Grant

Pennsylvania Housing Finance Agency ($1,000,000)

Background

Nearly half of the existing assisted affordable rental housing in Pennsylvania – almost 70,000 units – is more than 25 years old and located in weak markets where the greatest threat to continued affordability is ever-increasing operating expenses, particularly for older projects with less efficient building systems. Though affordable housing preservation has been a long-standing priority for the Pennsylvania Housing Finance Agency (PHFA), the commonwealth is facing a new preservation challenge. The generally older subsidized housing stock will likely see increases in utility expenses on the magnitude of 40 and 60 percent over the next several years when utility companies remove rate caps imposed when the state deregulated the electricity industry. Such steep increases, particularly in weak housing markets, can easily place affordable housing properties into financial stress and threaten their affordability.

Project Description

Pennsylvania’s new preservation strategy (Preservation through Smart Rehab) builds upon its existing commitment to green building and environmental sustainability, as demonstrated through its Low Income Housing Tax Credit energy-efficiency requirements. In order to initiate the Preservation through Smart Rehab program, the grant will fund an extensive effort to conduct comprehensive assessments of multiple properties’ utility expenses, mechanical systems, and physical condition to determine what may be appropriate, cost-effective improvements to limit energy consumption. The grant also will: help generate a dedicated and qualified cadre of energy auditors to scale the Preservation through Smart Rehab program statewide and fund marketing efforts directed towards prospective owners and property managers about taking advantage of the new energy auditing services and the capital resources that are available to implement energy-conservation technologies. The grant will support promoting the program at conferences, trade shows, and through written and electronic media, and support outreach efforts to educate the public, particularly residents of subsidized properties. A portion of the grant also will cover the cost of energy audits for properties that are suitable for preservation activities, but lack the financial resources to pay for the audit.

In conjunction to the grant-funded activities, PHFA will roll out the loan fund as a demonstration by extending an invitation to property owners to apply for loans for specifically identified developments. Properties will be selected based on age and physical condition, tenant occupancy (e.g., vacancy and wait list), financial strength, and development team experience. Also informing the selection process will be PHFA’s comprehensive affordable housing database that tracks, among other things, energy consumption and utility information on a significant portion of the state’s subsidized housing stock. Qualified properties will have to demonstrate that long-term benefits, namely units remaining affordable, ensue from the energy-conservation upgrades. After improvements are complete, PHFA will review energy-consumption data to determine if efficiencies have been maximized. Loan repayments drawn from energy savings will be recycled to fund new loans.

Contact

Brian Shull, Senior Development Officer
Pennsylvania Housing Finance Agency
211 N. Front Street
Harrisburg, PA 17101
717.780.3909
bshull@phfa.org