Healthy Homes: How a Little-known Delaware Program for Septic Tanks Can Be Replicated to Help Low-Income Families Get Energy Efficiency and Drinking Water Upgrades

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PACENation white paper details how Healthy Home Loan Programs can be established without the need for new legislation or appropriations. These programs would provide enormous benefits in low-income communities, including job creation, access to clean energy, improved water quality and reduced pollution

PACENation, the nonprofit organization that advocates for expanded access to financing for clean energy, clean drinking water and resilience upgrades, released today a white paper titled The Healthy Home Loan Program, A Clean Energy and Clean Drinking Water Financing Program for Low-Income Homeowners. The white paper details how a little-known Delaware program for septic tank upgrades, combined with policy precedents set in New York and Pennsylvania, can enable all fifty states to provide ultra-low-cost financing to eligible homeowners for a variety of critical home upgrades, including drinking water, energy efficiency, solar, electric vehicle charging and more.

The full paper, co-authored by Colin Bishopp and Jim Barrett, is available here.

PACENation’s white paper arrives on the heels of a recent study by Lawrence Berkeley National Lab, which found that assessment-based financing programs are one of the top three policies that "increase adoption of solar photovoltaics among low- and middle-income households, thus increasing adoption equity." Healthy Home Loan Programs would be a game-changer for millions of low-income American families whose needs and circumstances are not fully served by state and federal grant programs and who do not have access to traditional forms of financing like consumer loans and home equity lines of credit.

"Thousands of Michigan families need access to capital to improve the energy efficiency and drinking water quality in their homes,” said Michigan State Representative Rachel Hood. “For municipalities that want to provide homeowners with an affordable financing option, establishing a Healthy Home Loan Program is a great option to encourage investment in safe and sustainable homes."

The ideas underpinning the Healthy Homes Loan Program are not new. The model combines two proven approaches to financing residential property upgrades at the local level. "For more than a hundred years, American cities have used assessment-based financing to fund all manner of projects that serve a public purpose,” said Carolyn Berndt, Legislative Director for Sustainability at the National League of Cities. “What started with sidewalks and septic tanks has expanded to include clean energy, clean drinking water and resilience against extreme weather. The National League of Cities looks forward to sharing how a Healthy Homes financing program can be a model for local government officials all across the country. Confronting the climate crisis and supporting low-income communities are top priorities."

One of the key benefits of the Healthy Homes model is that it is scalable nationally and does not require any action by Congress or state legislatures. "It is rare we see a policy solution that doesn’t require new legislation,” said Kara Saul Rinaldi, President and CEO of the AnnDyl Policy Group, an energy and environmental policy strategy firm. “Healthy Home Loan Programs could play an important role in helping the Biden Administration achieve its commitment to weatherize two million homes over the next four years.”

The potential economic, environmental and equity benefits of Healthy Home Loan Programs are significant. Using an impact model developed by the University of California’s Schwarzenegger Institute for Public Policy, which is based on data from similar programs that provide energy and water upgrades to homeowners, the white paper estimates that for every 100,000 homes upgraded, 760,000 metric tons of CO2e will be avoided or eliminated and 8,700 local jobs will be created in the construction sector.

“The Climate Center supports the Healthy Home Loan Program concept to equitably address climate change,” said Ellie Cohen, Executive Director of The Climate Center. “By tapping existing state funding, the HHLP provides loans to lower income homeowners for water and energy efficiency retrofits. Consistent with our Climate Safe California program, the HHLP offers greenhouse gas reductions via an equity-based funding mechanism."

About PACENation

PACENation provides resources and support to local governments, businesses, and nonprofit organizations that are committed to allowing American property owners to improve the efficiency and resiliency of their homes and businesses with assessment-based financing options like Property Assessed Clean Energy.

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Colin Bishopp
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