Making Energy-Efficient Housing More Affordable for All

January 20, 2021

To close the affordable housing gap and also lower energy bills for low-income residents in Louisiana, it might take a solar village.

Rent increase in Louisiana in recent years

Gross rent, which includes energy bills and other utilities, has increased remarkably in all but a few Louisiana parishes since 2010, according to the Louisiana Housing Needs Assessment, which 海角社区 researchers conduct for the Louisiana Housing Corporation, a state agency. In Jefferson and Pointe Coupee, the increase is about 70%.

 

The affordable housing crisis looks a little different in Louisiana than it does across the nation. Every eighth residence is a mobile home鈥攎ore than twice the national average鈥攚hile only 1 in 25 residents (less than half the national average) lives in a multi-family home, such as an apartment building, where optimization in construction on a bigger scale could be a key to affordability. Costs for housing have also risen sharply in most Louisiana parishes since 2010, with incomes hardly keeping up. Every fifth homeowner and most renters are now what鈥檚 called 鈥渃ost-burdened鈥 or 鈥渞ent-stressed鈥 as they spend more than a third of their total income on housing. Importantly, this includes utilities鈥攅nergy bills (gas and electric), water, and sewer service.

 

An inherent challenge is how often energy-efficiency stands at odds with affordability.


Louisiana now ranks fifth in the nation in rent stress, according to the most recent , carried out by 海角社区 researchers on request by the , LHC, a state agency created in 2011 to advance housing policy, merging what was then known as the Louisiana Housing Finance Agency with Louisiana鈥檚 Office of Community Development and other housing programs. The agency鈥檚 stated mission is to ensure that 鈥渆very Louisiana resident is granted an opportunity to obtain safe, affordable, and energy-efficient housing.鈥 An inherent challenge is how often energy-efficiency stands at odds with affordability.
 
鈥淭he relationship between affordability and energy efficiency is not straightforward,鈥 said Roy Heidelberg, associate professor and chair of the Department of Public Administration in the 海角社区 E. J. Ourso College of Business and lead author of the Louisiana Housing Needs Assessment. 鈥淎n energy-efficient home could demand a higher contract rent while an energy-inefficient one might cost more in utilities.鈥
 
Median rent鈥攊ncluding utilities鈥攈as risen $88 in less than a decade in Louisiana. In the most densely populated parishes surrounding the larger cities, 鈥渆xtreme rent stress鈥 where more than half of one鈥檚 income is spent on housing, ranges from around 20% in Terrebonne (Houma), Calcasieu (Lake Charles), and Lafayette to about 25% in central and northern Louisiana, including Rapides (Alexandria), Ouachita (Monroe), and Caddo (Shreveport). In Jefferson (New Orleans) and East Baton Rouge, which have the biggest populations, around 30% of rental households are extremely rent-stressed. Working a minimum-wage job in Jefferson Parish now means spending, on average, 16 workdays out of a total 19 to 22 workdays in any given month on housing鈥攎edian gross rent has risen 68% in the parish in the last decade. This leaves between three and six workdays to make enough money to pay for food, healthcare, clothes, transportation, and other essentials.

鈥淓nergy-efficiency and affordable housing access are vital to the state and the health and wellness of Louisiana鈥檚 families," said LHC Executive Director E. Keith Cunningham, Jr. 鈥淟HC's Weatherization Assistance Program (WAP) provides energy efficiency improvements to approximately 700 low-income households annually at a total program cost of over $18 million. Our Low-Income Home Energy Assistance Program (LIHEAP) has provided over $100 thousand emergency energy assistance payments to approximately 60 thousand qualifying low-income households for a total program cost of over $129 million. These programs have provided approximately $147 million in long-term energy-efficient housing improvements to more than 2,100 households and 400 thousand emergency reimbursements of utility costs across four years.鈥

鈥淪olving Louisiana's affordable housing crisis will only be accomplished through thoughtful innovation and unique collaboration from our public and private-sector partners,鈥 Cunningham continued. 鈥淲e are happy to continue our work with 海角社区, which represents a genuine statewide objective.鈥
 

Multi-family energy-efficient affordable modular housing; Isabelina Nahmens and Roy Heidelberg

Isabelina Nahmens鈥檚 (left) team is bringing the latest technological advances in energy efficiency to affordable housing in modular, multi-family solutions (top) for Louisiana and the nation to help bridge the affordable housing gap and lower residents鈥 energy bills. Roy Heidelberg (right) conducted the two most recent Louisiana Housing Needs Assessments for the state.

 

As a driver of research and development for the state of Louisiana, 海角社区 is working on solutions to the affordable housing crisis in innovative ways. Isabelina Nahmens, professor of industrial engineering at 海角社区, received a large grant from the U.S. Department of Energy this year to develop a practical and affordable modular construction system for multi-family, energy-efficient housing.
 
