[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]



 
                      SOLVING THE CLIMATE CRISIS:
                      CLEANER, STRONGER BUILDINGS

=======================================================================


                                HEARING

                               BEFORE THE

                        SELECT COMMITTEE ON THE
                             CLIMATE CRISIS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            OCTOBER 17, 2019

                               __________

                           Serial No. 116-11
                           
                           
                           
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                        
 
 
 



                            www.govinfo.gov
   Printed for the use of the Select Committee on the Climate Crisis
   
   
   
   
                              ______

                U.S. GOVERNMENT PUBLISHING OFFICE 
 38-974                  WASHINGTON : 2020 
 
 
 
   
   
   
                 SELECT COMMITTEE ON THE CLIMATE CRISIS
                     One Hundred Sixteenth Congress

                      KATHY CASTOR, Florida, Chair
BEN RAY LUJAN, New Mexico            GARRET GRAVES, Louisiana,
SUZANNE BONAMICI, Oregon               Ranking Member
JULIA BROWNLEY, California           MORGAN GRIFFITH, Virginia
JARED HUFFMAN, California            GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia         BUDDY CARTER, Georgia
MIKE LEVIN, California               CAROL MILLER, West Virginia
SEAN CASTEN, Illinois                KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado

                              ----------                              

                Ana Unruh Cohen, Majority Staff Director
                  Marty Hall, Minority Staff Director
                        climatecrisis.house.gov
                        
                            C O N T E N T S

                   STATEMENTS OF MEMBERS OF CONGRESS

                                                                   Page
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, and Chair, Select Committee on the Climate Crisis:
    Opening Statement............................................     1
    Prepared Statement...........................................     3
Hon. Garret Graves, a Representative in Congress from the State 
  of Louisiana, and Ranking Member, Select Committee on the 
  Climate Crisis:
    Opening Statement............................................     4

                               WITNESSES

Anica Landreneau, Senior Principal, Director of Sustainable 
  Design, HOK
    Oral Statement...............................................     6
    Prepared Statement...........................................     8
Kara Saul Rinaldi, Vice President of Government Affairs, Policy, 
  and Programs, Building Performance Association
    Oral Statement...............................................    38
    Prepared Statement...........................................    40
James Rutland, President, Lowder Homes, on behalf of National 
  Association of Home Builders
    Oral Statement...............................................    48
    Prepared Statement...........................................    50
Khalil Shahyd, Senior Policy Advocate, Healthy People/Thriving 
  Communities, Natural Resources Defense Council
    Oral Statement...............................................    59
    Prepared Statement...........................................    61
Roy Wright, President, Insurance Institute for Business and Home 
  Safety
    Oral Statement...............................................    68
    Prepared Statement...........................................    69

                       SUBMISSIONS FOR THE RECORD

Report, Energy Efficiency Jobs in America, submitted for the 
  record by Ms. Castor...........................................    93
Report, Implementing an Outcome-Based Compliance Path in Energy 
  Codes: Guidance for Cities, submitted for the record by Ms. 
  Castor.........................................................    93
Report, Understanding Code Change Proposal CE264-19: Zero Code 
  Renewable Energy Appendix, submitted for the record by Ms. 
  Castor.........................................................    93
Letter from PG&E, submitted for the record by Ms. Castor.........    93

                                APPENDIX

Questions for the Record from Hon. Kathy Castor to Anica 
  Landreneau.....................................................    96
Question for the Record from Hon. Garret Graves to Anica 
  Landreneau.....................................................   104
Questions for the Record from Hon. Kathy Castor to Kara Saul 
  Rinaldi........................................................   113
Questions for the Record from Hon. Garret Graves to James Rutland   120
Questions for the Record from Hon. Kathy Castor to Khalil Shahyd.   123
Questions for the Record from Hon. Kathy Castor to Roy Wright....   127
Question for the Record from Hon. Garret Graves to Roy Wright....   129
    SOLVING THE CLIMATE CRISIS: CLEANER, STRONGER BUILDINGS

                              ----------                              


                       THURSDAY, OCTOBER 17, 2019

                          House of Representatives,
                    Select Committee on the Climate Crisis,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:03 a.m., in Room 
2020, Rayburn House Office Building, Hon. Kathy Castor 
[chairwoman of the committee] presiding.
    Present: Representatives Castor, Bonamici, Brownley, 
Huffman, Casten, Graves, Griffith, Palmer, Carter, and Miller.
    Ms. Castor. The committee will come to order.
    The chair is authorized to declare a recess at any time of 
this committee, without objection.
    I would like to start off the committee hearing this 
morning with a moment of silence for one of our colleagues. We 
have very heavy hearts this morning due to the passing of our 
colleague, Congressman Elijah Cummings of Maryland.
    He was a champion for the people, an outspoken advocate for 
fairness, equality. He was a true hero to his district in the 
Baltimore area, and everyone can take a page out of his life.
    So would you join me at this time in a moment of silence 
for this great American champion?
    [Moment of silence.]
    Ms. Castor. Thank you.
    Well, good morning, everyone.
    This year, our committee has discussed ways to reduce 
emissions in the transportation sector, the power sector, the 
industrial sector. And, today, we are looking at the building 
sector.
    Whether it is houses or apartment complexes or office 
buildings, the places where we live and work use a lot of 
energy, and they are responsible for a significant share of 
carbon pollution. In fact, just last year, residential and 
commercial buildings were the source of more than one-fourth of 
all carbon dioxide emissions in the United States.
    When Americans think of pollution, they usually think of 
smokestacks, but the reality is more complicated. About three-
fourths of electricity sold in the United States is used in 
building, and natural gas, oil, and propane are used to heat up 
showers or keep homes and offices warm. Even the manufacturing, 
transportation, and construction of building materials are 
contributing to carbon pollution.
    The climate crisis also leaves us with a resiliency 
problem. Many existing homes, businesses, and hospitals were 
not built to withstand the sorts of extreme events made worse 
by climate change, including extreme heat, flooding, storms, 
and wildfires. Over the last decade, extreme weather events 
have caused more than $750 billion in damage, with many of 
these losses occurring to buildings.
    We have a big challenge before us. In the United States, 
most of the homes and commercial buildings that we have right 
now will remain standing in 2050. They have already been built. 
By that year, scientists say we need to have hit zero net 
emissions to avert the worst impacts of the climate crisis. We 
need nothing short of an ambitious national plan to make sure 
new buildings are net-zero energy--that is, that they produce 
as much energy as they use.
    We also need to help property owners and business owners 
make existing buildings more energy-efficient, helping them 
rely more and more on clean energy rather than on fossil fuels.
    Of course, we must also work to make sure our homes and 
buildings don't end up as storm debris, and that starts by 
making them resilient to the physical impacts of climate 
change. In Florida, we saw the importance of strong building 
design codes and standards in the devastating aftermath of 
Category 5 Hurricane Michael that hit the Florida panhandle. 
The storm leveled many homes, but some were able to withstand 
the strong winds and the flooding because they incorporated 
more resilient building techniques.
    There is also an economic incentive to act. More resilient 
and efficient buildings not only pollute less, they also cost 
less to operate and to insure. That is more money in the 
pockets of homeowners and business owners across America. When 
we talk about constructing new buildings and retrofitting old 
ones, that means construction jobs--lots of well-paying, often 
unionized jobs. Many innovations already have been developed by 
businesses large and small, entrepreneurs, and our academic 
research centers and more, and we need to scale them up.
    Buildings are the foundation of our communities, so it is 
not surprising that State and local governments have taken the 
lead in developing a climate smart-building policy. In May, New 
York City set carbon emissions caps for energy use in buildings 
over 25,000 square feet. Last year, California created a 
program to incentivize the use of low-carbon technologies in 
new building construction. And we have seen how cities facing 
an existential threat from climate change, like Boston, Miami, 
and Norfolk, are at the forefront of developing resilient 
strategies to protect vulnerable communities.
    Now we must step up to help them. An ambitious national 
plan for cleaner, stronger buildings requires national 
leadership. And Congress needs to offer smart incentives to set 
a direction for the numerous Federal, State, and local 
officials involved in the building sector. We also have the 
responsibility to ensure communities on the front lines of 
climate change, including low-income and communities of color, 
are front of mind when we craft policy.
    I look forward to learning from our witnesses today. 
Welcome to all of you. We look forward to hearing your ideas 
for an ambitious, equitable building policy.
    At this time, I recognize the ranking member, Mr. Graves, 
for 5 minutes for an opening statement.
    [The statement of Ms. Castor follows:]
                              ----------                              


   Opening Statement of Chair Kathy Castor (As Prepared for Delivery)

 Hearing on ``Solving the Climate Crisis: Cleaner, Stronger Buildings''

                 Select Committee on the Climate Crisis

                            October 17, 2019

    This year, our committee has discussed ways to reduce emissions in 
the transportation sector, the power sector, and the industrial sector. 
Today, we're looking at the buildings sector.
    Whether it's houses, apartment complexes, or office buildings, the 
places where we live and work use a lot of energy. And they're 
responsible for a significant share of carbon pollution. In fact, just 
last year, residential and commercial buildings were the source of more 
than one-fourth of all carbon dioxide emissions in the United States.
    When Americans think of pollution, they usually think of 
smokestacks. But the reality is more complicated. About three-fourths 
of the electricity sold in the United States is used in buildings. And 
natural gas, oil, and propane are used to heat up showers, or to keep 
homes and offices warm. Even the manufacturing, transportation and 
construction of building materials are contributing to carbon 
pollution.
    The climate crisis also leaves us with a resiliency problem. Many 
existing homes, businesses, and hospitals were not built to withstand 
the sorts of extreme events made worse by climate change, including 
extreme heat, flooding, storms, and wildfires. Over the last decade, 
extreme weather events have caused more than $750 billion in damage, 
with much of those losses occurring to buildings.
    We have a big challenge before us. In the United States, most of 
the homes and commercial buildings that will be standing in 2050 have 
already been built. By that year, scientists say we need to have hit 
zero net emissions to avert the worst impacts of the climate crisis.
    We need nothing short of an ambitious national plan to make sure 
new buildings are net zero energy--that is, that they produce as much 
energy as they use. We also need to help property owners and business 
owners make existing buildings more energy-efficient, helping them rely 
more and more on clean electricity, rather than fossil fuels.
    Of course, we must also work to make sure our homes and buildings 
don't end up as storm debris. And that starts by making them resilient 
to the physical impacts of climate change. In Florida, we saw the 
importance of building design, codes, and standards in the devastating 
aftermath of Category 5 Hurricane Michael. The storm leveled many 
homes, but some were able to withstand the strong winds and the 
flooding because of more resilient construction techniques.
    There's also an economic incentive to act. More resilient and 
efficient buildings not only pollute less--they also cost less to 
operate and to insure. That's more money in the pockets of homeowners 
and business owners. And when we talk about constructing new buildings 
and retrofitting old ones, that means construction jobs. Lots of well-
paying, often-unionized jobs.
    Many innovations already have been developed by businesses--large 
and small--entrepreneurs, our academic research centers, and more. We 
just need to scale them up.
    Buildings are the foundation of our communities, so it's not 
surprising that state and local governments have taken the lead in 
developing climate-smart building policy. In May, New York City set 
carbon emissions caps for energy use in buildings over 25,000 square 
feet. Last year, California created a program to incentivize the use of 
low-carbon technologies in new building construction. And we've seen 
how cities facing an existential threat from climate change--like 
Boston, Miami, and Norfolk--are at the forefront of developing 
resilience strategies to protect vulnerable communities.
    Now we must step up to help them. An ambitious national plan for 
cleaner, stronger buildings requires national leadership. And Congress 
needs to offer smart incentives, to set a direction for the numerous 
federal, state, and local officials involved in the buildings sector. 
We also have the responsibility to ensure communities on the frontlines 
of climate change--including low-income communities and communities of 
color--are front-of-mind when we craft policy.
    I look forward to learning from out witnesses today, and hearing 
their ideas for ambitious, equitable building policy.

    Mr. Graves. Thank you, Madam Chair.
    And, Madam Chair, first, I want to thank you for 
recognizing our colleague, Elijah Cummings, and just the shock 
that we all learned this morning of his passing. I, like 
everyone, had the opportunity to work with him, and I respected 
the fact that he did fight for the people that he represented. 
And had very good, respectful interactions with him. And a loss 
to this Congress and to the State of Maryland, and I am just 
really devastated by the loss there.
    Secondly, I want to thank you for holding this hearing. I 
think this is a really important topic. I do. I think it is a 
really important topic.
    Third, I would like to thank you for--you put out an 
inquiry to the public asking for feedback on climate, and you 
and your staff, you all have been great about sharing that 
information and the feedback. And I do think it is important 
that we have those open lines of communication to ensure that 
we are looking at the same data and information to make sure 
that, as we move forward to a report, that we are seeing the 
same stuff so we can move in the same direction and ensure that 
we are being constructive moving forward.
    Madam Chair, you know I am from Louisiana, and you probably 
get aggravated listening to me talk about all the experiences 
from home, but we have in the last several years been through 
Hurricanes Katrina, Rita, Gustav, Ike, Isaac, and it has caused 
just really unbelievable consequences to our community.
    And, more recently, in 2016, we had this unnamed storm that 
was projected to be a 1,000-year storm. I think that our 
friends at NIFP at the time said that it was looking to be the 
fourth-most-costly flood disaster in U.S. history, and it was 
an unnamed storm. What was it? Thirty-two inches of rain in 36 
hours in some areas. I mean, where do you put that? Louisiana 
is as flat as can be; there is no way to evacuate the water. 
And it caused devastating consequences.
    In a previous life, I worked on resiliency measures. I 
helped to rebuild south Louisiana after Hurricanes Katrina and 
Rita, specifically rebuilding the coastal wetlands, rebuilding 
the levees, and just focused on resiliency and sustainability 
in communities.
    And one of the things we learned in all that process, 
through that $25 billion effort, one of the largest civil works 
programs in U.S. history, is we learned that we have more tools 
than just levees and restoring wetlands; that you have barrier 
islands and the dunes that go along with those. You have, of 
course, wetlands, which are really important. You have cheniers 
or ridges that are native to coastal Louisiana and many other 
coastal communities.
    You do have structural protection like levees and flood 
walls. You have pump stations. You have elevation of homes. You 
have zoning. You have building standards.
    And that last group of them, those are important tools, but 
they are not tools that are often in the tool chest of the 
Congress, of the Federal Government. But they are really 
important tools, and they need to be integrated into this 
overall objective of our desire to achieve certain resiliency 
standards.
    And I know that Mr. Wright has been outspoken about this 
issue and ensuring that we properly use those tools, and I 
think you are right on that. They are an important set of tools 
that we need to make sure we are properly investing in.
    And it is not just about the resilient construction and 
making sure of the right elevation and right materials. It also 
is ensuring that we are conveying lessons learned and successes 
in energy efficiency and conservation. That is important as 
well, and I think it is part of our overall resiliency.
    But, but, but, as I have said at other hearings, we have to 
make sure we get it right. And that means that we don't come in 
and tell these people, oh, you have to have this gold-plated 
shingle and this gold-plated window and other things that are 
going to make homes unaffordable.
    That is part of our overall resiliency goal, is making sure 
that we make safe houses affordable and accessible and that we 
are not going to be punitive to low-income folks and prevent 
them from having access to houses. And so we have to make sure 
that we are not sole-sourcing different building materials or 
standards to where there is only one company that makes a 
product.
    So I do think it is an important tool in the tool chest in 
terms of building standards and resiliency and elevation of 
homes and other things, but we have to be careful about how we 
are proceeding to ensure that the standards, the 
recommendations that we move forward with--and whether it is 
through the Flood Insurance Program reauthorization or other 
tools--that we do it in a way that truly advances the goal of 
resiliency, of affordability, of energy efficiency, 
conservation. I think that we can achieve multiple goals.
    I want to say it again. I really appreciate you holding 
this hearing. I think this is a great topic for us to be 
working together on.
    I want to thank all the witnesses for being here today, and 
I am looking forward to hearing your testimony.
    I yield back.
    Ms. Castor. Perfect.
    Without objection, members who wish to enter opening 
statements into the record may have 5 business days to do so.
    Ms. Castor. Now I would like to welcome our witnesses. I 
will proceed with an introduction, and then we will go to each 
one of you.
    Welcome, Anica Landreneau. She is a senior principal and 
director of sustainable design for the architecture firm HOK. 
Anica also serves on Washington, D.C.'s Green Construction and 
Energy Commercial Technical Advisory Group as well as on Mayor 
Bowser's Green Building Advisory Council.
    Kara Saul Rinaldi is vice president of government affairs 
and policy for the Building Performance Association. She is a 
leading energy and climate policy expert with more than 20 
years of experience. Previously, she was the director of 
government and public affairs for Owens Corning.
    Jimmy Rutland is president of Lowder New Homes and is on 
the board of directors for the National Association of Home 
Builders. He also serves on the State of Alabama Energy and 
Residential Codes Board and is a Certified Green Professional 
and a Green Energy Key Builder.
    Khalil Shahyd is a senior policy advocate for the Healthy 
People and Thriving Communities Program at the Natural 
Resources Defense Council. Khalil works to advance Federal 
policy supporting energy-efficiency programs targeting the 
affordable multifamily housing sector.
    And Roy Wright is the president of the Insurance Institute 
for Business and Home Safety. Previously, he was the Chief 
Executive of the National Flood Insurance Program and Deputy 
Associate Administrator for Insurance and Mitigation in FEMA's 
Federal Insurance and Mitigation Administration.
    Without objection, the witnesses' written statements will 
be made part of the record.
    And, with that, Ms. Landreneau, you are now recognized to 
give a 5-minute presentation of your testimony.

 STATEMENTS OF ANICA LANDRENEAU, SENIOR PRINCIPAL, DIRECTOR OF 
 SUSTAINABLE DESIGN, HOK; KARA SAUL RINALDI, VICE PRESIDENT OF 
      GOVERNMENT AFFAIRS AND POLICY, BUILDING PERFORMANCE 
  ASSOCIATION; JAMES RUTLAND, PRESIDENT, LOWDER NEW HOMES, ON 
  BEHALF OF THE NATIONAL ASSOCIATION OF HOME BUILDERS; KHALIL 
    SHAHYD, SENIOR POLICY ADVOCATE, HEALTHY PEOPLE/THRIVING 
COMMUNITIES, NATURAL RESOURCES DEFENSE COUNCIL; AND ROY WRIGHT, 
  PRESIDENT, INSURANCE INSTITUTE FOR BUSINESS AND HOME SAFETY

                 STATEMENT OF ANICA LANDRENEAU

    Ms. Landreneau. Thank you, Chair Castor and Ranking Member 
Graves, as well as members of the committee, for recognizing 
the important role our built environment has to play in 
providing a safe, resilient future for our country.
    In order to leverage the opportunity we have in the 
building sector, we need to reduce emissions from the built 
environment by at least 50 percent by 2030 and 100 percent by 
2050. We do this by addressing energy efficiency in new and 
existing buildings, electrification, grid harmonization, 
renewable energy, and embodied carbon.
    New buildings and alterations to existing buildings are 
subject to building codes, which have been developed since the 
1800s to protect people and communities. Building codes are 
updated in 3-year cycles by members of the building industry in 
a public stakeholder engagement process.
    And while model codes are updated every 3 years, they are 
not adopted uniformly across the United States. There are 11 
States with no statewide adoption or codes that predate the 
2006 Commercial International Energy Conservation Code, or 
IECC. In fact, nearly half the country is still on the 2009 or 
an older energy code at the State level. Half the country is 
building buildings that will consume energy for 60 or more 
years on decade-old energy codes.
    The U.S. is projected to construct 45 billion square feet 
over the next decade. The first step is simply to bring all of 
our States and cities up to the most current code.
    Many jurisdictions do not advance the code more 
consistently because they are challenged to maintain a 
sufficient code enforcement workforce or funds for training to 
address the new codes every 3 years. Analysis indicates $6 are 
lost for every $1 we don't spend on code compliance.
    Congress can provide assistance to jurisdictions who wish 
to convert to an e-plan review process or leverage integrated 
technology solutions to streamline permitting and inspections, 
enabling better code enforcement for more consistent code 
updates.
    Congress can also incentivize jurisdictions by replicating 
a highly successful program implemented under the 2009 American 
Recovery and Reinvestment Act that provided free training and 
resources along with strong incentives for jurisdictions to 
adopt the 2009 IECC.
    I also serve on the 2021 IECC Commercial Development 
Committee. That is up for a final vote in November, and it is 
estimated to be 10 to 15 percent more efficient than the 2018 
code.
    In addition to cost-effective efficiency measures, it 
includes a Zero Code appendix. This is built into the code 
enforcement framework of the IECC but is voluntarily adopted by 
jurisdictions and may be adjusted locally. The provisions 
contained in the appendix only become mandatory when specified 
as such in the jurisdictions adopting ordinance.
    Congress can offer incentives to state and local 
governments to increase the rate of adoption and encourage use 
of the Zero Code appendix. Congress can link existing Federal 
tax incentives to zero-energy and zero-carbon goals. Congress 
can maintain and increase Federal tax incentives for renewable-
energy technologies, including storage.
    A few cities and states are phasing in zero-energy and zero 
building codes already, including Santa Monica, California; 
Oregon; Washington, D.C.; and Cambridge, Massachusetts; among 
others.
    Energy codes address new construction and alteration 
projects that require a permit. However, in most established 
U.S. cities, 80 to 90 percent of the buildings that will be 
consuming energy in 2050 already exist. Therefore, other 
complementary policy solutions, such as transparency and 
benchmarking, are required.
    Transparency and benchmarking policies have been 
implemented in over two dozen jurisdictions: Austin, Chicago, 
Denver, Portland, Salt Lake City, and San Diego, just to name a 
few. These policies encompass nearly 92,000 properties at 11 
billion square feet of floor area reported every year, and, 
through transparency alone, they are seeing an average of 4 to 
13 percent improvement in energy efficiency.
    Investment in energy efficiency is an investment in local 
jobs. The city of Atlanta determined such investment returned 
$41 in local benefits for every $1 invested, and they now 
require commercial buildings over 25,000 square feet and larger 
to report annual Energy Star scores and perform energy audits 
every 10 years.
    Once jurisdictions have created transparency 
infrastructure, they may want to require buildings to take 
additional steps beyond reporting. Washington, D.C., Washington 
State, and New York City have already passed legislation to 
address existing building performance standards, elevating 
existing building performance through Energy Star, energy use 
intensity, and greenhouse gas emissions per building type.
    Congress can incentivize States and cities to adopt these 
policies, particularly when they are linked to national 
benchmarking platforms such as Energy Star Portfolio Manager. 
Support could include co-funding of staff or providing 
resources, tools, and training.
    Local policy can serve as a laboratory for innovative 
policy ideas that can be leveled up to State and eventually 
Federal policy. Eighty-two percent of the U.S. population lives 
in urban areas, and that number is growing. This growth in 
migration means we will see investment in new construction as 
well as reinvestment in our existing neighborhoods and 
communities.
    Thank you.
    [The statement of Ms. Landreneau follows:]
                              ----------                              


                     Testimony of Anica Landreneau

         Senior Principal, Director of Sustainable Design, HOK

   Before the U.S. House of Representatives, Select Committee on the 
                             Climate Crisis

