CHCDF Series on Housing as Infrastructure

Infrastructure Includes Substandard Housing

By , National Rural Housing Coalition

Family-Framing-in-the-sunset-300x225The lack of adequate water and waste disposal systems is a major infrastructure need of rural America and it is directly link to another pressing infrastructure need – substandard housing.

Most violations of federal drinking water standards are made by small communities with limited resources to dedicate to compliance.  Small and rural drinking water systems constitute nearly 85 percent of the 53,000 community water systems in America. The 2013 Environmental Protection Agency (EPA) Drinking Needs Assessment indicated a national need of $64.5 billion for small community water systems.[1] This represents 17.4 percent of total national need. The lack of adequate water and waste water systems has a direct impact on the quality of housing. The American Community Survey found that almost 630,000 occupied households in the country lack complete plumbing facilities – meaning they do not have one of the following: a toilet, tub, shower or running water.

President Trump proposed to triple funding for EPA’s Safe Water and Clean Water State Revolving Funds (SRFs), which would make $6 billion available. However, while approximately 96 percent of all health-based violations occur in systems serving a population of less than 10,000, less than a third of the SRF outlays are directed at these same small systems. Thus, this proposal would not meet the needs of America’s small towns.

The National Rural Housing Coalition has recommended that 20 percent of the new proposed level of funding for EPA’s SRFs be transferred to the U.S. Department of Agriculture (USDA) for use in its water and waste disposal loan and grant program and Sections 504 and 533 repair programs. USDA’s Water and Sewer loan and grant financing program is a key component of economic development in rural America.  The agency boasts a portfolio of more than 18,000 active water/sewer loans, more than 19 million rural residents served, and a delinquency rate of just 0.18 percent.  USDA is better equipped to address rural community facilities needs than state SRFs.

With the USDA Section 504 Loan and Grant program and the Section 533 Housing Preservation Grant program, rural communities have been able to address substandard housing needs that stem from a lack of adequate plumbing. These programs can provide critical assistance to shore up this infrastructure. For example, with an expanded HPG grant of $400,000 and $370,000 in leveraged funds, Self-Help Enterprises in California provided basic health and safety improvements and drill on-site water wells for 23 families in the drought-ravaged San Joaquin Valley.

The bottom line is that the Administration and Congress should take a holistic approach to addressing America’s infrastructure needs, and include funding for housing and water/wastewater systems in any infrastructure package.

This article is the sixth in a blog series of the Campaign for Housing and Community Development Funding that ties housing to infrastructure. To read the other blog posts, please click here.

[1] Defined as serving 3,300 and fewer persons.

This article was originally published at:

CHCDF Series on Housing as Infrastructure

Investing in Affordable Housing is Investing in Latino Communities

AAEAAQAAAAAAAAimAAAAJGVmMDkzMWE4LTdlYzEtNDhhNS05MDBmLTIzOGIxZmFlYWRiYgBy Daniel Palacios, Policy Associate, National Association for Latino Community Asset Builders (NALCAB)

During his campaign, Donald Trump emphasized and expressed frustration about the lack of economic opportunity and mobility for Americans across the country. The idea that upward mobility is out of reach for many Americans proved to be a compelling message for many voters, paving the way to victory for President Trump.

For many Americans, the challenge of economic opportunity is acutely felt in the context of housing, whether being able to afford rent, secure a mortgage or purchase an affordable home. The price of a mortgage is now more expensive than it has been in half a decade thanks to rising interest rates and growth in home values. While this challenge is not unique to any one demographic group, Hispanic Americans disproportionately bear the weight of affordable housing challenges. According to a report from the Joint Center for Housing Studies, 23 percent of Hispanic households are severely burdened by debt, compared with just 14 percent of white households. Given that Hispanics represent a large and rapidly growing segment of the population, a reduction of the affordable housing burden would free up more money for spending and investment, resulting in a direct stimulus to the economy and greater housing security for Hispanic families.

The National Association for Latino Community Asset Builders (NALCAB) strongly supports programs that work to address the affordable housing challenge facing many Hispanic families. When the housing market works better for low-and moderate income Hispanic (LMI) consumers, the entire country benefits. That is why the Trump administration should continue the federal government’s support for programs that equitably invest in LMI Hispanic communities.

