State Energy Standards (Project Number 2015-OE-0005)

Published by the Department of Housing and Urban Development, Office of Inspector General on 2015-11-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                               U.S. DEPARTMENT OF
                               HOUSING AND URBAN DEVELOPMENT
                                       OFFICE OF INSPECTOR GENERAL

                                          November 20, 2015

TO:            Clifford Taffet, General Deputy Assistant Secretary, D

FROM:          Kathryn Saylor, Assistant Inspector General for Evaluation, GAH

SUBJECT:       State Energy Standards (Project Number 2015-OE-0005)

In response to your request, the Office of Inspector General, Office of Evaluation (OE),
reviewed State qualified allocation plans (QAP) to identify what building standards States
use to award tax credits for low-income housing construction. The U.S. Department of
Housing and Urban Development (HUD) encourages State and local governmental entities
administering HUD-funded Home Investment Partnerships Program projects to adopt Energy
Star standards for new construction or substantial rehabilitation. The HUD Office of
Community Planning and Development (CPD) tracks units that meet the Energy Star
building standard as they contribute to HUD’s priority goal for energy-efficient housing. You
asked OE to review QAPs to determine whether States included alternative building
standards, equivalent to the Energy Star building standard, which could contribute to
achieving the priority goal.

In its 2006 Report to the Congress, Promoting Energy Efficiency at HUD in a Time of Change,
HUD described its department wide comprehensive strategy to significantly reduce energy use in
HUD’s inventory of public and assisted housing and in HUD-financed housing with a goal that
HOME grantees adopt energy efficiency
guidelines and incorporate Energy Star product        There is now a proliferation of standards,
and construction standards. In fiscal year 2007,      rating, and certification programs in the
CPD began tracking the number of HOME units           marketplace to help guide, demonstrate, and
built to Energy Star standards.                       document efforts to deliver sustainable, high-
                                                                   performance buildings.

                                                                   Source: Building Green

                                                  Office of Inspector General
                                                      Office of Evaluation
                                     451 7 Street SW, Room 8170, Washington DC 20024
                                          Phone (202) 708-0430, Fax (202) -401-2488
                               Visit the Office of Inspector General Website at www.hudoig.gov
In its December 2012 progress report and energy action plan, Affordable Green: Renewing the
Federal Commitment to Energy-Efficient, Healthy Housing, HUD reported spending
approximately $6.4 billion annually on utility costs in public and assisted housing. To address
energy efficiency goals, HUD adopted energy building rating standards, including Energy Star,
the 2009 International Energy Conservation Code (IECC)1, the Enterprise Green Communities
Initiative, the National Green Building Standard, Leadership in Energy and Environmental
Design (LEED) for Homes (for single-family), and LEED New Construction (for multifamily or
commercial development), as well as regionally or locally recognized green standards such as
Earthcraft and Built Green.2 Green, or sustainable, building is the practice of creating and using
healthier and more resource-efficient models of construction, renovation, operation, maintenance
and demolition. In its fiscal year 2014 agency financial report, HUD committed to creating
energy-efficient, green, and healthy housing, saying that reducing utility costs—generating
savings for residents and owners as well as for
taxpayers-is a key HUD priority. In May 2015, HUD            To earn the Energy Star certification for an
and the U.S. Department of Agriculture adopted the           entire home, the home must meet strict
2009 International Energy Conservation Code                  guidelines for energy efficiency. Homes
                                                             achieve this level of performance through a
(IECC) as the minimum energy standard for                    combination of energy-efficient improvements,
construction of rental housing and home-ownership            including effective insulation systems, high-
housing assisted under the HOME program (E-05-B).            performance windows, tight construction and
                                                                         ducts, efficient heating and cooling equipment,
                                                                         and Energy Star-certified lighting and
On its Web site, the U.S. Environmental Protection                       appliances.
Agency (EPA) describes Energy Star as a voluntary
                                                             Source: HUD Guidance for Reporting CDBG
program to identify and promote energy-efficient             (Community Development Block Grant)
products and buildings to reduce energy                      Accomplishments and Performance Measures in IDIS
                                                             (Integrated Disbursement and Information System),
consumption. To earn the Energy Star label, a home           October 2012
must undergo a process of inspections, testing, and
third-party verification to meet strict requirements by
delivering better quality, comfort, and durability. Homes certified under EPA’s 2012
requirements are at least 15 percent more efficient than those built to the 2009 IECC standard
and include additional energy-saving features to deliver a performance advantage of up to 30
percent compared to typical new homes.3

The Low-Income Housing Tax Credit program, managed by the Internal Revenue Service (IRS),
encourages the development of low-income rental housing by providing owners with tax credits
to construct new residential and commercial projects. To participate in the program, IRS requires
State housing finance agencies to maintain QAPs that explain how the program will be
administered in the State. One of ten criteria that a State must use to allocate housing credit

  IECC is a model code that establishes minimum design and construction requirements for energy efficiency.
  Green, or sustainable, building is the practice of creating and using healthier and more resource-efficient models of
construction, renovation, operation, maintenance and demolition. http://archive.epa.gov/greenbuilding/web/html/
  EPA established the Energy Star program in 1992 as a voluntary program under the authority of the Clean Air Act.
In 2005, Congress enacted the Energy Policy Act and "established at the Department of Energy and the
Environmental Protection Agency a voluntary program to identify and promote energy–efficient products and
buildings to reduce energy consumption, improve energy security, and reduce pollution through voluntary labeling
of or other forms of communication about products and buildings that meet the highest energy efficiency standards."

amounts among projects is the energy efficiency of the project. IRS does not require States to
identify or include energy efficiency standards in their QAPs.