        Solving the Climate Crisis: Cleaner, Stronger Buildings

                            October 17, 2019

    Thank you for recognizing the important role our built environment 
has to play in meeting our climate goals and providing a safe, 
resilient future for our country.
Why Buildings?
    Buildings and construction account for approximately 40% of global 
CO2 emissions.\1\ In order to leverage the opportunity we have in the 
building sector to meet the targets of the Paris Agreement, we need to 
reduce emissions from the built environment by at least 50% by 2030, 
optimally 65% by 2030, and completely eliminate emissions from the 
built environment by 2050.
---------------------------------------------------------------------------
    \1\ UN Environment Annual Report (2017).
---------------------------------------------------------------------------
    We do this by addressing the operational efficiency in new and 
existing building stock--targeting net zero or net positive 
performance, electrification, grid harmonization, renewable energy 
generation onsite and offsite, land use and development policies, as 
well as the embodied carbon in our building materials.
Energy Performance in New Buildings and Alterations
    New buildings and alterations to existing buildings are subject to 
building codes through a permitting and inspections process. Building 
codes are regulations for issues such as fire and life safety that have 
been developed since the 1800s to protect people and communities.
    In order to stay current and relevant, model building codes are 
updated in 3-year cycles by volunteer code committees comprised of 
members of the building industry, such as architects, engineers, 
manufacturers, building industry associations and building code 
officials. Anyone can submit code change proposals, code hearings are 
public and live webcast, draft code changes are subject to public 
comment and each new edition of the model code is ultimately voted on 
by members of the codes council after a lengthy stakeholder engagement 
process.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    From 2006 to 2012, model energy codes increased energy savings 
potential by nearly 30%.\3\ While model codes are updated every three 
years, they are not adopted uniformly across the US. There are 11 
states with no statewide adoption or codes that predate the 2006 
International Energy Conservation Code (IECC). In fact, nearly half the 
country is still on the 2009 or an older energy code at the state 
level.\4\
---------------------------------------------------------------------------
    \2\ https://aceee.org/blog/2016/02/take-ride-energy-slide-building-
codes.
    \3\ Assessment Methodology for Code Compliance in Medium to Large 
Cities (NRDC, IMT; 2018).
    \4\ http://bcapcodes.org/code-status/commercial/.
---------------------------------------------------------------------------
    Half the country is constructing buildings that will consume energy 
for 60 or more years on decade-old energy codes. Fortunately, cities 
(or counties) are able to adopt more stringent energy codes than the 
state level, and there are many instances where local code adoption has 
significantly outpaced the state.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Standard/Code Cycle Equivalency
    ASHRAE 90.1-2004    IECC 2006
    ASHRAE 90.1-2007    IECC 2009
    ASHRAE 90.1-2010    IECC 2012
    ASHRAE 90.1-2013    IECC 2015
    ASHRAE 90.1-2016    IECC 2018
    ASHRAE 90.1-2018    IECC 2021*

    *Final vote November 2019, publication 2020

    The U.S. is projected to construct 45 billion square feet over the 
next decade.\5\ One of the biggest opportunities and one of the 
simplest solutions is to simply bring all of our states and cities up 
to the most current energy codes so that this new building stock is as 
efficient as possible for the next few generations.
---------------------------------------------------------------------------
    \5\ U.S. Energy Information Administration Annual Energy Outlook 
2019.
---------------------------------------------------------------------------
    Why don't jurisdictions adopt the newest codes more regularly? Many 
jurisdictions do not advance the code more consistently because they 
are increasingly challenged to maintain sufficient code enforcement 
staff to effectively provide services and to fund the training, tools, 
and resources necessary to maintain skills let alone the capacity to 
address new codes every three years.\6\
---------------------------------------------------------------------------
    \6\ The Future of Code Officials: Results and Recommendations from 
a Demographic Survey (NIBS, ICC; 2014).
---------------------------------------------------------------------------
How much does it cost to enforce the energy code?
    A study conducted by the Lawrence Berkley National Laboratory found 
the average cost of enforcing the energy code to be $139 per commercial 
building and $49 per single-family home. These figures are based on a 
survey of 23 local building departments with an average time to conduct 
plan review and on-site inspections of five hours for commercial 
projects and 1.9 hours for residential projects. The authors of the 
study acknowledge that the cost estimates are only representative of 
personnel time and are exclusive of overhead, benefits, or travel cost 
(for on-site inspection), which could triple or quadruple the figures. 
Larger cities with higher overhead and labor costs may need to spend 
$400-$500 per new commercial building and $150-$200 per new single-
family residential home as the full cost of enforcing the energy code.
How much does it cost not to enforce the energy code?
    The direct result for building owners of legacy energy codes or a 
lack of code enforcement is higher utility bills. Analysis indicates 
for every dollar invested in energy code compliance six dollars are 
saved.\7\ That is six dollars lost for every dollar we don't spend on 
code compliance. In addition to monetary savings, adoption of and 
compliance with current energy code has many non-energy related 
benefits such as improved occupant comfort, better indoor air quality, 
and a more resilient building stock.
---------------------------------------------------------------------------
    \7\ Assessment Methodology for Code Compliance in Medium to Large 
Cities (NRDC, IMT; 2018).
---------------------------------------------------------------------------
What can Congress do?
    Congress can provide resources to state and local governments in 
many ways. Congress can provide assistance to jurisdictions who wish to 
convert to an e-plan review process or to leverage integrated 
technology solutions that work with Building Information Modeling (BIM) 
design tools to facilitate virtual inspections through Augmented 
Reality (AR), Virtual Reality (VR) or drone site visits, all of which 
can streamline the permitting and inspection process and creates more 
efficient use of staff resources, enabling better code enforcement 
procedures and more consistent code updates.\8\
---------------------------------------------------------------------------
    \8\ Disruption, Evolution, and Change: AIA's vision for the future 
of design and construction (AIA, 2019).
---------------------------------------------------------------------------
    Congress can also incentivize jurisdictions to adopt the latest 
codes by offering to co-fund staff or provide training for code 
officials using the existing U.S. Department of Energy (DOE) energy 
code training modules. There was a highly successful Federal program in 
the wake of the last recession with the 2009 American Recovery and 
Reinvestment Act that provided free training and 2009 IECC code books 
and workbooks along with strong incentives for all jurisdictions to 
adopt the 2009 IECC.\9\ This incentive program is likely a major factor 
leading 88% of the U.S. to at least be on the 2009 energy code or a 
later edition now.
---------------------------------------------------------------------------
    \9\ http://bcapcodes.org/topics/federal-funding/.
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What are Outcome-Based Codes and why do they matter?
    Ultimately if we want to meet our climate goals and advance our 
buildings to zero carbon, our codes need to move away from component-
based prescriptive manuals and predictive energy models to outcome-
based codes.
    Our current model code structure has limited potential impact on 
overall energy use because it applies only to new construction, major 
renovations, and installed building features. The efficiency of many of 
these installed features is actually limited by Federal law.\10\ In 
1975 Congress enacted the National Appliance Energy Conservation Act 
(NAECA) to set national standards for equipment like heaters, boilers 
and rooftop air conditioners, but this legislation also disallows 
states and other jurisdictions from setting more stringent local 
standards on these products. The International Code Council (ICC), the 
states, and or cities that adopt stretch energy codes, are still 
strictly limited in how much efficiency they can achieve in the 
products covered by NAECA.
---------------------------------------------------------------------------
    \10\ Federal Preemption as a Barrier to Cost Savings and High-
Performance in Local Codes (NBI, 2017).
---------------------------------------------------------------------------
    In addition, because of the robust (and lengthy) stakeholder 
engagement process, codes are also slow to embrace new technologies or 
materials, or innovative methods. A prescriptive code therefore by 
definition isn't always keeping up with the latest available 
technology, material or methods. A code enforcement official has some 
leeway to interpret the code but may feel restricted by code language 
and err on the side of excluding new means or methods.
    More importantly, the energy code doesn't address operations, 
maintenance, or occupant behavior that occurs after the issuance of a 
certificate of occupancy and that will impact performance over the 
lifecycle of a building.\11\ While a predicted performance compliance 
path does exist in the current code structure, and energy simulation 
tools and processes have become more seamlessly integrated into project 
design and delivery, and the cost of energy modeling pays for itself in 
well under a year of operational savings,\12\ simulation tools often 
don't account for the wide variation in operations and maintenance, 
occupant behavior or plug-loads.
---------------------------------------------------------------------------
    \11\ Implementing an Outcome-Based Compliance Path in Energy Codes 
(NIBS, 2017).
    \12\ Architect's Guide to Building Performance: Integrating 
performance simulation in the design process (AIA, 2019).
---------------------------------------------------------------------------
    Outcome-based codes establish a target energy use level or energy 
allowance, then require measured and reported actual energy use in 
relation to that target once the building is completed and occupied. At 
a minimum, an outcome-based energy code requires 12 consecutive months 
of post-occupancy performance within the allowed energy or carbon 
budget, typically within the first 18-36 months of use to normalize for 
weather and allow for commissioning. If the building doesn't meet 
performance requirements, the builder or owner forfeits a financial 
penalty.
    Many jurisdictions do not have the personnel or fiscal resources to 
adequately ensure compliance with energy requirements. By focusing on 
the outcome, code officials and communities can be assured that 
requirements are being met while not incurring additional enforcement 
burdens. Outcome-based codes mean that there would be less reliance on 
design documentation to obtain a permit, alleviating the pressure on a 
diminishing code enforcement workforce and freeing that workforce up to 
focus on building lifecycle performance policies such as transparency 
(annual benchmarking) and building performance standards. Typically, 
communities that are prepared for an outcome-based code already have 
adopted public and commercial building benchmarking policies, thus 
establishing an annual communication channel between building owner and 
building performance oversight agency.\13\
---------------------------------------------------------------------------
    \13\ Implementing an Outcome-Based Compliance Path in Energy Codes 
(NIBS, NBI; 2017).
---------------------------------------------------------------------------
    This simplification of the energy code would allow for more rapid 
escalation of performance expectations without the burden of retraining 
the entire code enforcement workforce every code cycle. It will also 
link escalation design expectations to more rigorous oversight of 
construction quality and ongoing performance optimization as an 
integral part of operations and maintenance activities. The National 
Institute of Building Sciences (NIBS) and New Building Institute NBI) 
have provided energy code appendix language in the guide Implementing 
an Outcome-Based Compliance Path in Energy Codes to help jurisdictions 
interested in moving towards an outcome-based code.
What can Congress do?
    Congress can incentivize states and cities to be early adopters of 
outcome-based codes by supporting the transition of staff and 
permitting infrastructure, public education and engagement programs, 
annual benchmarking and reporting infrastructure and the development of 
shared tools and lessons learned.
    Congress can also link existing Federal tax incentives to outcomes, 
such as target Energy Use Intensity (EUI) metrics or Zero Energy and 
Zero Carbon goals. By leveraging existing financial incentives but 
tying them to outcome-based requirements, Congress not only uses its 
buying power to reduce carbon emissions in the built environment but 
also creates a replicable framework that smaller jurisdictions can 
emulate and normalizes the expectation of performance outcomes.
Where is the model Energy Code now?
    The proposed International Energy Conservation Code (IECC) 2021 has 
concluded public comments and is up for final hearings in October and 
final vote in November 2019. It is estimated the proposed model code is 
approximately 10%-15% more efficient that the 2018 IECC. It includes 
cost effective advances in enclosure efficiencies, lighting, building 
commissioning and smart building operation infrastructure.
    The 2021 model energy code includes a Zero Code appendix, a 
platform that jurisdictions can opt into to incentivize or make 
mandatory for certain building types or sizes to help them meet their 
climate goals. As an appendix it is built into the code enforcement 
framework of the IECC but is voluntarily adopted by jurisdictions and 
could be adjusted locally to align with a step code or other local 
programs. The provisions contained in this appendix will become 
mandatory when specified as such in the jurisdiction's adopting 
ordinance.
    The Zero Code appendix to the 2021 IECC is constructed to require 
that new commercial, institutional, and mid- to high-rise residential 
buildings install or procure enough renewable energy to achieve zero 
net carbon annually.\14\ The appendix encourages on-site renewable 
energy systems when feasible but also supports off-site procurement of 
renewable energy through a variety of methods. This appendix does not 
allow renewable energy to be traded off against the energy efficiency 
required by the 2021 IECC. Buildings are required to comply with the 
2021 IECC using either the prescriptive or performance approach. When 
the prescriptive approach is used, the renewable energy that must be 
installed or procured is specified based on building type and climate 
zone.
---------------------------------------------------------------------------
    \14\ Understanding Code Change Proposal CE264-19 Zero Code 
Renewable Energy Appendix (AIA, 2019).
---------------------------------------------------------------------------
The ZERO Code Renewable Energy Appendix is unique because of its:
          1. Incorporation into the 2021 IECC, a highly efficient 
        national building energy code;
          2. Availability of sophisticated easy-to-use code compliance 
        tools and software (developed by the U.S. Department of Energy) 
        such as COMcheck, EnergyPlus, and a multitude of private sector 
        energy performance programs;
          3. Renewable energy default table and calculator for all US 
        locations that determines the renewable energy required and 
        estimates the potential on-site renewable energy production and 
        off-site renewable energy procurement needed to achieve zero 
        net carbon; and
          4. Recognition of off-site renewable energy options that 
        result in renewable energy generation that exceeds what 
        utilities are already required to provide by their mandated 
        RPS.
    Once the IECC 2021 model code is published Congress can offer 
incentives to state and local governments to increase speed of adoption 
and encourage use of the Zero Code appendix.\15\
---------------------------------------------------------------------------
    \15\ https://architecture2030.org/wp-content/uploads/ZERO-Code-RE-
Appendix-Fact-Sheet.pdf.
---------------------------------------------------------------------------
    The entire draft 2021 energy code has been endorsed by the U.S. 
Conference of Mayors \16\ as a key part of getting to net zero building 
construction by 2050.
---------------------------------------------------------------------------
    \16\ July 1, 2019 USCM Resolution 59.
    
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Why do we need a Zero Code?
    Zero Net Energy (ZNE) buildings are picking up momentum in the 
market and the early adopters have shown that our industry has the 
materials and technology available to complete 67 ZNE buildings and 
have another 415 on the way.\17\ These projects are located in every 
climate zone in the U.S. The majority of completed and verified ZNE 
buildings (roughly 80%) are smaller than 25,000 square feet. However, 
there are signs the market is ready to take on larger projects with 
than 40% of projects registered as `emerging zero energy' at 50,000 sf 
or larger. Advancing to a zero energy or zero carbon code, particularly 
in jurisdictions with advanced climate policies who are ready to take 
on the challenge, will move the market faster than waiting for 
voluntary market adoption.
---------------------------------------------------------------------------
    \17\ Getting to Zero Status Update and List of Zero Energy Projects 
(NBI, 2018).

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Who is adopting Zero Codes and policies?
    Many cities and a few states are already phasing in zero energy and 
zero carbon building codes. For example (see timeline, following page):
           The city of Santa Monica, CA started enforcing a 
        Zero Net Energy (ZNE) Code for single family and low-rise 
        residential buildings in 2017.\18\
---------------------------------------------------------------------------
    \18\ https://www.smgov.net/Departments/OSE/Categories/
Green_Building/Energy_Reach_Code_and_ZNE.aspx.
---------------------------------------------------------------------------
           The State of California \19\ requires all new 
        residential construction to be ZNE by 2030, all new commercial 
        construction to be ZNE by 2030. California also addresses 
        existing buildings, requiring 50% of commercial buildings to be 
        retrofitted to ZNE by 2030, and 50% of renovations to state-
        owned buildings to be ZNE by 2025%. 100% of state-owned 
        buildings by 2030.
---------------------------------------------------------------------------
    \19\ https://www.cpuc.ca.gov/ZNE/.
---------------------------------------------------------------------------
           The State of Oregon \20\ requires state-owned 
        buildings to achieve carbon neutral operations starting in 
        2022. The residential code must be solar-ready starting in 2020 
        and Zero-Energy ready in 2023. In 2022, the commercial code 
        must be solar-ready, and parking structures, commercial or 
        residential, are required to install a minimum of 2 Electric 
        Vehicle (EV) charging stations. All new commercial and state-
        owned buildings must be Net Zero by 2030.
---------------------------------------------------------------------------
    \20\ Oregon State Climate Action EO No. 17-20.
---------------------------------------------------------------------------
           In Washington, DC \21\ the Clean Energy DC Omnibus 
        Act requires a Net Zero building code by 2026 and a net-zero 
        retrofit to at least 12.5% of its building stock by 2032. DC 
        currently has a voluntary ``Appendix Z'' to its proposed Energy 
        Code update awaiting final approval to go into effect in 2020.
---------------------------------------------------------------------------
    \21\ https://code.dccouncil.us/dc/council/laws/22-257.html.
---------------------------------------------------------------------------
           Cambridge, MA \22\ has committed to be a Net Zero 
        community, requires all new buildings to be Net Zero by 2040.
---------------------------------------------------------------------------
    \22\ https://www.cambridgema.gov/ cents/media/Images/
CDD/Climate/NetZero/netzero_20150408_infographic.jpg.
---------------------------------------------------------------------------
           Other cities that have signed on as part of a global 
        C40 Cities Net Zero Carbon Buildings Declaration \23\ to net 
        zero carbon new construction by 2030 and existing buildings by 
        2050 include Los Angeles, New York City, Portland, San 
        Francisco, Seattle, San Jose.
---------------------------------------------------------------------------
    \23\ https://www.c40.org/other/net-zero-carbon-buildings-
declaration.
---------------------------------------------------------------------------
           The Energy Independence and Security Act of 2007 
        [EISA Sec. 433] requires New Federal buildings and Federal 
        buildings undergoing major renovations to reduce fossil fuel-
        generated energy consumption (baseline 2003) by 80% (2020), 90% 
        (2025), and 100% (2030).
        
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]       
         

What can Congress do?
    Congress can incentivize states and cities to be early adopters of 
Zero Energy and Zero Carbon codes by supporting the staff and 
permitting infrastructure, public education and engagement programs, 
annual benchmarking and reporting infrastructure and the development of 
shared tools and lessons learned.
    Congress can also link existing Federal tax incentives to Zero 
Energy and Zero Carbon goals. By leveraging existing financial 
incentives but tying them to Zero Energy or Zero Carbon, Congress not 
only uses its buying power to reduce carbon emissions in the built 
environment but also creates a replicable framework that smaller 
jurisdictions can emulate and normalizes the expectation of performance 
outcomes.
    Congress can maintain and increase Federal tax incentives for 
Renewable Energy technologies, including storage. As more production 
comes online, the ability to store energy and control how and when it 
flows onto the grid will be critical to maintaining our infrastructure 
and energy autonomy.
What do we need beyond Energy Efficiency and Renewable Energy to 
        achieve Zero Carbon buildings?
    Energy efficiency and renewable energy are key components to 
achieving a low carbon built environment. Another critical element is 
the electrification of buildings. While Renewable Portfolio Standards 
are addressing the combustion of fossil fuels at the utility level, we 
must also address the consumption of fossil fuels on site at the 
building and central plant. This means replacing fossil fuel-based 
cooking, water heating, space heating and cooling equipment with 
electric equipment in our codes for new construction and alterations, 
as well as in our existing buildings through retrofits.
What can Congress do?
    Congress can offer incentives for the replacement of fossil fuel-
based equipment, particularly water heaters, furnaces, boilers and 
space heating/cooling equipment (i.e. heat pumps), or rebates to buy 
down the cost premium for first-time installation of electric 
equipment. Studies indicate regional state-led incentive programs \24\ 
have been successful to date.
---------------------------------------------------------------------------
    \24\ http://www.aceee.org/sites/default/files/publications/
researchreports/a1803.pdf.
---------------------------------------------------------------------------
    Eliminating onsite combustion of fossil fuels can have co-benefits 
such as improved safety, indoor air quality and grid flexibility.
    In many cases natural gas or coal is used in large central plant 
facilities serving multiple buildings, particularly at hospitals, 
airports, universities and other campuses or networks that serve our 
communities. Providing resources to help these facilities convert to 
electric districts, renewable-ready districts and zero energy-ready 
districts can help them to be more resilient and prepared for the 
future.
What is the role of Existing Buildings and how do we get to them?
    Building codes in many states don't address existing buildings. The 
International Existing Building Code (IEBC) was created in 2003 and is 
adopted in approximately half of the Unites States.\25\
---------------------------------------------------------------------------
    \25\ The Role of Existing Building Codes in Safely, Cost-
Effectively Transforming the Nation's Building Stock (NIBS, 2017).
---------------------------------------------------------------------------
    The model energy code addresses new construction and planned 
alterations projects that require a permit. The construction activity 
triggers the code. Buildings with no planned construction activity are 
not typically addressed by energy codes.
    In most established U.S. cities, 80-90% of the buildings that will 
be consuming energy in 2050 already exist. U.S. cities only see 1-2% 
turnover (renovation or replacement) of building stock every year on 
average. Even cities with a lot of construction activity, like 
Washington, DC, still turn over less than 3% of building stock per 
year. And yet, in cities, buildings represent on average 50-70% of GHG 
emissions inventory. Buildings are the single largest opportunity to 
meet climate goals. For example:
           Boston, MA: buildings generate 75% of emissions \26\
---------------------------------------------------------------------------
    \26\ https://www.boston.gov/sites/default/files/
boston_ghg_inventory_2005-2015.pdf.
---------------------------------------------------------------------------
           Cambridge, MA: buildings generate 65.8% of emissions 
        \27\
---------------------------------------------------------------------------
    \27\ https://www.cambridgema.gov/CDD/climateandenergy/
greenhousegasemissions/communityemissions.
---------------------------------------------------------------------------
           Chicago, IL: buildings generate 53.7% of emissions 
        \28\
---------------------------------------------------------------------------
    \28\ https://www.chicago.gov/content/dam/city/progs/env/
GHG_Inventory/CityofChicago_2015_GHG_Emissions_Inventory_Report.pdf.
---------------------------------------------------------------------------
           Minneapolis, MN: buildings generate 63% of emissions 
        \29\
---------------------------------------------------------------------------
    \29\ https://lims.minneapolismn.gov/Download/PriorFileDocument/-
63089/WCMSP-178225.PDF.
---------------------------------------------------------------------------
           New York City, NY: buildings generate 71% of 
        emissions \30\
---------------------------------------------------------------------------
    \30\ http://www.nyc.gov/html/builttolast/assets/downloads/pdf/
OneCity.pdf.
---------------------------------------------------------------------------
           Washington, DC: buildings generate 75% of emissions 
        \31\
---------------------------------------------------------------------------
    \31\ https://doee.dc.gov/service/greenhouse-gas-inventories.
---------------------------------------------------------------------------
    Therefore, building codes alone won't address the issue of 
emissions in the built environment. Other complementary policy 
solutions, such as energy transparency and benchmarking, as well as 
building performance standards are required.
Transparency and Benchmarking Policies
    Energy benchmarking and transparency ordinances are being adopted 
by cities and states across the country, making publicly and privately-
owned building annual performance data available to jurisdictions and 
the public. The performance of all buildings, whether newly constructed 
or existing in place for decades, is the focus of the transparency 
movement, as cities create data-driven market mechanisms and public 
policies to support their climate commitments.\32\
---------------------------------------------------------------------------
    \32\ Leveraging Energy Transparency (AIA).
---------------------------------------------------------------------------
    Transparency and benchmarking policies have been implemented in 
over two dozen jurisdictions,\33\ including cities, counties and 
states, such as: \34\
---------------------------------------------------------------------------
    \33\ https://www.imt.org/wp-content/uploads/2019/06/IMT-
Benchmarking-Map-CityCountyState-CURRENT-062019.jpg.
    \34\ https://www.building rating.org/graphic/us-commercial-
building-policy-comparison-matrix.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


40% of the United States are represented with benchmarking and 
transparency policies at city, county or state level, indicating the 
---------------------------------------------------------------------------
widespread appeal.

