Seeing Green: A Fertile Research Landscape

Seeing Green: A Fertile Research Landscape

Raphael Bostic, Assistant Secretary for Policy Development and Research At HUD, the sustainability conversation takes place on two levels. One is definitely at the regional level; the other is at the parcel or building level. This is an important aspect to emphasize. About 40 percent of HUD’s budget goes to rental assistance associated with a fixed physical stock, and HUD spends about $6 billion annually on energy. Unfortunately, HUD’s physical stock is old, and has in many cases not been maintained to typical building management standards. If we were able to improve the performance of these buildings, our programs would run more efficiently. Think about it - a 20 percent improvement would reduce costs by $1 billion, and it could make housing less burdensome for our tenants. Housing affordability and household stability could both increase; people would be living more sustainable lives.

And so investment and effort here is a vital cog. We have started down this path via the weatherization improvements that have come as a result of the Recovery Act. And we are conducting a physical needs assessment of our stock. Moreover, individual Public Housing Authorities are exploring ways to improve their building performance using the latest technologies.

This emphasis on the existing stock is critical, because new development in any given year reflects only a small fraction of the total built environment. Thus, real change that moves the dial will necessarily involve a significant focus on existing structures, both residential and commercial. We need to clearly articulate the economic benefits of these activities in order to get them to scale.

I have often described the green building and sustainable development movements as more religion that science. It’s not that science isn’t possible. It’s that when it’s time to persuade, the argument usually evolves to “you should do it because it’s the right thing to do.” There is often little appeal to or recognition of the financial or fiscal imperatives. And this is a problem, because charity is not a business model that results in investments at scale. And such investments are sorely needed.

There are many questions that remain outstanding. What are the best practices? What is the evidence base for demonstrating that certain approaches and techniques have promise? Getting more specific, in finance, the Property Assisted Clean Energy (PACE) model is one that has been touted as a model for financing green retrofits. And yet there are significant challenges with this in the minds of many. The lien priority issue is clearly one, but there are others. For example, is the extra loan amount in practice truly covered by the resultant energy savings? Or do homeowners spend some of the savings, leaving their household balance sheet at a net negative?

For HUD, one premise of making investments in green is to lower the cost basis for tenants and leave them more income secure and stable. Is this really what happens among those living in green buildings? Do they save more? Do they really spend less on balance? Do they use less energy?

Looking at construction and market value, do investments in green features make sense for developers who have a build and sell strategy? Put another way, to what extent are green characteristics capitalized into sales prices? To what extent are they capitalized into rents? If there is evidence that they are, does this happen equally across metros? And what role does government regulation play in this dynamic?

We need for research to yield conclusive results that help transform green religion into a green foundation given that “the community of the willing” - those eager to apply green strategies and those looking for clear marching orders on how to do it - is very large. HUD received over 900 applications for its Sustainable Communities Regional Planning grants and the Community Challenge grants. The volume of response was breath-taking, far outstripping our expectations.

And we at PD&R recently closed on our call for proposals for research in sustainability, and experience the same avalanche of interest and response. For my group, the responses place sustainability among the previous most-sought-after NOFAs in PD&R’s history. Sustainability’s allure has once again been verified.

And so moving forward, we have learned there is a tremendous appetite for sustainability investments and research, and we will be working to find ways to leverage the identification of this “community of the willing” to advance these principles even more. The regional planning and challenge grant winners are establishing laboratories to test regional level sustainability issues, while pilots such as Power Saver and Green Finance Plus will do the same for building-level questions. The prospects are very exciting.

So we have embarked upon a grand experiment. I am looking forward to seeing how our experiments on the ground create “proofs of concept,” and I am eagerly awaiting the next wave of regional planning and parcel-level mimics. I can’t wait to see how our research NOFAs expose new truths and relationships that advance our understanding of what green things work and which ones don’t. Come, join us, and be part of the odyssey!