Home Rehabilitation Is Key to Supporting Energy Efficiency in Low-Income Housing

By Jonathan Susser | August 24, 2020

In North Carolina, 20% of homeowners are classified by the U.S. Census Bureau as cost-burdened by their housing. One factor that contributes to high housing costs is high energy costs. Approximately 1.4 million people across the state live with unaffordable energy bills, and the low-income market is particularly affected. For a number of reasons, low-income households tend to spend more of their income on energy than other housing types, and older and less expensive living units are typically among the least energy efficient.

North Carolina is home to many organizations and programs working to support energy efficiency in affordable housing, but barriers remain. One of these is a home’s physical condition.

Homes in poor shape may need to be rehabilitated before they can receive energy efficiency improvements, and lower-income families are more likely to be living in substandard housing units that threaten health and safety. Getting these households the necessary aid, however, has its own set of obstacles.

A ramp is added to a low-income household to support accessibility.
The Issue of Deferrals

The North Carolina Weatherization Assistance Program (NC WAP), administered by the North Carolina Department of Environmental Quality (NCDEQ), helps low-income North Carolinians save energy, reduce utility bills and stay safe in their homes. The program provides education about safety and energy efficiency; home evaluations; tuning, repairs and replacement of heating and cooling systems; attic, floor and wall insulation; minor repairs for health and safety; and more.

Approximately 1,600 North Carolina families benefit from NC WAP annually, and it is implemented in all counties in the state through 20 local weatherization service providers known as subgrantee agencies. To be eligible for assistance, families must have incomes at or below 200% of federal poverty guidelines.

At its core, NC WAP is an energy conservation program, not a home rehabilitation program; therefore, if a household requires major repairs or has problems beyond the program’s scope, weatherization may be deferred until the issues are resolved.

According to NC WAP, 5% to 25% of homes that apply for the program are typically deferred, though “this number can vary depending on several factors, including location, age of home, and urban vs. rural areas,” said Ernest Hodgson, a technical trainer and lead program analyst at NCDEQ.

Hodgson continued, “The home is most likely deferred at one of two times: at the time of application, because the applicant has listed an issue known to be cause for deferral; or at the time of the initial inspection, typically when the inspector discovers a condition that is a cause for deferral.”

Circumstances that necessitate deferral are outlined in the NC WAP State Plan, and Hodgson noted that the most common reasons are structural damage, such as roof leaks and major ceiling, wall or floor issues (over 24 square feet); the presence of knob-and-tube wiring; severe moisture and mold problems; and unsanitary environments that could compromise the health and safety of weatherization workers. Other concerns that arise include the existence of asbestos and major drainage problems.

When a deferral occurs, weatherization service providers help families pursue options for addressing the issues. “If possible, the agency will use another funding source that they oversee to address the problems; also, there are several non-governmental funding sources the NC WAP is partnering with to remedy issues,” explained Hodgson.

One source of support is the North Carolina Housing Finance Agency (NCHFA).

Housing Rehabilitation Takes a Village

The NCHFA is a self-supporting public agency that finances affordable housing opportunities for North Carolinians whose needs are not met by the market. Through partnerships with local governments and nonprofits, the NCHFA helps build and rehabilitate homes for low-income residents.

When it comes to assisting with structural and related repairs — such as ones causing deferrals for NC WAP — the agency’s Urgent Repair Program (URP) is an excellent resource. “When you think of the Urgent Repair Program, think of the emergency room for housing,” said Michael Handley, NCHFA’s manager of home ownership rehabilitation and compliance.

The URP partners with nonprofits, local governments and regional councils of government to finance emergency repairs through deferred, forgiven loans of up to $10,000. The program serves low-income households with special needs, such as seniors, persons with disabilities and veterans.

Conditions addressed by the URP are ones that threaten life or safety, such as failing septic systems, dangerous heating and cooling systems, roof damage, rotten floors, and egress or accessibility concerns. The primary goal is to enable people to remain in their homes safely and affordably. “As long as it’s going to kill you or displace you, we can do it,” said Handley.

The partner organizations approve applicants and oversee the work conducted by their contractors and rehabilitation specialists. The NCHFA helps these organizations be successful while monitoring performance to ensure that everything is completed in an open, fair and transparent manner. All updates have to meet North Carolina State Residential Code for One and Two Family Dwellings.

The URP was started in 1994 and is funded by the NC Housing Trust Fund, North Carolina’s most flexible resource for affordable housing needs. To date, it has benefited over 16,000 North Carolina low-income households, allowing special-needs populations to age in place and saving the state hundreds of millions of dollars.

The NCHFA wants to do even more — “There’s a definite need out there,” said Handley — but there are barriers. Additional funds would always help, but another limitation is finding partners with rehabilitation specialists and contractors qualified to perform the work. “Getting the right folks to do this is difficult.”

The Professional Housing Rehabilitation Association of North Carolina is one organization filling this gap, providing training, education, networking and technical assistance to rehabilitation specialists in the low-income housing field.

But more support is needed, and grants that used to be relied on to develop the skills and competencies necessary to succeed in this niche area no longer exist.

Looking Forward

Pursuing energy efficiency in the affordable housing sector continues to be critical. According to one study, raising the efficiency level of low-income housing to that of the median household would eliminate 35% of the former’s excess energy burden, which is the percentage of household income spent on energy.

But to reach that point, certain, often overlooked, criteria must be met. Before energy measures can be completed, homes need to be structurally sound and safe to live in; to make existing homes structurally sound and safe, you need the resources and personnel to get the job done.

So, as North Carolina’s electric cooperatives and other utilities implement robust energy efficiency and demand response programs, they recognize that “their success depends on the resolution of preexisting housing issues,” said Nelle Hotchkiss, chief operating officer and senior vice president of association services at North Carolina’s Electric Cooperatives. “Given this, we remain supportive of programs and efforts to help ensure the availability of suitable and affordable housing that allows energy efficiency measures to be a viable solution.”

Advanced Energy, too, has been committed to serving the low-income market by partnering with key stakeholders. “There are many organizations out there overcoming barriers to healthy, safe and affordable housing for North Carolina residents,” said Brian Coble, senior vice president. “It will take working together to guarantee these basic needs while also ensuring improved affordability through energy efficiency.”

Asked about what would most help the situation, NCDEQ’s Hodgson said, “The main thing would be more flexibility in our funding sources (or new ones) to address issues preventing weatherization from proceeding.” Currently, only 5% to 20% of homes that get deferred from NC WAP are later improved enough to receive weatherization.

The NCHFA is certainly not alone in providing funding to remedy some of the safety and related concerns that hinder low-income energy efficiency efforts. North Carolina’s Community Development Block Grant programs and the U.S. Department of Agriculture’s Rural Development initiatives, for example, distribute vital aid as well. “We’re just one voice in a choir,” said Handley.

When you don’t have willing and able boots on the ground, though, that financial support can only go so far. Handley’s response to what would most benefit the URP? “Capacity building would be incredibly helpful.”