    These policies encompass nearly 92,000 properties \35\ at 11 
billion square feet of floor area \36\ reported every year. Through 
transparency alone these cities are seeing an average of 4-13% energy 
improvement in their existing building stock. Just starting to use the 
benchmarking and reporting tools, such as EnergyStar Portfolio Manager, 
shining a light on building performance, and introducing a comparative 
metric has already inspired improved operations and maintenance as well 
as investment in energy efficiency.
---------------------------------------------------------------------------
    \35\ https://www.buildingrating.org/graphic/us-number-properties-
covered-annually.
    \36\ https://www.buildingrating.org/graphic/us-building-area-
covered-annually.

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The economic impact of investments in Energy Efficiency
    Investment in Energy Efficiency is investment in local jobs and the 
local economy. Building improvements focused on improved energy 
efficiency in existing building stock cannot be shipped overseas. They 
are labor intensive and site-specific projects, driving the creation of 
local jobs in construction, renovation, installation, operations and 
maintenance.\37\ According to the 2019 U.S. Energy and Employment 
Report, Energy Efficiency produced more new jobs in the United States 
in 2018 than any other energy sector, and accounted for more than 2.3 
million jobs overall, as compared with about 534,000 in renewable 
energy and about 200,000 in coal.
---------------------------------------------------------------------------
    \37\ Energy Efficiency in Buildings: the key to Effective and 
Equitable Clean Energy Action for Cities (IMT).
---------------------------------------------------------------------------
    Transparency and benchmarking policies encourage the private sector 
to invest in energy efficiency projects. Building owners want to 
maintain Class ratings for their portfolio and remain competitive in 
the real estate market. In order to get to 100% clean energy by 2035, 
the City of Atlanta determined that an approach including investment in 
energy efficiency would return $41 in local benefits for every $1 
invested.\38\ The City of Atlanta now requires commercial buildings 
25,000 square feet and larger to report annual EnergyStar scores and 
perform energy audits every 10 years.\39\
---------------------------------------------------------------------------
    \38\ Clean Energy Atlanta, Resolution No. 17-R-3510 (2017).
    \39\ https://atlantabuildingbenchmarking.files.wordpress.com/2019/
02/nrdc_100ce_plan_021319_v8_low-res.pdf.
---------------------------------------------------------------------------
What can Congress do?
    Congress can incentivize states and cities to adopt transparency 
and benchmarking policies, by co-funding staff or providing resources 
and tools, particularly when policies are linked to a national 
benchmarking platform such as the U.S. Environmental Protection Agency 
(EPA) EnergyStar Portfolio Manager tool. Congress can ensure EnergyStar 
Portfolio Manager remains relevant by maintaining funding for the 
Commercial Building Energy Consumption Survey which populates the 
database on the backend.
    Congress can leverage the National Laboratories and the U.S. 
Department of Energy Building Technologies Office (BTO) to provide 
demonstration and field validation of advanced technologies so that 
American businesses may foster innovative solutions to our building 
energy challenges, these technologies may become shelf-ready and cost-
competitive, and building owners may confidently employ these 
technologies in existing buildings to improve their performance.
    Congress can also incentivize building owners by providing 
financial incentives (tax incentives or rebates) for energy audits, 
retro-commissioning, deep green retrofits, systems or component 
replacement, and building operator training programs.
Building Performance Standards
    Once jurisdictions have established transparency and benchmarking 
infrastructure with its annual communication channels between building 
owners and a building performance oversight agency, it is easier to put 
a building performance standard into place. Cities may want to require 
building owners to take additional steps beyond just reporting 
performance such as improving buildings that exceed energy- or water-
consumption thresholds or fall below peer building EnergyStar scores.
    There are a small number of jurisdictions that have already passed 
building performance standards, but many more are looking at similar 
policies to address their existing building stock. The next most likely 
jurisdictions to pass similar policies will be those with existing 
transparency and benchmarking policies already in effect.


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    The Clean Energy DC Plan \40\ establishes a clear path to achieve 
over 50% reduction in GHG emissions by 2032. Savings from new Net Zero 
buildings are estimated to comprise 10% of the District's GHG emissions 
reduction plan and savings from existing building retrofits are 
estimated to comprise 20% of the District's GHG emissions reduction 
plan (see Targeted Action Areas).

    \40\ https://doee.dc.gov/sites/default/files/dc/sites/ddoe/
page_content/attachments/Clean%20Energy%20DC%20-%20Full%20Report_0.pdf. 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    In order to realize the GHG emissions reduction articulated in the 
Clean Energy DC Plan, in 2018 Washington, DC passed the Clean Energy DC 
Omnibus Amendment Act \41\ reducing benchmarking requirements to all 
buildings 10,000 square feet or larger (public and private owned) and 
creating a Building Energy Performance Standard (BEPS) to address the 
ongoing lifecycle performance of its existing building stock. Starting 
in 2021, buildings must meet the BEPS (which can be no lower than the 
local median EnergyStar score for each building type), or owners will 
have five years to bring the building into compliance through:
---------------------------------------------------------------------------
    \41\ https://code.dccouncil.us/dc/council/laws/22-257.html.
---------------------------------------------------------------------------
          a) Prescriptive Compliance Path: a set of previously 
        identified measures, such as commissioning, energy audits, 
        boiler replacement, lighting retrofits, roof replacement, 
        building operator training, calculated to approximate 20% 
        performance improvement. These prescriptive measures will vary 
        by building type, as the measures will have varying levels of 
        impact based on the load profiles of each building type. This 
        option leaves nothing to chance--if the owner is able to 
        document in year five proof that the required activities were 
        conducted, and that equipment or systems were purchased and 
        installed, the building will be deemed in compliance for that 
        BEPS cycle. However if the building's EnergyStar score is still 
        below the local median for its building type in year five 
        (baseline year for the next BEPS cycle), it will be required to 
        repeat the prescriptive compliance path or to look at another 
        compliance path for the next BEPS cycle.
          b) Performance Compliance Path: a 20% improvement in building 
        performance calculated by evaluating performance in year five 
        against performance in the baseline year. This path allows 
        building owners to work with their consultants to evaluate 
        different options and identify the best path forward for that 
        building. Owners may choose to leverage energy modeling tools 
        to evaluate different design options and quantify their 
        potential impact on building energy savings as well as project 
        simple payback. This option may work well for owners already 
        considering or planning to undertake building renovation or 
        repositioning projects, into which energy efficiency upgrades 
        can be folded in. It also gives the owner more flexibility and 
        choice. It is less predictable and requires the projects to be 
        undertaken and completed sufficiently early in the cycle for 
        the savings to be realized by the completion of year five so 
        that the 20% performance improvement can be documented. If the 
        owner is able to document in year five proof that the building 
        has improved by at least 20% from its baseline year, the 
        building will be deemed in compliance for that BEPS cycle. 
        However if the building's EnergyStar score is still below the 
        local median for its building type in year five (baseline year 
        for the next BEPS cycle), it will be required to repeat the 
        performance compliance path or to look at another compliance 
        path for the next BEPS cycle.
          c) Alternative Compliance Path: the DC Department of Energy 
        and Environment (DOEE) is tasked by the Act to develop 
        alternative compliance pathways. These may include third party 
        green building certifications or ratings, such as BREEAM In-
        Use, LEED for Existing Buildings: Operations and Maintenance, 
        EnergyStar, WELL or others. The alternative compliance path may 
        allow for some combination of portfolio trade-offs for multiple 
        building or large real estate portfolio owners, or even 
        tradeable credits between building owners, with a combination 
        of on-site and offsite efficiency improvements or on-site and 
        offsite renewable energy generation. A similar construct exists 
        now with tradeable stormwater credits, requiring buildings to 
        meet at least 50% of their stormwater obligations onsite but 
        allowing the remainder to be treated offsite so long as that 
        treatment remains within the District. This alternative pathway 
        has not yet been defined but will be developed in further 
        detail by the DOEE and the BEPS Task Force, comprised of local 
        building industry stakeholders.
    The distinguishing characteristic of Washington, DC's building 
performance standard is that it is on a five-year cycle, and 
benchmarked against a local median EnergyStar score, which by 
definition will rise over time as new high performance and net zero 
buildings come on line (Net Zero Building Code required for new 
construction in 2026) and the existing building stock improves in its 
energy performance. Building owners can be impacted in consecutive BEPS 
cycles, so careful consideration will need to be taken into determining 
whether incremental building performance improvement is the right path, 
or deep green retrofits that position a building well ahead of the 
median to leapfrog over the next few BEPS cycles is the better way to 
go. This decision may depend on existing tenant lease agreements, 
financing options and how recently the building has undergone 
renovation.
    With EnergyStar scores, based on a percentile, higher is better. 
Therefore, the standard is in and of itself a self-improving threshold 
or benchmark. It will automatically rise over time, and the five-year 
cycle will generate economic activity in the construction industry, as 
well as investment in buildings, neighborhoods, communities and 
infrastructure that improve quality of life for all residents, and 
encourage infill development and growth in the District as the built 
environment and services improve. The Act provides other pathways for 
addressing the improvement in performance of Affordable Housing stock 
and allows for flexibility in compliance with the BEPS in order to 
avoid unintended consequences with displacement of low-income 
residents.
    The Act provides funding for the newly establish Green Bank, a 
revolving green fund intended to help finance energy efficiency 
projects in the District, complementing DC Pace Bonds, the DC 
Sustainable Energy Utility and DC Solar for All programs that provide 
alternative financing for energy efficiency and renewable energy 
projects (in addition to private capital). If buildings failing to 
comply with the building energy performance requirements at the end of 
the 5-year compliance period shall pay an alternative compliance 
penalty established by DOEE.
    The Act additionally calls for a 100% Renewable Portfolio Standard 
by 2032 and an electrification of fleet vehicles, integral parts of 
decarbonizing the grid and bringing additional storage capacity to 
improve building and grid flexibility.
    The Act also establishes a Sustainable Energy Infrastructure 
Capacity Building and Pipeline Program with the purpose of increasing 
the participation and capacity of certified business enterprises, 
directing the Office of Contracting and Procurement to includes 
Certified Business Enterprise utilization as an evaluation factor when 
shortlisting and selecting businesses for professional services and 
when selecting contractors in best value procurements with a contract 
value of more than $250,000.
In Washington, DC, buildings represent 75% of Greenhouse Gas Emissions 
        (2016): \42\ 
        
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    \42\ https://doee.dc.gov/service/greenhouse-gas-inventories.

    Washington State determined efficiency to be the `largest, 
cheapest, lowest risk energy resource' and that `with an aggressive new 
energy efficiency policy the region can potentially meet 100 percent of 
its electricity load growth over the next twenty years with energy 
efficiency.' A 2017 report documented that energy efficiency programs 
in the state had created 65,000 jobs, primarily in the construction 
sector, and that the number is continuing to grow. In 2019, Washington 
State passed House Bill 1257 \43\ that requires a building performance 
standard go into effect between 2026 and 2029, affecting buildings 
50,000 square feet and larger.
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    \43\ http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/
House%20Passed%20Legislature/1257-S3.PL.pdf.
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    The standard shall establish Energy Use Intensity (EUI) targets by 
building type, require energy management plans, operations and 
maintenance programs, energy efficiency audits, investment in energy 
efficiency measures and shall be developed based on ANSI/ASHRAE/IES 
standard 100-2018. The standard must be updated every five years. In 
contrast to EnergyStar scores which are based on a percentile, Energy 
Use Intensity is a measurement of total annual energy use over the 
course of a year, divided by building area. It is often depicted in 
British thermal units per square foot per year (kBtu/sf/yr) or kilowatt 
hours per square foot per year (kWh/sf/yr). Therefore, when it comes to 
EUI, lower is better.
    The EUI targets can be no greater than the average EUI for building 
occupancy type, and may implement lower EUI targets for more recently 
built commercial buildings based on the state energy code in place when 
the buildings were constructed. Therefore, older building stock must be 
brought up to at least average performance and newer building stock may 
be held to a higher performance standard. The standard may become 
higher more stringent over time, assuming the average EUI improves 
(lowers) with the addition of new building stock and the improvement of 
energy performance in existing building stock. The standard for more 
recently constructed buildings is not necessarily self-improving, as it 
requires consideration and manual calibration, but it is clear the 
legislative intent is that this standard keep pace ahead of the 
building code as well.
    Buildings falling short of the performance standard must implement 
energy efficiency measures identified by energy audits to achieve its 
energy use intensity target. The bill requires investment criteria be 
developed that requires a building owner to adopt an implementation 
plan to either:
          a) Meet the energy intensity target
          b) Implement an optimized bundle of energy efficiency 
        measures that provides maximum energy savings without resulting 
        in a savings-to-investment ratio of less than 1.0
    Administrative penalties may be imposed upon a building owner for 
failing to submit documentation demonstrating compliance. The penalty 
may not exceed an amount equal to five thousand dollars plus an amount 
based on the duration of any continuing violation (may not exceed one 
dollar per year per gross square foot of floor area). Administrative 
penalties collected must be deposited into the low-income 
weatherization and structural rehabilitation assistance account.
    The state is required to develop an incentive program for early 
adoption and for buildings whose baseline EUI exceeds its target by at 
least fifteen EUI units (i.e. it is 15 units lower than the target 
EUI). The incentive is eighty-five cents per gross square foot of floor 
area, excluding parking, unconditioned, or semi-conditioned spaces 
(such as mechanical rooms or penthouses).
    The bill also requires that the building code council adopt rules 
for vehicle charging capability at all new buildings that provide on-
site parking. Where parking is provided, the greater of one parking 
space or ten percent of parking spaces, rounded to the next whole 
number, must be provided. Electric vehicles are integral parts of 
decarbonizing the grid and bringing additional storage capacity to 
improve building and grid flexibility.

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Figure 7: Washington Greenhouse Gas Emissions, 3 year average (2013-
2015)

    In 2015, Washington's largest contributors of greenhouse gases 
were: \44\
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    \44\ https://fortress.wa.gov/ecy/ublications/documents/1802043.pdf.

           Transportation sector at 42.5%
           Residential, commercial, and industrial sector at 
        21.3%
           Electricity sector at 19.5%

    Buildings make up 71% of GHG emissions in New York City.\45\ Energy 
consumption from electricity use, heating, and cooling all contribute. 
Building owners and managers can improve energy efficiency of building 
systems and operations and invest in cleaner on-site power generation. 
They can also support market growth for renewables through power 
purchase agreements and other mechanisms to procure cleaner energy that 
is generated off-site. Building tenants and occupants can reduce their 
energy consumption, which accounts for 40-60% of a building's energy 
use. Emissions from the city's power supply can be reduced by power 
suppliers switching to cleaner energy sources, and by fuel distributors 
offering low-carbon fuels.
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    \45\ http://www.nyc.gov/html/builttolast/assets/downloads/pdf/
OneCity.pdf.

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    In 2019, New York City passed the Climate Mobilization Act, 
including Bill 1253 which sets emissions caps on buildings over 25,000 
square feet and establishes an Office of Building Energy and Emissions 
Performance. The bill sets one standard to go into effect between 2024-
2029 and a more stringent standard to go into effect in 2030.
    The limits are calculated to require emissions reductions from the 
highest emitting 20% of buildings in each occupancy group for the first 
compliance date beginning in 2024, and the highest emitting 75% of 
buildings in each occupancy group for the second compliance date 
beginning in 2030.
    The Bill includes prescriptive performance improvement requirements 
for rent-controlled/rent-regulated housing units in order to prevent 
the legislation from displacing low- residents or increasing the cost 
of their housing.
    The Bill establishes a Property Assessed Clean Energy (PACE) 
program in the City. PACE is a voluntary financing mechanism that 
enables energy efficiency and renewable energy projects to receive 
long-term financing for little or no money down. Further, debt service 
is generally limited to the amount of money saved through the resulting 
reductions in energy use. Typically PACE financing is tied to property 
title rather than individual or company so that if a building transfers 
ownership before the completion of the payback period of an energy 
efficiency project, the new owner of the building continues to pay off 
the PACE bond.
    Specific emissions limits for each building occupancy type in 
calendar years 2035-2050 have yet to be established, but the end goal 
by 2050 has been defined: annual building emissions limits and building 
emissions intensity limits applicable for calendar years 2035 through 
2039 and building emissions limits and building emissions intensity 
limits applicable for calendar years 2040 through 2049 shall be set to 
achieve an average building emissions intensity for all covered 
buildings of no more than 0.0014 tCO2e/sf/yr by 2050.
    On and after January 1, 2050 building emissions limits and building 
emissions intensity limits shall achieve an average building emissions 
intensity for all covered buildings of no more than 0.0014 tCO2e/sf/yr.

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    What distinguishes this legislation is that is does explicitly 
allow for renewable energy credits (RECs), greenhouse gas offsets, or 
clean distributed energy resources. To be eligible, the source of the 
renewable energy credits must be considered by the New York independent 
system operator to be a capacity resource located in or directly 
deliverable into zone J load zone for the reporting calendar year. For 
calendar years 2024-2029, a greenhouse gas offset can only be 
authorized for up to 10 percent of the annual building emissions limit. 
For calendar years 2024-2029, a greenhouse gas deduction can only be 
authorized based upon the calculated output of a clean distributed 
energy resource located at, on, in, or directly connected to the 
building.
    The Act also included Bill 1318, which requires a feasibility 
assessment of replacing the City's gas-fired power plants with battery 
storage powered by renewable energy sources, as well as Bills 276 and 
1032 which equip the roofs of smaller new residential buildings and 
non-residential buildings with solar photovoltaic systems or green 
roofs.
    The bill acknowledges that of these use groups, hospitals have the 
highest GHG emissions per square foot in New York City, but that by law 
hospitals are required to maintain certain ventilation and exhaust 
rates, which is energy intensive. In addition, plug loads for mission-
specific equipment such as MRIs also contribute to high energy demand. 
Therefore, the bill includes provisions to ensure hospitals reduce 
emissions without impeding their mission.

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New York City's average GHG emissions intensity by building use type
What can Congress do?
    Congress can incentivize states and cities to adopt Building 
Performance Standards, particularly when policies are linked to a 
national benchmarking platform such as the U.S. Environmental 
Protection Agency (EPA) EnergyStar Portfolio Manager tool. Support may 
include co-funding staff or providing resources, tools and training for 
jurisdictions.
    Congress can continue to support the development and improvement of 
energy simulation tools that aid building owners in making financial 
investment decisions, as well as EPA EnergyStar Portfolio Manager 
platform, and ensure it remains relevant by maintaining funding for the 
Commercial Building Energy Consumption Survey which populates the 
database on the backend.
    Congress can leverage the National Laboratories and the U.S. 
Department of Energy Building Technologies Office (BTO) to provide 
demonstration and field validation of advanced technologies so that 
American businesses may foster innovative solutions to our building 
energy challenges, these technologies may become shelf-ready and cost-
competitive, and building owners may confidently employ these 
technologies in existing buildings to improve their performance.
    Congress can also incentivize building owners by providing 
financial incentives (tax incentives or rebates) for energy audits, 
retro-commissioning, deep green retrofits, systems or component 
replacement, and building operator training programs.
Why should Congress Incentivize Local Policy?
    Why is there such an emphasis on local policies and programs? Local 
policy can often be the most nimble and serve as a laboratory for 
innovative ideas that--once tested and proven at the local level, can 
be leveled up to state and eventually Federal policy. Local leadership 
is also where we see the most ambitious and sustained commitment to 
climate policy.
    82% of the U.S. population lives in urban areas \46\--and the 
number is growing. This growth and migration to cities means we will 
see investment in new construction as well as reinvestment in our 
existing neighborhoods and communities. More buildings could 
potentially mean more demand for energy but also more opportunity for 
density, transit-oriented development, as well as healthy, walkable and 
resilient cities, and transformation of our existing building stock and 
infrastructure.
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    \46\ UN World Urbanization prospects (2018).
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    Cities and urban counties are the loci for 85% of our Gross 
Domestic Product.\47\ This means they are the center of economic 
activity and commerce. Catalyzing local policies with Federal 
incentives and resources can normalize low- and zero-carbon development 
patterns, reducing market barriers and establishing a template for any 
city, town, county or state that wants to focus on resource efficiency, 
mitigation, resiliency, economic revitalization, jobs, equity and 
community redevelopment.
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    \47\ www.bea.gov.

