The Climate Leadership and Community Protection Act (Climate Act) includes a commitment for environmental justice goals. As part of that effort the Climate Act created the Climate Justice Working Group (CJWG) who has been tasked to help decide what that commitment entails. This article describes one project that I believe will be considered part of the environmental justice financial investements.
The Climate Act establishes a “Net Zero” target (85% reduction and 15% offset of emissions) by 2050. I have written extensively on implementation of the Climate Act. Everyone wants to do right by the environment to the extent that efforts will make a positive impact at an affordable level. Based on my analysis of the Climate Act I don’t think that will be the case. I believe that the ambitions for a zero-emissions economy outstrip available renewable technology such that the transition to an electric system relying on wind and solar will do more harm than good. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
Climate Act Background
The Climate Act is “Working to ensure all New Yorkers are represented in the State’s transition to a cleaner energy future and benefit from investments and opportunities provided by this historic transition”. In other words, they are addressing environmental justice. According to EPA: “Environmental justice is the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.”
One key part of that commitment is investment in disadvantaged communities. According to the Climate Justice Working Group (CJWG) webpage:
The Climate Act requires the state to invest or direct resources in a manner designed to ensure that disadvantaged communities to receive at least 35 percent, with the goal of 40 percent, of overall benefits of spending on: clean energy and energy efficiency programs and projects or investments in the areas of housing, workforce development, pollution reduction, low-income energy assistance, energy, transportation, and economic development
As I noted in a recent post on my CJWG disadvantaged community criteria comments, the distribution of those investments is sure to be contentious. I believe that the State is going to invest money in public housing for low- and middle-income housing as part of those investments. There are two concerns: is this what the CJWG thinks is appropriate and is this a good investment for society as a whole?
Ithaca Public Housing Rehabilitation
In what I believe is a prototype for public housing investments, on August 5, 2022 Governor Kathy Hochul announced a $75 million project to upgrade and preserve two outdated Ithaca Housing Authority properties with a total of 36 apartments and to replace another obsolete Authority property with 82 new affordable apartments. The 118-unit Ithaca Housing Authority Redevelopment is designed to be all-electric and was awarded funding through the Clean Energy Initiative program for multifamily buildings. A rendering of the project is shown below.
According to the press release:
Governor Hochul: “My administration is steadfast in our commitment to preserving and creating affordable housing that is sustainable, high-quality, and comfortable,” Governor Hochul said. “Today’s $75 million investment will help strengthen communities and provide new opportunities for Ithaca residents. We will continue to upgrade and modernize New York’s supply of public housing in the Southern Tier to provide a more stable and equitable future for the next generation.”
The Ithaca Housing Authority Redevelopment complements Governor Hochul’s sweeping plans to make housing more affordable, equitable, and stable. In the 2022-23 State Budget, the Governor introduced and successfully secured a new $25 billion, five-year, comprehensive housing plan that will increase housing supply by creating or preserving 100,000 affordable homes across New York including 10,000 with support services for vulnerable populations, plus the electrification of an additional 50,000 homes.
The first component of the Ithaca Housing project will be redevelopment at Overlook Terrace and Southview Gardens. The plan will renovate two buildings with 46 apartments, a community building, and a building for laundry and mechanical equipment. Major capital improvements will include the replacement of water heaters and furnaces to an all-electric option; upgraded laundry facilities; the replacement of entry doors, vinyl and aluminum siding, soffits and trim, windows, and roofs.; and site landscaping.
The other component is a complete rebuild of 70 apartments at The Northside Developments. The new affordable development will have 17 residential buildings with a total of 82 apartments – 12 more than the original thanks to a reconfiguration that adds much-needed one-bedroom apartments. The new development will include a one-story community building with a kitchen, office spaces, and a laundry room.
The press release notes that:
In total, there will be 20 one-bedroom units, 34 two-bedroom units, 40 three-bedroom units, 22 four-bedroom units, and two five-bedroom units. All of the apartments will be for households earning at or below 80 percent of the Area Median Income.
The press release also describes the funding sources:
State funding for the $75 million Ithaca Housing Authority Redevelopment includes $10.6 million in permanent tax-exempt bonds, Federal Low Income Housing Tax Credits that will generate $29.7 million in equity, and $18.8 million in subsidy from New York State Homes and Community Renewal. The development was awarded $1.4 million from the Clean Energy Initiative. Other funding sources include $9.3 million from the Ithaca Housing Authority, $300,000 from Tompkins County Community Housing Fund, and nearly $91,000 from Ithaca Urban Renewal.
