for Renters and Landlords
Energy upgrades cut costs for an
affordable-housing development in Colorado.
The location is great for families. The local high school and
elementary school lie a few hundred yards to the east, and a large
grocery store is just a few hundred yards to the west. Bus routes
and bike paths adjoin the property. Lafayette is now a fast-growing
bedroom community sending commuters to high-tech businesses
between Denver and Boulder, but it started in 1888 as a coal-mining
town and so has a picturesque downtown district. The last mine
closed in 1956.
Eagle Place townhomes are so-called Section 42 apartments,
occupied by families earning 40 to 50 percent of median income
for Boulder County. That’s roughly $40,000 per annum for a family
of three. Two bedroom units start at $727 a month, rising to $1,300
for the largest three-bedroom end-unit, with a view to the west of
the Rocky Mountains.
Developer Amory Host, president of
Peak Properties ( peak-properties.com),
says his company makes money on the
rentals in spite of the low rents, precisely
because of the solar and energy-efficiency
features. The “maximum gross rent” paid
by the tenant includes a utility-bill allowance. By halving the projected utility bill
to $58 per month (for a three-bedroom)
and $49 per month (for a two-bedroom),
Peak Properties gets to keep a larger piece
of the monthly rent allowance.
Even so, what made the development
financially viable was Colorado’s renewable portfolio standard, passed by voters
as Amendment 37 in November 2004. It
called for 4 percent of a utility’s renewable power purchase to come from solar
technologies. In negotiations with the
public utilities commission, Xcel Energy came up with a rebate of $4.50 per
installed watt during the first year. That
covered roughly half the cost of installing grid-tied PV systems, depending on
economies of scale. Additional savings
were expected through federal tax credits.
Consultant Dave Kreutzman of Sun
Electric designed a 67-kilowatt (k W) system using 322 Sharp 208 PV modules
with Fronius inverters ( sharpusa.com,
fronius-usa.com). Architect George Watt
worked the panels into an awning design.
In addition, the six-unit building got 96
solar thermal water-heating panels, each
4 feet by 10 feet (1.2 meter by 3 meters),
feeding 32 120-gallon (454-liter) storage
tanks for domestic hot water and for the Aquatherm space heating.
The storage tanks are located in second-floor utility rooms, where
insulated pipes make a very short run from the roof-top collectors.
No rebates were available for the water-heating system, but calculations showed it would play an important role in reducing the
monthly utility bill, especially as natural gas prices spiked.
The company broke ground in September 2006, and the first
tenants moved in a year later. The 60 units were fully rented by the
close of 2007.
A year later, Host reported that the energy systems worked as
designed and delivered the expected performance. “The tenants
don’t notice a difference but the utility bills are about half of what
you get with the average housing stock,” he said. In October, Eagle
Place received a Project of the Year award from MultiFamily Executive
magazine, a trade publication for the housing industry.
Host points out that under existing codes and incentive plans,
solar-enabled affordable housing makes sense only with new construction. “The rental market is on the rise here, but a lot of it is old
stock and can’t be upgraded economically,” he said.
In 1980, Host dropped out of the University of Colorado, and
earned an associate degree in passive solar design and drafting at
Denver’s Red Rocks Community College. Then he returned to CU to
graduate cum laude in economics in 1984, with an honors thesis on
the economics of solar energy. He founded Peak Properties in 1988,
and the company has put up half a dozen projects totaling about 710
rental units. The list includes several Section 42 affordable housing
developments, a senior housing project and some conventional-market apartment complexes. Host is now going through the permitting process for the 26-unit Trinity Commons development near
downtown Boulder, on property owned by Trinity Lutheran Church.
Half the units would be affordable rentals.
While the economy tanks, the market for affordable housing
projects is unaffected. These projects are funded by the federal government through state housing authorities, on a per-capita basis. In
Colorado, Host applies for financing to the Colorado Housing and
Finance Authority (CHFA, pronounced chiffa). “As the competition
for market-rate housing tightens up, we get new companies entering
the affordable-housing market,” Host explained. “CHFA now gets 10
project proposals for the same $5 million of available funding. The
same number of projects will get built, but they’re the good ones:
The market gets better-quality projects.”
In October 2007, Host launched a parallel company, Peak Solar,
specializing in solar and energy-efficient conversions for apartment
complexes. The firm has completed the engineering for a 282-k W PV
system feeding 560 apartments at the 40-year-old Cherry Creek Club
complex in central Denver. And the City of Lafayette has approved
a power purchase agreement covering installations on the public
library, police and courts building, and water reclamation center —
three arrays totaling 350 k W. r