Green Homes Partnership:

Energy-Efficient & Affordable Residential Development

NCSHA 2015 Annual ConferenceDavid Clifton, Assistant Director

Multifamily Housing & Community Facilities

An Unexpected Development:Single-Family Construction

Financing• Partnership with a private developer has opened a new

frontier for us in Washington State

• Outgrowth of Sustainable Energy Program, rather than single-family mortgage program

Goal: To increase awareness and value of energy-efficiency in residential construction

Origin• 2009 –state legislature empowered Commission to

finance energy projects

• We were asked to create a program that:

• Finances energy efficiency & renewable energy• Does not use state funds or credit

• Created Sustainable Energy Trust (SET)

• “Green bank”• Invested $6 million PIF Funds so far

Why Energy?• Heating, cooling, lighting, cooking & washing can

add 100s of dollars to housing costs

• Owners of energy-efficient homes are 33% less likely to default on their mortgages*

• Lenders don’t consider energy/utility costs when approving potential buyers

• Energy-efficient homes are considered luxury products—but greatly benefit those with lower incomes

*According to study conducted by University of North Carolina at Chapel hill

Enter: Green Canopy Homes• Seattle-based, for-profit developer dedicated to “inspiring

resource efficiency in residential markets”

• Sustainable Energy Trust a good match: lower-cost homes could pencil out

• Started with buy-fix-resell model—GCH could rehab homes to use 30-50% less energy

• Partnership now focused on new construction

• Four successful projects – 16 homes (8 more in works)

• 3 originally dilapidated homes in West Seattle

• Green Canopy Homes borrowed $720,000 from SET at 2% interest (repaid when homes sold)

• GCH bought and transformed all 3 w/$720K loan from SET

The Triplets

• Added 50% more living space

• Used 25-50% less energy

• 3-bedroom, 2 bath homes

Earth 6• Most recent project—on market

in June 2015

• Brand-new construction in existing neighborhood

• 6 townhome-style homes

• 3 stories, 3 bedrooms & 3 baths

• Typical Seattle house uses 28,000 kilowatt hours of power each year

• Each of these uses just 12,000

Next Steps:Evolution of the Partnership

• Using our success as a catalyst to bring in other investors

• Expanding outside Seattle to other parts of state

• Bringing in Community Land Trusts and other nonprofits

• Awareness: Bring in contractors on similar projects

• Educating homebuyers & real estate agents on the value of energy-efficient homes

The Birch Fund• Investor fund established by Green Canopy Homes• Goal: Inspire developers to do energy-efficient construction

at a lower cost to benefit those with lower incomes• Loans directly to developers

(function similar to Sustainable Energy Trust)• Hope to grow fund to $20M from present $7M• Commission’s role:

• Invested $500K• Guarantees losses to reduce risk to investors

Aligning Energy Across WSHFC Divisions

• Started as separate distinct program—now aligning with other work across Commission

• Multifamily—Encouraging green building

• Compliance—Utility allowances, data-sharing partnership with city of Seattle Utility Discount Program

• New program introduced June 2015

• Allows energy-efficient improvements to be financed into the loan at the time of purchase

• OR, can purchase a highly energy-efficient new home

• ¼ interest rate reduction, plus downpayment asssistance

Aligning Energy across WSHFC Divisions:

EnergySpark Home Loan

Contact

David Cliften, Assistant DirectorMultifamily Housing & Community

FacilitiesDavid.Clifton@wshfc.org

206-287-4407