Finally, the press release says:
The Clean Energy Initiative developed by New York State Homes and Community Renewal and the New York State Energy Research and Development Authority to create more than 1,500 energy-efficient, all-electric or electric-ready, climate-friendly affordable homes in existing multifamily buildings across the state.
What about the Numbers?
I have added an addendum with quotes included in the press release. To hear those people this is the greatest thing ever. For example, New York State Energy Research and Development Authority President and CEO Doreen M. Harris said, “NYSERDA is pleased to see construction commence on the Ithaca Housing Authority redevelopment project, which demonstrates that clean, resilient and affordable housing can be accessible to all New Yorkers”. The pragmatic approach is to look into the numbers to see if this is likely.
According to the press release this is a $75 million project to upgrade and preserve outdated Ithaca Housing Authority properties that will renovate or rebuild a total of 118 housing units. That works out to $635,593 per unit. The two components of the project both include a community building that also has mechanical equipment but however you calculate the cost per housing unit it is extremely high. According to the Ithaca Journal the typical cost of a home in Ithaca’s county in June 2022 was $357,450 and the cost of these units is well above that value.
The Press Release notes that:
All three properties will be highly energy-efficient and have an all-electric building design pursuant to the New York’s nation-leading Climate Leadership and Community Protection Act to curb building emissions. Additional energy efficiency measures will include heat-reflective roofing systems with tapered insulation, ENERGY STAR rated appliances, energy-efficient lighting and low-flow plumbing fixtures for a projected 15 percent in total energy savings.
The Draft Scoping Plan for the Climate Act does not provide detailed enough data to determine an estimate of the typical residential greenhouse gas emissions per year. The New York State Energy Research and Development Authority Patterns and Trends document gives estimates of total household energy for different fuels. I used Energy Information Administration carbon dioxide emission coefficients by fuel and found that the highest estimated emissions for the New York are for homes using fuel oil. As a conservative surrogate for the largest potential impact that these projects could possibly have, I used that estimate of 10 tons per year. If we assume that the existing housing units are responsible for ten tons of GHG emissions per year and that the project will eliminate all the emissions that means that the annual reduction of GHG emissions is 1,180 tons. The resulting cost per ton of CO2 removed is $63,559.
This article addressed two concerns: is this what the CJWG thinks is appropriate and is this a good investment for society as a whole? I believe that this project is an appropriate environmental justice investment because “All of the apartments will be for households earning at or below 80 percent of the Area Median Income”. As far as I can tell however, only Southview Gardens is in a draft Disadvantaged Community so it remains to be seen of all or only part of this investment is of the “least 35 percent, with the goal of 40 percent” investment target.
I have two relevant concerns about the Climate Act transition to net-zero. The first is affordability and the second is feasibility. The press release quotes Doreen M. Harris as saying “NYSERDA is pleased to see construction commence on the Ithaca Housing Authority redevelopment project, which demonstrates that clean, resilient and affordable housing can be accessible to all New Yorkers”. The numbers are worrisome relative to the claim that this project will demonstrate that affordable housing that meets the standards for the Climate Act is viable. Seriously, given that there are probably at least one million housing units similar to these, can New York afford to upgrade public housing to those standards at a cost over $600,000 per unit or over $600 billion in total?
As noted above the typical cost of a home in Ithaca’s county in June 2022 was $357,450. It is notable that there is such a big difference in cost relative to the redevelopment costs. Without a lot of work, it is not possible to break down the cost estimates to see how much of the projected costs are due to the energy transition enhancements. If those costs are a significant driver in the difference, then it is appropriate to ask whether this is an appropriate environmental justice investment. In my opinion, it is more appropriate to address environmental justice concerns for impacted communities today than it is to make investments that are futile unless all jurisdictions in the world also make similar commitments. Given that there is a limited amount of money available, then providing more upgraded housing is a better investment than limiting the housing upgrades because of the increased costs of the net-zero transition.
It will be interesting to see how this plays out. The Ithaca Housing Authority projects meet all the criteria for appropriate environmental justice investments except that most of the housing affected is outside of a Draft Disadvantaged Community. Will the CJWG recommend that all or only part of the funding be included in the 35% target and what will the State say?
The numbers are not encouraging from an affordability standpoint. If this is any indication of the potential costs for environmental justice investments then there will be problems. In addition to the magnitude of the per housing unit cost, the cost reduction efficiency is an issue. According to the Integration Analysis in 2020 the building sector emitted 105 million metric tons of carbon dioxide equivalent. Until such time that the cost per ton reduced for the building sector is brought down three orders of magnitude ($63 instead of $63,000 per ton reduced), I cannot imagine that the emissions reductions are affordable.
