City Gardens: A Potential Model for Stand-Alone Green Retrofits

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A demonstration project making major energy and water efficiency improvements at a 274-unit affordable multifamily rental housing development in southern California is a possible model for other similar “stand-alone” green retrofit jobs.

The work occurred at City Gardens, a community of 27 two-story garden style apartment buildings, a clubhouse/management office building, and two swimming pools on 11.9 acres in Santa Ana. Owned and operated by LINC Housing Corporation, a nonprofit based in Long Beach, the complex was built in 1969.

LINC Housing acquired and renovated the property in 1996 and upgraded seven of eight hot water boilers in the early 2000s. In early 2012, the nonprofit concluded there were opportunities for further energy efficiency improvements and began working with other partners to figure out which to make and how to pay for them.

These partners included Enterprise Community Partners, Southern California Gas Company, Southern California Edison, the California Housing Partnership Corporation (CHPC), and Stewards for Affordable Housing for the Future.

The property is master-metered for natural gas, which is used for heating, as well as for water and sewer. Units are individually metered for electricity, the only utility that residents pay.

The retrofit work, begun during the fourth quarter of 2012 and completed by April 2013, is projected to result in energy savings of about 23% per year.

The first step was assessing the current energy and water usage and costs at City Gardens and determining which upgrades to make to improve efficiency and reduce utility costs for LINC Housing and the residents.

Enterprise Community Partners provided funds for a green property needs assessment, which was conducted in February 2012. The report provided a suggested scope of work and estimates of costs and potential savings. CHPC later revised the estimates and scope of work to take into account upgrade measures that would qualify for rebates from Southern California Gas (SCG) and Southern California Edison (SCE) or be free under their direct install services programs.

Meanwhile, SCG and SCE each designated a single contact person for CHPC and LINC Housing officials. The contacts alerted them to the utilities’ rebate and direct install services programs available for the City Gardens retrofit project and guided them through the application process.

With the aid of CHPC, LINC Housing obtained nearly $397,000 in utility rebates and direct install services from the two utilities from three incentive programs:

 

  • Energy Savings Assistance Program (ESAP). SCG and SCE pay for energy and water conservation measures installed in apartments occupied by renter households at or below 200% of the federal poverty line, such as energy-efficient refrigerators, weather stripping, and low-flow shower heads.
  • Multi-Family Energy Efficiency Rebate Program (MFEER). Rebates to owners for gas or electric conservation improvements, including lighting.
  • California Solar Initiative. Rebates to owners for the installing solar photovoltaic (PV) or domestic water heating systems.

 

Retrofit improvements made at City Gardens to reduce electric, natural gas, and water usage included:

 

  • Replacing boilers
  • Installing energy-efficient lighting in common areas and apartments
  • Installing a passive solar domestic water heating system
  • Weatherization
  • Installing electronic pilot lights in forced air units in apartments
  • Adding insulation
  • Installing low-flow plumbing fixtures

LINC Housing, though, encountered some challenges.

One was that the two utilities – not the owner – normally designate the contractors to perform retrofit work done under the ESAP and MFEER programs. As a result, LINC Housing would have had to coordinate with three contractors. But because of cooperation between the two companies, the same contractor did the work for both utilities and the resident income verifications. This was more efficient for LINC Housing and for the residents.

The second challenge was verifying that City Gardens’ residents met the ESAP program’s income limit to qualify for free improvements in their units. At City Gardens, 55 units are restricted to households at or below 40% area median income and 219 to households at or below 60% of AMI.

Under the ESAP program, the utilities require contractors to go door-to-door to confirm the income of resident households to determine if they qualify for the ESAP program. As a result, this ruled out reliance on annual income certifications that LINC Housing already had for the resident households. This requirement is duplicative and creates extra work for residents.  Residents of 36 units wouldn’t cooperate with the income verification process or couldn’t be reached; 28 households were over income; and 9 units were vacant. However, 13 households otherwise ineligible for the ESAP program were qualified under a special rule that says all of a building’s units will qualify if at least 80% do. In the end, 201 of the 274 apartments qualified for the free ESAP improvements.

LINC Housing had to find a way to pay for the improvements not funded or partially funded under the three utility programs. Fortunately, the property was at a point where it could be refinanced.

The nonprofit funded the shortfall using some of the proceeds from a Fannie Mae Green Refinance Plus loan – the first one closed, in June 2012. The loan was originated by Bellwether Enterprise. Another separate loan was obtained from Enterprise, says Hunter Johnson, president & CEO of LINC Housing.

Going forward, he said LINC Housing plans to upgrade the irrigation system at City Gardens and is working to install a solar PV system. “It’s a great candidate for solar,” says Johnson, with plenty of space for solar panels on the roofs of buildings and carports. “If we could figure out how to pay for it we could install enough solar panels to create electricity for all of the residents as well as for ourselves. On a net basis, we wouldn’t be using any electricity.”