Page 18 RAIN February-March 1980 Many financing mechanisms already exist. Some states, such as : I : I : I : I : • : I : I : I : I : I : I : I : I : Oregon, subsidize weatherization loans so they can be offered at low interest rates. Some utilities offer low interest or no Interest! • A mandatory program must not increase the burden on low income residents, who are already hard-pressed to maintain affordable housing. administer because of the need for energy efficiency audits of each dwelling. Furthermore, the choice of an appropriate payback period is arbitrary . Nevertheless, the attraction of cost-effective standards lIes In the gloss of appearing more reasonable than prescriptive 5tandards_ It is also possible to adopt performance standards, although pres ·ntly it would be hard to tell whether most jurisdictions would have the sophistication to implement them, and whether the refinement they offer would be worth the administrative costs. Implementation There are several possible implementation schemes. The Seattle Energy Office has proposed a date after which all structures covered by the (lrJinance must be retrofitted. After a three-year grace period there will be a systematic program of inspection of all aHected umtSover the following two-year period. Minnesota has also set a date after which all structures must be in compliance. Portland, Oregon, has proposed blocking the transfer of title after an initial five-year grace period. Since the transfer of title is controlled by another jurisdiction, state law will have to be changed to give Portland this authority. Seattle faced the same problem and chose not to try for implementation through transfer of title. In addition to jurisdictional problems, this method also fails to cover property which is not sold or is sold by land sales contract. However, its advantage is that you do not have government inspectors coming to your home and giving you a set period of time to comply or start paying a penalty. Inspection There are two reasons for inspection: compliance and quality of \ ork. cattle is proposing to incorporate its Home Conservation Rrquirement (HCR) into the Seattle Housing Code. Inspection would be conducted by city employees specifically trained as weatherization inspectors to inspect for HCR compliance only. In order to avoid the problem of tying weatherization into a more extensive enforcement of the entire Housing Code, the inspectors will not be "mmpetent" to take note of other Housing Code violations. Seanl l'stimates enforcement will cost $4.3 million in a program rCljuiring $55.4 million in retrofits and providing benefits of $98.8 mjllion in savings. Portland's approach is self-certification. It relies on the assumption that most people will obey the law. Its advantages are that there is no extra cost for enforcement and individuals do not have their privacy invaded by government inspectors. Mlnnesuta requires a pre-sale inspection to ascertain compliance with the mandatory standards, but this inspection is not tied to enforcement or to penalties for non-compliance. There will be random inspC'ctions for enforcement. It can also be argued that weatherization work should be inspt,<ted to ensure proper installment, since improperly installed insulation can significantly reduce its effectiveness. Consumers would know they were receiving the benefits for which they were payin " while energy suppliers would know the conservation for which they were planning would be achieved . Financing A key issue in developing any mandatory weatherization program IS the financing mechanism. Even though a program is designed so that thl' costs are offset by the energy savings, many people would find it difficult to cover the front-end costs of weatherization. Those costs could range from $500 to $1200 per dwelling, deferred payment loans, Federal grants for weatherization are available to low income homeowners. These can be extended to rental units, as has been done in Minneapolis, Minnesota, and Lane County, Oregon. Community development block grant money can be used to offset the costs of weatherization . And some individuals will pay for the work without borrowing. Portland is setting up a new, non-profit corporation to provide for financing and implementation of its program. The City of Seattle is considering providing low interest loans to complement other financing programs. Since 70% of the residences in Eugene, Oregon, are heated electrically, citizens there are advocating a financing scheme which includes placing costs for conservation measures in the rate base of the municipal electric utility. Non-residential heating customers would be included in the weatherization requirement to the extent they are covered by the other available financing programs. Other Considerations A mandatory program must not increase the burden on low income residents, who are already hard pressed to maintain affordable housing. When a loan program is mandated, there is a need to ensure that property owners do not pass on unjustified rent increases and blame them on the weatherization program. Property owners should be required to make available to their tenants a Weatherization Cost Disclosure Form to show the cost of weatherization per dwelling. The impact of the weatherization program will be insignificant relative to probable market-based increases, and the program must not take the blame for causing rents to be raised. There is also a myriad of federal regulations to implement the National Energy Conservation Policy Act of 1978. Weatherization programs will have to take these into account. For example, if the program is to rely on a new utility financing program, a waiver from certain prohibitions in the regulations must be obtained. Conclusion So far, most governmental conservation programs have relied on incentives. We feel that incentives are not adequate to bring about the weatherization of rental housing. If weatherization of this segment of our residential structures is a goal, it can only be achieved through mandatory programs. However, we must be careful that we do not create programs which have greater burden than benefit. With adequate financing, we feel communities can design their own local programs which will be equitable and reasonable, Access In developing the Seattle Home Conservation Requirement, a mandatory program covering owner-occupied and rental property up to fourplex structurrs, Marta Metcalf of the Seattle Energy Office has written an excellent discussion paper covering the various issues. While one might arrive at dif!errnt conclusions regarding th e specific recommendations, the paper provides concisr arguments about the choicrs which mllst be made. Contact : Marta Metcalf Seattle Energy Office 920 Arctic Building Seattle, WA 98104 2061625-3835 Don Corsoll and Sam Sadler are coordinators of the Whiteaker Neighborhood Enagy Project in Eugrne , Oregon . The project, funded by the National Center for Appropriate Techn ology , is working to have a mandatory weatherization ordinancr udopted by th e City of Eugene , Contact : Don Corson and Sam Sadler Oregon Appropriate Technology P.O. Box 1525 Eugene, Oregon Y7440 503/683-1613
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