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What can the Federal Government do with its own portfolio?
    Some Federal projects are procured through a Design-Bid-Build 
process. In this process, the Federal government describes the program 
(scope of work) and hires an architect (and its team of consultants) to 
design a building or project, and the design is ultimately translated 
into construction documents and issued for bid so that it can be 
awarded to a contractor for construction. The architect is typically 
contracted through a qualifications-based selection process, and 
performance metrics can be integrated into the contract documents to 
ensure the contractors are bidding on minimum performance requirements.
    Starting in 2006, the U.S. General Services Administration (GSA) 
started requiring a minimum level of LEED Silver certification for 
Federally owned buildings. In 2010 this was increased to a minimum 
level of LEED Gold. Request for Proposal (RFP) documents or contracts 
do not typically reference project-specific performance metrics such as 
energy use intensity (EUI), water consumption or greenhouse gas (GHG) 
emissions. The default is usually to rely on Executive Orders and the 
Energy Independence and Security Act (2007) to define those targets 
generally, however these performance expectations are not contractually 
binding if they are determined not to be cost effective' and energy 
efficiency, water efficiency, reduced carbon emissions or renewable 
energy generation can be excluded from a project with the intent of 
managing project costs.
    Some Federal projects are procured through a lease-back process 
where the Federal government issues a Request for Lease Proposals, 
issues its requirements relative to location, tenant area, amenities, 
rental rates, and other selection criteria. The private sector competes 
in a design competition to win and build a project that will be leased 
back to a government tenant. This allows the Federal government to move 
into new buildings that are built to suit' without having to provide 
the capital for construction. The lease agreements are usually for 10-
year increments and can be renewed at the end of the agreement. These 
buildings are often good investment vehicles for real estate investment 
trusts. Historically, a Request for Lease Proposals (formerly 
Solicitation for Offers) will include requirements that the base 
building be certified LEED Silver or EnergyStar rated and that the 
tenant fitout be consistent with LEED Silver as well as specific LEED 
credit criteria. Under the current Executive Order 13834 \48\ base 
building requirements for sustainability criteria or certifications 
have been omitted from solicitations for lease proposals as these 
requirements have been deemed unnecessary for lease agreements.
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    \48\ https://www.federalregister.gov/documents/2018/05/22/2018-
11101/efficient-federal-operations.
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    Other Federal projects are procured through a Design-Build 
contracting method, where the project will be directly awarded to a 
general contractor with a proposed design, and the Federal government 
is seeking a Guaranteed Maximum Price (GMP). This is usually 
precipitated by the Federal government hiring a design firm to create a 
set of Bridging Documents, or a preliminary design, in order to get 
funding approval from Congress. This preliminary design defines the 
criteria of the Design-Build contract. But not all Design-Build 
contracts begin with Bridging documents. Contractors partner with a 
design team to develop the design enough to put together a cost 
estimate and submit a GMP. Although Design-Build contracts are 
evaluated and weighted based on many factors, including design and 
sustainability, the most heavily weighted factor is always price. The 
proposal with the lowest price is most likely to win. This encourages 
teams to propose a design that meets the minimum performance 
requirements rather than a design that meets the Federal government's 
climate goals.
What can Congress do to improve its procurement process?
    Congress can direct the Federal government to explicitly include 
project-specific and binding performance metrics in design and 
construction contracts, such as Energy Use Intensity (EUI) targets, 
reduction in water use (from EPAct 1992 baseline), reduction in fossil 
fuel consumption, reduction in GHG emissions, onsite renewable energy 
generation, Lighting Power Density (LPD), spatial daylight autonomy 
(sDA), or embodied carbon (GWP). These should be benchmarked at each 
stage of the design, included in the construction bid and any changes 
in the Value Engineering process should have to be cross checked 
against these metrics. Contractors already forfeit penalties for 
projects that are delivered over schedule. Performance metrics will 
continue to be eroded in the Value Engineering process unless they are 
tied to end of project contract expectations.
    Congress can direct the Federal government to explicitly include 
performance metrics in solicitation for lease proposals, such as Zero 
Energy buildings, Zero Carbon buildings, Energy Use Intensity (EUI) 
targets, reduction in water use (from EPAct 1992 baseline), reduction 
in fossil fuel consumption, reduction in GHG emissions, onsite 
renewable energy generation, Lighting Power Density (LPD), spatial 
daylight autonomy (sDA), or low embodied carbon (GWP). If these 
characteristics are prioritized in the selection process, it will 
incentivize the private sector to invest in advanced building 
technology. When the Federal government required LEED Silver in its 
lease agreements, it became the new default for commercial office 
buildings seeking Federal tenants. Furthermore, most developers went 
beyond LEED Silver to achieve LEED Gold or Platinum certification for 
their buildings. Expressing a preference or placing value on a 
characteristic sends a signal to the market.
    Congress can direct the Federal government to solicit stepped 
design options and fees in Design-Build proposals. For example, the 
Energy Independence and Security Act (2007) section 433 requires a 
reduction in fossil fuel consumption in buildings by 80% in 2020, 90% 
in 2025 and 100% in 2030.\49\ A project team might be able to show a 
pathway to zero fossil fuels and zero carbon emissions by 2030, but if 
the team can only submit a single project price and feels it would not 
win the project unless it submits the lowest price, then it will not be 
incentivized to show the lowest carbon solution. It is possible to 
design a project so efficiently that the design becomes reductive 
rather than additive. Peak loads are reduced through orientation, 
massing, a high-performance envelope and the result is a reduction in 
HVAC system sizing. A low carbon or zero carbon design might not carry 
as high of a cost premium or as long of a payback timeframe as 
anticipated. Solicitations should provide bidders with an opportunity 
to demonstrate a lowest price option (often the least performance 
option as well) as well as stepped packages that offer progress towards 
the Federal carbon reduction goals and the pricing of those packages. 
If a Zero Carbon design could be offered at a very nominal premium and 
with <10 year payback, procurement officers should have an opportunity 
to evaluate that option in concert with the lowest cost/lowest 
performance options.
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    \49\ [EISA Sec. 433]: New Federal buildings and Federal buildings 
undergoing major renovations shall reduce their fossil fuel-generated 
energy consumption (baseline 2003) by 55% (2010), 65% (2015), 80% 
(2020), 90% (2025), and 100% (2030).
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    Investment in high performance buildings has proven to have payback 
that benefits American taxpayers. GSA inventoried its portfolio and 
determined \50\ that operating expenses in high performance buildings 
cost 10% less per square foot to operate than industry benchmarks and 
23% less per square foot to operate than other Federal buildings 
(legacy stock).
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    \50\ The Impact of High-Performance Buildings (GSA, 2018).
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    Congress makes decisions about the priorities for buildings it 
constructs, leases or retrofits. Expressing a preference or placing 
value on a characteristic sends a signal to the market. If the 
investments Congress makes with tax dollars prioritize low carbon and 
carbon neutral projects, then Congress has established value and 
created demand. The economy is a social construct that we create 
through policy and priorities; matter and energy, carbon and currency 
exist within the larger ecosystem and are subject to its constraints.

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    ``The Government's economic decision-making tools should be used in 
a manner that supports environmentally and socially responsible 
operations in programs and major acquisitions extending into the future 
. . . Tools and policies must support sustainable government 
operations, so that we can make the most preferable environmental and 
social choice when purchasing goods and services.''
    ``The traditional economic paradigm upon which our financial 
decision-making is based . . . assumes that the economy functions 
independent of the natural world, with the environment as a subset of 
no value except as a source of resources and a ``sink'' for wastes 
(Figure 2). Social inputs beyond labor costs are not considered at 
all.'
    ``The new ecological economic paradigm nests the economy within the 
environment, rather than independent of it. And, rather than 
shortchanging the role of society, as in the traditional economic 
model, this paradigm defines the economy as a construct of society that 
moves goods and services (matter and energy) through it while 
determining what has value and is economically viable (Figure 4). In 
this paradigm, solar energy sustains the ecosystem, whose products are 
used as factors of economic production. The economy then sends its 
wastes back into the ecosystem, to be broken down by natural processes. 
The economy can only be sustained if there are healthy societies, 
living in healthy ecosystems that furnish renewable resources and 
assimilate wastes.'' \51\
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    \51\ www.gsa.gov/cdnstatic/
2009_New_Sustainable_Frontier_Complete_Guide.pdf.
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Examples of High-Performance Federal Projects in HOK's Portfolio
    HOK has designed tens of millions of square feet of building space 
for the Federal government, including New Construction projects, 
Adaptive Reuse, and Deep Green Retrofits.

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    NASA Building 20 in Clear Lake, TX (LEED Platinum) 83,205 sq. feet. 
Primarily open office environment with access to daylight and views. 
Measures include a highly efficient building envelope, underfloor air 
distribution, a total energy recovery wheel and solar hot water 
harvesting supplying 18% of the building's domestic hot water 
consumption. The project was designed to be 57% more energy efficient 
than a similar office building, with gross square footage 6% below 
program.

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    NOAA Daniel K. Inouye Regional Center at Pearl Harbor, HI (LEED 
Gold, AIA COTE Top 10) 350,000 sq. feet. Located on a national historic 
landmark site on Oahu's Ford Island, NOAA's Inouye Regional Center 
features the adaptive reuse of two World War II-era airplane hangars 
linked by a new steel and glass building. The new complex houses a 
diverse range of critical programs, functions and Federal departments, 
including the Pacific Tsunami Warning Center. The facility has a 
comprehensive skylight diffuser system that virtually eliminates the 
need for artificial light during the day and Hawaii's first hydronic 
passive cooling unit (PCU) system which uses cold water drawn from a 
deep sea well to cool air before it is distributed through an 
underfloor air system. Combined these systems contribute to 42% energy 
use savings compared to a similarly programmed facility. A graywater 
system irrigates the native landscaping.

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    U.S. Coast Guard Headquarters at St. Elizabeths West Campus in 
Washington, DC (LEED Gold) 1.2 million sq. feet. HOK provided landscape 
architecture, sustainable design and interior design services for the 
Coast Guard. HOK's design for the step-down courtyards, edges and green 
roofs provides continuity between the surrounding woodlands and an 
adjacent historic government campus. Rainwater that falls onto the 
green roofs permeates through the plant roots and soil and into a 
drainage system that leads to a stormwater pond for reuse in 
irrigation. Advanced HVAC system, lighting controls and high-
performance enclosure contributed to 33% energy use savings compared to 
a typical office building.

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    Byron Rogers Federal Building and Courthouse in Denver, CO (LEED 
Gold) 494,156 sq. feet. Due to its age and condition, the 18-story 
project was selected to receive funding for a complete remodel through 
the 2009 American Reinvestment and Recovery Act (ARRA). GSA received 
additional ARRA funding to incorporate then emerging energy-efficiency 
technologies such as LED lighting into the design. The building 
underwent deep green retrofits to enclosure, HVAC, lighting and 
plumbing systems. GSA articulated a performance requirement in the 
contract (Target: 39.1 kBtu/sf/yr). The Federal building renovation 
contributed to the combined 46% EUI reduction of the Federal building 
and courthouse (former combined site EUI 79.1 kBtu/sf/yr, post-
renovation EUI 42.5 kBtu/sf/yr).

    Ms. Castor. Thank you.
    Ms. Saul Rinaldi, you are recognized for 5 minutes.

                 STATEMENT OF KARA SAUL RINALDI

    Ms. Saul Rinaldi. Thank you, Chair Castor, Ranking Member 
Graves, and members of the committee. Thank you for inviting me 
to testify here today. I am pleased to represent the Building 
Performance Association.
    Addressing climate change is critical to our future. In 
fact, I brought a piece of that future with me here today. My 
daughter, Annabella, and son, Dylan, are sitting in the 
audience behind me.
    Ms. Castor. Would you all stand up?
    Mr. Graves. Are you supposed to be in school?
    Ms. Saul Rinaldi. They got a pass, just for today--just the 
morning.
    While buildings are a significant contributor to our 
climate crisis, they can also be a key part of the solution. 
Policies aimed at retrofitting the over 115 million homes 
across the country will not only help reduce carbon emissions 
from the Nation's residential building stock but will also help 
homeowners save money on their monthly utility bills and 
improve the comfort, health, safety, and resiliency of their 
homes.
    Ultimately, the cleanest and cheapest energy is the energy 
you don't use in the first place. The residential building 
sector remains an untapped resource of carbon-reduction goals. 
A new report from ACEEE found that energy efficiency alone can 
cut energy use and greenhouse gas emissions by half by 2050. 
Buildings deliver 33 percent of the total emissions from that 
model.
    But simply put, energy efficiency creates jobs. According 
to this year's ``Energy Efficiency Jobs in America'' report 
released by E4TheFuture and submitted with this testimony, the 
energy-efficiency sector employs 2.3 million Americans, twice 
as many workers as the entire U.S. fossil fuel industry, and 
energy efficiency is leading the Nation's energy economy in new 
job creation, accounting for half of the entire energy industry 
job growth in 2018.
    These local, family-sustaining jobs exist all across the 
country. In fact, the report found that 99.7 percent of U.S. 
counties have energy-efficiency jobs, and more than 300,000 of 
these jobs are in rural areas.
    A significant portion of energy-efficiency jobs in the U.S. 
are in the residential sector, and approximately 56 percent of 
energy-efficiency jobs involve construction and repair. These 
are the contractors, the boots on the ground, installing 
energy-efficiency products and technologies and working to 
reduce energy waste in homes and commercial buildings across 
the country.
    Importantly, policies that provide incentives for building 
efficiency retrofit, such as the HOMES Act, H.R. 2043, or tax 
policy like the 25C tax credit or 179D tax deduction, or 
legislation that supports valuing energy efficiency like the 
SAVE Act, which is a part of H.R. 3962, create a ripple effect 
on jobs. Demand for insulation, air sealing, and high-
efficiency HVAC will not only create work for those who install 
these products but will also create jobs in manufacturing and 
distributing of those technologies. These create jobs around 
the industrial centers where workers eat, shop, and live.
    It is also important to note that the energy-efficiency 
industry is comprised of mainly small businesses. Eighty 
percent of energy-efficiency businesses in America have fewer 
than 20 employees.
    These small businesses need resources to help train new 
hires and provide ongoing education to existing employees, 
keeping them up to date on certifications and training in the 
latest energy-efficiency and renewable-energy technologies. We 
recommend Congress pass the Blue Collar to Green Collar Jobs 
Development Act, H.R. 1315, which would provide a 
comprehensive, nationwide program to improve energy-efficiency 
and renewable-energy training.
    In addressing climate change, policymakers must look at 
buildings as an integral part of the grid. Buildings not only 
use energy but they can generate clean power, store energy, and 
shift demand from times of high cost and strain on resources to 
times when wind and solar power are abundant and energy is 
cheapest.
    I am the lead author of a new report on grid-interactive 
efficient buildings, released today by the National Association 
of State Energy Officials, that describes how homes with 
energy-efficiency measures combined with smart technologies and 
small-scale storage and generation resources can support grid 
needs and achieve carbon reductions while benefiting consumers. 
This report includes policy recommendations, and I have 
submitted the report with my testimony.
    With the power of the purse in the hands of Congress, I 
must emphasize the important climate role this body has to 
advance energy-efficiency research, development, and deployment 
in the appropriations process. Dollar for dollar, Federal 
investment in energy efficiency creates more jobs than 
investments in the utilities sector or fossil fuels. And 
Federal investments in DOE programs that support energy 
efficiency, like the Building Technologies Office and 
Weatherization Assistance Program, lead to job creation and 
carbon reductions.
    In closing, I thank you, and I ask that you consider the 
buildings you live and work in as a part of the solution to 
climate change. The built environment is one of the largest 
consumers of energy and, thus, emitters of greenhouse gas 
emissions.
    With energy policy and program innovation in the building 
sector, we can reduce the need for new power plants, deliver 
more reliable energy services at lower cost, all while making 
homes like the ones Annabella, Dylan, and their children will 
live in healthier and more comfortable places to live.
    Thank you.
    [The statement of Ms. Saul Rinaldi follows:]
                              ----------                              


                     Testimony of Kara Saul Rinaldi

 Vice President of Government Affairs, Policy, and Programs, Building 
                        Performance Association

   Before the U.S. House of Representatives, Select Committee on the 
                             Climate Crisis

