Incentives for Multifamily Building Developers Save Energy in Long Term
A year-long study conducted by Virginia Tech’s Center for Housing Research on behalf of Housing Virginia finds that apartments built to higher energy efficiency standards, including third party testing and inspection, outperform new standard construction housing by more than 40 percent with respect to energy consumption. The study suggests investors in multifamily housing across the nation could benefit from the Low Income Housing Tax Credit (LIHTC) program that encourages developers and builders to use a recognized third-party standard in design and construction in order to reduce long-term energy usage.
Beginning in 2007, the Virginia Housing Development Authority (VHDA) implemented a set of incentives in the LIHTC program. The incentives required third party testing and inspection from EarthCraft Virginia and LEED.
The LIHTC Program is the primary federal housing program designed to create rental housing that is affordable to renters with low and moderate incomes. Under the program, private investors in affordable rental housing receive a tax credit as an incentive for investment. The program produces over 100,000 apartments every year nationally and about 2,000 per year across Virginia.
The study says that LIHTC programs beyond Virginia could use the report’s findings as a means for guiding policy, and the findings could guide multifamily developers and property owners in creating energy saving building stock.
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