The buildings sector truly sits at the intersection of climate change, income inequality, and racial inequity.
The building sector’s impact on climate change is undeniable. It is the largest emitting sector in the United States when accounting for direct and indirect emissions. In 2019, 13% of U.S. greenhouse gas emissions came from direct emissions of the buildings sector, primarily from heating and cooling. When electricity consumed by the end user—indirect emissions—is factored in, buildings account for a whopping 31% of total U.S. greenhouse gas emissions.
The sector is also one of the most visible examples of racial inequity in the nation. In the United States, people of color are disproportionately impacted by unsafe, hazardous, and inefficient housing and schools. People of color, who are more likely than their white counterparts to live in low-income households and in high-poverty communities, spend up to half of their income on rent and spend three times as much on energy as their white counterparts do. This energy burden is in part because they are more likely to live in older, less energy-efficient housing.
Investments in improving the nation’s building sector will drive down the emissions causing climate change and take steps to address the systemic racism pervasive in the public school system and the housing sector while creating local, good-paying union jobs, and fighting income inequality.
One key opportunity in the BIL is investing in energy-efficient MUSH (Municipal Buildings, Universities, Schools, and Hospitals) buildings through an energy efficiency state revolving fund, school retrofits, and the State Energy Program. These buildings represent a large portion of the commercial building stock with roughly 912,000 in the U.S. and tend to be the most energy-intensive. MUSH buildings are generally older or historic or have high electricity demand—such as the hospital sector. Therefore, targeting these buildings for energy efficiency retrofits can significantly reduce carbon emissions while creating local jobs and saving taxpayer money on energy bills for these public-serving institutions.
The Energy Efficiency Revolving State Loan Fund received $250 million and the State Energy Program (SEP) received $500 million in the BIL. These investments, which can go towards MUSH building retrofits, represent 19,687 direct, 12,675 indirect, and 17,812 induced jobs, a total of 50,174 jobs over 10 years. There is an additional $500 million in grants for public schools to use towards energy efficiency, renewable energy, and alternative fueled vehicles. School retrofits would create an additional 33,450 jobs over ten years.
The BIL also includes funding for residential buildings, largely to improve energy efficiency, safety, and affordability, particularly for low-income households. The Weatherization Assistance Program (WAP) received $3.5 billion in funding towards long term solutions for energy efficiency while the Low Income Home Energy Assistance Program (LIHEAP) received $500 million to address short-term needs for paying energy bills. It’s noteworthy that without a waiver, 15% of LIHEAP funds can go towards weatherization assistance and with a waiver up to 25%. The Energy Efficiency Conservation Block Grants (EECBG), which received $550 million in BIL and directly fund local projects, can go towards residential and commercial buildings, and historically retrofits represent the largest percentage of EECBG funds. DOE received $250 million in AFFECT grants that go towards improving energy and water efficiency for federal buildings and $225 million to provide technical assistance to states for adopting or updating building codes.
|Category||Program Name and Description||Funding Level||Administering Agency or Office||Funding mechanism||Timeline||Standards||Eligible Entities|
|Federal||Assisting Federal Facilities with Energy Conservation Technologies (AFFECT) Grants – Provides grants for the development of energy and water efficiency projects and processes at U.S. federal government-owned facilities.||$250 Million||DOE – Office of Energy Efficiency and Renewable Energy and Federal Energy Management Program||Existing – Competitive Grants||FY22 – expended||Davis Bacon; PLA for construction projects over $35 million; Buy America||Federal facilities|
|MUSH -commercial||Energy Efficiency and Renewable Energy Improvements at Public School Facilities – Energy efficiency, renewable energy, and alternative fueled vehicle upgrades and improvements at public schools.||$500 million||DOE – Office of Energy Efficiency and Renewable Energy||New – Competitive Grants||FY22 – FY26||Davis Bacon; Priority to local businesses common to state or geographic area; Buy America||Public K-12 schools|
|Commercial and Residential||Building Codes Implementation for Efficiency and Resilience – Update building energy codes to improve energy efficiency, resilience, and health.||$225 Million||DOE – Building Technologies Office||New – Competitive Grants||FY22-26||Davis Bacon; Buy America||State agencies such as state energy office, tribal energy office, state building code agency and partnerships with one or more local building code agency; codes and standards developers; associations of builders and design and construction professionals; local and utility energy efficiency programs; consumer, energy efficiency and environmental advocates.|
|Energy Efficiency Revolving Loan Fund – Expected benefits for building infrastructure and energy system upgrades and retrofits within communities.||$250 Million||DOE – State Energy Program||New – Revolving Loan Fund||FY22 – expended||Davis Bacon; Buy America||States|
|State Energy Program – Funds are used broadly to implement state energy plans which can include MUSH and commercial retrofits and weatherization.||$500 Million||DOE – State Energy Program||Existing – Formula Grants||FY22 – FY26||Davis Bacon, Buy America; No matching requirements||State energy office, tribal energy office|
|Energy Efficiency Conservation Block Grants (EECBG) – Implement and manage energy efficiency and conservation projects and programs; in the transportation, building, and other sectors.||$550 Million||DOE – Office of Energy Efficiency and Renewable Energy||Existing – Block Grant||FY22 – expended||Davis Bacon; Buy America||State, eligible unit of local government, tribe|
|Residential||Weatherization Assistance Program (WAP) – Reduces energy costs for low-income households by increasing the energy efficiency of their homes.||$3.5 Billion||DOE – Office of Energy Efficiency and Renewable Energy||Existing – Formula Grant||FY22 – expended||Davis Bacon ; (limited to multifamily buildings with more than five units); Buy America||States, U.S. territories and tribal governments|
|Low Income Home Energy Assistance Program (LIHEAP) – Assistance in managing costs associated with home energy bills, energy crises, weatherization and energy-related minor home repairs.||$500 Million||HHS – Office of Community Services||Existing – Formula Grants||FY22 – FY26||Davis Bacon; Buy America||States, U.S. territories and tribal governments|
Rounding Out the Build Back Better Agenda: Buildings
The BIL provides good funding for a number of energy efficiency programs with proven track records, including WAP, SEP, and EECBG, as well as AFFECT grants which help federal buildings become high-performance. While these programs are modestly funded for the 2022 fiscal year, other programs—such as LIHEAP and grants for energy efficiency at public school facilities—are woefully underfunded in the bill. In 2019, only 16% of eligible households received a LIHEAP subsidy and there is an annual $85 billion spending gap for public school facilities. While there is funding for lead remediation in schools through the water title, the bill completely leaves out funding for getting toxic substances such as lead paint and PCBs out of public schools, which is a perennial health risk and largely affects disadvantaged communities.
Future Build Back Better Agenda legislation must provide a substantial and much-needed $150 billion investment into affordable housing. Pre-pandemic, there was a nearly seven million unit shortfall of affordable housing which means for every low-income household eligible and in need of affordable housing, only one in four receive assistance. Additionally, there were thirty million affordable housing units considered substandard due to health hazards such as lead, poor heating, gas leaks, and more. The pandemic has caused housing prices to soar and further exacerbate the affordable housing crisis.