Mr. John Ainslie, Chair

Board of Housing and Community Development

600 East Main Street, Suite 300

Richmond VA, 23219

Dear Chairman Ainslie,

I am writing today on behalf of the Virginia Multifamily Energy Efficiency Coalition (MFEEC) to support the inclusion of certain energy proposals as part of the current draft of the Uniform Statewide Building Code (USBC). The Virginia Multifamily Energy Efficiency Coalition is a cross-sector initiative lead by the Virginia Housing Alliance whose goal is to advance policies and programs that will provide comprehensive energy efficiency services to the state’s multifamily affordable housing stock, recognizing the impact that efficiency has on housing affordability for Virginia’s citizens. While we believe it would ultimately be most beneficial to consumers in Virginia for the Board to adopt the 2015 IECC without amendments as we assert in our comments below, we are also supportive of Virginia adopting any set additional measures contained in the 2015 IECC it deems appropriate into the USBC. Accordingly, based on the recent stakeholder process, we fully support the compromise proposal put forth by the Energy Code Sub-Workgroup that would create an optional compliance pathway for builders to meet the 2018 Energy Rating Index while requiring that all homes are tested to assure duct system leakage of 4% or less for systems outside of conditioned space. Additionally, we support the proposed amendments that would require 75% high-efficiency lighting and R-3 insulation on hot water pipes.

Virginia has a great opportunity for leadership in energy efficiency, and the Commonwealth should commit to strategies that will enable the goal of achieving cost-effective energy efficiency in our housing stock. Energy efficiency is the simplest and most cost-effective way to reduce energy consumption, and we encourage the Board to assess the long-term costs and benefits of energy efficiency when evaluating code proposals. Increased Energy Efficiency standards in the Virginia building code will benefit home buyers, builders, investors, renters, the grid, and the environment.

Many of the latest advances in residential energy efficiency have been in response to consumer demand. For low-income and very low-income Virginians, monthly utility costs are a major determinant of housing affordability. Prospective tenants and homebuyers are seeking affordable housing with low and stable monthly expenses on energy bills. Modern consumers are attracted to efficient homes, therefore home builders who build the most efficient homes will be offering a more attractive product in the housing market; the property values will be higher, and there will be greater demand for their construction. While there is not yet a standardized way to market the efficient features and performance of a home, the industry is actively moving towards recognizing efficiency as a marketing tool and it is not unreasonable to expect that a home’s efficiency rating to find its way into the MLS (multiple listing service) within the next several years. In addition, homeowners with efficient homes are less likely to lose their homes to foreclosure. A 2013 study from the University of North Carolina’s Center for Community Capital compared mortgage default rates in a sample of 71,000 Energy Star and Non-Energy Star homes including many in Virginia. The study found that default risks are on average 32% lower in the energy-efficient homes while accounting for loan, household and neighborhood characteristics.

Recent studies have confirmed that many non-energy benefits are derived from efficiency upgrades. Housing-related health and safety risks are a serious problem for low-income Virginians and especially for those living in multifamily housing and for households of color.  The “co-benefits” of energy upgrades include improved indoor air quality and the overall health and safety of the residents, as well as reduced hospital visits. Better indoor air quality is a particularly important health benefit in Virginia where the city of Richmond ranked as the second asthma capital of the country in 2015 after ranking first in 2014 according to the Asthma and Allergy Foundation of America (AAFA). Savings from Energy Efficiency measures enable homeowners and tenants to redirect spending to non-energy needs such as education and health care. To make this point further, a 2016 study from the American Council for an Energy-Efficient Economy found that on average in 48 American cities, low-income households pay 7.2 percent of household income on utilities on average – more than three times the amount that higher-income households pay (2.3 percent). In Richmond, these numbers are 6.5 percent and 3.1 percent respectively. In Virginia Beach, these numbers are 7.5 percent and 3.9 percent. This study suggests that building homes and apartments that will cost less to heat and cool will have a particularly greater positive impact on low-income Virginians.

Housing Virginia and the Center for Housing Research at Virginia Tech released a study in 2015 that analyzed actual utility usage data in 15 Low-Income Housing Tax Credit projects across the state that were built or renovated to EarthCraft standards. Building to the Earthcraft program standards includes blower door tests, duct leakage tests, higher R-Values in wall assemblies and many other building techniques that are included in the 2015 International and Energy Conservation Code but not in the current draft 2015 USBC. This study was the first of its kind in Virginia and found that on average by building to the EarthCraft standard, these apartments consumed 40% less energy than standard new construction (against 2009 IECC), and outperformed the program’s projected energy models by 17% on average. Translated to 2014 energy costs, these apartments were saving the average resident $54 a month or $648 annually. The impact of this reduction in energy costs for low-income tenants is substantial; $54 a month may not sound like a significant amount, but for extremely low-income Virginians, that reduction can represent almost 10% of total housing costs. The results of this study suggest that we can rely on this energy modeling to deliver on the savings it projects and that reasonable efficiency measures such as those prescribed by the 2015 IECC will provide Virginians with homes that are more affordable – and, incidentally, more comfortable and healthy.  

The Energy Information Administration estimates that buildings consume approximately 40% of United States domestic energy supply, 70% of the electricity, and produce 35% of the United States carbon dioxide (CO2) emissions. Meeting energy needs through efficiency saves ratepayers from considerable unnecessary investment in utility infrastructure, thereby keeping rates lower than would be the case in the absence of energy efficiency implementation. Reduction in usage reduces peak load on the grid and helps to alleviate the need for additional generating capacity, which is an increasing concern of utilities. The energy savings potential can make a big difference in enabling Virginia utilities to achieve statewide energy savings goals, such as the voluntary goal to reduce retail electricity consumption for commercial and residential buildings by an amount equal to 10% of 2006 consumption by 2020. The Governor’s Executive Committee on Energy Efficiency was presented data from the State Energy Office showing that full adoption of the 2015 IECC model code will be essential in order for the Commonwealth to meet the 10% electricity savings goal. The reduction in needed peak generating capacity that would result from adopting the 2015 IECC would also put utilities in a better position to meet whatever level of carbon emission limits may be set for electric power plants in the future as a result of Governor McAuliffe’s Executive Directive 11 made on May 16th.

In 2012, the IECC model code included significant, worthwhile efficiency measures that were not included in the 2014 Virginia USBC update, such as an increase for wall and attic insulation, more efficient window and lighting requirements, hot water pipe insulation, and required mechanical testing for whole home air-tightness and ductwork. Based on calculations by the Department of Energy, this was a missed opportunity for Virginia’s consumers. Energy modeling by the US Dept. of Energy estimates that had Virginia adopted the 2012 IECC without amendments in its last code cycle, occupants of average new homes in Virginia, would have enjoyed a net annual cash flow savings of $272 starting from year 1 and a life-cycle cost savings of $5,836 over the course of a 30-year mortgage.

In making its decision, we are hopeful that the Board will consider the long-term benefits stronger efficiency standards in the USBC would deliver to owners and renters living in newly built houses and apartments in Virginia. It is our hope that if the Board approves the proposal set forth by the Energy Code Sub-Workgroup supported by the MFEEC this building code cycle can serve as an important step towards fully adopting the current IECC in the future. Building to the model energy code will deliver demonstrable results that will make a real difference to consumers through the entire lifecycle of these buildings and we believe that instituting mandatory duct testing and creating an Energy Rating Index compliance pathway per the sub-workgroup proposal is an important intermediary step Virginia can take towards this goal.  

Sincerely,

Zack Miller

Director of Policy

Virginia Housing Alliance

Multifamily Energy Efficiency Coalition