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SUSTAINABILITY UPDATE

HP Sustainability Solutions—At The Intersection of Affordable Housing and Climate Change

by Esther Toporovsky

In 2020 the NYC Housing Partnership established HP Sustainability Solutions (HPSS) as an evolution and expansion of the Housing Partnership’s traditional role of facilitating the creation of affordable housing in New York as an intermediary between public private partnerships. HP Sustainability Solutions similarly plays a key role in public private partnerships involving owners of multi-family building and public agencies doing oversight to meet climate goals in New York. In establishing HPSS, the Housing Partnership responded to an emerging need to serve owners of portfolios of multi-family affordable housing and their residents by advising them on how to make sound investments in energy projects and address climate change. HPSS’s focus is to ensure affordable housing development and preservation and climate targets are achieved to improve infrastructure, resilience, health and the well-being of the most vulnerable populations in New York. These goals bring significant social and economic benefits to all New Yorkers.

HP Sustainability Solutions advises affordable housing owners/developers and government agencies on the integration of energy efficiency and renewable energy to improve residential building performance and reduce carbon emissions.

New York State’s Climate Leadership and Community Protection Act (CLCPA) is shaping the future of emissions and energy policy, in part through New York City’s Local Law 97 (LL97), which requires building owners and developers to meet carbon emissions reduction targets over time or face financial penalties. Affordable housing owners and developers face challenges in finding effective strategies to meet these mandated environmental sustainability goals across their portfolios. Residential portfolio owners and developers face these unfunded energy and greenhouse gas emissions mandates without a clear roadmap on how to get there. Incentives are available from several sources, but it can be daunting for property owners to identify, access and coordinate them as they seek to retrofit legacy multifamily buildings to meet new mandated environmental goals. This can be more complicated and difficult than new construction projects designed and built to comply with higher clean energy standards. Complicated capital structures also challenge affordable housing owners as they try to capture savings from investments in alternative energy.

HP Sustainability Solutions advises owners of multi-family affordable housing portfolios on investment strategies to meet climate targets. HPSS applies decades of experience in real estate development financing with its knowledge of energy savings and generation equipment. HPSS’s understanding of the special challenges that affordable housing faces in making energy investments enables us to create solutions specifically tailored to this market.

HPSS consults with owners and developers on structuring the financial aspects of energy enhancements that will work within the complexities of affordable housing economics. HPSS takes a portfolio-wide approach, aggregating multiple projects to produce meaningful returns. We analyze alternative energy investment opportunities across portfolios of affordable housing assets and advise owners on implementing these projects. HPSS also helps affordable housing owners maximize the benefits of solar energy into their new construction/ renovation projects through underwriting support. Our approach delivers solar that not only pays for itself but delivers added benefit to the project’s capital stack.

HP Sustainability Solutions works with public agencies to come up with effective climate solutions for multifamily affordable housing

HP Sustainability Solutions also advises public agencies on the development of policies, programs and regulations impacting the affordable housing community, which-encourages market adoption of clean energy. HP We bridge affordable housing owners and developers with public agencies allocating funding to support these projects. Unlocking access to energy and climate programs for affordable housing creates equitable solutions to meet mandated climate goals.

The New York State Energy Research and Development Authority (NYSERDA) and New York State Homes and Community Renewal (HCR) have engaged HP Sustainability Solutions to advise on the implementation of the State’s Climate Leadership and Community Protection Act (CLCPA) across the HCR portfolio, leading to a ‘first-of-its kind’ program where energy dollars have been allocated directly to HCR to administer. This means that affordable housing developers can apply for funding for clean energy upgrades as part of traditional, business-as-usual, affordable housing financing. NYSERDA has dedicated multiple sources of funding for this program. HCR has established “Clean Energy Incentives for High Performance Projects” program, to provide developers with $7.5 million ($12,500/unit) to build up to 600 units of all-electric, highly-efficient affordable housing. Future phases will include thousands of additional units of housing and funding for both new and existing buildings directly through HCR financing.

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