Cover: Energy Efficiency as a Tool for Preservation of Affordable Rental Housing

Energy Efficiency as a Tool for Preservation of Affordable Rental Housing

Evaluation of the Efficiency Emphasis in the MacArthur Foundation's Window of Opportunity Initiative

Published Dec 10, 2018

by Heather L. Schwartz, Aimee E. Curtright, Cordaye Ogletree, Elizabeth Thornton, Lisa Jonsson

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Research Question

  1. Can foundation investment in energy efficiency achieve certain intermediate outcomes in service of the larger goal of preserving affordable housing?

In response to the predicted potential loss of nearly a million affordable rental homes in the United States, the MacArthur Foundation in 2000 launched a large philanthropic initiative called Window of Opportunity (WOO) to preserve privately owned affordable rental housing. By 2011, the foundation had learned from its WOO recipients and affiliates that improvements in energy efficiency (EE) could enable residential building energy costs to be lowered, improving cash flow and, by extension, the viability of multifamily affordable rental housing. As a consequence, the foundation decided to invest in energy efficiency. From 2012 to 2015, the MacArthur Foundation awarded 39 grants and loans totaling $27.5 million to promote the energy efficiency of multifamily affordable rental housing. Awardees for these grants and loans spanned the real estate, energy, and environmental sectors. This evaluation confirms that there have been marked increases nationally since 2010 in investments in the energy efficiency of multifamily rental housing, including in the subset that is affordable. Interviews, grantee accomplishments, and two case studies indicate that, of the seven desired outcomes the foundation outlined for Window of Opportunity-Energy Efficiency (WOO-EE), the initiative's greatest contributions were to help improve cross-sector collaboration and to increase awareness of EE as a preservation tool for affordable multifamily rental housing. WOO-EE activities had a smaller positive influence on three more of the outcomes, had no appreciable influence on one of them, and had an unknown influence on another.

Key Findings

Five aspects of WOO-EE worked well

  • MacArthur effectively used its reputation to convene influential organizations that work across sectors.
  • Although WOO-EE lasted only four years, it built on the much longer WOO initiative, which allowed organizations to build capacity, networks to form, and ideas to be piloted and then enacted.
  • WOO-EE helped build the capacity of organizations to ready them for loans from commercial banks.
  • Foundation staff had enough content knowledge to select effective grantees.
  • The foundation's considerable investments in the Preservation Compact (in Chicago) helped to incubate Elevate Energy, which has gone on to be a leading organization in energy efficiency and one that exemplifies MacArthur's influence on the field.

Three aspects of WOO-EE worked less well

  • The foundation intentionally took risks with its WOO-EE project-related investments, several of which did not work as planned.
  • The foundation originally conceived of the availability and use of energy data as a "lynchpin" for expanding investment in energy efficiency, but neither of the organizations that received WOO-EE grants related to data or benchmarking created tools that have gained wide use.
  • Few energy-efficiency programs for affordable multifamily rental housing have gone to scale.

Research conducted by

The research described in this report was prepared for the MacArthur Foundation and conducted in the Infrastructure Resilience and Environmental Policy Program within RAND Social and Economic Well-Being.

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