New York—The New York City Department of Housing Preservation and Development (HPD) and New York City Housing Development Corp. (HDC) have kicked off the city’s Green Housing Preservation Program, the goal of which is to assist owners of small- to mid-sized multifamily properties in the city in making energy-efficiency and water conservation improvements. The program is designed, according to the city, to address rising building costs, a growing affordable housing crisis in the city, and the risks of climate change.
Buildings across the five boroughs that have at least five units and fewer than 50,000 square feet (about 50 units) are eligible for the program. The Green Housing Preservation Program provides 0 percent interest evaporating loans for energy efficiency and water conservation improvements, and 1 percent repayable loans to help cover the costs of moderate rehabilitation improvements that go beyond the energy efficiency measures. The new program is projected to assist 475 units in the first year.
Examples of energy efficiency improvements include insulation, efficient light fixtures, weatherproofing windows, and the installation of efficiency controls on systems such as boilers and low-flow water fixtures. Based on a typical scope of work, buildings may reduce utility costs by about 10 percent or more annually. This represents an average savings of approximately $1,500 for a 10-unit building and $3,000 for a 20-unit building.
Many owners of small- to mid-sized buildings are being squeezed by steadily rising energy and water costs, and would benefit from weatherization and other efficiencies to reduce those expenses. Unfortunately, it’s often difficult to secure the necessary financing to make those kinds of improvements, hence the creation of the program.
Such improvements promise considerable savings for owners and tenants. That’s because utility costs account for roughly 25 percent of the average operating budget of a rent-stabilized building. As for the tenant side of things, as rents and utility costs have outstripped wages, the demand for affordable housing has grown dramatically, along with the number of New Yorkers suffering from rent burdens. Currently 56 percent of city households are rent burdened, meaning they’re paying more than a third of their income in rent and utilities, and three in ten are paying half or more of their income to rent and utilities.
It’s also an environmental program. Almost 75 percent of the city’s greenhouse gas emissions come from buildings, with 35 percent of emissions from residential buildings.
The program and related green preservation initiatives are being funded with $45 million in HPD’s fiscal year 2016 budget. Also, the New York City Energy Efficiency Corp. created a fund that will be available to participating owners who need assistance in financing the predevelopment requirements necessary for participation in the program.