House Approves HUD Pay-For-Success Demonstration

A demonstration program that would allow federally supported housing developments to take advantage of savings from energy improvements has cleared another hurdle, being approved by the U.S. House of Representatives recently.

The Pay For Success (PFS) demonstration is part of a larger Private Investment in Housing Act of 2015 (H.R. 2997), which passed the House with bi-partisan support and now moves to the Senate. The idea was proposed by Enterprise Community Partners and several other national housing advocacy organizations.

The Private Investment in Housing Act would authorize the U.S. Department of Housing and Urban Development (HUD) to enter into contracts with outside entities that would raise capital from investors, make energy related investments in HUD-supported properties, and then be repaid by documented cost savings from those improvements. HUD properties that benefit would include properties with Project Based Rental Assistance (PBRA) contracts, as well as Section 202 and 811 properties.

A recent blog post by advocates supporting the initiative explained the many difficulties in making energy-related improvements in HUD properties.  “The PFS contract would allow HUD to overcome barriers to achieving long-term cost savings—including a lack of upfront capital, regulatory impediments and split incentives between building owners and the residents who pay utilities—without costing the federal government anything,” The full article is here: http://tinyurl.com/pux22as.

The Private Investment in Affordable Act of 2015 is being pushed by Enterprise Community Partners, the Low Income Investment Fund, and Stewards of Affordable Housing for the Future, and supported by many other organizations.

Contact: John Broderick, jbroderick@leadingageny.org, 518-867-8383 ext. 139