The High Cost of the Green New Deal For Public Housing
The Green New Deal for Public Housing recently introduced in the Senate completely shut residential natural gas use out of consideration in new public housing standards. The plan would upgrade building efficiency and reduce overall energy costs but erases any savings from efficiency by forcing all-electric appliances into new buildings and retrofitted homes.
Cost to Residents
The federal public housing program provides assistance to residents with incomes below 80 percent of area median income (AMI). Nearly two-thirds of public housing funding recipients are considered “extremely low income,” with a household income below 30 percent of AMI or $14,605. According to the Department of Energy:
“Low-income households spend a larger portion of their income on home energy costs (e.g., electricity, natural gas, and other home heating fuels) than other households spend.”
Known as an ‘energy burden,’ these disproportional utility payments are caused by weather, home age, poor insulation, and older appliances. Depending on the size of the accommodation, and projected heating and cooling demand based on region, public housing residents will have varying costs, with those in colder climates spending disproportionately more than fairer weather communities.
Low income households use 36 percent more electricity on average. At nearly three times the cost of natural gas, policies that force electrification have the potential to significantly increase energy bills for this demographic. Utility allowances help many in public housing afford their energy bills, but that is subject to availability – the government has roughly 1 million units in the program – and it varies heavily between families. Further, the entirety of their utility costs are not always covered.
The high energy burden that low-income individuals would then face in an all-electric future motivated Cherri Witt Brown, executive director of Greely-Weld County, Colorado’s Habitat for Humanity, to write an op-ed about the prospect of mandating all-electric homes in her community:
“An all-electric home costs Coloradans $1,083 more annually than an average natural gas home. For some of the families we serve, that is an entire month’s pay. Eliminating natural gas as an option for new builds increases the overall homeownership costs for low-income families and could price the families we work with out of a home. In addition, a recent study by GTI shows that Colorado consumers could see a 139% increase in annual energy costs when transitioning to an electric heat pump from an efficient natural gas system. That’s not a cost our families are equipped to shoulder.”
A frequent claim from electrification advocates is that electrifying homes would reduce indoor air pollution and that this can only be accomplished by banning natural gas. However, with proper use, improved building efficiency and ventilation options, the risk of indoor air pollution quite literally goes out the window.
Investing in proper ventilation removes particulate matter from the kitchen and increased building efficiency means that by opening the windows, residents are no longer paying to warm the outside, and can opt for improved air circulation without disturbing their thermostat. In fact, the only failure of these methods is the human component:
“A survey of over 350 California residents showed that 40 to 60 percent did not use an exhaust hood or open windows while cooking … some survey results show people largely do not feel that exhaust fans are needed, and for others, the fans are too noisy or people simply do not think of using them.”
The possibility for relatively cost-effective solutions demonstrates that the argument needn’t be either or. It’s possible to improve indoor air quality while securing energy savings.
The cost savings from natural gas use are vital if the proposal is meant to work within the necessary budget limitations it mentions. According to the Consumer Energy Alliance, it costs $2,500 to purchase and install a new electric furnace and $1,180 for an electric water heater. Across the 5 million households that receive federal rental assistance, the respective costs to replace both appliances would be $12.5 billion and $5.9 billion.
The total costs for retrofitting all public housing would be nearly 40 percent of the U.S. Department of Housing and Urban Development’s (HUD) current budget. This money is better spent on improving building efficiency which is the major cost of improving public housing. HUD is keen on updating the housing stock to maximize efficiency and cost savings:
“Many of the technologies that would be replaced for basic livability needs may also lead to better energy and water performance by default simply because of newer product standards that require higher efficiencies compared to the original technologies in the units. Yet, in contrast to other modernization costs, more aggressive improvements could result in even more savings in the form of reduced utility cost—thereby making them desirable for reasons beyond restoring the housing to good working condition.”
The greatest cost saving option would be to install high efficiency natural gas appliances, making use of existing infrastructure and capitalizing on reduced energy use from improved building efficiency.
Public housing residents don’t benefit from an argument forcing a choice between cost and health when both are easily achieved. Mandated electrification would only burden residents with higher energy bills. And if the program is going to work within a budget, the money for increased utility allowances for higher priced electricity and cost to retrofit is better spent on maximizing building efficiency. Natural gas remains the best option to maximize savings and reduce overhead cost, and by not considering its uses, the Green New Deal for Public Housing jeopardizes any financial gain seen from improved energy efficiency.