Explore This Section

Cascade: No. 73, Winter 2010

Energy Renovations Help Preserve Rental Housing

Stable rental housing will become ever more important as the current home foreclosure crisis unfolds. Rental housing is a critical part of any community’s healthy housing mix because it ensures diversity, opportunity, and a labor force for essential community services.

Unfortunately, many affordable apartments are at risk of being lost from the affordable housing stock. Many older properties are in need of repair; however, owners do not have the operating revenue to make much-needed improvements. This cash flow crunch is exacerbated by rising energy costs. Many older properties, which were built before current energy standards for new construction were adopted, are energy inefficient. Increasing operating expenses combined with limited revenues make it very difficult for owners to maintain their rental properties.

Efforts to Make Older Rental Housing More Energy Efficient

The National Housing Trust (NHT) strives to safeguard affordable apartments through policy advocacy, financing, and real estate development. NHT was formed in 1986 in response to the potential loss of thousands of affordable apartments due to expiring federal subsidies or physical deterioration. The work is guided by a 16-member board of directors that consists of representatives of all major interests in affordable housing preservation.1

NHT has a long history of working with federal and state policymakers to create resources and capacities to preserve subsidized and privately owned affordable rental housing. NHT currently works closely with federal and state policymakers to ensure that federal Weatherization Assistance Program (WAP) funds are available for subsidized multifamily housing.

The American Recovery and Reinvestment Act (ARRA) included a dramatic increase in WAP funding for energy efficiency improvements in housing occupied by low-income households.2 Traditionally, WAP funding has been mostly targeted to residents of single-family housing. The dramatic increase in funding presents a unique opportunity to support state efforts to increase energy efficiency and conservation in existing multifamily housing.

An NHT affiliate, the National Housing Trust/Enterprise Preservation Corporation (NHT/Enterprise), is a nonprofit housing developer that collaborates with local partners and investors to raise capital to buy and renovate affordable apartments that are at risk of being converted to market rate or that are deteriorating. NHT/Enterprise has preserved and improved nearly 5,000 affordable apartments, including 188 apartments in Pennsylvania.

Meanwhile, the National Housing Trust Community Development Fund (NHTCDF), a community development financial institution (CDFI) operating since 1997, provides predevelopment and interim development loans of $50,000 to $500,000 for 24 to 36 months at below-market interest rates. NHTCDF also offers a “green” loan product to help developers incorporate practical, environmentally friendly design elements when rehabilitating affordable housing.

NHTCDF has made 55 loans totaling more than $10 million in 14 states and the District of Columbia, helping preserve more than 5,500 affordable apartments and leverage more than $460 million in private investment. Two of the loans total nearly $900,000 and will be used to preserve affordable housing in Elizabeth, NJ, and Wilmington, DE.

NHTCDF has never suffered a loan loss. Among other investors in NHTCDF are the Bank of America in Charlotte, NC, and SunTrust Bank in Atlanta, GA.

The Skyview Park Apartments in Scranton, PA, have been renovated with capital improvements that reduced energy use and conserved water.The Skyview Park Apartments in Scranton, PA, have been renovated with capital improvements that reduced energy use and conserved water.

Case Study: Skyview Park Apartments

NHT/Enterprise, in partnership with Evergreen Partners, a for-profit real estate development company based in Portland, ME, acquired Skyview Park Apartments in Scranton, PA, and completed more than $8 million in renovations.

Built in the early 1970s, the facility was constructed with financing from two federal housing programs — Section 236 and project-based Section 8 programs. By 2006, Skyview Park’s affordability restrictions were set to expire. Although almost fully occupied, the apartments were in dire need of rehabilitation.

In July 2009, NHT/Enterprise reopened the property, which is home to 188 low- and moderate-income families and senior citizens. Before and since the renovations, residents have not had to pay more than 30 percent of their income toward rent under the Section 8 program.

Skyview Park’s renovation project sought to reduce energy use and conserve water by installing Energy Star-approved appliances and heating and air conditioning systems, energy-efficient lighting, low-flow toilets and faucets, and programmable thermostats. These improvements have already resulted in cost savings for tenants and more stable rental housing through lower operating expenses. A comparison of utility costs during comparable six-month periods before and after the renovation shows a 24 percent reduction in expenses.

The support of many partners made the preservation of Skyview Park Apartments possible. The U.S. Department of Housing and Urban Development (HUD) approved a 20-year Section 8 contract. The Pennsylvania Housing Finance Agency provided acquisition and rehabilitation financing through an allocation of scarce low-income housing tax credits and a soft loan through its PennHOMES Program. Critical gap capital was also provided by the City of Scranton, Lackawanna County, and the Pennsylvania Housing and Redevelopment Assistance Program. In addition, the Harry and Jeanette Weinberg Foundation helped construct a community center.


Skyview Park demonstrates that affordable multifamily housing can be preserved and made more energy efficient, sustainable, and sanitary for low-income families while reducing energy expenses. NHT looks forward to future opportunities to preserve and improve affordable rental housing in Pennsylvania, New Jersey, and Delaware.

For information, contact Michael Bodaken at 202-333-8931, ext. 111, or mbodaken@nhtinc.org E-Mail or Todd Nedwick at 202-333-8931, ext. 128, or
tnedwick@ nhtinc.org; E-Mail www.nhtinc.org. External Link

  • 1The board includes Brian A. Hudson Sr., executive director of the Pennsylvania Housing Finance Agency.
  • 2Funding for the WAP increased from approximately $250 million annually to nearly $5 billion to be spent over three years.

E-Mail Notification

Find out when information for community development publications and events is released.

Contact Us

Federal Reserve Bank of Philadelphia
Community Development Studies & Education Department
Ten Independence Mall
Philadelphia, PA 19106-1574

(215) 574-6037 – phone
(215) 574-2512 – fax

View All Contacts