These programs support over  1.6 million housing units. HUD Has Taken Positive Steps to Promote Energy Efficiency, but Efforts to Encourage Voluntary Actions Have Limitations

HUD’s energy efficiency efforts, which have focused primarily on the  voluntary adoption of various measures, have included positive steps such  as promoting the use of energy performance contracts in public housing,  developing a benchmarking model that allows for the identification of  public housing authority properties that consume comparatively more  energy, and piloting a green initiative. HUD has sought to promote energy efficiency by providing  information, training, and technical assistance; offering program  incentives; and leveraging resources outside of HUD. Energy Performance Measures

HUD has taken steps to improve its energy program management and  monitoring through the development of performance measures to track  and assess the progress of its energy efficiency efforts. HUD pays an estimated $5  billion in utility costs annually but has not collected the data that would be  necessary to understand its current utility costs or the financial benefits  that these practices could provide for many of its programs. HUD officials  told us that collecting these data and developing a benchmarking system  could be useful to understand the energy use and savings opportunities in  its multifamily housing portfolio, but that it could be costly to HUD and  the property owners. A 2003 study by Harvard University—funded by  HUD—found that collecting consumption data in FHA-insured privately  owned multifamily housing would not be unreasonably burdensome. By not  benchmarking utility costs in its multifamily portfolio, HUD is missing an  opportunity to target less efficient multifamily properties for green  building improvements, an action that could reduce the resource  consumption and utility expenses for HUD and its funding recipients. HUD has focused its attention on incentives that encourage  energy efficiency, but it provides few financial incentives to encourage  more comprehensive green building practices—such as water  conservation and indoor air quality. Many state and local governments have  used financial incentives to encourage the use of green building, including  nonenergy green building practices, in their affordable housing programs. Some  states have worked with organizations with experience in green building  to promote green affordable housing in their regions. Although green building practices can provide long-term benefits and  savings opportunities, HUD has focused its attention primarily on energy  efficiency and currently has few incentives to encourage nonenergy green  building in its affordable housing portfolio. However, some of HUD’s  affordable housing portfolio may not participate in programs such as the  LIHTC. While some green building practices can add to up-front costs, they can  also provide long-term financial and health benefits. HUD’s public housing office has shown leadership and  initiative in partnering to develop a utility benchmarking tool that could be  used to identify properties with high levels of utility consumption, but  HUD’s multifamily assisted housing has no such tool. Such HUD green building programs could provide affordable  housing developers with financial assistance to deal with the added costs  of green building and HUD with the data it needs to understand the  relationship between the up-front costs and long-term benefits of green  building. Recommendations for Executive Action

In order to better promote green building practices, we recommend that  the Secretary of HUD direct the appropriate program offices to take the  following actions:    ensure completion of the regulation that would require the use of  energy-efficient products and appliances for public housing as directed  by the Energy Policy Act of 2005,    proactively work with DOE to expeditiously implement energy- efficiency updates to the HUD Manufactured Housing Code,    ensure that updates to handbooks are regularly completed in a timely  fashion to provide more current guidance on energy-efficient and other  green building practices,    consider working with DOE’s Oak Ridge National Laboratory and EPA  to develop a utility benchmarking tool for multifamily properties, and    assess whether the single-point incentive awarded for energy efficiency  is sufficient to stimulate higher levels of energy efficiency for its  competitive grant programs and consider providing nonenergy green  building incentive points for these programs.
Why GAO Did This Study

Rising energy prices and concerns about the environment have fueled interest in "green building"--resource-efficient construction and maintenance practices that reduce adverse impacts on the natural environment. The Department of Housing and Urban Development (HUD), spends an estimated $5 billion on energy costs annually in its affordable housing programs and has recently taken steps to reduce its energy costs. GAO was asked to review (1) HUD's efforts to promote energy efficiency in its programs and the use of performance measures, (2) potential costs and long-term benefits of green building in HUD's affordable housing programs, and (3) lessons learned elsewhere that HUD could use to promote green building. GAO reviewed HUD program documents and studies on green building, interviewed HUD officials and industry representatives, and made site visits to locations that use green building practices.

What GAO Found

HUD has taken steps to promote energy efficiency by providing information, training, and technical assistance, but its efforts have limitations. HUD has also provided some financial incentives to promote green building, including energy efficiency, for public housing and for a small segment of the multifamily properties HUD supports. Additionally, HUD has developed some performance measures to track the progress of its energy efficiency efforts. However, HUD has not begun requiring energy-efficient products and appliances in its public housing properties, as required by statute. HUD has also not implemented major energy efficiency updates to the building code for manufactured housing in more than a decade. Without such requirements and updates, public housing authorities may be spending more on utility expenses than is necessary and manufacturers may lack an incentive to build energy- efficient manufactured homes. Green building practices can increase up-front costs but may also provide long-term benefits, including financial, environmental, and health benefits. But the benefits in rental housing may not go to the party incurring the up-front costs, potentially discouraging the use of green building practices in a significant segment of affordable housing. HUD has partnered with others to develop a utility benchmarking tool for identifying savings in public housing, but only for the public housing portfolio. Utility benchmarking is often used to assess energy consumption and to help identify properties that could improve their energy efficiency. HUD does not collect the data needed to understand its current utility costs or future savings possibilities in some parts of its multifamily housing portfolio. HUD officials told GAO that developing a utility benchmarking tool for this portfolio would be helpful but could be costly to HUD and property owners. However, a 2003 study by Harvard University--and funded by HUD--found that collecting consumption data in insured privately owned multifamily housing would not be unreasonably burdensome. Without such a tool, HUD cannot fully understand the utility costs for over 1.6 million units in its portfolio and may be missing opportunities to reduce utility expenses for some properties. HUD has focused its attention on incentives that encourage energy efficiency but has few financial incentives, such as those used by states, to encourage other green building practices such as water conservation. Many state and local governments have used financial incentives to promote the development of green affordable housing. For example, in the scoring systems for some competitive funding, applicants are awarded additional incentive points for energy and nonenergy green building practices. Without financial incentives for nonenergy green building, HUD is likely missing opportunities to make its affordable housing more resource efficient and environmentally friendly.