We reviewed QAPs for the 50 States and the District of Columbia. States did not include the
level of detail on building standards that CPD anticipated in their QAPs. States discussed
compliance with elements of some energy efficiency building standards but were not consistent
in requiring overall compliance with the standards. This inconsistency prevented us from
determining with certainty that alternative standards in any QAP were equivalent to Energy Star
certification requirements. The results of our QAPs review are attached.

Since HUD committed to support Energy Star as a priority goal, it has adopted numerous
additional building standards that contribute to energy efficiency. In the HUD FY 2010-2015
Strategic Plan, HUD committed to support energy efficient, green, and healthy housing as a
specific strategic goal. Just as HUD adopted the energy star building standard as its quality
measure for the HOME program in 2006, it could adopt new policy to expand tracking toward its
priority goal to include additional building standards.

To get a more complete picture of the energy efficiency building standards States have
implemented, we suggest you refer to

         A U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Web
          site, which provides the status of State energy code adoption
          (https://www.energycodes.gov/adoption/states) and
         The International Code Council Web site, which provides State and jurisdiction adoption
          of a variety of international construction codes (http://www.iccsafe.org/about-

cc:       Mike Freedberg, Office of Economic Resilience, Senior Advisor for High Performance
          Crystal Bergemann, Office of Economic Resilience, Senior Energy Analyst
          Adrian Macias, Office of Economic Development, HUD-Stat meetings
          Lisa Abell, OIG Audit Liaison Officer for CPD
          Randy McGinnis, AIGA


                     Qualified Allocation Plans Comparison
         State           Plan     Energy standards and green programs

        Alabama           2015                   2009 or 2012 IRC
                                                   Energy Star**
         Alaska           2013                  2009 and 2012 IECC
                                                   Energy Star**
         Arizona          2014                         IECC
                                                   Energy Star**
        Arkansas          2013                 None included in QAP
        California        2015                         LEED
                                                 Green Communities
                                                    Green Point
                                         2008 Energy Efficiency Standards
                                                   Energy Star**
        Colorado          2014          2011 Enterprise Green Communities
                                                   LEED Energy
                                                  Energy Outreach
       Connecticut        2013                 None included in QAP
        Delaware          2014                     Energy Star**
                                                    2009 IECC
         Florida          2014                 None included in QAP
         Georgia          2014                     Energy Star**
                                                     Earth Craft
         Hawaii           2013-           State Energy Conservation Code
                          2014                         LEED
                                                    Energy Star
             Idaho        2014                         IECC
                                                    Energy Star
                                     ICC 700 National Green Building Standards
         Illinois         2014                     Energy Star**

   Indiana       2014-                    Energy Star**
                 2015                          IRC
     Iowa        2014                      2012 IECC
                                           Energy Star
   Kansas        2015                      2006 IECC
                                           Energy Star
                                        Kansas Energy Star
  Kentucky       2014                 None included in QAP
  Louisiana      2013                      Energy Star
                                            2009 IECC
                                      Louisiana Energy Code
    Maine        2014         Maine Uniform Building and Energy Code
                                            2009 IECC
                                          Energy Star**
 Maryland        2014                 None Included in QAP
Massachusetts    2014                     Energy Star**

  Michigan       2013-                    Energy Star**
                 2014                         LEED
  Minnesota      2014-                 None included in QAP
  Mississippi    2015                      Energy Star**
   Missouri      2014                        2012 IRC
  Montana        2014                       2009 IECC
                                            Energy Star
  Nebraska       2014                 None included in QAP
   Nevada        2014                       Energy Star
                                     Division Energy Standards
New Hampshire    2014                 None Included in QAP
  New Jersey     2013     New Jersey Energy Star Equivalency Requirements
                                            Energy Star
 New Mexico      2013                          LEED
  New York       2013                      Energy Star**
                          New York State Energy Research and Development
                         Authority Multifamily Building Performance Program
North Carolina   2014                        Energy Star

         North Dakota           2014                              LEED
              Ohio              2014                            2011 EGC
          Oklahoma              2013                          Energy Star**
           Oregon               2014                      None included in QAP
         Pennsylvania           2014                            Energy Star
                                                                2009 IECC
         Rhode Island           2014                            Energy Star
        South Carolina          2013                            Energy Star
                                                                2006 IECC
         South Dakota           2013                            Energy Star
          Tennessee             2015                             2009 IRC
                                                              Energy Star**
             Texas             2014                       None included in QAP
             Utah              2014;                            Energy Star
                               2015                               LEED
           Vermont              2015                              LEED
                                                                Energy Star
            Virginia            2014                          Energy Star**
                                                                Earth Craft
         Washington             2012                      None included in QAP
        Washington DC           2012                            2012 IECC
                                                                Energy Star
                                                  International Green Construction Code
         West Virginia         2013-                            Energy Star
                               2014                                IECC
           Wisconsin           2013-                      None included in QAP
           Wyoming             2014                          Energy Star
                                                        IECC Model Energy Code

** Only required to comply with certain aspects of the Energy Star program
EGC—Enterprise Green Communities
LEED—Leadership in Energy and Environmental Design
NGBS—National Green Building Standards IECC—
International Energy Conservation Code IRC—
International Residential Code
BEES—Building and Energy Efficiency Standards