Addendum for Press Release Quotes:
Homes and Community Renewal Commissioner RuthAnne Visnauskas said, “This $75 million investment in the Ithaca Housing Authority speaks to our commitment to upgrading and protecting our existing affordable housing assets. The redesign of these apartments will yield modern and highly energy-efficient homes for 118 households and will preserve affordability and extend the useful life of these buildings for decades to come. Governor Hochul’s bold and forward-looking housing agenda is ensuring a brighter and more secure future for public housing residents in Ithaca and across the entire state.”
New York State Energy Research and Development Authority President and CEO Doreen M. Harris said, “NYSERDA is pleased to see construction commence on the Ithaca Housing Authority redevelopment project, which demonstrates that clean, resilient and affordable housing can be accessible to all New Yorkers. Through the Clean Energy Initiative, we are working with our sister agency, New York State Homes and Community Renewal, to make strategic investments in multifamily buildings like those being developed through this project, that reduce greenhouse-gas emissions and provide healthier, comfortable and resilient living spaces.”
Senator Chuck Schumer said, “Every New Yorker deserves access to safe affordable housing, but historic underinvestment has created a housing crisis in places like Ithaca. I am proud that the federal Low-Income Housing Tax Credit that I have fought hard to protect and expand has supplied the millions needed to make these new affordable homes a reality. Housing is a human right and I will keep fighting to get every dollar of federal support needed to help lay the foundation in Ithaca for a brighter, ‘gorges’, and more equitable future for all residents.”
State Senator Tom O’Mara said, “State investments in safe and affordable housing continue to strengthen the fabric of neighborhoods and the quality of life for tenants and residents in the city of Ithaca and communities across this region and state. It’s an important commitment that will deliver critical short- and long-term benefits.”
Assemblymember Anna Kelles said, “I am encouraged to see this project move forward at a moment when rising rents, increased home prices, and lack of supply have exacerbated the housing and affordability crisis. We must continue to create affordable and safe housing for low- and middle-income families. This project addresses this need by rehabilitating 36 units, and fully replacing 70 units that were outdated and potentially unsafe with 82 new, safe, and sustainable units. This 118 unit project will add 12 new units, including one and two bedroom units which are currently in acute deficit in Ithaca and all units will be rented at 80% area median income (AMI). Hopefully this is just one more step in a long needed road of adding to our affordable housing stock. I also applaud the project’s sustainability goals with all of the units in this housing project constructed all-electric with air source heat pumps providing heating and cooling, in line with the city of Ithaca and Tompkins County aggressive climate goals.”
Acting Ithaca Mayor Laura Lewis said, “The city of Ithaca is pleased to have the support of so many partner agencies in the redevelopment of critically needed low-income housing. Substantial renovations of Overlook Terrace and Southview Garden and, at Northside Apartments the complete replacement of outdated buildings that were first constructed decades ago, will provide families with high quality and environmentally efficient homes. This investment in our community will benefit generations of Ithacans.”
Tompkins County Legislature Chairwoman Shawna M. Black said, “This project is an excellent example of re-invigorating our affordable housing options in Tompkins County. We’re proud of what Ithaca Housing Authority offers to our community and that these projects will be energy efficient and align with New York State’s Climate Leadership and Community Protection Act. Thank you to New York State, Ithaca Housing Authority, and our Tompkins County Community Housing Fund for contributing to these developments. I can’t wait to see construction begin and to get people back into their homes.”
3d Development Group President Bruce Levine said, “Our focus was on the needs of the existing tenants, future tenants, the community at large, and the global need for improved energy sustainability and reducing fossil fuel emissions. This project was made possible by the support received from the state, federal and local government agencies. Because everyone got on board and believed in the goals and initiative, the final result will transform the Ithaca Northside neighborhood for decades to come.”
Ithaca Housing Authority Executive Director Brenda Westfall said, “Our vision and end goal is to provide quality affordable housing for our current and future tenants while ensuring that the properties are energy efficient and meet energy sustainability goals for decades to come. As a lifelong resident of the city of Ithaca, it is extremely rewarding to witness the commitment and support that many different agencies brought forth in bringing our vision to life. This project will both improve and preserve the quantity and quality of affordable housing we are able to provide while complimenting the landscape of the neighborhoods in which the properties are located.”