Epic Homes: It’s not about the houses, it’s about the people living in the houses.

Tens of thousands of low-to-moderate-income families in Fort Collins live in energy inefficient housing that perpetuate health and economic disparities. The solution, “Epic Homes”, is an integrated, scalable public-private partnership model to “find, finance, and fix” energy inefficient rental properties and document health and well-being impacts. Epic Homes leverages private capital to offer simple and attractive financing for energy upgrades to achieve social and environmental outcomes.

Innovation Summary

Innovation Overview

The Problem: Over 46,000 low-to-moderate-income (LMI) residents of Fort Collins live in energy inefficient, rented housing that is harmful to their family welfare, and which contributes to critical socioeconomic disparities in the community.

The Innovation: entitled Epic Homes, is designed to “find, finance, and fix” thousands of energy inefficient properties, benefiting low-to-moderate-income households who rent, while rigorously collecting data to document indoor environmental quality (IEQ), health and well-being indicators. Fort Collins is joining forces with private companies, universities, homeowners and other stakeholders to implement a scalable approach to renovate low-to- moderate-income rental properties, so they are more energy efficient, affordable and healthy. Organisers will demonstrate measurable improvements in health, productivity and quality of life indicators for residents, while also creating other important co-benefits, including new jobs and businesses, private sector investment and lower carbon emissions. In collaboration with the Colorado Energy Office, Colorado State University, efficiency contractors, banks, property owners and tenants, they want to change how people think about energy efficiency in rental housing, and its intersection with health, well-being and equity.

Goals of the Innovation (through 2021):

• Upgraded 360 rental properties (home to at least 230 LMI families), out of 2,000 overall upgraded homes
• Document indicators of home performance and indoor environmental quality that are likely associated with improved health
and well-being for 80 homes
• Savings from 15% reduced energy use and lower utility bills will be available for other family priorities
• 70% of rental property owners will report financing is not a barrier to energy efficiency upgrades

Who benefits from Epic Homes?: Fort Collins are creating multiple benefit streams for a diverse group of stakeholders, including:

- For LMI families (with more efficient, safe and comfortable homes)
- For property owners (improving asset value – their rental property – making their properties more attractive to prospective
renters and reducing tenant turnover, thereby increasing operating income)
- For the City (improved community equity, increased housing stability, reduced energy consumption and carbon emissions, job
and investment creation and documented health and well-being impacts for residents and LMI renters)
- For energy efficiency contractors and partnering businesses (ready customers and embedded project finance via the “on-bill”
option offered by Epic Homes)

How is the innovation envisioned for the future?: From the beginning Fort Collins designed the Epic Homes program for scale and potential replication to other cities in Colorado and across the United States. Toward that end, organisers are working with the State of Colorado Energy Office and the Environmental and Energy Study Institute (EESI) to create strategies, tools and methodologies to help other communities and municipal utilities replicate and incorporate approaches they are pioneering with Epic Homes. Also, in 2018 Epic Homes was selected as a Grand Champion of the Bloomberg Philanthropies Mayors Challenge, a national municipal innovation competition between more than 320 American cities. As part of that award, Fort Collins received $1.1M in prototyping and prize monies and technical support and engagement for three years with Bloomberg Philanthropies. At present, they are raising approximately $7.5M of private-sector capital for the on-bill financing component of Epic Homes, and they estimate that the loan fund may eventually reach approximately $16M, which would allow the funding to become an “evergreen” (self-sustaining) capital stack to support future demand for energy efficiency upgrading of single-family and small multi-family homes in perpetuity.

How their course of action was influenced: Data, evidence and prototyping with LMI families and other stakeholders convinced them that upgrading the energy efficiency of housing could address a host of interrelated community problems, including:

• Poor housing and indoor air quality exacerbate health and well-being disparities;
• A high percentage of low-to-moderate-income residents live in poor-quality rental properties;
• Research shows even modest improvements in indoor air quality can have significant, positive impacts on health outcomes in
areas with relatively cleaner air (e.g. most of the U.S.A, not so much severely polluted cities like Beijing or New Delhi);
• Reduced energy use and lowered utility bills from energy efficiency upgrading is well documented;
• Traditionally, neither rental property owners nor renters have an incentive to invest in efficiency upgrades;
• This sub-optimal outcome is often referred to as the ubiquitous “split incentive”, which Epic Homes helps to narrow;

Innovation Description

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