Observations on DHCD’s Housing Innovation Partnership Grant RfP Draft by LEAP

In general, LEAP is concerned about what could be construed as a focus on affordable housing throughout the RfP rather than energy efficiency. It manifests itself in many portions of the RfP with the most indicative example being the top line goal of energy cost savings rather than energy unit savings and/or GHG emission reductions. LEAP is also concerned that there could be bias against non-multifamily housing types and potential grant applicants that are not one of DHCD’s existing clients or WAP agencies. Most importantly though, perfection should never stand in the way of making incremental progress and LEAP does want to see the grant application process open promptly and funding made available to ensure as much energy saving can be done as soon as possible.

Summary of important concerns about the existing draft that should be addressed:

? 50% Energy Cost Savings goal may be cost-prohibitive for the much of the available
low-income housing when factoring in ROI of certain measures. A 20% energy cost
savings goal along with an additional total energy unit savings and/or home energy GHG
reduction goals should be considered.

? 10% match requirement biases towards existing DHCD grantees and ignores funding
cycles and other dynamics of potential organization types. Not requiring a match or
taking it down to 5% is suggested.

? Multifamily building-type seems to be favored over single-family detached to the
detriment of larger potential energy reductions and cost savings per household.

? Reporting and engagement requirements are overly burdensome, should be outsourced
to 3rd parties, and are narrowly focused on the housing sector instead of also
considering the energy efficiency and energy spaces also.

Observations:

50% Energy Cost Saving goal: This should be one of many energy type of savings goals which
could include total energy unit savings and/or GHG reductions. Additionally and in LEAP’s
experience, achieving a reduction in energy cost savings of 50% or more is very, very difficult in
some housing types and considering the fuel type being used. When considering switching from a fuel oil furnace to a high efficiency electric heat pump in a 50+ year old home that also needs significant insulation and air sealing, it is very possible to achieve the 50% cost savings.
However, finding something similar in other housing types and that is also cost effective (say not including $20k worth of windows) in order to hit the cost saving target would be very difficult. Thus, DHCD should reduce the energy cost saving target to 20% while adding an additional home energy GHG emission reduction target of between 20-50% depending on fuel switching would deliver important results while better addressing the climate change problem being faced.

Required 10% match: LEAP considers this to be a hardship for not only LEAP participating, but
for many other participants because of lack of access to many existing programs that DHCD
runs and/or programs that utilize the WAP territorial system such as Dominion’s income and age qualifying programs. Without being able to potentially “braid” those programs into a proposed project, it would bias proposals to those already receiving DHCD funding or access because of DHCD’s WAP territory system that hasn’t been updated in more than a decade. Municipalities budgeting cycles would make it difficult to allocate such funding for a match and have the work start before July-August of next year. Finally, utility cooperatives are already stretched thin from an ability to subsidize directly some cooperative members over others.

Multifamily building favoritism over other types of housing stock: From the proposed funding
structure (30% upfront, 60% upon major completion, and 10% on finalization), to the “feasibility” scoring criteria on “support of building owners or managers” and “identified candidate building(s)”, and usage of the purpose’s section saying the grants should only benefit “designated as affordable housing”, the RfP looks to favor multifamily types where one
multifamily building (or complex) would score higher vis-a-vis assisting rural single-family
detached and/or manufactured home owners spread out over a large municipality and/or area. Assisting single-family detached dwellings at a potentially large scale requires payment of many smaller “jobs” such as HVAC replacement that can’t wait months for payment. For that reason, the WAP pays on each job completion and not on a year’s worth of work’s completion. Such payment flexibility should also be an option. Additionally, scoring criteria needs to be analyzed against bias for single family housing stock with flexibility given to proposals that can’t identify unique addresses for 30 single family households to be served and have secured owner permission, but rather demonstrate the need and a target area for implementation. Finally, very few single-family detached homes have an affordable housing designation because they weren’t built with subsidized funding. The household’s income qualification is what should deem the home “affordable” and not if it has a DHCD designation, which only multifamily properties who previously received some kind of DHCD funding are likely to have.

Outreach and education sections: LEAP believes adding additional requirement to grantees of
preparing case studies, web pages, videos, and presenting at Housing related conferences (no
energy or energy efficiency related spaces were noted in the draft) would be overly burdensome and reduce the amount of resources of grantees to achieve the desired results. LEAP does not keep on staff a policy analyst that could assist in preparing such work and previously contracted with 3rd parties to prepare such documents and attend such events. LEAP suggests the requirement be to collect and provide information to 3rd parties such as the Virginia Center for Housing Research to prepare the case studies and reports, which should be contracted separately by DHCD for that purpose. Let the grantees focus on delivering energy saving measures and have a third party analyze and present the results.