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Energy Poverty: Effects on Housing and Household Wellbeing
NLIEC 2005June 15, 2005
Donnell ButlerDavid Carroll
Carrie-Ann Ferraro
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Organization of Presentation
• Introduction – 10 minutes
• Arizona Analysis – 20 minutes
• Phoenix Area Analysis – 10 minutes
• Local Area Analysis – 5 minutes
• Indicators of Wellbeing – 10 minutes
• Conclusion – 5 minutes
• Questions / Feedback – 15 minutes
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Purpose of the Project
• Furnish information about the energy needs of low-income households in Arizona to policymakers and program managers
• Explore the linkages among energy poverty, housing affordability, and household well being
• Demonstrate how existing data sources can be used to obtain useful information for policy formulation and program design
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Status of the Project
• Preliminary Report – Presented NLIEC Board with an overview of available information
• NLIEC Conference – Press conference and presentation
• Final Report – Additional details that are responsive to suggestions from NLIEC Board and conference attendees
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State Level Analysis
Methodology
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Data Sources for Arizona • 2000 Census Public-Use Microdata (PUMS)
– 5 Percent Sample has about 19,000 LIHEAP eligible records
– Data available includes:• Household Demographics: income and poverty level,
presence of vulnerable members, race and ethnicity, languages spoken, household composition, employment, income program participation
• Housing Unit Characteristics: age of unit, unit type, home ownership
• Energy Data: Main heating fuel, energy expenditures
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Data Sources for Arizona • 2002-2004 Current Population Survey, Annual Social
and Economic Supplement (ASEC)– Statistical variances are too large for a single ASEC
annual file to allow for a useful analysis for Arizona– Three-year average of 2002, 2003, and 2004 data used
to estimate the FY 2003 LIHEAP eligible population– Data available includes:
• Household Demographics: income and poverty level, presence of vulnerable members, race and ethnicity, household composition, employment, income program participation
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Definitions
• LIHEAP Eligible/Low Income - 150% of HHS Poverty Guidelines (Arizona Standard)
• Energy Burden – Direct energy expenditures as a share of gross money income
• Energy Gap – Difference between client energy burden and any target burden
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Limitations
• Maximum Income Standard – Federal maximum income standard covers at least 50% more households
• Renters – About 15% of households pay for part or all of their energy through their rental payments
• Update – Information not yet updated for recent increases in energy prices and poverty
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State Level Analysis
Findings
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Arizona Information Needs
• Policymakers and program managers need:– State-level cross-sectional data to understand
current status for Arizona– State-level longitudinal data to understand trends
for Arizona– National-level data to understand how those
energy needs compare to households nationwide
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Number of Households
Percent of All Arizona Households
LIHEAP Eligible Households, 2000 362,8001 19.1%
LIHEAP Eligible Households, 2003 436,0002 21.4%
Arizona LIHEAP Eligible Households (2000 and 2003)
1 Source: 2000 Decennial Census PUMS 5 Percent Sample. 2 Source: Three-year Average of the CPS ASEC 2002-2004.
Arizona LIHEAP Eligible Population
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Number of Households
LIHEAP Eligible Households, 2003 436,0001
LIHEAP Recipient Households, 2003 18,6002
Arizona LIHEAP Eligible and Recipient Households (2003)
1 Source: Three-year Average of the CPS ASEC 2002-2004. 2 Source: LIHEAP Household Reports FY 2004.
Arizona LIHEAP Recipient Population
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Arizona LIHEAP EligibleEnergy Expenditures
10%
12%
27%
25%
13%
13%
0% 5% 10% 15% 20% 25% 30%
No Separate Energy Bill
Less than $500
$500 - $999
$1,000 - $1,499
$1,500 - $1,999
Over $2,000
Energy Expenditures for Arizona LIHEAP Eligible Households (1999)
Source: 2000 Decennial Census PUMS 5 Percent Sample.
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Energy Burden
• Percent of total household income spent on total residential energy.
• At the national level, the median residential energy burden was 3 percent for all households and 10 percent for all low-income households in 2003.
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Arizona LIHEAP Eligible Energy Burden
10%
17%
28%
16%
7%
4%
17%
0% 5% 10% 15% 20% 25% 30%
No Separate Energy Bill
Less than 5%
5 - <10%
10 - <15%
15 - <20%
20 - <25%
25% or greater
Energy Burden for Arizona LIHEAP Eligible Households (1999)
Source: 2000 Decennial Census PUMS 5 Percent Sample.
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Energy Gap
• The dollar amount needed to reduce a customer’s energy burden to an amount equal to a specified energy burden percentage.
• At the national level, about $4.9 billion dollars in energy assistance would have been needed to ensure that no low-income household spent more than 15% of income on residential energy in 2003. The amount required to reduce residential energy bills to 25% of income was $2.7 billion.
