This article was originally published in the March/April 1993 issue of Home Energy Magazine. Some formatting inconsistencies may be evident in older archive content.



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Home Energy Magazine Online March/April 1993




Making Low Income Housing Affordable: The Northgate Retrofits


by Chip Patullo

Vermont-based energy consultant Chip Patullo was the energy spacialist for the rehabilitation project at Notrhgate Housing Inc. in Burlington, Vt.

The first non-profit buyout and rehabilitation of a HUD housing complex demonstrates that energy efficiency can keep housing costs affordable, and that fuel switching can be an effective demand-side management strategy.

The 1,400 residents at Burlington, Vermont's Northgate Apartments faced an uncertain future in 1988. The owners of Northgate announced that they intended to pre-pay their U.S. Housing and Urban Development (HUD) loan ahead of schedule and convert the 336-unit complex to market level rents. What followed was a grass-roots effort to save the apartments for low-income families and the first tenant non-profit buyout of a HUD subsidized project.

There are really two stories here: There's the story of how low-income tenants took control of their housing (see box, The `Other Story,' The Buyout of Northgate,). Second, the most powerful tool in reducing housing costs was energy efficiency. Before the Northgate rehabilitation project, some residents had to make a choice between paying the rent or paying for the heat.

Located on the shores of Lake Champlain, Northgate consists of 54 wood-framed, two-story buildings. Nearly half of the residents receive housing subsidies from HUD, but 84% of households have at least one person employed and 33% have two wage earners. More than 500 children live at Northgate.

Making Northgate More Energy-Efficient

The primary goal of the rehabilitation was to catch up on the deferred maintenance and basic functioning of the site, while upgrading energy efficiency. Northgate had been neglected for years. The first phase of the project involved installation of new exterior doors, new windows, exterior siding with infiltration barriers, foundation insulation, wall and attic insulation, and the replacement of roofing and sheathing. Overdue general maintenance measures brought the added benefit of increased energy efficiency. For instance, few doors and windows opened and closed properly. Replacing them reduced air infiltration and increased thermal performance. Similarly, site grading was improved to keep water out of the cellars because excess moisture had created a considerable amount of rot. During the grading, cellar walls were insulated to 2 ft below sill height with 2 in. rigid foam insulation.

Blown-in cellulose insulation (R-30), already installed in attics before the rehabilitation, was checked for depth consistency, and reapplied where necessary. Because the attics were not originally designed to contain so much insulation, and due to code requirements, roofs were ventilated with ridge and soffitt vents to allow moisture to escape. Exterior wood siding (which in some cases had already come off) was removed because of past moisture problems. Wood siding was replaced with a heavy grade (42 mil) insulated vinyl siding. Interior walls were also insulated as needed.

Not all energy measures were possible, so deciding what to replace and improve was no small task. For instance, while poorly functioning windows had to be replaced, a low-emissivity (low-E) window upgrade was rejected so that additional funds could go toward extensive sill repair. (If this retrofit were done in 1993, the low-E cost increment would have been almost zero.) Rotted sheathing on one third of the roofs also had to be fixed. Occasionally crews discovered whole walls were not insulated. Energy-efficient refrigerators and new stoves were also installed in each unit. Simple payback and cost effectiveness were the overriding concerns as decisions were made regarding energy efficiency. Our goal was to get the most bang for the buck, remembers Amy Johnston, the rehabilitation project manager for Northgate Housing Inc. We just weighed the paybacks and went with items which had a payback we could live with. Many energy-related measures offered a 2-5 year payback.

Burlington Electric played a key role in the project. The utility contributed $267,000 toward a fuel switch from electricity to natural gas. Burlington Electric also helped Northgate obtain a $54,800 grant from the U.S. Department of Energy to provide on-site energy education, to document energy-efficiency retrofits, and to measure their effects. Northgate hired an energy specialist--the author--to help residents understand their newly converted heating systems, thermostats, and performance of their newly rehabilitated and more energy-efficient apartments. With technical assistance from a Lawrence Berkeley Laboratory (LBL) research team, the specialist also documented the retrofits, collected utility billing data, and calculated the performance of the energy efficiency measures.

Fuel Switching

The key energy retrofit was the replacement of old electric baseboard heaters and electric water heaters with 336 individual gas-fired boilers to provide both space and water heating. This was completed after the shell retrofits. Hot water is now provided by integral heating boilers, which is more efficient because there is no stored hot water. Instead water is heated when it flows over a heating coil.

One of the biggest challenges was the introduction of digital set-back thermostats. In addition to helping the residents learn the correct use of the thermostats, the energy specialist was able to troubleshoot problems associated with the installation of the new thermostats. Half of them were incorrectly wired and had to be fixed.

The fuel switch was a win-win situation for Northgate and Burlington Electric (see box, Fuel Switching and Source Energy). With a natural gas cost equivalent in Burlington of roughly one quarter the cost of electricity per delivered Btu, the fuel switch resulted in huge savings for the tenants.