        Solving the Climate Crisis: Cleaner, Stronger buildings

                            October 17, 2019

    Chair Castor, Ranking Member Graves, and members of the Committee, 
thank you for inviting me to testify today on the important role that 
buildings can play in reducing America's contribution to global climate 
change. As you may know, the buildings sector is responsible for 31% of 
all U.S. greenhouse gas emissions.\1\ While buildings are a significant 
contributor to our climate crisis, they can also be a key part of the 
solution. I will discuss commercial and federal buildings but will 
focus in particular on how the residential sector is key to carbon 
reductions and achieving numerous other benefits. Policies aimed at 
retrofitting the over 115 million homes across the country will not 
only help reduce carbon emissions from the nation's residential 
building stock but will also help homeowners save money on their 
monthly utility bills and improve the comfort, health, safety, and 
resiliency of their homes. Advancing energy efficiency in buildings 
across the U.S. will support climate change mitigation and resilience, 
while also being an engine for job growth and economic opportunity.
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    \1\ https://www.epa.gov/sites/production/files/2019-04/documents/
us-ghg-inventory-2019-main-text.pdf.
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    I am President and CEO of the AnnDyl Policy Group, an energy and 
environmental policy strategy firm, and I serve as the Vice President 
of Government Affairs, Policy, and Programs for the Building 
Performance Association (BPA), formerly known as the Home Performance 
Coalition, a national non-profit 501c3 organization that works with 
industry leaders in the home performance and weatherization industries 
to advance energy-efficient, healthy and safe homes retrofit policies, 
programs and standards through research, education, training and 
outreach. I am pleased to represent BPA here today.
Energy Efficient Buildings are a Pathway to Deep Decarbonization
    There is significant opportunity to decarbonize the buildings 
sector by adopting policies that advance energy efficiency. Energy 
efficiency is a critical pathway to achieving deep decarbonization 
because it is cleaner and cheaper than building new low-carbon or 
carbon-free generation. Deploying energy efficiency reduces demand for 
primary energy and generating capacity needs and therefore lowers the 
overall costs of shifting to a low-carbon energy system.\2\ Ultimately, 
the cleanest and cheapest energy is the energy you don't use in the 
first place. A new report from ACEEE found that energy efficiency alone 
can cut energy use and greenhouse gas emissions in half by 2050.\3\ 
Buildings deliver 33% of the total emissions reductions in the report's 
model, and upgrades to existing buildings and homes and appliance and 
equipment efficiency are identified as some of the largest cost-
effective opportunities to achieve these reductions.
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    \2\ An NRDC study found that 80% emissions reductions in the U.S. 
by 2050 is achievable and cost-effective using existing clean energy 
technologies. Energy efficiency is the single greatest contributor to 
emissions reductions in the model scenario which assumes an aggressive, 
but technically and economically achievable, deployment of energy 
efficiency across the U.S. economy. https://www.nrdc.org/sites/default/
files/americas-clean-energy-frontier-report.pdf.
    \3\ https://aceee.org/sites/default/files/publications/
researchreports/u1907.pdf.
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    The residential buildings sector in particular remains a largely 
untapped resource for carbon reduction goals. I will discuss specific 
policy opportunities to address barriers and advance energy efficiency 
in the residential sector in a moment.
Energy Efficiency Creates Jobs
    Energy efficiency is the largest employer and fastest growing 
sector in the energy industry. Put simply, energy efficiency equals 
jobs. According to this year's ``Energy Efficiency Jobs in America'' 
\4\ report released by E4TheFuture and attached to this testimony, the 
energy efficiency sector employs 2.3 million Americans, twice as many 
workers as the entire U.S. fossil fuel industry, and energy efficiency 
is leading the nation's energy economy in new job creation, accounting 
for half of the entire energy industry's job growth in 2018. These 
local, family-sustaining jobs exist all across the country. In fact, 
the E4TheFuture report found that 99.7% of U.S. counties have energy 
efficiency jobs and more than 300,000 of these jobs are in rural areas. 
A significant portion of energy efficiency jobs in the U.S. are in the 
residential sector, and approximately 56 percent of energy efficiency 
jobs involve construction and repairs. These are the contractors--the 
``boots on the ground''--installing energy efficiency products and 
technologies and working to reduce energy waste in homes and commercial 
buildings across the country. These jobs are, by their very nature, 
inherently local and cannot be exported. Contractors are local--their 
kids go to the same schools as their clients, they sponsor baseball 
teams, they share in community successes and failures. Policies that 
encourage investment in energy efficiency can further advance growth in 
this industry, creating even more well-paying jobs all across America 
and generating economic opportunity through the decarbonization 
transition.
---------------------------------------------------------------------------
    \4\ https://e4thefuture.org/wp-content/uploads/2019/09/Energy-
Efficiency-Jobs-in-America-2019.pdf.
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    Importantly, policies that provide incentives for building 
efficiency retrofits, such as the HOMES act or tax policy like the 25C 
or 179D federal credits, create a ripple effect on jobs. Demand for 
insulation, air sealing, HVAC will certainly create work for those who 
install these products, but it also creates jobs in the manufacturing 
and distributing of those products. This creates jobs around those 
industrial centers where workers eat, shop, and live.
    Not only is energy efficiency the largest employer in the energy 
sector, it has the most potential for even more job growth moving 
forward. With an aging building stock across the country we have only 
scratched the surface on investing in energy efficiency improvements. 
Addressing barriers to retrofitting these existing homes and buildings 
and advancing energy efficiency across the entire buildings sector will 
simultaneously support decarbonization and job creation.
    It is also important to note that the energy efficiency industry is 
comprised mainly of small businesses: 80% of energy efficiency 
businesses in America have fewer than 20 employees.\5\ These small 
businesses are the heart of the American economy--creating jobs, 
driving growth, and saving us all money through improved energy 
efficiency. They are also the ones that are in need of assistance when 
it comes to ensuring that there are qualified workers to fill these 
jobs. Small energy efficiency businesses need resources to help train 
new hires and provide ongoing education to existing employees, keeping 
them up to date on certifications and trained in the latest 
technologies and health and safety practices. To prepare more American 
workers for quality jobs in energy efficiency and drive further growth 
in this industry, Congress should act to support workforce development 
and jobs training. The Blue Collar to Green Collar Jobs Development Act 
of 2019 (HR 1315) would create a comprehensive, nationwide program to 
improve education and training for workers in the energy efficiency 
industry, including manufacturing, engineering, construction, and 
building retrofitting jobs. This legislation will result in more 
American workers who are equipped to provide energy efficiency products 
and services and whose work will reduce energy waste and save money for 
homes and businesses across the country.
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    \5\ https://e4thefuture.org/wp-content/uploads/2019/09/Energy-
Efficiency-Jobs-in-America-2019.pdf.
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Energy Efficiency Provides Building Resilience
    Energy efficiency measures not only save energy and reduce carbon 
pollution, they also improve the physical structure of the building. 
Building envelope improvements like high performing insulation and air 
sealing increase the durability of the building and its ability to 
withstand extreme weather and keep occupants safe. Studies have shown 
that buildings built to the latest energy code, with efficient, well-
sealed structures, are able to maintain safe indoor temperatures 
through extreme heat and cold and allow residents to remain safe and 
comfortable for longer during a power outage.\6\ Beyond the durability 
and resilience of the physical buildings themselves, energy efficiency 
enhances resilience in other ways: providing health and safety benefits 
like improved indoor air quality, delivering cost savings to families 
and businesses which creates new opportunities for productive spending 
and local investment, and supporting the reliability and resilience of 
our power grid which I will discuss further in a moment.
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    \6\ http://www.aceee.org/files/proceedings/2014/data/papers/1-
439.pdf.
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Energy Efficiency Policy as a part of Equity Policy
    Energy efficiency is a key strategy for both reducing carbon 
emissions and improving the lives of Americans. Legislation that 
advances energy efficiency in buildings, especially residential 
buildings, provides many benefits in addition to energy and pollution 
reductions including increased comfort, health, and energy 
affordability.
    The occupants of the vast majority of homes in the U.S. experience 
building-related comfort problems, health issues, and/or high utility 
bills--problems which could all be significantly mitigated by proper 
construction techniques and energy efficiency upgrades.\7\ Studies have 
shown that improvements in occupant health from residential energy 
efficiency are strongest among vulnerable groups: lower income 
households and residents with pre-existing health conditions linked to 
housing risks.\8\
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    \7\ https://www.building-performance.org/sites/default/files/0819-
EE-high-performing-homes-blueprint-v8.pdf.
    \8\ https://e4thefuture.org/wp-content/uploads/2016/11/Occupant-
Health-Benefits-Residential-EE.pdf.
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    Energy costs are a significant living expense. For the nearly one-
third of U.S. households who face challenges paying energy bills or 
sustaining adequate heating and cooling in their homes, the cost 
savings provided by energy efficiency are critical.\9\ Congress should 
advance policies aimed at helping middle income Americans make 
efficiency upgrades to their homes (e.g. HOMES Act) as well as programs 
designed to make efficiency upgrades to low income homes (e.g. 
Weatherization Assistance Program).
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    \9\ https://www.eia.gov/todayinenergy/detail.php?id=37072.
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    In addition to the cost-savings benefits to homeowners, efficiency 
upgrades also have health and safety benefits. A U.S. Department of 
Energy report on the Weatherization Assistance Program found that home 
improvements focused on energy efficiency can improve indoor air 
quality, which reduces respiratory illness and sick days, and reduce 
thermal stress caused by exposure to extreme indoor thermal conditions 
(temperature, humidity, drafts).\10\ A report from E4TheFuture, 
entitled ``Occupant Health Benefits of Residential Energy Efficiency,'' 
\11\ which reviews existing research on the link between resident 
health benefits and energy efficiency upgrades, also found that 
residential energy efficiency upgrades can produce significant 
improvements in asthma symptoms and help improve overall physical and 
mental health.
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    \10\ https://weatherization.ornl.gov/wp-content/uploads/pdf/
WAPRetroEvalFinalReports/ORNL_TM-2014_345.pdf.
    \11\ https://e4thefuture.org/occupant-health-benefits-of-
residential-energy-efficiency/.
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    It is critical that Congress continue to support and expand the 
Weatherization Assistance Program. I was the lead author of a report 
\12\ in 2017, published by the Home Performance Coalition, that offered 
recommendations for improvements to the program, opportunities for 
streamlining, and ways to encourage the use of private sector 
contractors. Some of these ideas are included in the Weatherization 
Enhancement and Local Energy Efficiency Investment and Accountability 
Act (HR 2041) which would reauthorize and make updates to the 
Weatherization Assistance Program. This bill has passed out of 
Committee this year and awaits a floor vote. I urge Congress to act on 
this important legislation.
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    \12\ https://www.building-performance.org/sites/default/files/
Weatherization%20%26%20HP%20Recommendations%20Report2.pdf.
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Smart Energy-Efficient Buildings are a Pathway to a Clean, Affordable, 
        Resilient Grid
    When we talk about clean energy and decarbonizing the electric 
grid, buildings and energy efficiency must be part of that 
conversation. When we discuss grid resilience and stability concerns, 
building efficiency must be a part of the conversation, because it is 
buildings that are being asked not only to generate power (through 
renewables) but to reduce their energy consumption at certain times of 
the day (through demand response).
    There is a growing need for policymakers to look at buildings as an 
integral part of the grid that not only use energy but can also 
generate power, store energy, and shift demand from times of high 
demand and cost to times when wind and solar power are abundant and 
energy is cheapest. Thanks to advances in technology, our nation's 
buildings--and the residential sector in particular--can be enabled to 
play an important role in managing energy demand to support grid 
efficiency, reliability, and resilience and achieve significant carbon 
reductions.
    The U.S. Department of Energy (DOE) Building Technologies Office 
(BTO) has been doing a lot of work in the area of ``Grid-interactive 
Efficient Buildings'' (GEBs). I am the lead author of a new report 
released today by the National Association of State Energy Officials 
(NASEO) entitled ``Residential Grid-Interactive Efficient Building 
Technology and Policy: Harnessing the Power of Homes for a Clean, 
Affordable, Resilient Grid of the Future,'' that describes how homes 
with energy efficiency measures, combined with smart technologies, and 
small-scale storage and generation resources can support grid needs and 
achieve carbon reductions while consumers benefit from utility bill 
savings, increased comfort, and amenity.\13\ GEB technologies (e.g. 
smart thermostats, efficient connected appliances, battery and thermal 
storage, and home energy management systems) make homes smart, 
connected, efficient and flexible, allowing them to reduce or shift 
energy use to take advantage of variable renewable energy and support a 
cleaner grid, while helping American families lower their utility bills 
and increase comfort and convenience.
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    \13\ The report, released today, is attached to this testimony.
---------------------------------------------------------------------------
    Importantly, GEBs can provide energy savings and demand flexibility 
as a cost-effective clean energy solution that reduces carbon 
emissions. Smart grid-interactive technologies provide two-way 
communication between a home and the grid and offer new tools to target 
load shedding and shifting more precisely and continuously, exactly 
when and where it is needed, while maintaining occupant comfort and 
needs. For example, a smart water heater is able to receive a signal 
when there is overproduction of renewable energy and respond by 
adjusting its heating cycle to use that clean power and then store the 
hot water for use later in the day. With intelligent controls smart 
water heaters ensure that residents always have access to hot water, 
while maximizing the use of carbon-free generation by responding 
dynamically to grid conditions. The building efficiency sector is 
undergoing rapid change and is increasingly a source of innovation and 
new technology, with more sophisticated solutions for home energy 
management. As the sensors, controls, software, and machine learning 
that comprise home energy management systems advance and integrate with 
more technologies, these platforms can support the interconnection of 
solar, storage, and flexible end uses in the home to coordinate load 
management strategies for grid and user benefit.
    Energy efficiency measures are the foundation of a smart, grid-
interactive efficient home. They reduce the baseline load of a home, 
lowering overall electricity use. Conventional energy efficiency 
measures include building envelope improvements and replacement of 
existing equipment and systems (e.g., appliances, lighting, HVAC, 
boilers) with higher-efficiency models. All of these measures provide a 
foundation for other solutions' effectiveness: minimizing the load size 
that requires shifting, enabling homes to hold a comfortable 
temperature for longer periods of time, and ensuring distributed 
generation and storage are appropriately sized. Smart technologies help 
advance energy efficiency in buildings, driving additional savings and 
connecting efficiency measures with new opportunities to provide load 
flexibility. Smart thermostats, for example, offer monitoring, control, 
and optimization of HVAC systems to take advantage of energy saving 
opportunities (e.g., via learned schedules and low energy ``away'' 
modes) and can also be used for demand response. On the hottest days of 
the year, smart thermostats can respond by raising the setpoint 
slightly to save energy and ease strain on the grid, when paired with 
other efficiency measures like a tight, well-insulated building 
envelope and dynamic efficient window shading keep the home cool and 
comfortable--all with little to no effort from the homeowner.
    Deploying these solutions in an integrated way can cost-effectively 
reduce peak demand, address capacity constraints, and provide other 
grid services--deferring transmission and distribution upgrades and 
reducing the need for new power plants. A recent study by Rocky 
Mountain Institute \14\ found that Clean Energy Portfolios of wind, 
solar, storage, energy efficiency, and demand flexibility are now cost-
competitive with new natural gas plants, while providing the same grid 
reliability services currently serviced by natural gas.\15\ In order to 
integrate these clean energy resources and maximize carbon reductions 
across the power system, the grid needs ``intelligence.'' Smart grid 
technologies in the buildings sector like smart meters, sensors and 
controls, and software solutions provide enhanced monitoring, 
detection, and control capabilities. These technologies are an 
important and cost-effective way to increase the reliability and 
efficiency of the grid and maximize the use of renewable energy, by 
providing increased visibility into grid conditions and allowing 
utilities to better manage increasingly complex energy systems.
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    \14\ https://rmi.org/insight/clean-energy-portfolios-pipelines-and-
plants.
    \15\ The study also found that energy efficiency and demand 
flexibility_resources that GEBs can provide--are the least-cost route 
to meeting energy, capacity, and flexibility needs.
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    We need to break down the silos between energy efficiency, 
renewables, and distributed energy resources such as electric vehicles 
and battery storage. Advancing energy efficiency and smart energy 
management technologies will help homes and buildings save energy and 
use energy more flexibly to minimize our carbon footprint. Plans for 
interoperability, incentives, and maximizing data use is critical for 
tapping this great energy resource. With policy and program innovation 
that brings all of these pieces together to optimize energy usage we 
can reduce the need for new power plants, deliver more reliable energy 
services at lower costs, all while making homes healthier, more 
comfortable places to live.
    As noted in the Residential Grid-Interactive Efficient Building 
Technology and Policy report, the Building Performance Association also 
encourages federal investment in the following areas to advance 
innovation with residential GEBs, supporting both decarbonization in 
the buildings sector and a cleaner, more resilient grid:
           Grid modernization. Investment in full deployment of 
        smart meters (AMI) across the entire residential sector would 
        create an enabling infrastructure for grid-interactive energy 
        optimization. Smart meters provide two-way communication 
        between a home and utility and provide much more granular 
        energy usage information, creating new opportunities for 
        targeted energy efficiency and demand response and supporting 
        the integration of customer-sited resources like rooftop solar 
        and battery storage, enabling a broad range of GEB solutions.
           Residential GEB demonstration and deployment. To 
        build on research on grid-interactive efficient building 
        solutions, funding should focus on demonstration and deployment 
        to (1) evaluate energy optimization strategies integrating 
        energy efficiency and smart technology in real homes and (2) 
        assess the potential of different retrofit measures to increase 
        energy efficiency, grid interactivity, and demand flexibility 
        in existing homes.
           Advance workforce education. Curriculum development 
        and resources to train home performance contractors on 
        integrating smart technology within home performance retrofits 
        to further advance residential energy efficiency and demand 
        flexibility.
           Research to quantify the value of residential GEBs 
        and their benefits. New methods and tools for valuing the hard-
        to-quantify benefits residential GEBs provide, including energy 
        resiliency and non-energy benefits like convenience and safety.
           Development and promotion of standards for 
        interoperability. Standard communications protocols and 
        interoperability are key to ensuring that different 
        technologies can work together effectively, and integrated 
        solutions are cost-effective and future-proofed.
Residential Sector is Key to Carbon Reductions
    The residential buildings sector remains a largely untapped 
resource for carbon reduction goals. Residential buildings consume more 
electricity than any other sector \16\ and are the largest contributor 
to peak demand,\17\ which makes this sector especially important from a 
carbon emissions reduction standpoint. I authored a report in 2016, 
published by the Home Performance Coalition, which outlines how 
residential energy efficiency can play an important role as a proven, 
low-cost, and accessible way to help meet carbon emission reduction 
goals.\18\ The residential buildings sector is often overlooked by 
policymakers because of its diversity and complication: over 70% of our 
nation's housing stock was built before 1990, with almost 40% older 
than 1970,\19\ and the characteristics of homes vary considerably by 
the year they were built, meaning they need individualized attention. 
Retrofitting and providing certifications to allow for the valuation of 
these homes could achieve significant energy and carbon savings. Each 
house is unique and the barriers that exist in terms of financing, 
homeowner education and engagement, and proper valuation of efficiency 
characteristics of residential buildings all make it a difficult sector 
to tackle from a policy perspective. The following pieces of 
legislation and policy proposals represent a multi-pronged policy 
approach to reducing carbon emissions in the residential building 
stock:
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    \16\ https://www.eia.gov/electricity/annual/html/epa_01_02.html.
    \17\ https://www.energy.gov/sites/prod/files/2019/04/f61/bto-
geb_overview-4.15.19.pdf.
    \18\ https://www.building-performance.org/sites/default/files/
A%20Policymaker%E2%80%99s%20 
Guide%20to%20Incorporating%20Existing%20Homes%20into%20Carbon%20Reductio
n%20Strat- egies%20and%20Clean%20Power%20Plan%20Compliance_0.pdf.
    \19\ https://www.eia.gov/consumption/residential/data/2015/hc/php/
hc2.3.php.
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Other Legislative and Policy Proposals to Incentivize Residential 
        Energy Efficiency:
           Home Owner Managing Energy Savings (HOMES) Act of 
        2019 (116th--HR 2043, Rep. Welch). Would establish a grant 
        program for rebates to make residential energy efficiency 
        upgrades with a network of rebate aggregators, quality 
        assurance, and pilot on pay for performance. Earlier iterations 
        of the HOMES Act from previous Congresses have been bipartisan 
        with Rep. McKinley (R-WV).
           Access to Consumer Energy Information Act or the E-
        Access Act (116th--discussion draft, Rep. Welch) (114th--HR 
        1980/S 1044, Rep. Welch (D-VT), Rep. Cartwright (D-PA) / Sen. 
        Markey): Would allow DOE to facilitate customers' access to 
        their own electricity data, adds consumer access to energy use 
        and price data to State energy conservation plans, and provides 
        for establishment of voluntary guidelines with access to third 
        parties according to a protocol established by the Secretary.
           Residential Energy Efficiency Valuation Act 
        ``REEVA'': A short term grant program to states to provide 
        incentives based on measured energy savings from energy 
        efficiency upgrades of residential buildings. Payments are to 
        contractors/aggregators based on performance. The contractor/
        aggregator is to utilize financing to provide market-based 
        incentives for their customers. Language available from the 
        Building Performance Association.
           Sensible Accounting to Value Energy (SAVE) Act 
        (114th--HR 614/ 113th--S 1106, Rep. Murphy, Rep. Jolly/Sen. 
        Bennet, Sen. Isakson): HUD to develop and issue guidelines to 
        all federal mortgage agencies to implement enhanced loan 
        eligibility based on energy cost savings due to efficiency 
        upgrades. Supported by the NAHB and many others. Included in 
        the Energy Savings and Industrial Competitiveness Act (HR 3962, 
        S2137).
           Tax credit. We recommend support for tax incentives 
        for homeowners that invest in sound residential energy 
        efficiency home upgrades; tax incentives like a forward-
        looking, expanded 25C tax credit. The 25C tax credit is the 
        only energy efficiency tax credit provided to consumers, 
        everyday homeowners who struggle to pay their utility bills. 
        Residential tax incentives are critical to reducing the upfront 
        cost of energy efficiency improvements, thereby allowing more 
        Americans access to the efficiency market, reducing monthly 
        utility bills, increasing the health and safety of homes, and 
        reducing carbon emissions. We support a forward-looking 
        extension of a tax credit for residential energy efficiency 
        upgrades and recommend improving the 25C credit by updating 
        goals and transitioning the credit into permanent performance-
        based instead of prescriptive incentive.
           Energy Efficiency Resource Standard (EERS). Direct 
        electric and natural gas utilities to achieve increasing levels 
        of energy savings through cost-effective customer energy 
        efficiency programs.\20\ States could administer the program, 
        and limited credit trading would be allowed. While traditional 
        EERS models set resource-specific savings targets, a national 
        standard could be designed more flexibly with an overarching 
        GHG emissions reduction goal, which would allow for beneficial 
        electrification where clean electricity replaces direct fossil 
        fuel use to reduce emissions.\21\
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    \20\ According to ACEEE analysis, a federal EERS of 20% electricity 
and 12% natural gas savings by 2030 would save utility customers nearly 
$150 billion on their energy bills and would achieve CO2 emissions 
reductions equivalent to taking nearly 50 million cars of the road. 
https://aceee.org/policy-brief/energy-efficiency-resource-standard-
eers.
    \21\ ACEEE recently published ``Next-Generation Energy Efficiency 
Resource Standards'' which looks at new EERS approaches that can help 
meet aggressive climate goals, along with delivering cost, grid and 
equity benefits. https://aceee.org/sites/default/files/publications/
researchreports/u1905.pdf.
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Energy Efficiency in Commercial Buildings
    Some of the policy proposals above also will help to advance energy 
efficiency in the commercial buildings sector including support for 
workforce development (H.R. 1315), Access to utility data, implementing 
a federal EERS. Support for the retrofit of existing commercial 
buildings is important because it is estimated that over half of the 
buildings that will be in use in 2050 are already built.\22\
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    \22\ https://buildingefficiencyinitiative.org/articles/why-focus-
existing-buildings.
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    Key to advancing commercial energy efficiency is a forward-looking, 
permanent extension of the 179D Energy Efficient Buildings tax 
deduction which will help support building owners and investors in 
retrofitting existing buildings, as well as in constructing new above-
code buildings. Importantly this deduction has included performance 
criteria, incentivizes whole building efficiency, and requires 
verification. Congress should consider making the 179D tax deduction 
permanent in order to incentivize more and broader energy efficiency 
improvements in commercial buildings and reduce carbon emissions from 
this sector.
Federal Investment in Energy Efficiency Provides Significant Returns
    With the ``power of the purse'' in the hands of Congress, it would 
be remiss for me to fail to mention the important role this body has to 
advance energy efficiency research, development, and deployment in the 
appropriations process. Dollar for dollar, federal investments in 
energy efficiency create more jobs than investment in the utility 
sector or fossil-fuels,\23\ and federal investments in DOE programs 
that support energy efficiency--like the Building Technologies Office, 
Weatherization Assistance Program, and State Energy Program--lead to 
job creation and economic growth.
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    \23\ ACEEE. N.d. Energy Efficiency and Economic Opportunity. 
Retrieved from http://aceee.org/files/pdf/fact-sheet/ee-economic-
opportunity.pdf.
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    The following programs at the Department of Energy deserve the 
support of the American taxpayer as these programs are proven to 
provide a significant return on investment. When funded they will 
continue to provide energy cost relief to households, support American-
based industry and American jobs, ameliorate issues with the aging 
electrical grid, and support national security goals.
           Building Technologies Office (BTO), which develops 
        critical technologies, tools, and solutions that help U.S. 
        consumers and businesses achieve peak efficiency performance in 
        new and existing homes and buildings across all sectors of our 
        economy. Programs like Home Performance with Energy Star, which 
        advances contractor engagement in high efficiency equipment 
        installations, and Home Energy Score, which helps ensure that 
        energy efficiency is valued in real estate transactions--are 
        just two examples of crucial residential programs within BTO. 
        The Residential Building Integration program within BTO has the 
        capacity to fundamentally transform the performance of homes 
        and greatly improve the energy efficiency in the 115 million 
        existing residential buildings throughout this country. We 
        recommend funding be focused on facilitating later-stage 
        research, demonstration, and widespread deployment of 
        technology solutions in new and existing homes, with an 
        emphasis on whole-house energy efficiency retrofits (including 
        outreach, engagement and training to private sector 
        contractors) and continuing efforts to advance smart home 
        technology. BTO's programs can significantly improve the energy 
        efficiency in the residential sector through its partnerships 
        with the thousands of small businesses in this sector, the 
        construction trades, equipment, smart grid technology and 
        systems suppliers, integrators and state and local governments. 
        We encourage the direct engagement with residential contractors 
        and businesses, which are crucial to the success of buildings 
        programs.
           State Energy Program (SEP), which provides funding 
        and technical assistance to states, territories, and the 
        District of Columbia to enhance energy security, advance state-
        led energy initiatives, and maximize the benefits of decreasing 
        energy waste. Over the past 30 years, SEP has proven to be the 
        critical link in helping states improve efficiency in hospitals 
        and schools, establish business incubators and job training 
        programs, and establish relationships with energy service 
        companies and small businesses to implement cost-effective 
        energy efficiency programs across their state. The Oak Ridge 
        National Laboratory found that every dollar invested in SEP by 
        the federal government yields over $10 leveraged for energy-
        related economic development and realizes $7.22 in energy cost 
        savings for U.S. citizens and businesses--a tremendous economic 
        value. SEP provides extraordinary value and flexibility, which 
        is why governors across the country strongly support continued 
        funding. It is important to note that SEP defers to the 
        governors all decisions on allocating resources provided by DOE 
        to meet their states' priorities such as energy emergency 
        planning and response and energy related economic development.
           Weatherization Assistance Program (WAP), which helps 
        low-income and rural families, seniors, and individuals with 
        disabilities make lasting energy efficiency improvements to 
        their homes. WAP has a proven track record of creating new jobs 
        and contributing to the economy through the program's large 
        supply chain of vendors, suppliers, and manufacturers. Since 
        1976, WAP has helped make more than 7 million homes more 
        efficient, saving the average recipient about $4,200 over the 
        lifetime of their home. A peer-reviewed study from the Oak 
        Ridge National Laboratory found that the program is cost-
        effective at even conservative levels of evaluation. Each 
        dollar that goes toward weatherization assistance yields at 
        least $2.30 in benefits, and by some estimates as much as $4.10 
        to the home and society. The President's FY20 budget request, 
        which zeroes out funding for the WAP program, would be a 
        devastating blow to America's low- and moderate-income 
        citizens: making those who are already vulnerable, more 
        vulnerable, and those who are already poor, poorer.
    Aside from the very important programs noted above, we recommend 
Congress do everything in its power to support the later-stage research 
and development, field validation, deployment, demonstration, consumer 
education, and technical assistance activities performed within the 
Office of Energy Efficiency and Renewable Energy (EERE). While the 
Administration continues to place an emphasis on early-stage research 
activities within EERE, if the results of that early-stage research are 
not then integrated and pushed out into the market through 
demonstration and deployment activities, these innovative energy 
technologies, practices, and information cannot be fully utilized by 
American consumers and companies to reduce carbon emissions. This is 
particularly the case with complex systems and structures such as 
America's homes and buildings. We urge Congress to support--and hold 
the Administration accountable to advancing--a comprehensive and real-
world strategy that includes medium- and later-stage research, 
deployment, and demonstration activities that are designed to utilize 
the most effective means to increase buildings' energy efficiency in 
order to reduce carbon emissions.
Leading By Example: Energy Efficiency in Federal Buildings
    There are also important opportunities to simultaneously save 
American taxpayer money and reduce carbon emissions by improving the 
energy performance of federal buildings. Energy Savings Performance 
Contracts (ESPCs) are an innovative and effective model for public-
private partnerships to improve building energy efficiency. ESPCs allow 
federal agencies to procure energy savings and facility improvements 
with no up-front capital costs or special appropriations from Congress 
and provide savings guarantees, reducing government risk. Studies by 
the Oak Ridge National Laboratory show that actual cost savings exceed 
guaranteed savings for many ESPC projects allowing significant cost 
savings to accrue to the government.\24\ In the short term, Congress 
should enable more of these successful public-private partnerships 
through the following pieces of legislation and policy proposals:
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    \24\ https://info.ornl.gov/sites/publications/Files/Pub41816.pdf.
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Legislation:
           Federal Energy and Water Management Performance Act 
        of 2019 (S. 1857, Sen. Murkowski, Sen. Manchin): Would 
        reauthorize the Federal Energy Management Program (FEMP) at $36 
        million and improve federal energy and water requirements.
           Energy Savings and Industrial Competitiveness Act of 
        2019 (S. 2137, Sen. Portman, Sen. Shaheen; H.R. 3962, Rep. 
        Welch, Rep. McKinley): Would reauthorize the Federal Energy 
        Management Program (FEMP) at $36 million and improve federal 
        energy and water requirements. It extends energy use reduction 
        goals and would expand the scope of existing energy standards 
        for new federal buildings to include major renovations.
           Energy Savings through Public-Private Partnerships 
        Act of 2019, (S. 1706, Sen. Gardner, Sen. Coons; H.R. 3079, 
        Rep. Welch): Would encourage the increased use of ESPCs in 
        federal facilities by addressing barriers and increasing the 
        use of energy efficiency and distributed generation.
Federal Appropriations:
    Congress should ensure adequate funding for the following programs 
to continue to improve the performance and cost savings for federal 
buildings:
           Federal Energy Management Program (FEMP). In 
        addition to reauthorizing this important program (S. 1857), 
        Congress should ensure continued adequate funding for FEMP 
        including carveouts for the Assisting Federal Facilities with 
        Energy Conservation Technologies (AFFECT) program which 
        provides grants to federal agencies to support the use of 
        ESPCs, to achieve energy savings and implement other important 
        climate-related measures like resiliency that might not 
        generate utility bill savings.
           U.S. General Services Administration (GSA) Office of 
        Federal High-Performance Buildings. Through ESPCs, construction 
        and leasing policies, and other public private partnership 
        models GSA has saved millions of dollars. GSA has reported, for 
        example, that sustainable building standards helped GSA avoid 
        more than $250 million in energy and water costs from 2008 to 
        2014.\25\ These programs save taxpayers money while reducing 
        energy-related carbon emissions and should continue to be 
        funded by Congress to ensure continued progress.
---------------------------------------------------------------------------
    \25\ https://app_gsagov_prod_rdcgwaajp7wr.s3.amazonaws.com/
GSA_FY_2015_SSPP_Final.docx.
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                               Conclusion

    In conclusion, Madam Chair and esteemed members of the committee, I 
ask you to consider the buildings you live and work in as a part of the 
solution to the climate crisis. The built environment is one of the 
largest consumers of energy and thus emitters of greenhouse gas 
emissions. We need to break down the silos between energy efficiency, 
renewables, and distributed energy resources such as electric vehicles 
and battery storage. With policy and program innovation that brings all 
of these pieces together to optimize energy usage we can reduce the 
need for new power plants, deliver more reliable energy services at 
lower costs, all while making homes healthier, more comfortable places 
to live.

