bite out of climate change. To start, below are four key policy recommendations for public officials to increase efficiency, reduce costs, and cut greenhouse gas emissions through the Department of Housing and Urban Development:

  • Reauthorize funding for HUD’s HOPE VI program, which rebuilds and improves severely distressed, substandard public housing. Give the program a fresh direction by requiring all HOPE VI construction projects to meet energy efficiency standards, such as Energy Star Home, or other environmental standards, such as Enterprise Community Partners’ Green Communities Criteria.
  • Create an Energy Efficiency Block Grant to be housed under HUD using its Community Development Block Grant authority. This would be similar to the U.S. Conference of Mayors’ recommendation for a block grant devoted to environmental and energy-related projects, but it should be exclusively for construction and renovation that features enhancement of residential energy efficiency.
  • Strengthen the energy efficiency criteria for HOME Investment Partnerships Program projects, which provide affordable housing grants to state and local-level governments. In 2002, the program agreed to comply with the 1992 International Energy Conservation Code guidelines. These guidelines, however, are outdated and do not reflect the potential savings from current Energy Star and other green building standards.
  • Reinvigorate and re-launch the energy mortgage options through the Federal Housing Administration as well as Fannie Mae and Freddie Mac. HUD has regulatory authority over the home mortgage giants Fannie Mae and Freddie Mac, even though both are privately owned—authority that HUD can use to set clear expectations of the use of Energy Efficient and Energy Improvement Mortgages.

These are just a few of the policy options at our disposal, in just one agency. They illustrate the scale of the problem as well as the opportunities at hand, and they point a way forward. In addition to HUD programs, there are other educational programs and financial aid tools that can be deployed to fight global warming, among them:

  •  Increase energy lending with an aggressive outreach and education campaign to consumers, developers, lenders, and other relevant fields in order to build support for realizing these financial, energy, and emissions savings.
  •  Reevaluate how the Community Reinvestment Act, which is designed to guarantee non-discriminatory lending, can encourage community-based lenders to market financial products that are environmentally friendly and energy efficient as a form of critically needed community reinvestment.

These are just a few changes in federal programs that would significantly increase residential energy efficiency. The journey ahead toward global warming reduction and energy security is a long one, but these steps will be critical in moving our nation onto the right path. In this case, change truly does start at home. We must not miss these opportunities.

To read more about the Center’s Energy Opportunity initiative, please see:

Endnotes

[i] World Resources Institute, U.S. GHG Flow Chart.

[ii] Energy Information Administration. Greenhouse Gas Emissions Data for Carbon Dioxide.

[iii] Fannie Mae, Energy Efficient Mortgage Brochure (PDF). More information at www.energystar.gov.

[iv] Energy Star® Qualified Residential Light Fixtures, Fast Facts.

[v] Canine, Craig. “California Illuminates the World.” OnEarth, Natural Resources Defense Council (Spring 2006).

[vi] Energy Information Administration, Office of Energy Markets and End Use, Forms EIA-457 A-G of the 2001 Residential Energy Consumption Survey: Household Energy Consumption and Expenditures Tables.

[vii] Texas, California, and Florida are used for comparison because they are three of the four most populated states in the United States, hence the reason the Energy Information Administration features their data as well.

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