The costs of energy measures were difficult to separate from the total costs of the rehabilitation. However, the energy specialist estimated that $2.1 million of the $8 million rehabilitation budget went toward conservation measures--over $6,000 per apartment.

Evaluating the Project

The LBL team used computer simulations of individual apartments to evaluate the individual measures. The team analyzed utility bills, pre- and post-retrofit, to determine aggregate, weather normalized energy savings, and also used surveys of the residents' satisfaction to evaluate the performance of the retrofits.

The team used the DOE-2 computer program to simulate the performance of a four-unit, one-bedroom apartment building, and an eight-unit, two and three bedroom building. The program modeled the hourly energy usage for a year, and determined the value of each renovation measure. The analysis assumed occupants would be working during weekdays for estimates of domestic hot water loads and lighting use. The units were modeled using their design characteristics, which were often much better than their actual state when the retrofits were performed. The computer model predicted that the building improvements would reduce building energy use by 22%.

The actual total energy savings were calculated from utility bills. The quality of the data was high because all meters were read on the same dates. The PRInceton Scorekeeping Method (PRISM) was used to account for variations in weather and to analyze energy consumption changes. Correcting to account for seasonal variation proved important, as the pre-retrofit year was significantly colder, 6,161 heating degree-days compared to 5,384 for the post-retrofit period.

Following the retrofits, the energy specialist interviewed roughly one third of the residents concerning their satisfaction and comfort. Survey questions covered satisfaction with inside temperature, draftiness, humidity, hot water temperature, appliances, thermostats, and energy-related behavioral changes.

Lower Bills, Higher Thermostat Settings

Computer simulations predicted that the retrofit of the exterior walls, which included an air and vapor barrier (house wrap) and new vinyl siding, would reduce infiltration by about 25%, producing an energy savings of 3%. The replacement of single pane windows with double pane glass was estimated to yield about a 19% energy savings based on a reduction of infiltration and heat transfer through the window. According to the simulations, additional ceiling insulation (approximately 1 in.) did not provide significant savings, and higher ventilation rates in the attics actually increased energy losses, causing a slight increase in energy consumption.

Insulating the basement walls (to prevent water pipes from freezing) also had little effect on energy consumption because the basement was treated as an unconditioned space and floors were well insulted. Because of the lower efficiency of the gas boilers and the hot water distribution system compared to the original electric resistance system, the site energy consumption for heat and hot water was estimated to increase by about 20%. Thus, all measures taken together were estimated to really only decrease energy consumption by about 6%.

The `Take Back Effect'

Despite the gains in energy efficiency, actual energy use at the meter increased by 15% after the retrofits which was at least partly explained by the tenant survey. Only a couple of rooms in each apartment were heated prior to renovations. Also, people kept their thermostats substantially lower before the retrofits than the computer simulations assumed. According to the residents, 58-60deg.F was the average pre-retrofit thermostat setting. Many people only heated certain rooms before the retrofits. The new heating systems had only one zone for each floor, making it difficult to isolate rooms. This explains the first variance between the estimated decrease in consumption and the increase in energy use at the meter. Once people could afford to heat their homes, they boosted the thermostats, a phenomenon known as the Take Back Effect. Residents took back the energy savings (and years of misery) at the meter by raising thermostat settings to more comfortable levels (for example, 68-70deg.F).

Watch The Bill, Not The Energy Use!

The key concern for the residents was cost savings--not necessarily energy savings. Residents received what they needed: Utility bills indicated that for the average unit, there was a 47% drop in annual costs from $1,276 to $676. In the tenant survey, 84% of residents indicated that their apartments were too cold before the retrofits, compared to 5% after the retrofits. Ninety-eight percent of residents said their energy bills decreased after the retrofits. The survey showed an overwhelmingly high approval rate with the renovations--97% of those surveyed were satisfied with the results. The high tenant satisfaction is unique, and one of the reasons is that Northgate and the utility worked to make sure things worked after they were installed, says Rick Diamond, leader of the LBL analysis team.

Before the rehabilitation, some rents were set at about half of market rates, but with such high energy costs, some tenants actually paid more than market rates. Once dilapidated tenements were transformed into a pleasant set of energy-efficient homes. Utility bills were ultimately reduced--offsetting a rent increase. Through the buyout and rehabilitation project, Burlington preserved its largest block of public housing and made it more affordable, but the big winners are Northgate's residents. n


1. For a more technical look at the retrofit and rehabilitation see, Affordable Housing Through Energy Efficiency: The Northgate Story, R.C. Diamond, J.A. McAllister, H.E. Feustel, C. Patullo, and T. Buckley: Proceedings of the Thermal Performance of the Exterior Envelopes of Buildings Conference. Clearwater, Fla., December 1992.

2. The full report on which this story is based is The Northgate Miracle: Energy Efficiency and Affordable Housing, Patullo, Chip; Northgate Housing Inc., Burlington, Vt. 1992.