    Ms. Castor. Thank you very much. And, without objection, we 
will make sure that the National Association of State Energy 
Officials report issued today is included in the record.
    [The information follows:]
                              ----------                              


                       Submission for the Record

                      Representative Kathy Castor

                 Select Committee on the Climate Crisis

                            October 17, 2019

    ATTACHMENT: Residential Grid-Interactive Efficient Building 
Technology and Policy: Harnessing the Power of Homes for a Clean, 
Affordable, Resilient Grid of the Future. National Association of State 
Energy Officials, October 2019.
    This report is retained in the committee files and available at: 
https://naseo.org/data/sites/1/documents/publications/AnnDyl-NASEO-GEB-
Report.pdf.

    Ms. Saul Rinaldi. Thank you.
    Ms. Castor. Mr. Rutland, you are now recognized for 5 
minutes.

                   STATEMENT OF JAMES RUTLAND

    Mr. Rutland. Thank you, Chairwoman Castor, Ranking Member 
Graves, members of the committee. I am pleased to appear before 
you today on behalf of the National Association of Home 
Builders. I would like to share our views regarding resiliency 
and energy within residential buildings.
    My name is Jimmy Rutland. I am a third-generation home 
builder from Montgomery, Alabama. I am the president of Lowder 
New Homes, which focuses on building quality and energy-
efficient homes.
    I also serve on the State of Alabama's Energy and 
Residential Codes Board, where I work with others involved in 
the residential and commercial construction industries to adopt 
and amend energy and building codes for the entire State.
    NAHB has been a longtime leader in the drive to make homes 
more energy-efficient and has repeatedly demonstrated a 
commitment to sound Federal disaster and flood plain management 
policies and cost-effective, market-driven resiliency solutions 
that maintain housing affordability while balancing the needs 
of growing communities.
    Housing affordability is currently a real concern. It is at 
a 10-year low for the single-family market. Almost a third of 
the Nation's households pay more than 30 percent of their 
income for housing. NAHB estimates that if the median U.S. new 
home price goes up by just $1,000, more than 127,000 households 
would be priced out of the housing market nationwide. 
Recognizing this crisis, Congress must factor in housing 
affordability when looking at solutions to build a cleaner and 
stronger economy.
    Similarly, there are 130 million homes in the U.S. that 
were built before 2010 and are much less energy-efficient and 
resilient than today's homes. Therefore, in addition to housing 
affordability, any efforts to address the performance of homes 
must prioritize the inefficiencies of existing homes over new 
homes.
    Through the myriad of proposals from legislators and 
stakeholders, many have suggested that mandates and more 
stringent building codes or the immediate adoption of the 
latest published code is the answer to improving residential 
resiliency and energy efficiency. This is unnecessary and 
unwise.
    Codes are nearing a point of diminishing returns in terms 
of the cost-benefit ratio, so further increasing their 
stringency may not make economic sense. To put it simply, 
mandates fail to consider the needs or desires of consumers, 
like the flexibility needed for realistic, widespread 
application, and add unnecessary cost to home construction.
    Model building codes are designed to establish minimum 
requirements for public health and safety for commercial and 
residential structures. Homes constructed following these 
requirements are built to withstand damage from disasters and 
provide substantial resiliency for many catastrophic events. 
Because modern codes are already efficient and resilient, any 
changes must be carefully evaluated.
    Further, State and local jurisdictions are already taking 
the lead in ensuring their codes are adequate. To do so, they 
evaluate each new edition of the model codes and add, remove, 
or revise provisions so that the codes better fit their local 
construction practices, geography, risk, and market conditions. 
This could mean adding a hurricane clip to roofs that are in 
areas prone to hurricanes or elevating homes in areas prone to 
flooding.
    Recognizing these different conditions, it is essential to 
States, like my home State of Alabama, are able to adopt of the 
codes that are best suited for them while other States are able 
to do the same. Any Federal intervention into this process will 
be extremely problematic and undermine the outcome.
    Instead of mandates, Congress should support voluntary 
programs and incentives, both of which are proven ways to drive 
consumer behavior. For example, Alabama has established a grant 
program and makes tax credits up to $3,000 available for 
retrofitting homes to make them more resistant to disasters.
    On the national front, tax incentive programs such as 45L 
and 25C have permeated the market and assisted many families 
and building owners to invest in energy-efficient homes. These 
incentives are critical to helping offset the high initial cost 
associated with some of the high-performance features needed to 
upgrade homes.
    Therefore, I urge you today to retain and expand the 
current offerings and work hand-in-hand with other stakeholders 
to offer additional ways to recognize the value and benefit of 
upgrades.
    In conclusion, I urge Congress to promote voluntary and 
market-driven programs which promote lower total ownership cost 
through utility savings as well as provide the flexibility 
builders need to construct homes that are cost-effective, 
affordable, and appropriate to a home's geographic location.
    Thank you for the opportunity to testify before you today. 
I recommend Congress seriously consider and address housing 
affordability when exploring solutions to build a cleaner and 
resilient economy.
    [The statement of Mr. Rutland follows:]
                              ----------                              


                       Testimony of James Rutland

                      President, Lowder New Homes

           On behalf of National Association of Home Builders

   Before the U.S. House of Representatives, Select Committee on the 
                             Climate Crisis