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Arizona LIHEAP Eligible Energy GapEnergy Gap for Arizona LIHEAP Eligible Households (1999)
Number of Households
Energy Gap(in Millions)
Households with Energy Burdens Greater than 5%
266,700 $222.1 M
Households with Energy Burdens Greater than 10%
166,000 $128.4 M
Households with Energy Burdens Greater than 25%
68,500 $57.0 M
2000 Source: 2000 Decennial Census PUMS 5 Percent Sample.
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ArizonaEnergy Assistance
Energy Gap(in Millions) 1
FY ’04LIHEAPBenefits 2
FY ’04SupplementResources 3
Shortfall
Households with Energy Burdens Greater than 5%
$222.1 M $ 5.7 M $16.4 M $200 M
Households with Energy Burdens Greater than 10%
$128.4 M $ 5.7 M $16.4 M $106 M
Households with Energy Burdens Greater than 25%
$57.0 M $ 5.7 M $16.4 M $ 35 M
1 2000 Decennial Census PUMS 5 Percent Sample.2 FY 2004 LIHEAP Grantee Survey for FY 2004. 3 LIHEAP Clearinghouse: http://www.liheap.ncat.org/Supplements/2004/supplement04.htm
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Arizona LIHEAP EligibleVulnerable Group Members
Number of Households
Percent of Households
Households with Vulnerable Group Members
Household with Elderly (Age 60 or older) 154,100 35%
Household with Nonelderly Disabled 64,375 15%
Household with Young Child 117,200 27%
Households with No Vulnerable Group Members
Households with No Vulnerable Groups 119,500 27%
Arizona LIHEAP Eligible Households with Any Vulnerable Group Members (2003)
Source: Three-year Average of the CPS ASEC 2002-2004.
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Arizona LIHEAP EligibleLinguistic Isolation
Linguistically Isolated Arizona LIHEAP Eligible Households (2000)
Source: 2000 Decennial Census PUMS 5 Percent Sample.
Not Isolated
85%
Spanish Isolation
15%
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• LIHEAP Eligible – 363,000 in 2000 to 436,000 in 2003• Energy Burden – Average almost 10% of income• 1999 Energy Gap – $222 million for 5% burden target• 2003 Energy Assistance – $22 million from all sources• Vulnerable households - 73% of LIHEAP eligible
households have a vulnerable household member• Spanish language isolation – 15% of LIHEAP eligible
households do not have a household member who speaks English “very well”.
Arizona LIHEAP EligibleSummary of Findings
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Metropolitan Area Analysis
Methodology
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Data Sources for Phoenix • 2002 American Housing Survey (AHS) Phoenix
Metropolitan Area Sample– Metropolitan Area Sample has about 650 LIHEAP
eligible records – Estimates are not available at the state level from the
national AHS sample– Several Metropolitan Areas are surveyed each year– Phoenix was most recently surveyed in 2002 & 1994
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Data Sources for Phoenix • 2002 American Housing Survey (AHS),
Phoenix Metropolitan Area Sample (continued)
– Data available includes:• Household Demographics: income and poverty level,
presence of vulnerable members, race and ethnicity, household composition,
• Housing Unit Characteristics: unit type, home ownership, housing adequacy, housing costs
• Energy Data: Main heating fuel, energy expenditures, heating and cooling equipment
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Definitions and Limitations
• Shelter Burden – Direct housing expenditures as a share of gross money income
• Phoenix-Mesa Metropolitan Area– Maricopa and Pinal Counties
• Limitations similar to state level data
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Metropolitan Area Analysis
Findings
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Phoenix Information Needs
• Phoenix policymakers & program managers need:
– Information related to demographic characteristics and energy needs of low-income households
– Information on the relationship between energy needs and other low-income needs, including housing, to promote the integration of programs aimed at assisting low-income households
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Number of Households
Percent of All Phoenix Households
LIHEAP Eligible Households, 2002 203,800 17.5%
Phoenix LIHEAP Eligible Households (2002)
Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample.
Phoenix LIHEAP EligiblePopulation
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Phoenix LIHEAP Eligible Energy Burden
11%
25%
27%
9%
6%
4%
18%
0% 5% 10% 15% 20% 25% 30%
No Separate Energy Bill
Less than 5%
5 - <10%
10 - <15%
15 - <20%
20 - <25%
25% or greater
Energy Burden for Phoenix LIHEAP Eligible Households (2002)
Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample.
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Shelter Burden
• Percent of total household income spent on total housing costs (including residential energy costs) .
• Affordable housing (HUD definition): “housing for which the occupant is paying no more than 30 percent of his or her income for gross housing costs, including utilities”.
• Some researchers have defined severe shelter burden more conservatively as a household that spends 50 percent or more of their income on shelter costs.
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Shelter Burden for Phoenix LIHEAP Eligible Households (2002)
Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample.