A Major Housing Crisis

A housing crisis looms and threatens the loss of thousands of low-income units across the country as federally subsidized housing will be raised to market rents. This predicament is expected to confront occupants of 360,000 HUD section 221(d)(3) apartments over the next five years. Over the next 10 years, up to 650,000 HUD Section 221(d)(3) and 236 subsidized units may be lost as affordable housing. These units were built in the 1960s and 1970s by private developers under a number of federally guaranteed rent and mortgage subsidy incentive programs that will soon expire. In 1993 alone, the owners of more than 50,000 currently affordable units may prepay their mortgages by which these units were built. After prepayment, the owner has no obligation to continue operating the development as low-income housing. What happened at Northgate can happen elsewhere. Northgate's success should help support the case for similar changes at other apartment complexes and should inspire owners and residents of other multifamily units. The project is a model, showing the linkages between energy efficiency and housing affordability.


Fuel Switching and Source Energy

Most electric utilities don't like to discuss fuel switching, but it is an increasingly popular money and energy saving strategy. The most common measures involve removing the electric space heating and water heating units and replacing them with natural gas-fired furnaces and water heaters. Further savings can be achieved if electric stoves and clothes dryers are replaced. Electricity use for these appliances drops to almost nothing while natural gas use skyrockets. Meanwhile, the utility bill (electricity and gas) plummets. Measurements at the meter and comparisons of energy use will indicate that consumption actually increased. How can this be? The comparison is misleading because electricity is many times more expensive than gas.

Most electricity is generated by burning coal, gas or oil. The generation process results in about two units of energy wasted for every unit of electricity generated. If the energy comparisons included these conversion losses, then gas heating would appear to use less energy than electricity. (This is a source energy comparison; comparing energy use at the meter is a site energy comparison.) Electricity catches up with gas to some extent because most electric appliances are more efficient than their gas counterparts. A typical gas furnace wastes 10-20% of its energy. Nevertheless, gas nearly always wins out. At Northgate, total source energy use dropped by 41% from pre- to post-renovation years, with the peak month use reduced by 52%.

Burlington Electric Dept. is unusual in that it is a winter-peaking utility. It burns oil to provide the electricity which heated Northgate in the past. By switching to natural gas heating, most of those conversion losses are avoided. The utility saves twice because it also doesn't need so much expensive generating capacity.

Burlington Electric is aggressively pursuing fuel switching. Over the planned life of its Heat Exchange program, the utility expects to spend $3 million and projects savings of more than 12 million kWh annually. Switching low-income customers to cheaper fuels has the added benefit of reducing billing arrearages. Before the fuel switch at Northgate, 5.2% of Burlington Electric's residential load was consumed by the complex--representing 2.2% of the utility's customers. Because the utility paid a premium for peak electricity, it was cost-effective to help customers convert to an alternative fuel. Northgate now uses less than 1.6% of Burlington's electric load.

-- Alan Meier


The `Other Story,' The Buyout of Northgate

In 1981, residents formed a tenants organization to work for lower energy costs, better maintenance, and improved management. Among other things, maintenance issues were addressed with the support of the city through inspections and code enforcement. However, in 1986, events at a nearby low-income housing project overshadowed Northgate. Indian Brook Apartments was converted into condominiums. All 50 families living there were displaced by higher income residents.

Indian Brook's closing spurred people to find out what might happen to Northgate, the state's largest low-income residential complex. The developers, who at the time owned about 75% of the state's prepayment-eligible housing, were involved in other ventures and had made known their intention to sell off all of their subsidized housing portfolio. In reaction, Burlington passed an anti-condominium conversion ordinance and created a task force to assess options for saving Northgate.

Over the next two years, many public and private organizations gathered to create the buyout deal. Through perseverance, diplomacy, and creative financing, a non-profit corporation was formed to buy out the developer and rehabilitate the apartments with attention to energy efficiency. Nine major investors eventually came together and put up $21.6 million. The deal closed on December 29,1989. Northgate Non-Profit was created to set the terms for the buyout. Its organizing tenets were: allow no residents to be displaced, maintain the existing income mix, set rents at 30% of income including utility costs, maintain a mix of rentals and limited equity co-ops together, and rehabilitate the complex, assuring its long-term soundness.



Related Articles

The Key to Persistence (Nolden)
'Read Me Your Thermostat': Short-Term Evaluation Tools (Kinney)
Evaluating Low-income Water Heater Fuel Switching (Witte, Wilder, and Kushler)
Air Sealing in Low-Rise Buildings (Hayes)
The Best Boiler and Water Heating Retrofits (Lobenstein and Hewett)
Bright Prospects for Lighting Retrofits (Hasterok)
Controlling Recirculation Loop Heat Losses (Lobenstein)
Downsizing Steam Systems (Gifford)
Energy Education: A Kilowatt Is a Terrible Thing to Waste (Firari)
Energy Savings Rise High in Multifamily Buildings (Diamond)
Evaluating Ventilation in Multifamily Buildings (Hayes and Shapiro-Baruch)
Profiles of Multifamily Weatherization Projects: A Tale of Five Cities (Kinney, Wilson, and MacDonald)
Using Fuel Bills for a Targeted Investment (Padian)

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