A key strategy for the Trump administration to address the affordable housing challenge is through the continued support for Community Development Financial Institutions (CDFIs), the Community Development Block Grant (CDBG) program, and the HOME Investment Partnership Program (HOME). CDFIs are community-based, private-sector financial entities that address the lending, debt and equity needs of LMI communities. CDFIs bring a community-centric lens to investing in affordable housing, a vision that mainstream financial institutions do not often share. Equally as important are the CDBG and HOME programs, which provide funding for new home construction, rehabilitation of existing homes, and mortgage principal reduction assistance. Combined, these three programs provide a vital set of tools that enable communities to address the many elements of their affordable housing needs.

To see these tools in action, look to Affordable Homes of South Texas, Inc. (AHSTI). Headquartered in McAllen, Texas, AHSTI enhances the quality of life for the people of South Texas by providing affordable home ownership opportunities and related services to eligible families. South Texas has a high concentration of Hispanic residents, many of whom are LMI working people seeking affordable home ownership opportunities. AHSTI creates opportunities through land development, provision of general contracting services and mortgage financing exclusively for low-income working families who do not qualify for conventional home loans. Over the past six years, AHSTI has deployed a total of $36,889,416 in single family mortgages, creating 529 new homeowners in various cities across South Texas. Twelve percent, or $4,453,806 of these funds, have come directly from Financial Assistance Awards from the CDFI Fund, while 11 percent, or $3,992,479 of these funds, have come from CDBG and HOME combined.

Funding from the CDFI Fund, CDBG program, and HOME program have proven vital to meeting AHSTI’s mission, allowing it to leverage multiple sources of capital to finance affordable home construction. AHSTI serves as a prime example of the fact that no single program offers the solution to all affordable housing challenges. Rather, it is through a combination of resources, both private and public, that organizations like AHSTI will be better equipped to meet the affordable housing opportunities of the communities they serve.

Enabling families to purchase a home of their own is an accomplishment by itself, but AHSTI’s work extends well beyond homeownership. AHSTI’s construction of new, affordable homes also generates employment opportunities for local construction companies and an increase in the tax base for municipalities, spurring greater economic opportunity throughout the community.

Affordable housing investments, like those supported by AHSTI, serve as catalysts for economic development in Hispanic communities across the country. If we truly wish to improve our national infrastructure, we should continue to support public and private investments that make affordable housing a reality for all people.

This article was originally published at:

CHCDF Series on Housing as Infrastructure

Energy Savings Can Help Preserve the Supply of Affordable Units

By Kathi Whalen, Public Housing Authorities Directors Association
Originally published on PHADA

Congressional funding for the public housing program has sharply declined. In the last eight years successive deep cuts to the Operating Fund have resulted in more than $6 billion in losses. And the Capital Fund is consistently funded at levels well below the annual accrual needs. This means that the infamous $26 billion capital backlog continues to grow unabated. These funding levels threaten the existence of public housing – housing currently occupied by many of the neediest families, seniors and disabled persons in more than 3,000 communities across the country. Ambitious infrastructure spending is needed to preserve and update the public housing inventory.

In the midst of this current funding crisis HUD continues to spend a significant portion (1 in every 5 dollars) of its public housing budget to pay for utility costs. HUD pays utility expenses calculated on actual consumption. Housing authorities (HAs), in turn, pass these funds through to utility providers. Neither HUD nor housing authorities have adequate resources to change the trajectory of this spending. Since 2012, HAs have received only a portion (81–90%) of their operating needs from Congress but must, of course, continue to pay 100% of their utility bills. The combination of unchecked utility costs and declining operating funds means fewer remaining dollars to serve residents and to maintain their housing units. An infusion of infrastructure spending for energy improvements could break this costly cycle by providing housing agencies the financial resources to pay for 21st-century technology to sharply lower utility (typically gas, electricity, oil, water) consumption and costs. Savings generated by reductions in utility costs could then be put to work preserving public housing on behalf of public housing residents. The new Trump Administration has a few options for finding energy savings that also support public housing preservation. They are:

1. Energy Performance Contracts (EPC) with Energy Service Companies (ESCO)

The Department has encouraged housing agencies to enter into Energy Performance Contracts with energy service companies (ESCO) to address their public housing energy-efficiency needs. This allows housing agencies to use private borrowing to make energy improvements. HUD agrees to continue to pay utility costs at a “frozen” consumption level for 20 years. The savings – the difference between the frozen consumption level and the new reduced energy spending allows for repayment of the ESCO loans. This approach has limited application since it tends to work best for larger agencies that can produce major costs savings with the energy improvements. After 20 years agencies have much more efficient, more financially secure properties and HUD can pay utilities at lower consumption levels.

