(Written by Ernest Rodriguez-Naaz – Director of Communications, New Mexico Mortgage Finance Authority – Originally published in the March 2007 Housing Journal)

Affordable Housing Builders Go Green

What does a 60-unit multi-family development in Alamogordo have in common with a 30-unit multi-family complex in Gallup? Both projects are part of an environmentally conscious trend by developers to incorporate “green planning and design” elements into affordable housing projects. These projects are aimed at some of New Mexico’s most vulnerable populations, while others are designed with tenants that saddle a range of income levels. Traditionally, incorporating green design elements has been reserved for affluent communities or for custom homes where household incomes are significantly higher than area median incomes.

For example, two affordable housing projects are creating a new paradigm in New Mexico. Azotea Apartments in Alamogordo feature 14 one- and two-story buildings containing 24 one-bedroom and 36 two-bedroom apartments, with all units set aside for households age 62 and over. In 2004, Azotea won the New Mexico Mortgage Finance Authority’s (MFA) Low Income Housing Tax Credit Design Competition award as well as a Green Communities TM grant from Enterprise Social Investment Corporation. Tierra Realty Trust and Golden Spread Rural Frontier Coalition partnered to develop this project, desiring to create a high quality affordable housing community to alleviate the senior housing shortage in the area.

“I sought green non-toxic building materials such as recycled finger-jointed framing studs (produced locally by White Sands Forest Products), recycled carpet and tile, water-based natural paints, non-formaldehyde wheat based plywood and recycled cotton insulation,” Tierra Realty Trust CEO and Founder Stephen Crozier said. “These buildings are designed in conjunction with a landscape design to harvest rainwater from roofs and provide irrigation to native plantings as well as sited to create a sense of security, neighbor interaction and passive solar gain to maximize energy efficiency.” The project was at 100% occupancy even before it opened its doors.

In January 2007 Lt. Governor and MFA Board Chair Diane Denish, along with MFA executives and other local and state officials, attended the groundbreaking ceremony of the Chuska Apartments in Gallup. The Chuska Apartments is a 30-unit project serving residents between 30 percent and 60 percent of the area median income. Ten of the units are reserved as transitional units for homeless families with children; the remaining units will go to working, mixed-income families who meet program guidelines. The development is located along a public transportation route on an urban infill site within walking distance to community amenities. An oversized common room will serve as a community room for resident gatherings as well as accommodate important social services. The buildings in the project are positioned to take full advantage of solar angles, and the primary heating source will be passive solar gain supplemented by solar hot water collectors and a hydronic baseboard heating system. Future plans include rooftop photovoltaic panels to create a completely solar community. “Even the windows are utilized in ways that promote natural ventilation and cooling, which further lessens energy consumption,” said MFA’s deputy director Joseph Montoya. The Chuska Apartments was conceived by the Supportive Housing Coalition of New Mexico and was a winner of MFA’s 2006 Low Income Housing Tax Credit Design Competition.

“Traditionally, ‘affordable’ meant low-cost and uninventive housing,” said MFA executive director Jay Czar. Today, more than 100,000 affordable housing units are built every year that draw on a vast pool of federal, state, local and private funding sources like the Green Communities program by the Enterprise Social Investment Corporation. “The projects in Alamogordo and Gallup demonstrate that although going ‘green’ may be more capital intensive on the front end, the subsidy is there to support it,” said Czar. “Perhaps equally important but often overlooked, green housing results in proven utility and maintenance savings over time, which is critical to creating sustainable affordability for low and moderate income families.”

In the private residential market, Green Builder Media and Imre Communications conducted a survey of 250 residential builders and showed that homebuyers are willing to pay 11%-25% more for environmentally-friendly homes. This option is out of reach for families who qualify for affordable housing programs and therefore it is incumbent on builders to seek creative alternatives. In Massachusetts two power companies, Western Massachusetts Electric Company and National Grid, help pay the difference in cost between the way Rural Development has been building and what it needs to do to meet Energy Star Homes standards (set by EPA), with average payments ranging from $3,600 to $3,800 for each 1,200-square foot home.[1] While the amount seems small, it could make a difference in the builder’s ability to incorporate “green” or not.

In New Mexico, MFA is currently working with Governor Richardson’s office and the state legislature to seek funding for an Energy$avers Program that would provide low or no-interest incentive loans to builders to install energy efficient systems when constructing new and/or rehabilitating existing affordable homes. Additionally, the program would provide a low or no-interest rate loan fund to individuals for energy efficiency retrofits, including conversion of existing utility systems to solar systems.

Green building advocates suggest that a small investment can yield a 30% recurring energy savings and in some cases improve the health of residents.[2] Others contend that whatever the premium in the initial construction, there is a payback over the life of the building(s). New Mexico, through MFA, is one of several states including California, Oregon, New Jersey and Washington State that give low-income housing developers who incorporate green elements extra points on their applications to win allotments of the federal Low Income Housing Tax Credit. The majority of financing for both Azotea and Chuska Apartment complexes came from the federal tax credit program administered by MFA.

“Green developers are typically concerned with two factors when it comes to environmentally friendly buildings: energy saving features and renewable resources. That’s why green building makes sense for organizations committed to affordable housing,” said MFA housing development director Linda Bridge. “MFA will do everything it can to promote the development of affordable green building in New Mexico.”

The New Mexico Mortgage Finance Authority is a quasi-public entity financing housing and related services for low to moderate income families throughout the state. MFA provides a variety of affordable housing programs that range from assistance to homeless individuals and families, to developing new housing projects, and to providing opportunities for homeownership. MFA is a fully self-supporting, not-for-profit enterprise and does not receive any state funds for its operations. MFA can be reached toll-free within New Mexico at 1-800-444-6880 or visit its website at: www.housingnm.org.

[1] Wallace, N. The Chronicle of Philanthropy, Building Green, October 26, 2006

2 Ebeling, Ashlea Forbes Magazine. Low-Income-Housing Builders See Green, December 2004