Plans to make affordable housing more energy efficient received a big boost in California.
Gov. Jerry Brown along with Julián Castro, secretary of the Department of Housing and Urban Development (HUD), met in San Francisco to announce a series of actions aimed at expanding financing for energy improvements in multifamily housing.
The efforts center around unlocking Property-Assessed Clean Energy (PACE) financing in the state. PACE is a mechanism for financing energy efficiency and renewable energy improvements. HUD says commercial PACE programs have the potential to provide a robust source of capital to accelerate renewable energy and efficiency retrofits for energy and water in multifamily housing, making the existing multifamily stock more affordable to renters with low incomes, and saving money for consumers and taxpayers.
To remove existing barriers and accelerate the use of PACE financing for multifamily housing, the following actions were announced:
- Brown is establishing a California Multifamily PACE Pilot in partnership with the MacArthur Foundation. The pilot will enable PACE financing for certain multifamily properties, including specific properties within HUD, the California Department of Housing and Community Development, and the California Housing Finance Agency’s portfolios, opening up financing to an entire segment of commercial PACE projects;
- Castro is issuing guidance clarifying the circumstances under which HUD can approve PACE financing on HUD-assisted and-insured housing in California; and
- The Department of Energy is committing to work with the state to design and undertake a study assessing the performance of California’s PACE program as data becomes available.
In addition, HUD announced it will support the state in creating a California Master-Metered Multifamily Financing Pilot Project.
MacArthur is committing at least $10 million in “impact investments” to create and expand the two pilot programs and explore other innovations.
In addition, HUD is hosting a Feb. 19 roundtable with leaders from the finance and philanthropic communities to discuss opportunities to enhance solar financing for affordable housing.
About a quarter of U.S. households live in multifamily housing units. There are more than 3 million units in California alone, and improving the energy efficiency of these buildings nationwide by 20% would save nearly $7 billion in energy costs each year and cut 350 million tons of carbon pollution in a decade, reports HUD.