        Solving the Climate Crisis: Cleaner, Stronger Buildings

                            October 17, 2019

Introduction
    Chairwoman Castor, Ranking Member Graves, I am pleased to appear 
before you today on behalf of the National Association of Home Builders 
(NAHB) to share our views regarding resiliency and energy use within 
residential buildings. My name is Jimmy Rutland and I am a third-
generation home builder and developer from Montgomery, Alabama. I am 
the former President of the Greater Montgomery Home Builders 
Association and serve on the board of directors of NAHB. In addition to 
my service with the local, state and national home builders 
associations, I serve on the State of Alabama Energy and Residential 
Codes Board. In this capacity, I work with various industries and 
regulators involved in Alabama's residential and commercial 
construction industry to adopt and amend energy and building codes for 
the entire state.
    NAHB represents more than 140,000 members who are involved in land 
development and building single-family and multifamily housing, 
remodeling and other aspects of residential and light commercial 
construction. NAHB's members construct approximately 80 percent of all 
new housing built in the United States each year.
    NAHB's mission is to enhance the climate for housing and the 
building industry, including providing and expanding opportunities for 
all people to have access to safe, decent and affordable homes. Due to 
the wide range of activities they conduct on a regular basis to house 
the nation's residents, our members are often required to comply with 
various regulatory and incentive-based programs to address issues 
related to climate change and resilience.
    NAHB is leading the way to improve resiliency and the performance 
of new and existing homes. As a longtime leader in the drive to make 
homes more energy efficient, NAHB has also repeatedly demonstrated a 
commitment to sound federal disaster and floodplain management policies 
and cost-effective, market-driven solutions that maintain housing 
affordability while balancing the needs of growing communities with the 
need for reasonable protection of life and property.
    As stakeholders in both the public and private sectors wrestle with 
finding the right balance of regulations and programs to protect homes 
and their occupants from severe weather events and hazards, some argue 
that more should be done. But most additional efforts come at costs 
that not only curtail homeownership and significantly hinder housing 
affordability, but also can severely impact state and local economies. 
This is because these policies can greatly influence how existing 
structures and cities are reengineered, rebuilt and/or remodeled and 
impact how and where new homes and communities are built. Depending on 
how they are developed and implemented, they can also be inflexible and 
overly protective, fail to target areas of highest risk, reduce 
availability of buildable land, tax limited resources, and have 
significant cost implications that can have a detrimental impact on 
housing affordability in many areas of the country.
    To address these questions regarding the role clean energy and 
resiliency plays in the housing market and to identify the challenges 
the industry faces in doing so, this testimony highlights the following 
points:
           Maintaining housing affordability must be the 
        cornerstone to any efforts to create cleaner and stronger 
        homes. Any efforts to improve or increase the efficiency or 
        resiliency of the U.S. housing stock should focus on cost-
        effective, market-driven solutions.
           Homes built following modern building codes are 
        resilient. Improving the performance of the 130 million homes 
        built before 2010 that are much less energy efficient and 
        resilient than today's new homes is a much more effective way 
        to achieve energy savings and improve resiliency than targeting 
        new homes.
           State and local governments must retain authority 
        over land use and their code adoption processes so they can 
        continue to direct community development and implement the 
        codes that best fit their jurisdictions.
           Climate change mitigation programs that recognize 
        and promote voluntary-above code compliance have a proven track 
        record and demonstrate that mandates are not necessary.
           Incentives play an important role in providing 
        homeowners a cost-effective way to invest in energy efficiency 
        and resiliency. Mandates, which fail to consider the needs or 
        desires of consumers, lack the flexibility needed for 
        realistic, widespread application, and add unnecessary costs to 
        home construction and retrofits, are an unwise approach to 
        improving efficiency and home performance.
Status of the Nation's Housing Stock
    The American housing stock continues to age, especially as 
residential construction continues its modest rebound after the Great 
Recession. Because recent production has fallen short of even the 
levels needed to accommodate the number of net new households, there is 
increasing pressure to keep existing homes in service longer--homes 
that may not perform as well or be as resilient as newer homes.
    One hundred and thirty million homes out of the nation's housing 
stock of 137 million were built before 2010, and therefore, most were 
not subject to the modern building codes that are now in effect. 
Equally problematic, the latest Census statistics show the number of 
homes built before 1970 that are taken out of commission is only about 
six out of every 1,000 being retired per year.
    These low rates of replacement mean that the built environment in 
the U.S. will change slowly and continue to be dominated by structures 
that are at least several decades old. Indeed, optimistic estimates 
suggest that if 1.2 million homes were built every year, after 20 years 
only 16 percent of the conventional housing stock would consist of new 
homes built between now and then. In comparison, 68 percent would still 
consist of homes that were built before 1990.
    Older homes are less resilient and energy efficient than new homes. 
They were not built to the stringent requirements contained in modern 
codes, use (and lose) more energy, and are more susceptible to damage 
from natural disasters. Many of FEMA's post-disaster investigations 
support this conclusion. For example, FEMA's Mitigation Assessment Team 
Report regarding Hurricane Sandy reads, ``Many of the low-rise and 
residential buildings in coastal areas [that had observable damage] 
were of older construction that pre-dates the NFIP.'' Similarly, the 
Insurance Institute for Business and Home Safety stated in its 
preliminary findings report for Hurricanes Harvey and Irma that, 
``[t]otal destruction from wind occurred to mobile homes, as well as 
older site built conventional homes,'' and ``[n]ewer homes generally 
performed better than older buildings.''
    Clearly, these statistics and studies demonstrate that improvements 
in construction practices and building codes have made significant 
strides in improving the efficiency and resiliency of new construction 
and that further gains will be difficult and costly. As policymakers 
seek to improve efficiency and mitigate the effects of future natural 
disasters, they need to create opportunities and incentives to 
facilitate upgrades and improvements to the older homes, structures and 
infrastructure that are less resilient to natural disasters.
    These structures make up the majority of the housing stock and will 
for the foreseeable future. They were built when there were no national 
model codes or constructed following codes that are now outdated, and 
thus provide a wealth of opportunities for improvement. Because they 
also represent the biggest energy users and are the least resilient, 
programs and policies that focus on the existing housing stock would 
reap the most benefits.
Housing Affordability
    According to a nationwide survey conducted for NAHB in August 2019, 
four out of five American households believe the nation is suffering a 
housing affordability crisis and at least 75 percent report this is a 
problem at the state and local level as well. Other NAHB research shows 
that housing affordability in the single-family market is near a 10-
year low. Only 61.4 percent of new and existing homes sold in the first 
quarter of 2019 were affordable to families earning the U.S. median 
income of $75,500, and if the median U.S. new home price goes up by 
$1,000, more than 127,000 households would be priced out of the housing 
market nationwide.
    As a result, owning or renting a suitable home is increasingly out 
of financial reach for many households. In fact, almost a third of the 
nation's households are cost burdened and pay more than 30 percent of 
their income for housing. At the same time, net new households are 
being formed faster than new single-family and multifamily homes are 
coming on line to accommodate them, so there is both a surge in need 
and not nearly enough supply.
    And finally, making things worse, NAHB estimates that nearly 25 
percent of the final cost of a single-family home and more than 30 
percent of the cost of a multifamily home is due to government 
regulations at all levels of government--regulations such as building 
codes, energy efficiency mandates and zoning requirements. This is 
further exacerbating the supply/demand curve and making the housing 
market even more challenging.
    Clearly, the nation is experiencing a regulatory and housing 
affordability crisis. President Trump recognized this earlier this year 
when he issued an Executive Order establishing a White House Council on 
Eliminating Regulatory Barriers to Affordable Housing through which he 
directed federal agencies and others to address, reduce and remove the 
multitude of overly burdensome regulatory barriers that artificially 
raise the cost of housing development and help to cause the lack of 
housing supply.
    Despite these real challenges, many continue to suggest that home 
builders should make their homes more resilient and/or efficient in an 
effort to respond to and stem the impacts of climate change, meet 
carbon emissions limits or further environmental goals, among others. 
Unfortunately, many of the suggestions made to date will only 
exacerbate the current housing crisis.
    Many people cannot afford to purchase a home, much less one that 
exceeds current building requirements. In Louisiana, after a new code 
was adopted in 2017, builders saw an increase in construction costs of 
about 8 percent. Compliance with many code changes and conducting 
certain building retrofit activities can be even costlier. For example, 
building costs can increase between $4,800 and $14,000 due to the 
changes from the 2006 to the 2009 code and the national average cost 
for a typical residential 6-kilowatt photovoltaic system, a basic 
requirement for a net zero home, is close to $18,000. Obviously, those 
costs are passed along to the consumer and can have a significant 
impact on the pool of eligible buyers.
    Additionally, recent research has found that taking steps toward 
achieving near-zero carbon consumption will increase a renter or 
homeowner's monthly costs from $55 to $311. Most potential home buyers 
and those who are renovating or upgrading their existing homes do not 
have the financial resources to cover such exuberant costs.
    At the end of the day, stricter construction standards and 
mitigation comes with a price tag. Regardless of the level of benefit, 
the benefit must be obvious to the homeowner in the form of reasonable 
paybacks in energy, insurance premiums, or other savings, and some 
entity must provide the upfront funding required to conduct the 
construction or mitigation activities or they will not occur.
    This is where the challenge lies for most consumers and homeowners. 
Just because more stringent codes or pre-disaster mitigation may 
provide a benefit doesn't mean it can or will be implemented. While the 
increased funding from the Disaster Recovery Reform Act of 2018 (DRRA) 
can help, because most of these sources have been consistently 
oversubscribed and target the highest risk structures, it is unlikely 
they will be able to fully serve the array of mitigation needs 
associated with existing housing. New sources, avenues and incentives 
must be found to make upgrades and overall housing more affordable.
Options to Improve Resiliency and Energy
    There have been a number of legislative proposals, regulatory 
suggestions and strategy recommendations about ways to make our 
buildings cleaner and more resilient. Most have focused on increasing 
mandates and creating funding streams or other incentives. Few have 
centered on facilitating or recognizing voluntary efforts. NAHB 
strongly believes that incentives and voluntary, market-based programs 
are the only ways to meet these goals in a cost-effective manner. 
Further, given the significant improvements that can be gained from 
improving the existing building stock, NAHB strongly encourages 
Congress to focus on the highest risk areas and improving the older 
homes, structures and infrastructure that are less energy efficient and 
less resilient to natural disasters.
           Federal Building Code Mandates Problematic
          Many have suggested that more stringent building codes or 
        meeting mandatory energy requirements, such as net-zero, are 
        the only answers to improving residential resiliency and energy 
        efficiency. NAHB strongly disagrees, as both options are 
        problematic, unnecessary and adversely affect housing 
        affordability. Further, states traditionally have, and continue 
        to take the lead on these issues, so federal intervention is 
        not necessary.
                   Modern Codes are Resilient
                  Building codes are designed to establish minimum 
                requirements for public health and safety for 
                commercial and residential structures. Although they 
                have existed in various forms for decades, building 
                codes in the United States achieved a milestone in 2000 
                when the three regional code organizations were 
                consolidated into the International Code Council (ICC) 
                and their codes were combined to create the first set 
                of ``I-Codes,'' which were published in 2000.
                  Although there are other building codes available, 
                the I-Codes are the most widely used model building 
                codes, with some form of the International Building 
                Code (IBC) adopted in all 50 states and versions of the 
                International Residential Code (IRC) adopted in 49 
                states. The I-Codes are modified through a formal 
                public consensus process every three years. This has 
                resulted in the publication of a new edition in 2003, 
                2006, 2009, 2012, 2015 and 2018. Work has commenced on 
                the 2021 version of the code and final votes will take 
                place in the fall of 2019.
                  When the I-Codes were created, a number of major 
                improvements were immediately made to the traditional 
                building code requirements within the residential 
                building code to address issues observed after 
                Hurricane Andrew in 1992 and the California earthquakes 
                of 1989 and 1994. Although additional improvements have 
                been made since the I-Codes' debut in 2000, the number 
                of changes incorporated into the newer editions of the 
                IRC that dramatically impact structural reliability and 
                occupant life safety within residential structures have 
                greatly diminished. In other words, the modern building 
                codes (e.g., post-2000) have proven to be resilient and 
                the need for triannual updates is not necessary for 
                improved resilience.
                  Despite this, many believe that homes built following 
                the ``latest published edition'' of the building code 
                equate to more resilient homes, but that is not 
                necessarily the case when compared to those built to 
                previous editions of the IRC. Homes built to modern 
                building codes--defined as any edition of the IRC--have 
                been shown to be resilient. Evidence from FEMA and 
                others demonstrate the IRC, throughout its history, has 
                been very effective in preventing the destruction of 
                homes due to various storms and earthquakes and 
                significantly reducing damage to wall and roof 
                coverings. Further, because many of today's new homes 
                are built with additional sustainable and high-
                performance building features, they are even more 
                durable and resilient.
                  The successful performance of the IRC is also an 
                indication of the ``maturing'' of building codes as 
                they have gone through the iterative process of 
                refinement since 2000. While tweaking the code to 
                reflect technological advances will continue, it is 
                clear that major changes aren't as necessary as they 
                used to be. Similarly, because the codes are nearing a 
                point of diminishing returns in terms of the cost/
                benefit ratio, additional updates may not be cost 
                effective. Homes can be built to withstand any 
                disaster, but homes cannot yet consistently be built to 
                withstand any disaster and be affordable. New homes 
                built to modern codes are efficient. New homes built to 
                modern codes are safe. New homes built to modern codes 
                are resilient. There is no need to require adherence to 
                the latest published edition of the code--especially if 
                that is interpreted to mean the most recent version.
                   Use of Latest Published Codes 
                Problematic
                  A number of recent proposals, like those enacted in 
                the DRRA, are targeted at making buildings more 
                resilient through various avenues, such as providing 
                additional resources for the implementation of building 
                codes post disaster, allowing certain funds to be used 
                for code adoption and enforcement, and requiring repair 
                and rebuilding of federally-assisted facilities to 
                follow certain building codes. Many of these efforts 
                are predicated on requiring the use of ``latest 
                published editions'' of certain codes or standards. 
                This is unnecessary and creates a number of challenges.
                  First, homes designed and constructed to the national 
                model building codes are built to withstand damage from 
                disasters and already provide substantial resiliency 
                for many high-seismic, high-wind, heavy snow, wildfire 
                and flooding events while maintaining housing 
                affordability. Because modern codes already are 
                resilient, increasing the stringency is not necessary.
                  Second, it is not clear that this definition 
                recognizes and accommodates the different risks, 
                building technologies and landforms that occur across 
                the country or specifically allows the model codes to 
                be amended. State and local governments play a key role 
                in the building code adoption process and determining 
                the value of and need for each model code requirement. 
                This is done through a thorough consideration of the 
                code's applicability within the jurisdiction, along 
                with costs, technology, and resources, among other 
                factors.
                  Because many states and local governments don't fit 
                the mold of the national averages reflected in the 
                model codes, they frequently find the need to amend the 
                model codes prior to adoption. They do so by adding, 
                removing, or revising provisions so that the codes 
                better fit the construction practices and techniques, 
                geography and risks, and economic and market conditions 
                within the region. If they were unable to make these 
                vital changes, state and local governments would be 
                stuck trying to fit the square peg of national codes 
                into the round hole that represents local conditions. 
                Equally problematic, doing so would impose numerous 
                unnecessary requirements on builders--requirements that 
                translate into higher costs for buyers.
                  Third, each state and local government follows its 
                own code adoption, implementation, and enforcement 
                processes and has limited dedicated resources, which 
                may not be conducive to adopting the latest published 
                codes within expected timeframes. Evaluating and 
                adopting a new building code is a time consuming and 
                costly undertaking--a multi-step process that 
                oftentimes requires state legislative, as well as 
                administrative action.
                  Recognizing the level of effort required to update 
                the codes, coupled with resource constraints and the 
                controversial changes made to the codes in the past, 
                many state and local governments have elected to follow 
                a six-year or longer cycle for updating their building 
                codes instead of a three-year cycle. In this way, they 
                are able to maintain building safety without 
                compromising their ability to oversee, administer and 
                enforce the requirements or keep up with emerging 
                technology.
                  Given these realities, mandating the adoption of the 
                ``latest published editions'' creates an unintended 
                disadvantage for many states and localities that, under 
                other measures, would be considered fairly up to date 
                in maintaining their codes (e.g., following a standard 
                and predictable process and timeline).
                   States are Already Taking the Lead
                  For decades, state and local governments have been 
                responsible for evaluating each new edition of the 
                model consensus-based building codes and determining 
                which provisions are applicable within their borders. 
                Some states make few changes to the model codes, others 
                hand-pick the provisions and/or amend certain 
                requirements, and others use the model code as a 
                baseline to create their own state-specific code.
                  Under this rubric, Nevada is free to identify the 
                risks it faces and adopt the codes that are best suited 
                to its locale, geography and economic conditions, while 
                North Carolina is able to do the same. In fact, the 
                model codes are intended to be tailored and amendments 
                are made to nearly every code that is adopted at the 
                state or local level, whether it applies to only the 
                administrative requirements or major rewrite of the 
                entire document.
                  For example, North Carolina adopted its 2018 building 
                codes based on the 2015 I-Codes on January 1 of this 
                year with 38 pages of amendments. Similarly, Nevada 
                adopts the building codes at the local level, but 
                collaborates statewide on the amending process and had 
                14 pages of amendments on the residential code alone. 
                State and local governments take their building code 
                adoption and enforcement responsibilities seriously, as 
                demonstrated by the time and effort spent on tweaking 
                and tailoring the codes to get them right. Federal 
                intervention into this process is neither prudent nor 
                necessary. Any federal intrusion into this process 
                could have a dramatic impact on each state's ability to 
                implement the codes that best fit their jurisdiction. 
                Likewise, federal mandates that impose building code 
                requirements across the board will have similar 
                unacceptable results. One reason the codes work is 
                because they can be tailored to local conditions, 
                market forces, and consumer wants and needs. A blanket 
                mandate ignores these factors; a federal mandate is not 
                needed.
           Federal Energy Code Mandates Problematic
          Like structural building codes, more stringent federal 
        building energy codes needlessly raise housing costs and fail 
        to reduce energy usage in a cost-effective manner. Therefore, 
        they are unnecessary.
                   New Homes Are Efficient
                  New construction is more energy-efficient than 
                existing construction because of better insulation, 
                energy efficient appliances and HVAC equipment, among 
                other improvements. For example, single-family detached 
                homes built in 2000-2009 on average used about 100.1 
                Btu per square foot of heated area per year, in 
                contrast to 120.6 Btu for homes built in 1970-1979 and 
                135.4 Btu for homes built before 1950. Although the 
                size of new homes has increased, the total energy used 
                on heating and cooling has not, especially when newer 
                homes are compared to homes built before 1950. With the 
                growing interest in voluntary efforts to further reduce 
                energy usage in new construction, overall consumption 
                is likely to continue to decrease.
                  Despite these gains over time, new homes are still 
                being targeted for increased energy efficiency. This 
                makes little sense because savings will be minimal and 
                doing so will create a host of new problems. The energy 
                codes are nearing a point of diminishing returns in 
                terms of the cost/benefit ratio, meaning that most 
                updates will probably not be cost effective. Further, 
                if policies are adopted that apply more stringent 
                energy conservation requirements to new homes, the cost 
                of these homes will significantly increase. This may 
                encourage people to remain in older, less energy-
                efficient homes, which would result in higher energy 
                usage, higher greenhouse gas emissions, and lower 
                standards of living, among other impacts--all of which 
                are contrary to the intended goals.
                  Energy efficiency policies must not inadvertently 
                penalize new construction. Instead of relying on new 
                homes to provide desired use reductions at a cost-
                prohibitive pace, Congress should focus on increasing 
                the energy efficiency of the existing housing stock 
                because this is where the real energy savings will 
                occur.
                   Net Zero is Impractical
                  Even more problematic than more stringent energy 
                mandates would be any requirement for homes to meet net 
                zero or near zero emissions or energy usage. The 
                current demand for net or near zero energy homes 
                represents a sliver of the housing market. Designed and 
                built to produce as much energy as they consume, net 
                zero homes require careful planning, which increases 
                upfront design and engineering costs. Net zero design 
                also creates further challenges because it uses passive 
                techniques, such as orienting the house to take 
                advantage of the sun for heating and cooling, which 
                requires treating the home as a system instead of 
                discrete elements. This requires additional thought and 
                consideration because changing one aspect of the design 
                may affect another part of the house and additional 
                modifications may be required.
                  Equally challenging is that to achieve net zero, 
                additional systems must be incorporated, such as solar 
                photovoltaics (PV), solar hot water and special 
                controls for heat pumps to maintain needed comfort 
                levels. Other aspects typically include highly-
                efficient windows, lighting and appliances. While 
                individually some of these installations may be 
                workable from a cost standpoint, because achieving net 
                zero energy generally requires the installation of most 
                of them, the total costs can be prohibitive. In 
                addition, some of the required elements do not work 
                well in certain geographic regions, so requiring their 
                installation and use would be nonsensical. As a result, 
                mandating net zero or near net zero is extremely 
                difficult, costly and impractical in most if not all of 
                the country.
                  While NAHB has long been an advocate for energy 
                efficiency codes that are cost-effective and affordable 
                for home buyers throughout the nation, the energy codes 
                are growing increasingly stringent, increasingly 
                unworkable and marginally cost-effective, at best. 
                Mandating adherence to overly burdensome requirements--
                particularly for new construction--adversely impacts 
                housing affordability, disadvantages new construction, 
                and may not yield the intended results.
          NAHB strongly discourages Congress from including mandates, 
        such as building codes or meeting a net zero standard as 
        solutions toward a clean economy. Building codes have little to 
        offer in the form of emissions reductions and can impose 
        significant costs on new home construction, supporting 
        industries, and, ultimately, consumers. Likewise, any other 
        federal initiatives that would impact where or how homes are 
        built would be equally problematic.
          State and local governments maintain primary authority over 
        local land use and building practices and no federal policy 
        should change that. In addition to maintaining their self-
        interests, these entities have the knowledge of local 
        conditions, market and housing needs, risks and opportunities. 
        Rather than impeding this proven system, Congress should 
        support voluntary programs, retrofitting existing buildings, 
        education and other policies aimed at encouraging consumers to 
        improve the performance of their homes and use energy more 
        wisely.
           Voluntary Programs Promote High Performance
          NAHB supports climate change mitigation programs that 
        recognize and promote voluntary-above code compliance for 
        energy efficiency and resilience in lieu of mandates because 
        they provide choices, have been proven to produce results, show 
        value to consumers and are cost-effective. In other words, they 
        are driven by the market. NAHB continues to lead the industry 
        in developing and providing solutions to facilitate and promote 
        the use of voluntary means to update the housing stock.
                   Respond to Market Demand
                  Because one size never fits most, it is important 
                that builders, home buyers and homeowners have choices 
                when it comes to finding strategies to reduce energy 
                usage or increase the resiliency of their homes. As 
                such, one reason NAHB strongly opposes federal mandates 
                is because they fail to take into account the needs or 
                desires of consumers and others, and typically lack the 
                flexibility needed for realistic, widespread 
                application. Flexibility allows builders to choose the 
                specific efficiency component(s), program or green 
                certification that best suits their needs and the 
                desires of the home buyers based on their ability to 
                afford and willingness to pay. In other words, having 
                options versus requirements allows the market to 
                function as intended.
                  As a result, voluntary, above-code programs such as 
                ENERGY STAR for homes, DOE's Better Buildings program, 
                the ICC700 National Green Building Standard, Leadership 
                in Energy & Environmental Design (LEED) Resilient 
                Design Pilot credits, RELi 2.0 pilot, FORTIFIED Home 
                and the U.S. Resiliency Council (USRC) rating all have 
                widespread participation.
                  Numerous similar initiatives have also been 
                successful and many homeowners voluntarily take steps 
                to improve their home's performance on their own. The 
                popularity of these programs has led to proven track 
                records in reducing energy usage and/or improving home 
                resiliency. For example, over 190,000 units have been 
                certified to the ICC 700 National Green Building 
                Standard to date; more than 98,000 ENERGY STAR 
                certified single-family homes and multifamily units 
                were built in 2018 alone, for a total of nearly 2 
                million homes since 1995; and 10,700 homes have the 
                FORTIFIED designation.
                  In addition to increasing resiliency and energy 
                efficiency in residential structures, these programs 
                provide value to consumers through decreased energy 
                bills, insurance discounts, peace of mind and other 
                benefits. The many choices also allow stakeholders to 
                pick and choose the specific elements that fit their 
                needs and budgets, which make voluntary alternatives 
                inherently cost-effective. Consumers are taking notice. 
                NAHB's recent What Home Buyers Really Want survey found 
                that energy-saving features, such as ENERGY STAR 
                appliances, windows and whole house certification are 
                among the most-wanted home features. Clearly, 
                voluntary, above-code federal programs that allow for 
                competition and choice in the market are in demand and 
                thriving. The broad participation in these programs 
                demonstrate that mandates are unnecessary and Congress 
                should not upset this established market.
                   Provide Cost-Effective Options
                  NAHB continues to lead the way to improve energy 
                efficiency and resiliency in the residential sector for 
                new and existing homes through two specific efforts--
                the ICC 700 National Green Building Standard and the 
                Retrofit Tech Notes.
                  In 2008, seeing the value of providing our members 
                and others with a measurable and recognized way to 
                build sustainable homes, NAHB launched the development 
                of a green building standard for residential buildings, 
                now known as the ICC 700 National Green Building 
                Standard (NGBS). The NGBS is an affordable yet rigorous 
                standard that applies to all types of residential 
                buildings, from single-family homes to multifamily 
                buildings of all sizes, retrofits and land development. 
                It focuses on energy efficiency, water conservation, 
                resource conservation, indoor environmental quality, 
                site design and homeowner education and is the basis of 
                a national certification program administered by the 
                Home Innovation Research Labs.
                  This rigorous certification requires buildings to 
                improve in every category to achieve a higher 
                certification level. The NGBS is also the first and 
                only residential green building standard approved by 
                the American National Standards Institute (ANSI), which 
                guarantees that the NGBS was developed using a true 
                consensus process.
                  The NGBS continues to evolve and is updated on a 
                continuous basis to quickly respond to new solutions 
                and innovations in design, materials, technologies, 
                commissioning, building operation strategies, market 
                preferences, financial transactions, etc. The NGBS is 
                directly tied to the national building codes published 
                by ICC to ensure compatibility and seamless 
                implementation by all stakeholders, including 
                developers, designers, jurisdictions and building 
                operators. The upcoming 2020 edition of the NGBS is 
                expected to be released in early 2020. The NGBS has 
                proven to be a useful and relied-upon voluntary option 
                for green building and increasing energy efficiency and 
                resiliency in the residential sector.
                  Although the NGBS can be used for retrofits, many 
                households do not have the interest or means to conduct 
                the larger scale renovation projects to which the NGBS 
                may apply. Recognizing this challenge, NAHB, in concert 
                with FEMA, the International Code Council, and the 
                Insurance Institute for Business & Home Safety, is 
                developing a series of Tech Notes that describe 
                different types of retrofit techniques that can be used 
                to increase the resiliency of existing buildings.
                  Importantly, these will focus on strategies that 
                require minimal costs (preferably less than $1,000 for 
                a typical home) but have a significant impact on 
                reducing damage.
          The first six topics include sealed roof decks, attachment of 
        roof coverings, flashing and sealing of roof penetrations, use 
        of hurricane shutters, use of impact resistant doors and 
        methods of preventing ice dams. It is hoped that these new 
        resources will help homeowners understand their options, 
        recognize that certain mitigation options can be cost 
        effective, and compel them to take action. The first set of 
        Tech Notes is scheduled to be completed by early 2020.
          NAHB continues to demonstrate its commitment to increase the 
        performance of homes through the development of these 
        resources. We strongly urge Congress to recognize and promote 
        voluntary, market-driven, and viable green building, high 
        performance and resiliency initiatives. Unlike mandates, these 
        programs can promote lower total ownership costs through 
        utility savings as well as provide the flexibility builders 
        need to construct homes that are recognized as being cost-
        effective, affordable and appropriate to a home's geographic 
        location.
           Incentives are Crucial to Success
          Incentive programs that offset the increased costs for above-
        code and mitigation activities are an important tool to reduce 
        the barriers that many energy efficiency and resiliency 
        opportunities pose and encourage more homeowners to invest in 
        home modernization. For example, due to the high initial costs 
        associated with purchasing and/or installing certain energy 
        efficient features, many homeowners are unable to finance 
        desired or necessary upgrades and, without assistance, would 
        likely forego the improvements. Incentives that are available 
        at the federal and state levels, as well as those that could be 
        offered through the real estate valuation and transaction 
        processes, can address this issue, produce results and have 
        proven to be attractive alternatives to mandates.
                   Federal Incentives
                  Congress has taken a number of steps to alleviate the 
                challenges associated with funding retrofits and energy 
                efficiency upgrades. The most prominent are federal 
                funding for pre-disaster mitigation and tax incentives.
                  The DRRA includes a number of actions related to 
                improving the ability of existing structures to 
                withstand catastrophes, including the creation of the 
                National Public Infrastructure Pre-Disaster Mitigation 
                Program. States and tribal governments that have 
                received a major disaster declaration in the past seven 
                years will be eligible to competitively apply for these 
                grants, which estimates suggest could range from $800 
                million to $1 billion annually. NAHB asserts that 
                increasing the resiliency of the existing housing stock 
                would be a prudent use of this funding stream.
                  Tax incentives are also a proven way to realize 
                results and, in fact, are the most effective at 
                advancing energy efficiency improvements. Sections 25C 
                for qualified improvements in existing homes (building 
                components), 45L for new homes and 179D for commercial 
                buildings have permeated the market and assisted many 
                families and building owners to invest in efficiency. 
                Not only does this reduce energy consumption, NAHB 
                estimates that for every $100,000 spent on remodeling, 
                1.11 full-time equivalent jobs are created. The 
                remodeling activity generated by the 25C tax credit in 
                2009 was associated with over 278,000 full-time jobs. 
                Unfortunately, because these tax incentives keep 
                expiring and being retroactively renewed, the positive 
                impact of these incentives has decreased since 2011. 
                Continuing and expanding programs like these, which 
                have demonstrable results, will compel more homeowners 
                to take positive actions.
                   State Incentives
                  States can also play a role in enticing positive 
                behavior. One alternative that has been used in several 
                states is providing insurance discounts to homeowners 
                who conduct specific activities. In Texas, the state's 
                hurricane insurance pool, the Texas Windstorm Insurance 
                Association, offers premium discounts of 19 percent to 
                33 percent for building code compliance. In Rhode 
                Island, insurers are required to waive the hurricane 
                deductible for insured homeowners who voluntarily 
                implement mitigation measures that are specified in the 
                insurance regulation. In Alabama, tax credits of up to 
                $3,000 are available for retrofitting a taxpayer's 
                legal residence to make it more resistant to 
                hurricanes, tornadoes, other catastrophic windstorm 
                events, or rising floodwaters.
                  In addition, the Alabama State Legislature 
                established the Strengthen Alabama Homes Act in 2011 to 
                provide grants to qualified homeowners to retrofit 
                their homes to reduce property damage caused by 
                hurricanes or other catastrophic windstorm events. 
                Currently, the response to the program has been so 
                overwhelming that the program administrator has 
                temporarily stopped taking new grant applications.
                  Clearly, these state programs have proven to be 
                popular, as they provide value through loss reduction, 
                yet enable and facilitate broader participation through 
                reduced costs. The recognition and expansion of 
                programs like these is one way to engage participation 
                while offsetting the hefty costs associated with 
                upgrades.
                   Other Incentives
                  There are a number of other opportunities to 
                facilitate, incentivize, and offset the costs of 
                voluntary above-code construction and/or pre-disaster 
                mitigation that could be achieved through public-
                private partnerships and other collaboration. These 
                options include modifications to property valuation and 
                financing protocols; loans, grants and other funding 
                programs; and insurance premium reductions within the 
                National Flood Insurance Program (NFIP), among others.
                  Under current practice, in most instances, mortgage 
                companies, appraisers and real estate professionals do 
                not consider the costs or benefits associated with 
                various resiliency or energy efficiency upgrades. This 
                creates a disincentive to take proactive steps to 
                reduce a home's exposure, as those expenditures are not 
                necessarily considered to add value. If the 
                improvements are not included in the appraisal or 
                appraised value of the structure, not only is the buyer 
                uninformed about the home's qualities, his or her 
                willingness to pay more can be significantly 
                diminished.
                  In an effort to spur private investment in efficiency 
                and resiliency, the value and benefit of above code 
                practices and mitigation measures should be 
                incorporated into standard real estate lending 
                practices and real estate listings. By recognizing and 
                valuating the upgrades, appraisers can consistently 
                give weight to these improvements, lenders may 
                reconsider qualifying loan ratios, realtors can promote 
                their benefits, homeowners would get assurances that 
                the investments they have made will retain value and be 
                recognized in resale and homes would be more likely to 
                get the upgrades needed to improve their performance.
                  Similar to the valuation process and state insurance 
                discounts, recognizing improved resiliency can also be 
                done by tweaking the NFIP. Currently, all improvements 
                to fortify a home against flood hazards do not result 
                in flood insurance premium discounts. For example, in 
                its ``Reducing Flood Risk to Residential Buildings That 
                Cannot Be Elevated'' document, FEMA outlines several 
                alternative actions that can be taken in lieu of 
                elevation. Of the measures discussed, however, only 50 
                percent of them are eligible for flood insurance 
                premium reductions.
                  This limitation clearly registered with homeowners 
                because FEMA's Office of Flood Insurance Advocate, in 
                its 2017 Annual Report, identified customer frustration 
                with the inability to obtain reduced premiums after 
                conducting certain mitigation activities as a problem. 
                More confounding is the fact that some of the projects 
                identified in the report were undertaken through a 
                qualified FEMA Hazard Mitigation Assistance grant. 
                Clearly, changes to the NFIP that recognize, allow and 
                credit homeowners who take any of the suggested steps 
                (and others) could go a long way toward improving 
                resiliency.
                  Incentives are a proven way to drive efficiency and 
                improve home performance while preserving housing 
                affordability. Congress is urged to retain and expand 
                the current offerings and work collaboratively with 
                state and local governments and the finance, insurance 
                and real estate industries to offer additional ways to 
                recognize and offset the increased costs associated 
                with many energy efficiency and resiliency designs, 
                techniques and construction practices.
Conclusion
    NAHB is committed to working as a partner with all levels of 
government to encourage energy efficiency and resilience. However, 
housing affordability cannot be jeopardized in the process. NAHB urges 
Congress to focus on solutions that are market driven, such as above 
code voluntary programs and other incentives, and to focus on 
increasing the energy efficiency and resiliency of the existing housing 
stock. Any federal mandates or further push to require the adoption of 
more stringent building codes is unnecessary, may not achieve the 
intended results and will prevent healthy competition in the 
marketplace. NAHB looks forward to working with the committee to find 
reasonable ways to increase community resilience and move the nation to 
a clean energy economy.

    Ms. Castor. Thank you very much.
    Dr. Shahyd, you are recognized for 5 minutes.

                   STATEMENT OF KHALIL SHAHYD

    Dr. Shahyd. Thank you, Chair Castor, Ranking Member Graves, 
and distinguished members of the select committee. Thank you 
for holding this hearing and for the opportunity to testify.
    My name Khalil Shahyd. I am a senior policy advocate with 
the Natural Resources Defense Council, which is part of Energy 
Efficiency for All, or EEFA. We are a national partnership 
working to bring awareness to and increase energy-efficiency 
services in affordable multifamily housing. Affordable housing 
is generally defined as spending less than 30 percent of 
household income on housing.
    America is being confronted today with two existential 
crises, and how we respond will determine the type of Nation we 
are for generations to come. They are the climate crisis and 
the increasing cost of housing. And these two issues are 
absolutely linked, creating extreme burdens for households and 
families across this country. These include renters, female-
headed households, the elderly, African-Americans, and other 
communities of color.
    Often, low-income and vulnerable households have very few 
housing options. They are left to rely on low-quality housing 
due to residential segregation, long-term neighborhood 
disinvestment, and deferred maintenance to the housing stock. 
These homes tend to waste energy so that low-income families 
pay more per square foot for energy than higher-income 
residents.
    The result is that nearly one-third of households in the 
U.S. struggle to pay energy bills. And, in fact, one in five 
households have been forced to choose between buying food, 
medicine, or other necessities over paying an energy bill.
    As if this were not enough, Americans are increasingly 
facing the prospects of dealing with major weather disasters 
such as hurricanes, flooding, wildfire, and other climate-
related emergencies that place vulnerable housing stock at risk 
of destruction. And that leads to displacement and 
destabilization of families and communities.
    To avert the worst impacts of climate change, our policies 
must ensure both the reduction of emissions that cause climate 
change and that people can live in safe, affordable housing.
    With decisive leadership, Congress can address the dual 
crises of affordable housing and climate change while helping 
to produce hundreds of thousands of new clean jobs and 
alleviate the negative health impacts of indoor and outdoor air 
pollution.
    NRDC's report, ``America's Clean Energy Frontier,'' shows 
that we can reduce carbon emissions by at least 80 percent by 
2050, with fully half coming from energy efficiency. This means 
that energy efficiency is absolutely critical to achieving U.S. 
emissions-reduction goals and doing so in an affordable manner.
    Consider that residential energy efficiency is the largest 
single measure that can reduce climate pollution in the U.S. 
Along with cutting pollution and reducing energy bills, 
efficiency has considerable health and safety benefits, 
including improved indoor air quality, which reduces the 
likelihood of asthma.
    And we have a report coming soon that shows that 
retrofitting America's affordable multifamily housing can 
create hundreds of thousands of local jobs that can't be 
outsourced. Already, energy efficiency accounts for more than 
2.2 million jobs nationally. That is 10 times more than oil and 
gas drilling and 30 times more than coal mining.
    There are two major programs that fund energy efficiency 
and affordable housing at the Federal level, and both need more 
resources from Congress. There are also several pending pieces 
of legislation that could help, but, in the interest of time, 
let me focus for a minute on the Department of Energy's 
Weatherization Assistance Program.
    Every year, the program's efficiency improvements help 
reduce energy costs for thousands of low-income families, 
cutting America's climate pollution by 2 million metric tons. 
In total, residential energy-efficiency improvements can 
account for carbon reductions as high as 550 million metric 
tons every year by 2050.
    Unfortunately, there are many barriers to increasing energy 
efficiency in the Nation's affordable housing, but Congress can 
help. Despite the considerable need for efficiency improvements 
in low-income housing, many programs that facilitate retrofits 
are sorely underfunded. Across the country, only about 35,000 
homes can enroll in the Weatherization Assistance Program on a 
yearly basis, and the maximum per-unit expenditure is only 
about $6,000. That is not enough.
    There is not a State in the country where there isn't a 
waiting list for services that is not extremely long, sometimes 
years, for the Weatherization Assistance Program. For example, 
at the current rate, it would take Ohio almost 150 years to 
weatherize all currently eligible homes.
    The cost of regular maintenance and upgrades for 
multifamily housing are among the most significant barriers to 
preserving affordable, quality homes for low-income households. 
Without attention, the properties deteriorate. Federal action 
is needed to incentivize investments in hard-to-reach sectors 
of the housing markets. Without it, there will be greater 
inequity and greater costs to families who are least able to 
afford it.
    We have a housing affordability crisis in America. Millions 
of affordable rental homes have already been lost, demolished 
because housing providers could not afford the cost of 
maintaining those buildings. Much of the remaining affordable 
rental homes are aging and in need of repair. The escalating 
climate crisis will only worsen this situation.
    Energy efficiency can help bridge the growing gap between 
renter incomes and rising housing costs. And retrofitting 
existing housing can preserve and expand the affordable housing 
stock for low-income tenants. Energy efficiency can be a win 
for everyone, but Congress needs to act. And we hope this 
committee can help.
    Thank you.
    [The statement of Dr. Shahyd follows:]
                              ----------                              


                       Testimony of Khalil Shahyd

  Senior Policy Advocate, Health People/Thriving Communities Program, 
                   Natural Resources Defense Council

   Before the U.S. House of Representatives, Select Committee on the 
                             Climate Crisis

