Encourage Energy Efficiency to Reduce Houehold Energy Costs

Why should housing policymakers focus on reducing household energy costs?

Direct outlays for shelter, such as rent or mortgage payments, represent only one component of the costs associated with where we live. These costs also include energy expenditures - specifically, spending on transportation and utilities - that are influenced in large part by the location and quality of our homes.

The individual contribution of each of these components depends in large part on the trade-offs families make when seeking affordable housing. Households that move to outlying areas in order to save on housing costs may find that any savings are offset by increases in the cost of transportation, while families living in older affordable homes with poor insulation or inefficient appliances may be confronted by escalating utility costs. Well-coordinated policies can help to address each of these factors, reducing the combined costs of place and freeing up funds for food, health care, and other essentials.

Household Transportation Costs

The linkages between transportation and housing go beyond mobility. Providing transportation options where families live also has important implications for overall affordability.

The Brookings Institution analyzed household costs and created an Affordability Index that used the Twin Cities as the model. In this report transportation is shown to be the second largest household cost. Nationally they found that transportation expenditures as a percentage of household costs range from less than 10 percent in transit-rich areas to nearly 25 percent in other areas.

A Transit for Livable Communities report states the average Twin Cities household spent 17 percent of its income on transportation. This is worrying enough but the report also showed that low income households spent substantially more. Households in major areas that have more extensive transit systems spent significantly less than the average. This is a lesson that should not be lost on policy makers.

Housing that is built at sufficient densities to support public transit gives residents the opportunity to choose from a range of transportation alternatives. These can include public transit that is less costly, and more energy-efficient, than a personal vehicle.

Importantly, land use policies that increase density around transit stops or in urban centers but do not ensure that some of those units are affordable to working families may succeed in improving livability only for higher-income families. Communities are using a range of policy tools to ensure a place in these desirable locations for low- and moderate-income households.

Utility Costs

There are many ways that households can reduce their energy costs. Some of these changes are minor and require little effort, while others are more costly and require a contractor. These big improvements may be expensive but over time households can recoup the cost with reduced energy use. The Department of Energy and Energy Star both provide extensive information for householders looking to enhance energy efficiency and lower utility bills. There are also many other sources that offer access to information and resources that will help residents handle energy-related costs. To learn more about these resources click here.

How can housing policies help to reduce families' energy and transportation costs?

There are a variety of housing policy tools that can help address rising utility and transportation costs. To reduce energy consumption and utility bills, a growing number of housing developers have started using environmentally-friendly designs and materials. While some energy-efficient construction techniques carry little or no cost, others are more costly and may drive up the initial price of housing. It is important for communities to carefully consider both the up-front costs and the long-term savings of different energy-efficiency standards. Additional information on green building policies can be found here.

For existing buildings, there are many opportunities for policy-makers and residents to implement energy efficiency solutions. Grants, low-interest loans, technical assistance, and many other tools are all available. Click here for more information on how residents can incorporate energy efficiency into existing and new housing.

What are the benefits to the community of housing that is energy-efficient and well located near public transit or job centers?

The benefits of increased energy efficiency extend beyond the pocketbook. Green homes also promote better health through the use of construction practices and building materials that improve ventilation and indoor air quality, minimize moisture, and reduce or eliminate the presence of toxins. Additionally, the inclusion of affordable homes in mixed-use communities or in proximity to public transit reduces residents' reliance on personal vehicles, helping to decrease traffic congestion, greenhouse gas emissions, and other transportation-related air pollution. Walkable communities and compact development encourages a healthier lifestyle and greater physical activity among residents while preventing sprawl and environmental degradation.

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