2. Frozen Rolling Utility Base

HUD should apply the frozen consumption (rolling utility base) used successfully in energy performance contracts to all public housing agencies to provide a financial mechanism to create widespread energy improvements and savings. Agencies that are allowed to generate savings and to then use those proceeds to improve their properties will shortly become expert at establishing energy-saving priorities. Moving to Work (MTW) flexibility has helped some agencies become leaders in energy conservation. Because of low Operating and Capital Fund levels the improvement will be incremental and not as dramatic as those in ESCO partnerships. Retained savings from energy savings will benefit struggling properties and their residents. And as with ESCOs, after 20 years agencies have much more efficient, more financially secure properties and HUD can pay for utilities at lower consumption levels.

3. Direct Infrastructure Investment – “It Takes Money to Save Money”

Direct infrastructure investment for energy improvements would allow housing authorities to create more energy-efficient properties more quickly. This would improve comfort and livability for residents and help to preserve properties for the next generation in need. It would importantly end the long-term demand for HUD to fund utility consumption levels indefinitely. Direct infrastructure investments in energy improvements could cause larger savings across the public housing inventory to accrue even more quickly. With adequate investments agencies could also optimize their energy solutions. For instance, an agency with aging boilers could do more than just replace boilers. The better long-term solution might include a more thorough approach – perhaps the installation of a geothermal field along with more insulation and high performance windows and doors. These one-time comprehensive solutions are rarely an option with declining Congressional funding. Public housing units and building are often clustered and contiguous making energy investments helpful and effective for a large numbers of households. Infrastructure investments in renewable might reasonably allow some properties to be less dependent on the electrical grid or to become net producers of energy.

CHCDF Series on Housing as Infrastructure

NLIHC’s Advice to Trump and Congress: Affordable Rental Housing Must Be Central to Any Infrastructure Bill

By Sarah Mickelson, Director of Public Policy, NLIHC

Throughout the campaign and first month in office, President-elect Trump has focused on the importance of investing in our nation’s infrastructure to spur economic growth, create millions of new jobs, and increase wages for American workers. Policymakers from both sides of the aisle agree—including Senate Democrats, making this an issue that could garner broad, bipartisan support.

To maximize this investment’s impact on long-term economic growth, any infrastructure package should include resources to increase the supply of affordable housing for families with the lowest incomes. Investing in affordable housing infrastructure—through new construction and preservation—bolsters productivity and economic growth. By connecting people to communities with well-paying jobs, good schools, and transit, affordable housing infrastructure spurs local job creation and increase family incomes. Investments in affordable and accessible housing boosts local economies and contributes to neighborhood and community development. Moreover, a targeted investment in affordable housing infrastructure could make significant headway towards ending homelessness and housing poverty.

In addition to investing in roads and bridges, NLIHC strongly believes that any comprehensive infrastructure package should include an expansion of the national Housing Trust Fund (HTF), a new tool exclusively focused on increasing the supply of affordable homes for those with the lowest incomes. Moreover, Congress should consider an increase in Housing Choice Vouchers or other rental assistance to help connect families to areas of opportunity, resources to rehabilitate public housing stock to preserve this asset for current tenants and future generations, and the inclusion of affordable housing developments among projects eligible for loans and equity investments through a national infrastructure bank.

The HTF should be a top priority for any infrastructure bill. It is the most highly targeted federal rental housing capital and homeownership program; by law, at least 75% of HTF dollars used to support rental housing must serve extremely low income (ELI) households earning no more than 30% of the Area Median Income (AMI) or the federal poverty limit. Because the HTF is administered by HUD as a block grant, each state has the flexibility to decide how to best use HTF resources to address its most pressing housing needs.

An infrastructure investment in the HTF would directly address the severe shortage of rental homes that are affordable to extremely low income households. NLIHC’s forthcoming report, The Gap, found that there is a national shortage of 7.4 million rental homes that are affordable and available to more than 11.4 million extremely low income renters. This means that for every 100 extremely low income renters, there are just 35 rental homes that are affordable and available to them. A full 75% of these households pay more than half of their income on rent. These families – seniors, people with disabilities, veterans, and low-wage workers – are forced to make impossible choices between paying the rent and buying groceries, visiting their doctor, commuting to their jobs, or saving for college and are often one unexpected expense away from homelessness.

In 2016, the first $174 million in HTF dollars were allocated to states. Most states have chosen to use their HTF investment to build and preserve affordable rental housing for extremely low income veterans, seniors, people with disabilities or special needs, and people experiencing homelessness. While this initial round of funding is an important first step, far more resources are necessary to meet the need.

