DC's Affordable Housing Needs to be Powered with Efficient and Clean Energy

Testimony of Lara Levison
Sierra Club District of Columbia Chapter
Budget Hearing on the Department of Housing and Community Development
& Housing Production Trust Fund
DC Council Committee on Housing
April 3, 2023

Councilmember White, thank you for the opportunity to testify at this budget hearing on the Department of Housing and Community Development and the Housing Production Trust Fund. My name is Lara Levison, and I am the Energy Committee Chair for the Sierra Club District of Columbia Chapter. The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. The DC chapter has about 3,000 dues-paying members.

The Sierra Club is deeply concerned that the mayor’s proposed budget fails to fund several essential programs that are vital both for the District to achieve its climate change goals and to improve the quality of living and working in DC. 

ALL-ELECTRIC NEW HOUSING

Our top priority is combating climate change while keeping social equity concerns at the center of our efforts. When the Council passed the Climate Commitment Act, it committed the District to reduce greenhouse gas emissions in the District and achieve carbon neutrality by 2045. A major reason the District is not on track to meet these commitments is our continued burning of fossil fuels, including fracked gas in residential buildings. Thanks to the tremendous decline in the cost of utility-scale solar and wind power capacity, renewable power can be procured at affordable rates. For the following reasons, the District needs to transition off burning gas in residential buildings, and the Department of Housing and Community Development (DHCD) has a central role to play in ensuring that new housing is all electric. 

• Burning gas for heat pollutes both our climate and our homes. It brings documented health impacts including a 42% increased risk of asthma, aggravated respiratory symptoms and greater susceptibility to lung infections, and IQ and learning deficits in children.^[1]
• Burning gas for heat is more expensive than efficient electric heat.  By ensuring that new affordable housing runs solely on clean electricity, DHCD can keep utility costs down for the low to moderate income renters and owners who live there. As the District transitions off gas to heat buildings, a dwindling number of District residents will have to pay the costs of gas delivery infrastructure. Gas heat will become increasingly expensive, and DHCD should act now to ensure that District residents who live in affordable housing are protected from skyrocketing costs of gas heat in the near future

GREENER GOVERNMENT BUILDINGS ACT - DGS

Councilmember White, thank you for your leadership last year in introducing and passing the Greener Government Buildings Act,^[2] which mandates that buildings owned or financed in significant part by the District government must adhere to net zero energy standards. But the Greener Government Buildings Act will only take effect if it is funded. If the DC Council fails to fund the law, its passage is meaningless.

To fund this transition for government buildings managed by the Department of General Services (DGS), the Mayor’s budget falls far short. The fiscal impact statement on the Greener Government Buildings Act stated, “The bill will cost $8.4 million in fiscal year 2023 and $9.9 million in the four year financial plan.”^[3] The fiscal impact statement also indicated the need for four FTEs to implement the policy.^[4] As far as we can tell, the Mayor’s budget includes no additional FTEs for this purpose, and the DGS capital budget includes only $1.5 million for retrofitting District buildings.

Councilmember White, the Sierra Club and our allies in the Washington Interfaith Network and Interfaith Power and Light were proud to work with you on this legislation when you chaired the committee with oversight of DGS. We ask that you commit to us that the law you wrote and shepherded through the Council is not just words on a piece of paper and that you provide some funding from the Housing Committee to implement the Greener Government Buildings Act. Our schools, recreation centers, and other government buildings will benefit from implementing the law through reduced utility bills and cleaner indoor air in buildings that do not combust fossil fuels indoors.

HOUSING PRODUCTION TRUST FUND

While we are pleased that the Mayor’s proposed budget increases DHCD’s funding by 21% over FY2023, the budget unfortunately cuts funding for the Housing Production Trust Fund (the “Fund”). The Fund is the District’s largest and most important tool to create, protect, and preserve affordable housing. However, the proposed budget allocates only $31 million to the Fund, a 91% decrease from last year’s allocation of $354 million, an 81% reduction from FY22, and an 82% reduction from FY2021. Moreover, the proposed FY2024 allocation comes entirely from federal dollars, with nothing from the District’s local funds. This has not happened since 2015. Every year since then, the District contributed more money, and more local money, to the Fund than the Mayor proposes for FY2024. The slowdown in the real estate market means that the Fund can also expect declining funds from deed recordation and deed transfer taxes relative to the last few years.

This sharp decline in the Fund for FY2024 is especially significant because it undercuts the force of the Greener Government Buildings Act, which requires large new residential housing (over 10,000 square feet) to adhere to net zero energy standards if at least 15% of the total cost is District-financed.^[5] Any financing whose stated purpose is to provide for new construction or substantial rehabilitation of affordable housing qualifies as District-financed.^[6] This includes all new construction that receives at least 15% of its financing from the Fund. We ask the Housing Committee to insist on continued financial support for the Fund, including a specific allocation from the General Fund in addition to $31 million in federal dollars.

BUILDING ENERGY PERFORMANCE STANDARDS

In addition to the drastic cuts in the Housing Production Trust Fund, the proposed budget eliminates multiple sources of support for affordable housing and green energy. The District’s Building Energy Performance Standards (BEPS) program requires owners of large buildings to improve energy efficiency. The goal of BEPS is to encourage energy efficiency and reduce the total amount of energy consumed by buildings. Energy efficiency is among the most effective ways for the District to reach its climate commitments, and BEPS is an important part of encouraging and normalizing best energy efficiency practices across the real estate industry. Here, the Mayor’s proposed budget eliminates $30 million in ARPA funding for helping affordable housing improve and comply with BEPS. It also fails to fund DGS to comply with BEPS. And the Mayor proposes to delay implementation of BEPS for three years.

This isn’t just a raid on energy efficiency, it’s also a raid on affordable housing. Energy efficiency reduces costs to cool and heat homes through lower utility bills. Robbing affordable housing in DC of funding to comply with DC’s energy efficiency rules makes housing less affordable by robbing affordable housing residents of lower utility bills. These cuts across the FY2024 budget are impossible to square with the Council’s commitments to creating and maintaining affordable housing in the District. 

RESIDENTIAL AND COMMUNITY SERVICE DIVISION

The Mayor’s budget also reduces by 50% the funds available as loans for eligible owners to address District housing code violations, such as repairing walls and floors, replacing windows, and repairing plumbing, electrical, and heating systems. This program is a key vehicle for DHCD to support electrification of single family homes owned by low to moderate income District residents.The Housing Committee should insist on at least doubling the funding to this program.

Thank you, Councilmember White, for the opportunity to testify today. The Sierra Club very much appreciates your environmental and climate leadership on the DC Council, and we look forward to continuing to work with you in the coming years.

^[1] Gas Stoves: Health and Air Quality Impacts and Solutions, RMI, 2020, available at: https://rmi.org/insight/gas-stoves-pollution-health (noting aggravated respiratory symptoms and higher susceptibility to lung infections and 42% increased risk of developing asthma symptoms); Effect of prenatal exposure to NO2 on children’s neurodevelopment: a systematic review and meta-analysis, Environmental Science and Pollution Research International, April 20, 2020, available at https://www.ncbi.nih.gov/pmc/articles/PMC7329770/ (noting effects on IQ and learning deficits in children); see generally https://drive.google.com/file/d.1CtsfcMEOV3EqSTtM6FPJUbJDE9A5vQO2/view