Supporting low-income homeowners: lessons from a program to coordinate weatherization and rehabilitation services

Abstract

Homeownership is the primary way most families build wealth in this country. Low-income homeowners are less likely to get that benefit because they are more likely to own older houses that are more costly to operate and need more essential maintenance. Rapidly escalating home energy costs are straining the budgets of many low-income homeowners, increasing the likelihood of under maintenance and mortgage default. This paper presents an evaluation of a demonstration program designed to coordinate weatherization and rehabilitation programs in order to assist low-income households, decrease energy costs, and to improve the condition and value of their homes. The experience of 11 local non-profit organizations, funded to develop programs to coordinate weatherization and housing rehabilitation services, were studied over a five-year period. The results of the evaluation indicate that there are many obstacles to coordinating weatherization and rehabilitation programs, but that it can be accomplished under the right conditions. Major gaps exist between program eligibility thresholds and in the types of assistance available to low-income homeowners. Policy recommendations for facilitating coordination are presented.

Keywords:

• housing rehabilitation
• weatherization
• low-income homeownership

Notes

¹Those programs, however, have impacts that are much broader than just helping the low-income homeowners who receive assistance. For example, residential energy consumption constitutes 21% of all energy used in this country (Energy Task Force 2008). Weatherization programs that help low-income homeowners lower their energy bills are also a way to reduce overall consumption, our dependence on imported oil, and the emission of greenhouse gases which may be contributing to global climate change. Weatherization programs have also been promoted as a way to create jobs and generate positive local economic impacts (Schweitzer and Tonn 2003; Oppenheim and MacGregor 2008). The importance of weatherization programs in addressing a variety of pressing issues may be deduced from the fact that the American Recovery and Reinvestment Act of 2009 (ARRA) included $16 billion “to improve the energy efficiency of existing homes” (HUD News Release No. 09-051).

²The WAP program was expanded to include Puerto Rico and US territories in 2009.

³The subsidy may be a below-market interest rate, deferred payments, partial or total waiver of repayment of principal, or some combination.

⁴The problems created by differences in income eligibility thresholds are compounded by the fact that the programs have different definitions of what is included in income for purposes of determining eligibility. Even if the eligibility thresholds were the same, a household might qualify for one program and not the other because of differences in program regulations specifying what counts as income.

⁵The memorandum of understanding between DOE and HUD announced in May 2009, (HUD News Release No. 09-051) does nothing to help alleviate the problem with respect to homeowners. The memorandum authorizes WAP program agencies to accept HUD income verification for public and assisted housing and LIHTC properties to demonstrate income eligibility for WAP. It does not close the income gap between 200% of poverty and 80% of AMI and only applies to properties for which HUD certifies the income of the occupants. Since HUD does not do that for low-income households who are owner-occupants, the memorandum does not apply.