The Trump administration and Congress should seize this opportunity for broad, bipartisan legislation to address the full scope of affordable housing infrastructure challenges, including those faced by extremely low income households. By significantly expanding the HTF, the President and Congress can provide the resources needed to help the economy, local communities, and families thrive.

CHCDF Series on Housing as Infrastructure

Bringing Healthy, Efficient  Infrastructure Home

Originally published Thursday, February 16, 2017, on Stewards of Affordable Housing for the Future


Our Nation’s infrastructure is more than just roads and bridges, it is also the networks and systems that deliver energy and water to homes and businesses across the country. These networks are aging and burdened by modern demands. The right investments in our energy and water infrastructure and in retrofitting buildings themselves can drive down costs and create jobs while producing a healthier living environment.

Energy and water efficiency in affordable housing not only saves money and sustains federal investments, but also creates jobs. According to a recent report[1], the energy efficiency sector employed 1.9 million people in 2015. The industry is prime for future growth. Committing to update our outdated housing infrastructure can create high paying jobs while addressing a backlog of physical repairs needed to improve safety and quality of life in publicly assisted housing.

Lack of energy and water efficiency is costly; nowhere is this more evident than in publicly and privately owned housing that is affordable to low income residents. Low-income families spend an average of 7.2 percent of their income on energy bills as compared to two percent by high-income households. [2] The average public housing authority spends 22 percent of its operating budgets on energy and water[3].  In privately-owned properties financed with equity from Low Income Housing Tax Credits (LIHTC), utilities made up 18 percent of operating expenses.[4]

Lower energy consumption decreases resident utility expenses, freeing up more money for other resident needs.  In assisted housing, less energy consumption reduces government subsidy costs and helps preserve these long-term investments by reducing operating costs and improving the long-term financial stability of the property. Reduced energy consumption also lowers demands on the larger, aging energy infrastructure.

Great strides have been made in reducing utility expenses.  Many states require utilities to invest in programs that support energy efficiency, but there is work to be done to ensure that significant savings and benefits are realized in affordable multifamily housing.

Investments in infrastructure that enhance efficiency make good financial sense.  They offer the opportunity to leverage public and private funds for short and long-term savings, job creation and greater opportunity for residents.

The private sector recognizes the value of investments in efficient energy and water infrastructure. Stewards of Affordable Housing for the Future (SAHF) and its members have committed to efficiency, launching the Big Reach initiative in 2013. The Big Reach is a collaborative effort of SAHF, along with its partners and supporters, to achieve a portfolio-wide 20 percent reduction in energy and water consumption by the year 2020.

The National Housing Trust (NHT) is one of the organizers of Energy Efficiency for All (EEFA), a coalition of state, local and national organizations working to make multifamily homes healthy and affordable through energy efficiency. EEFA works with a range of partners in 12 states to promote effective utility energy efficiency programs that can optimize energy use for all affordable building owners, and ensure healthy and inexpensive housing for residents.  To date, EEFA has secured more than $230 million in energy efficiency investments in affordable multifamily housing from private utilities.

Other multifamily housing developers have committed resources to improving the energy efficiency of their properties.  Utility incentives and other existing programs support small-scale retrofits, but new financing sources and approaches are needed to achieve the systemic measures that will generate deep, lasting savings and strengthen our housing and energy infrastructure.   Policies should identify federal sources to leverage utility company and other private financing sources, and should further incentivize private investment in efficient affordable housing infrastructure by ensuring that owners can benefit from utility cost savings and by expanding pay for success programs.

Investment in the energy and water systems in housing is also an investment in our country’s greatest asset, the people who occupy affordable homes. Updating energy and water systems creates healthier homes for residents and create a better platform for their success. For example, healthy indoor air systems can significantly mitigate the consequences of asthma in a child or chronic respiratory disease in seniors. Healthy residents are better poised for education and work, which makes our economy stronger.  Any investments in our nation’s energy and water infrastructure should be holistic and include investments to make all homes energy efficient and healthy.

This post is the third in a series from members of the Campaign for Housing and Community Development Funding examining the critical role of housing in our nation’s infrastructure. Look for previous blog posts from the National Housing Conference and Housing Assistance Council and the next blog post from the National Center for Healthy Housing on February 22.

[1] Environmental Entrepreneurs (E2) E4TheFuture, Energy Efficiency Jobs in America, December 2016

[2] Energy Efficiency for All, American Council for an Energy-Efficient Economy, Lifting the High Energy Burden, April     2016

[3] Federal Register/Vol. 81, No 192/Tuesday, October 4, 2016/Notices/FR-5913-N-27

[4] Novogradac & Company, 2015 Multifamily Rental Housing Operating Expense Report