鈥淲e鈥檙e trying to remove the stigma and altogether wrong idea that affordable housing and modular construction is low-quality and something you have to settle for,鈥 Nahmens said. 鈥淚t doesn鈥檛 have to be that way. A modular home is often better built, and also, it can be beautiful. We just have to figure out the right formula to get energy-efficient, high-performance homes鈥攕mart homes, if you will鈥攚ithin the reach of everybody.鈥

 

鈥淲hat鈥檚 remarkable about this project is how it鈥檚 combining energy-efficiency and affordable housing at scale.鈥鈥擜lison Donovan, senior consultant, VEIC


For this project, sponsored by the U.S. Department of Energy鈥檚 Office of Energy Efficiency and Renewable Energy, Nahmens partnered with VEIC in Vermont (a non-profit formerly known as the Vermont Energy Investment Corporation), builders, and the National Renewable Energy Laboratory in Colorado. The modular construction solutions they鈥檙e now working on could benefit residents in Louisiana as well as across the nation.
 
鈥淲hat鈥檚 remarkable about this project is how it鈥檚 combining energy-efficiency and affordable housing at scale,鈥 said Alison Donovan, a senior consultant at VEIC. 鈥淲e鈥檙e not talking about super-insulated and high-performance homes built for a million dollars. It鈥檚 about bringing the benefits of that technology to affordable housing, which is at the heart of our work. In many ways, this is a social justice issue.鈥
 
The team鈥檚 goal is to work with industry partners and American factories to come up with homes that are at least 50% more energy-efficient鈥攂oth in construction and once in use鈥攖han the current code (the 2018 International Energy Conservation Code, or IECC) at no additional cost. They have also received support from the U.S. Department of Housing and Urban Development (HUD) to explore the advantages of installing solar panels on modular homes directly in the factory as opposed to in the field.
 
鈥淭hese add-on technologies are often installed at construction sites where you have lots of different trades and several independent companies working under one general contractor,鈥 Nahmens said. 鈥淭his often makes for uneven quality across a subdivision, and no matter how energy-efficient each component might be, that efficiency is easily lost if the components aren鈥檛 installed right. You can put in the best windows in the world, but if you don鈥檛 fit them properly, they鈥檙e just expensive windows.鈥
 
The 鈥渟olar village鈥 idea her team is working on will be all-electric, with triple-pane windows, steel siding, and air-source pumps for heating and cooling. By putting as many components as possible together in the factory (what the industry calls 鈥渦pstream鈥), multiple efficiencies can be achieved. From the structural part of the house to the finishings (flooring, appliances, cabinets, etc.)鈥攅verything can come together at the factory.
 

Extreme rent stress in the most populated Louisiana parishes in each housing region

Percentage of extremely rent-stressed people (who spend more than half of their income on rent and utilities) in the most populous parishes, surrounding the bigger cities, in each of the eight regions surveyed in the Louisiana Housing Needs Assessment.

 

鈥淚t鈥檚 a no-brainer,鈥 Nahmens said. 鈥淵ou have a production line with skilled labor, and all of the materials get delivered in bulk to one place, so you get more quality control and lower prices than if dealing with separate vendors. We can gain a lot of operational efficiencies at the factory level, so the more we can do there, the better.鈥
 
鈥淭his is really the whole idea behind the benefit of modular housing,鈥 she continued. 鈥淏ut 鈥榣ow-cost鈥 isn鈥檛 enough. Homes must be energy-efficient to be truly affordable, and this has huge implications for health, too.鈥
 

鈥... We want the homes to be energy-efficient, so people don鈥檛 pay tons of money for their energy bills, which leaves less money left over for healthy food and healthcare. Energy-efficiency and affordability affects all facets of people鈥檚 lives.鈥濃Isabelina Nahmens, professor, 海角社区 Department of Mechanical & Industrial Engineering

 

Energy efficiency is closely tied with the 鈥渢ightness鈥 of a home, yet just sealing and insulating a home introduces other challenges with indoor air quality. While leaky homes allow dirty air to sneak in through dirty gaps, such as inside walls where critters may nest and dust tends to settle, tightly sealed and insulated homes must be built to bring in fresh air and remove moisture for a healthy indoor environment. To do this, additional labor and more sophisticated equipment are needed, which can increase the construction cost of a home unless the process is streamlined鈥攎aking this an ideal challenge for modular construction, according to Nahmens.

鈥淚n Louisiana, low-income residents are disproportionately affected by hot and humid weather鈥攁s well as flooding and hurricanes,鈥 Nahmens said. 鈥淲e don鈥檛 want people living in leaky homes, period, and we want the homes to be energy-efficient, so people don鈥檛 pay tons of money for their energy bills, which leaves less money left over for healthy food and healthcare. Energy-efficiency and affordability affects all facets of people鈥檚 lives.鈥

Donovan agreed, calling 海角社区鈥檚 Nahmens 鈥渢he best鈥 at bringing residents鈥 needs, research, and industry together:
 
鈥淚sa is our national expert in lean manufacturing. She brings the real-world experience of working with industry, which helps us make sure that our energy-efficient affordable housing solutions will not only be useful, but actually used.鈥