Phoenix LIHEAP Eligible Shelter Burden
Number of Households
Percent of All Phoenix Households
Shelter Burden Less than 50% 98,500 48.3%
Shelter Burden 50% or Greater 105,400 51.7%
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Energy Burden when Shelter Burden is 50% or Greater for Phoenix LIHEAP Eligible Households (2002)
Source: 2002 American Housing Survey, Phoenix Metropolitan Area Sample.
Phoenix LIHEAP Eligible Shelter Burden of 50% or Greater
33%
67%
99%
0% 20% 40% 60% 80% 100%
Less Than10%
10% - <25%
25% orGreater
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• Energy burden distribution is similar to Arizona.
• 52% of Arizona LIHEAP eligible households experience severe shelter burden.
• Energy burden has a substantial impact on housing affordability.
Phoenix LIHEAP EligibleSummary of Findings
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Neighborhood Level Analysis
Methodology
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Neighborhood Data Sources
• 2000 Census Summary File 3 (SF3)– Data is limited to entire population; does not offer
estimates of LIHEAP eligible population – Data available includes:
• Household Demographics: income level, age of householder, race and ethnicity, languages spoken, household composition, income program participation
• Housing Unit Characteristics: age of unit, unit type, home ownership
• Energy Data: Main heating fuel
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Neighborhood Data Sources• 2000 Census Special Tabulations
– Estimates of the LIHEAP eligible population can be obtained from the Census Bureau for small areas, including Census Blocks, Block Groups, and Tracts
– Data available includes:• Household Demographics: income and poverty level, presence of
vulnerable members, race and ethnicity, languages spoken, household composition, employment, income program participation
• Housing Unit Characteristics: age of unit, unit type, home ownership
• Energy Data: Main heating fuel, energy expenditures
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Neighborhood Data Needs
• Local program managers need local-level information about the population in their communities in order to:– Effectively implement programs
– Target outreach initiatives
– Improve integration of energy assistance programs with other programs designed to assist low-income households
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Indicators of Wellbeing Analysis
Methodology
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Indicators of Wellbeing Data Sources• Effects of Energy Poverty on Housing and Household
Wellbeing
• 2003 National Energy Assistance Survey of LIHEAP Recipients:– Sponsored by NEADA
– Survey instrument is publicly available
– Interviewed a nationally representative sample of over 2,000 LIHEAP-recipient households from 20 states
– Documented the choices that LIHEAP-recipient households make when faced with unaffordable home energy bills
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Limitations
• Survey Response Challenges:– Relying on Respondent Memory– Response bias (e.g., prideful responses) – Inability to control response situation
• Population– Having received benefits, LIHEAP recipients
might be better off than LIHEAP eligible
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Indicators of Wellbeing Analysis
Findings
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Indicators of Wellbeing Housing Problems
4%
9%
4%
28%
0%
5%
10%
15%
20%
25%
30%
Didn't make full rentor mortgage
payment
Evicted from home orapartment
Moved in with friendsor family
Moved into shelter orbeen homeless
Housing Problems
Pe
rce
nt
of
Ho
us
eh
old
s
Source: 2003 National Energy Assistance Survey.
Housing Problems Experienced by LIHEAP Recipient Households (2003)
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Indicators of Wellbeing Household Wellbeing
22%20%
30%
38%
0%
10%
20%
30%
40%
Went without food forat least one day
Went withoutmedical or dental
care
Didn't fill prescriptionor took less than the
full dose
Unable to pay energybill due to medical
expenses
Other Expenses
Pe
rce
nt
of
Ho
us
eh
old
s
Sacrifices to Wellbeing by LIHEAP Recipient Households (2003)
Source: 2003 National Energy Assistance Survey.
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Indicators of Wellbeing Effects on Health
21%
14%
7%5%
0%
5%
10%
15%
20%
25%
Became sickbecause home was
too cold
Needed to go to adoctor or hospital
because home wastoo cold
Became sickbecause home was
too hot
Needed to go to adoctor or hospital
because home wastoo hot
Health Problem
Pe
rce
nt
of
Ho
us
eh
old
s
Source: 2003 National Energy Assistance Survey.
Health Problems Experienced by LIHEAP Recipient Households (2003)
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Indicators of Wellbeing Summary of Findings• In the last five years, due to their energy bills:
– 28% of respondents reported that they missed a rent or mortgage payment.
– 22% of respondents reported that they went without food for at least one day.
– 38% of respondents reported that they went without medical or dental care.
– 21% of respondents reported that they became sick because their home was too cold
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• Using existing data sources, one can develop a broad array of information about the energy needs of low-income households.– All data used for this presentation are publicly available.
• Data is available to explore linkages among energy poverty, housing affordability, and household wellbeing.
• Information can be used by policymakers and program managers to make effective decisions related to program design, operations and evaluation.
Conclusion
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Energy Poverty: Effects on Housing and Household Wellbeing
NLIEC 2005: June 15, 2005
Donnell Butler ([email protected])David Carroll ([email protected])
Carrie-Ann Ferraro ([email protected])
http://www.appriseinc.org/Phone: 609-252-8008