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Utility Allowance Guide for Owners of Affordable Rental Housing

The California Housing Partnership and National Housing Law Project have jointly published a guide to assist owners of affordable housing in understanding the implications of recent changes to federal program utility allowance requirements, and to provide tips for assessing whether utility allowance adjustments can be used as a resource to finance or pay back the costs of energy efficiency and renewable improvement projects.
Utility Allowance
application/pdf
5.93MB

Frequently Asked Questions: Methodology for Completing a Multifamily Housing Utility Analysis

FAQs pertaining to the implementation of H 2015-04 (June 22, 2015), which governs methodologies for completing multifamily housing utility allowance analysis.
HUD Utility Allowance
application/pdf
92.82KB

Utility Allowances in Federally Subsidized Multifamily Housing

Despite this split incentive problem, HUD has considerable leverage to reduce utility costs in its portfolio, which can benefit both HUD and households receiving a rental subsidy. While certain changes to HUD’s utility scheme would require congressional action and are therefore outside of HUD’s direct power to change, HUD administrators could change regulations and guidance documents without seeking outside approval. Specifically, as further detailed in the policy recommendations section, HUD can issue rules and guidance to: incentivize owners and tenants to conserve energy, encourage project owners to retrofit buildings, more accurately project utility consumption, and create transparency on how allowances are calculated. Such changes will improve the financial viability of existing properties and free resources that can be repurposed for other HUD goals.
Policy Proposal Report/Research Brief Utility Allowance
application/pdf
1.68MB

Household Energy Bills and Subsidized Housing

Household energy consumption is crucial to national energy policy. This article analyzes how the rules covering utility costs in the four major federal housing assistance programs alter landlord and tenant incentives for energy efficiency investment and conservation. We conclude that, relative to market-rate housing, assistance programs provide less incentive to landlords and tenants for energy efficiency investment and conservation, and utilities are more likely to be included in the rent. Using data from the American Housing Survey, we examine the differences in utility billing arrangements between assisted and unassisted low-income renters and find that—even when controlling for observable building and tenant differences—the rent that assisted tenants pay is more likely to include utilities. Among all tenants who pay utility bills separately from rent, observable differences in energy expenses for assisted and unassisted tenants are driven by unit, building, and household characteristics rather than the receipt of government assistance.
Incentives Report/Research Brief Resident Engagement Split Incentive Utility Allowance
application/pdf
338.24KB

Methodology for Completing a Multifamily Housing Utility Analysis

This notice provides instruction to owners and management agents (O/As) for completing the utility analysis required at the time of the annual or special adjustment of contract rents and when a utility rate change results in a cumulative increase of 10 percent or more from the most recently approved utility allowance. A significant new development, properties undergoing new construction or substantial rehabilitation may establish initial utility allowances for new or rehabilitated units based on analysis completed at underwriting though an energy consumption model, including an HFA-approved utility allowance calculator. This option is based on guidance established by the Internal Revenue Service under Section 42 Utility Allowance Regulations Update. The notice includes expanded options for owners of HUD-assisted properties to do use an energy consumption model
HUD Utility Allowance
application/pdf
243.81KB

Building Energy Efficiency Partnerships for Affordable Multifamily Housing: 2015 and Beyond

This paper offers a snapshot of the resources devoted to promoting low-income multifamily housing energy efficiency retrofits; it describes many of the policies, public-private resources and partnerships influencing and funding the field in late 2014.
EB5 ESCO Finance Policy Proposal Report/Research Brief Retrofit Utility Allowance Utility Incentives & Programs
application/pdf
1.78MB

Covering The Gap: Utility Allowances and Innovative Strategies to Pursue Energy Efficiency Retrofits

Topics include:
-What is a utility allowance and why they important?
-Methods for UA calculation
-Complexities and barriers to increased rents
-Workaround and potential solutions
-On bill repayment
On-Bill Utility Payment Utility Allowance
application/pdf
559.92KB

Comparing Tenant Versus Owner Paid Rules Governing Utility Allowances

A utility allowance table for Project-Based Section 8 comparing tenant versus owner paid rules governing utility allowances.
HUD Utility Allowance
application/pdf
286.15KB