        Solving the Climate Crisis: Cleaner, Stronger Buildings

                            October 17, 2019

    Chair Castor, Ranking Member Graves, and distinguished members of 
the Committee; thank you for holding this hearing and for the 
opportunity to testify today on the critically important topic of 
``solving the climate crisis: cleaner, stronger buildings''.
    My name is Khalil Shahyd, I am a Senior Policy Advocate with the 
Natural Resources Defense Council (NRDC). NRDC is an international, 
non-profit environmental organization representing more than three 
million members and online activists. Since 1970, our environmental 
experts have worked to protect the world's natural resources, improve 
public health, and ensure a safe and sustainable environment for all.
    NRDC's top institutional priorities include advocacy to avert the 
worst consequences of climate change, creating a healthy environment 
and clean jobs by scaling up clean energy and increasing investments in 
energy efficiency.
    NRDC has a long history of engagement on federal and state energy 
efficiency standards as a key policy to lower energy bills, improve 
indoor air quality and reduce greenhouse gas and other forms of 
pollution. Since 2014, we've worked with the Energy Efficiency for All 
(EEFA) coalition partnering with leaders and advocates across the 
nation to ensure that utility rate-payer-funded energy efficiency 
programs respond to the needs, potential and benefits of increased 
energy efficiency investments in the affordable multi-family housing 
sector.
    EEFA unites people from diverse sectors, including housing, health, 
energy efficiency, environmental, and community advocacy organizations, 
that have not typically worked together in the past to collectively 
make multifamily affordable homes energy and water efficient. Our 
national includes the National Housing Trust, Elevate Energy, Natural 
Resources Defense Council and the Energy Foundation as well nearly 50 
state and community-based organizations.
    What began as a project involving eight state-level partnerships 
has now grown to twelve states and an expanded network of leaders and 
practitioners in the Network for Energy, Water, and Health in 
Affordable Buildings (NEWHAB). NEWHAB is a platform for coalition 
members and diverse sector leaders to convene, learn from one another, 
and develop collective solutions to increase access to healthy and 
affordable homes.
    Together, our coalition partners work to ensure that utility, 
state, local, and federal entities provide equitable investment to 
improve the efficiency of affordable multifamily homes; advance proven 
best practices in efficiency program design and implementation to help 
meet the needs of affordable housing building owners and residents; and 
advocate for policy solutions to ensure that non-toxic, healthy 
building materials are used in all home improvements. EEFA's advocacy 
has led to nearly $500 million in new confirmed and expected funding 
for efficiency upgrades and 19 new or improved energy efficiency 
programs that specifically serve affordable multifamily housing. More 
than 100,000 affordable apartments have received upgrades via these 
programs, benefitting an estimated 200,000+ low-income renters.
    Congressional action to address climate change can deliver positive 
benefits for the environment and people, with targeted policies to 
ensure safe, healthy and energy efficient affordable housing affordable 
housing. Benefits including;
           Preserving affordable housing
           Lowering household energy cost
           Improving indoor air quality and health outcomes
           Creating jobs with career opportunities for workers
Why energy efficiency?
    Many households in the United States are currently experiencing a 
dual crisis related to the affordability and quality of residential 
housing. Nearly two-thirds of renters nationwide say they can't afford 
to buy a home, as home prices are rising at twice the rate of wage 
growth while more than 11 million Americans (roughly the population of 
New York City and Chicago combined) spend more than half their paycheck 
on rent.\1\
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    \1\ https://www.curbed.com/2019/5/15/18617763/affordable-housing-
policy-rent-real-estate-apartment.
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    The legacy of housing discrimination, redlining and disinvestment 
also exacerbate the housing burden for low-income families, which often 
face few options but to rely on inadequate or lower quality housing to 
secure their families. Many low-income and vulnerable households have 
few residential options but to rely on low-quality housing due to 
residential segregation, long-term neighborhood disinvestment and 
deferred maintenance of the housing stock. These homes tend to be 
energy inefficient, impacting the stability of many families due to 
high utility bills and recurring illnesses from inadequate indoor air 
quality. Struggling families sometimes spend more than 20 percent of 
their incomes on electricity and heat--far more than the national 
average of 2.7 percent and nearly one-third of households in the United 
States have struggled to pay their energy bills, while about one in 
five households had to choose between purchasing food, medicine or 
other necessities to pay an energy bill.\2\
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    \2\ https://www.eia.gov/todayinenergy/detail.php?id=37072.
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    Poor ventilation can cause homes to be drafty in winter and allow 
in moisture in summer that leads to mold and illness. Poor construction 
and inefficient appliances leave families unable to safely maintain 
comfortable temperatures, leaving them further vulnerable to illness or 
potentially deadly accidents. In fact, 79 percent of fatal home heating 
fires are started by space heaters or stoves used when home heating 
systems are inadequate or malfunctioning.\3\
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    \3\ https://www.nfpa.org/News-and-Research/Data-research-and-tools/
US-Fire-Problem/Heating-equipment.
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    In addition, rising energy costs place an additional burden on 
families that have little flexibility in their household budgets to 
meet their needs. According to the U.S. Energy Information 
Administration (EIA), retail residential electricity rates (the amount 
one pays per kilowatt-hour, or  cents/kWh) have risen across the nation 
at a rate of about four percent on average over the last 10 years--
faster even than the rise in average rent cost. Climate change will 
likely exacerbate these trends, as average temperatures rise and 
unpredictable weather gives rise to greater extremes of both hot and 
cold. Because of these and other factors, the use of energy at home 
imposes costs and consequences that vary significantly based on where 
one lives.
Rural Energy Burden
    These burdens are particularly acute for rural households. Across 
the nation over a quarter of all rural low-income households devote 
more than 10 percent of their income to energy expenses.\4\ That's a 
significant expense, and for a household it often means deciding 
between keeping heat or lights on versus paying rent, buying food or 
paying for medicines or school supplies. Such high energy burdens 
increase the likelihood that these households will see their utility 
services shut off at some point. Once shut off, additional fees 
increase the cost of reestablishing service, and inability to pay can 
lead to arrears that damage credit ratings, making reopening services 
or even qualifying for better housing difficult or impossible.
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    \4\ https://www.energyefficiencyforall.org/resources/the-high-cost-
of-energy-in-rural-america-household-energy-burdens-and/.
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    Due to the lower densities of the population over wider areas, the 
cost of delivering energy and energy efficiency services to rural 
households is on average higher than for their urban counterparts. 
Rural communities are more likely to be serviced by smaller rural coops 
or publicly owned utilities that may lack the capacity or resources to 
invest in comprehensive energy efficiency programs. Consequently, rural 
energy costs are vastly higher than the national averages and higher 
than in metro areas.
    Rural families are caught in a vise, since they are also more 
likely to be impoverished while facing higher costs. Approximately 43 
percent of households in rural areas have incomes below 200 percent of 
the federal poverty level, increasing vulnerability to high energy 
burdens. Low incomes, high energy use, non-ownership status, and 
inefficient housing stock are some of the key drivers of high energy 
burdens, which can place significant financial stress on families and 
other households.
    Rural households are also much more likely to live in manufactured 
housing than their urban counterparts. More popularly known as mobile 
homes--which are built in a factory, transported to a site on a flatbed 
truck, and installed on-site--manufactured housing tends to be less 
energy efficient and more costly to repair than traditional homes. 
About 20 percent of all rural households live in manufactured homes, 
making provision of energy efficiency services costlier and less likely 
to happen.
Urban Energy Burdens Highest for Low-Income Renters and Households of 
        Color
    Similarly, low-income households in large metros pay 7.2 percent of 
household income on utilities--more than twice as much as the median 
household and three times as much as higher income households who often 
have the luxury to live in more modern and energy efficient homes.\5\
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    \5\ https://www.energyefficiencyforall.org/resources/lifting-the-
high-energy-burden-in-americas-largest-cities-how-energy/.
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    Affordability is a particularly acute challenge for renters in 
multifamily buildings, where close to 50 percent of our nation's low-
income renters--nearly 10 million people, live.\6\ Almost half of these 
residences were built 50 years ago. Energy cost and energy related 
maintenance cost in multifamily housing, including public housing are 
usually the highest recurring expenditure to maintain affordable, 
quality homes. In fact, low-income households--in affordable 
multifamily buildings--spend, on average, 7.2 percent of their income 
on utility bills, which amounts to about $1,700 annually out of a 
median household income of $25,000. That is more than triple the 2.3 
percent spent for electricity, heating and cooling by higher-income 
households. Increasing energy efficiency in these homes could cut 
electricity use as much as 32 percent.\7\
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    \6\ http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/
jchs_americas_rental_housing_2013_1_0.pdf.
    \7\ https://www.energyefficiencyforall.org/resources/potential-for-
energy-savings-in-affordable-multifamily-housing/.
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    When viewed by race/ethnicity, communities of color are more 
burdened by energy cost than white families. Poverty and discrimination 
in rental and housing markets drive low-income households and people of 
color into older, less efficient buildings leading to higher energy 
costs. As a result, African-American households experienced a median 
energy burden 64 percent greater than white households, and Latino 
households had a median burden 24 percent greater than white 
households.
    Meanwhile, Memphis had the highest energy burden for low-income 
households, with residents spending, on average, 13.2 percent of their 
income for energy. The median annual income for low-income residents of 
Memphis is $19,157, meaning that a family would be paying a whopping 
$200 a month ($2,400 a year) for energy to keep the lights on and their 
homes comfortable.
    In fact, in 17 of the nation's largest cities, a fourth of low-
income households experienced an energy burden greater than 14 percent.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Low income households and affordable housing owners face a 
multitude of barriers when making efficiency investments including: 
``split incentives'' and the need for upfront financing to pay for 
upgrades. Where renters pay energy bills but owners make investments in 
durable equipment in the building, neither party can fully capture the 
benefit of an investment in energy efficiency leading to the split 
incentive. Since these tenants are more likely to move, they have less 
incentive to spend their own money on efficiency since they will not 
enjoy the benefits of long-lived investments. Low income households, 
including most renters, have little surplus in their budget to pay for 
the upfront cost of energy efficiency upgrades.
    Thankfully there are solutions to these huge burdens. Reducing the 
cost of energy through increased efficiency and regular maintenance 
that can improve residential energy performance by reducing energy 
consumption can help to preserve the long-term affordability of homes.
Federal Programs Falling Short of the Need
    Federal support for energy efficiency through programs such as the 
U.S. Department of Energy's Weatherization Assistance Program (WAP) 
have played an important role establishing the techniques and 
technologies used by energy efficiency professionals across the home 
performance sector.\8\ The creation of WAP has led to the establishment 
of workforce training centers, best practices and the deployment of 
adoption of more advanced energy audits and diagnostic equipment to 
assess home energy performance.\9\ However, despite the considerable 
and persistent need for energy efficiency improvements in low income 
housing, many programs that facilitate retrofits are sorely 
underfunded. Across the country, only about 35,000 homes can enroll in 
WAP on a yearly basis with a maximum per unit expenditure of just over 
$6,000. Not enough to achieve the type of savings through whole 
building retrofits that will be required. At the current rate of 
service provision, it would take the State of Ohio roughly 150 years to 
weatherize all the homes currently eligible for the Department of 
Energy's Weatherization Assistance Program.\10\
---------------------------------------------------------------------------
    \8\ https://www.energy.gov/eere/wipo/weatherization-assistance-
program-history.
    \9\ ibid.
    \10\ Dave Rinebolt, Executive Director and Counsel at Ohio Partners 
for Affordable Energy; ``comments during a panel discussion on the 
Multiple Benefits of Federal Energy programs''.
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Benefits of Action
Preserving Affordability of Housing
    The cost of regular maintenance and upgrades for multifamily 
housing are the most significant barriers to preserving affordable, 
quality residential housing for low-income families. As negligence and 
neglect inflate the cost of repairs, federal action will be required to 
incentivize investments in hard to reach sectors of the housing market. 
Failure to act will ultimately will result in greater inequity and 
greater costs to local and state budgets. According to a recent report 
by the Green and Healthy Homes Initiative; ``Investments that address 
social inequities in housing, energy and health are necessary to 
produce greater affordability, housing stability, energy security, 
resiliency, health equity and social justice for all Americans''.\11\
---------------------------------------------------------------------------
    \11\ https://assets.ctfassets.net/ntcn17ss1ow9/
2CMLkZBwlL3n37tfwNfqWS/e5dc2cfc9d74f6a39b5149f922707583/
AchievingHealth_SocialEquity_final-lo_0.pdf.
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    Without needed support for reinvestment in and preservation of 
existing affordable housing, we run the risk of exacerbating the 
affordable housing crisis. Millions of affordable rental homes have 
already been demolished because housing providers could not afford the 
cost of maintaining the buildings. Much of the nation's remaining 
affordable rental homes are in buildings that are aging and in need of 
repair. Climate change, and climate induced disasters from hurricanes, 
flooding or fires risk further damage to homes critical for enabling 
access to affordable housing to America's low-income families.
    Improving the energy and water efficiency of buildings is an 
essential strategy to preserve existing affordable rentals. Efficiency 
upgrades can result in significant financial savings to the property by 
lowering operating expenses that can be reinvested in property 
improvements. The saved financial resources for building owners can be 
used to replenish reserves that are set aside for future building 
repair needs, and/or free up capital to offset potential rent 
increases. There are several ways that efficiency upgrades can help to 
preserve affordable housing by improving the financial stability of the 
property;
          1. Utility bills can comprise up to a fifth of operating 
        expenses in multifamily affordable homes and often are the 
        largest controllable, variable expense.
          2. Replacing older building equipment with new, more 
        efficient equipment can result in lower maintenance costs.
          3. Savings from efficiency upgrades improve the cash flow of 
        the property, which can then be used to leverage additional 
        debt financing that can be reinvested to make other capital 
        improvements to the building.
Lowering Energy Cost for Renters
    Energy efficiency investments provide a critical cross sector 
opportunity to stimulate multiple household and societal benefits. 
First, weatherizing a home for low-income families offers numerous 
benefits. Weatherization saves an average of $283 per year for families 
living at or below 200 percent of the federal poverty level--which is 
just over $12,000 for a single person household and $25,000 for a four-
person household. Households residing in rural manufactured homes would 
see savings of $458 per year or more than one-quarter of their energy 
bill and a full 1.5 percent of their household income. Rural renting, 
low-income, elderly, and non-white families would all save over $100 
per year if they had the same utility costs per square foot as the 
metropolitan median household.
    Investing in energy efficiency is the most cost-effective path to 
reducing the demand for energy, thus reducing the amount families need 
to spend on energy services. If we were just able to bring the low 
income and low-income multifamily housing stock up to the efficiency of 
the median household in our largest cities, we would eliminate at least 
35 percent of the excess energy burden these families face. The average 
family could save as much as $300 annually on utility bills in addition 
to improvements in health, comfort and safety.
Health Benefits of Energy Efficiency
    Direct energy savings benefits to households from efficiency are 
just one potential benefit from efficiency upgrades. Improving the 
energy efficiency of homes when coupled with actions addressing social 
determinants of health and prioritizing the use of healthy building 
materials can provide a number of ``non-energy'' health benefits to 
households.
    Energy efficiency measures can improve indoor air quality by 
reducing criteria air pollutants such as carbon monoxide, lead, ground-
level ozone, nitrogen dioxide, particulate matter, and sulfur 
dioxide.\12\ Persistent exposure to these pollutants can increase the 
likelihood of cardiovascular disorders, respiratory illness and risk of 
carbon monoxide poisoning. In addition, outdoor particulate matter (PM) 
can enter a home through cracks and gaps in the doorways or walls but 
also through open windows and HVAC systems.
---------------------------------------------------------------------------
    \12\ https://www.epa.gov/criteria-air-pollutants.
---------------------------------------------------------------------------
    In Washington State, the Department of Commerce, who operates the 
state's weatherization program, incorporates asthma and Chronic 
Obstructive Pulmonary Disease (COPD) among the outcomes administrators 
would use to measure program achievements. The Weatherization Plus 
Health program, partnering with local public health organizations to 
assist in recruitment and assessment served more than 500 families 
across the state of Washington and is expanding to provide services to 
more households.\13\
---------------------------------------------------------------------------
    \13\ https://www.commerce.wa.gov/growing-the-economy/energy/
weatherization-and-energy-efficiency/matchmaker/weatherization-plus-
health-wxh/.
---------------------------------------------------------------------------
Residential Energy Efficiency Creates Jobs
    In addition to the health and cost saving benefits of investing in 
energy efficiency, there are job \14\ and economic development \15\ 
benefits that provide opportunities for families. For every dollar 
invested in energy efficiency for low income families, two dollars are 
put back into the economy through energy savings and increased income 
from job creation. In fact, energy efficiency is a labor-intensive 
industry that already accounts for more than 2.2 million jobs across 
the nation. Ten times more than oil and gas drilling, and thirty times 
more than coal mining.
---------------------------------------------------------------------------
    \14\ http://aceee.org/files/pdf/fact-sheet/ee-job-creation.pdf.
    \15\ https://www.iea.org/newsroom/news/2014/september/energy-
efficiency-a-key.
---------------------------------------------------------------------------
    These include direct jobs for contractors hired to implement 
efficiency measures in the home, indirect ``supply-chain'' jobs 
generated from the purchase and provision of the materials required to 
complete the projects, and the final boost in economic activity from 
the increased combined expenditure of job related income for 
contractors and energy cost savings for families who receive the 
services.
    A soon to be released report by EEFA on the job potential in 
retrofitting affordable multifamily housing found that more than 
700,000 jobs can be created by deploying energy efficiency upgrades in 
eleven states with active EEFA coalitions.
Environment and Climate Benefits of Energy Efficiency
    Finally, boosting energy efficiency also means we avoid the cost of 
building out expensive energy infrastructure like power plants and 
transmission lines, reducing the nation's energy-related utility costs.
    Further, everyone's health improves when we reduce the amount of 
hazardous mercury, sulfur dioxide and particulate matter spewing out of 
power plant smokestacks and furnaces.
    NRDC's 2018 analysis and report, America's Clean Energy Frontier: 
The Pathway to a Safer Climate Future, shows that the U.S. economy can 
reduce carbon emissions by at least 80 percent by 2050, with fully half 
of those savings coming from energy efficiency. This means that 
maintaining and accelerating energy efficiency improvements is 
absolutely critical to achieving U.S. emissions reduction goals and 
doing so in an affordable manner. Aggressive deployment of energy 
efficiency technologies and system-wide energy efficiency services will 
be needed across all economic sectors, to slash our energy demand by 40 
percent.
    The residential sector has a key role to play in meeting those 
goals. Residential energy efficiency is the largest single measure 
source of potential carbon reduction in the nation.\16\ Every year 
improvements undertaken through WAP alone cuts America's climate 
pollution by two million metric tons.\17\ In total, residential 
efficiency can account for as much as 550 million metric tons of 
CO2 equivalent emissions reductions annually by 2050 (equal 
to the combined electric power emissions of California, Texas, New 
York, Florida, Illinois, and Virginia in 2016).\18\
---------------------------------------------------------------------------
    \16\ https://www.nrdc.org/resources/americas-clean-energy-frontier-
pathway-safer-climate-future.
    \17\ https://energy.gov/eere/articles/celebrating-40-years-america-
s-weatherization-assistance-program.
    \18\ https://www.nrdc.org/resources/americas-clean-energy-frontier-
pathway-safer-climate-future.
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We need Congressional leadership to realize these benefits
    To avert the worst impacts of climate change, our policy must 
ensure both the reduction of emissions that cause climate change and 
also support people's capacity to adapt and thrive in a post carbon 
world. In order to act on climate change while also addressing the 
threat of rising inequality, we must accelerate action on all fronts 
and in particular create a more supportive policy environment for 
affordable housing and accelerate residential energy efficiency. We 
need Congressional action to lead our nation in its response to climate 
change and to realize the enormous benefits of these investments. 
Through decisive action, Congressional leaders can address the dual 
crisis of affordable housing and climate change, while producing 
hundreds of thousands of clean jobs and alleviating the negative health 
impacts of indoor and outdoor air pollution.
    Addressing these core policy areas will enable affordable housing 
and low-income families to be engaged as partners in actions that 
contribute to meaningful emissions reductions by reducing household 
energy use and demand. Key policies congress should support toward 
these outcomes are;
Preserving Affordable Housing
           Expand the National Housing Trust Fund from $367m 
        now to $3.5 billion/year. Affordable housing is in short supply 
        across the country, and this is one of the newer sources of 
        funding to improve it. The support can be used to reduce energy 
        use and increase resiliency of housing, depending on state 
        allocation plan requirements. But the need vastly outstrips the 
        funding currently available.
           Support and utilize S. 1703 the Affordable Housing 
        Credit Improvement Act (AHCIA) \19\ and S. 1288 the Clean 
        Energy for America Act \20\ to enable Low Income Housing Tax 
        Credit (LIHTC) properties to take advantage of tax incentives 
        available for energy efficiency investments.\21\ The LIHTC is 
        the largest and most successful tool for creating and 
        preserving affordable housing. The Clean Energy for America Act 
        amends the Internal Revenue Code of 1986 to provide tax 
        incentives for increased efficiency investments in retrofitting 
        existing and new residential and commercial buildings.
---------------------------------------------------------------------------
    \19\ https://www.novoco.com/sites/default/files/atoms/files/
sb_1703_ahcia_060419.pdf.
    \20\ https://www.congress.gov/bill/116th-congress/senate-bill/1288/
text.
    \21\ https://www.novoco.com/notes-from-novogradac/using-energy-
efficient-practices-preserve-affordable-homes.
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           Support H.R. 4307, the Build More Housing Near 
        Transit Act.\22\ The legislation would require major transit 
        projects using Federal Transit Administration (FTA) New Starts 
        capital investment grant funding to incorporate an evaluation 
        of housing development near transit station areas as a part of 
        the application process.
---------------------------------------------------------------------------
    \22\ https://www.congress.gov/bill/116th-congress/house-bill/4307/
text.
---------------------------------------------------------------------------
Lowering Household Energy Cost
           Support reauthorization of S. 983, the 
        Weatherization Enhancement and Local Energy Efficiency 
        Investment and Accountability Act.\23\ This bill reauthorizes 
        the DOE WAP, creates a new innovation fund for special 
        projects.
---------------------------------------------------------------------------
    \23\ https://www.congress.gov/bill/116th-congress/senate-bill/983/
cosponsors.
---------------------------------------------------------------------------
           Support S. 185 the Investing in State Energy 
        Act.\24\ This bill would require that the Department of Energy 
        (DOE) distribute funding appropriated for WAP and SEP by 
        Congress to implementing agencies within 60 days.\25\
---------------------------------------------------------------------------
    \24\ https://www.congress.gov/bill/116th-congress/senate-bill/185/
text.
    \25\ https://www.nrdc.org/experts/deron-lovaas/congress-must-pass-
investing-state-energy-act.
---------------------------------------------------------------------------
Improving Indoor Air Quality and Health
           Support H.R. 3590, the Environmental Justice and 
        Civil Rights Restoration and Enforcement Act.\26\ This bill 
        reinforces that Federal agencies are to comply and be held 
        accountable to the Title VI Civil Rights Act and that 
        disparities and outcomes shown to have disparate impact must be 
        address through Environmental Justice actions.\27\ This bill 
        gives communities the legal tools to hold Federal agencies 
        including the Environmental Protection Agency (EPA) accountable 
        to unequal burdens.
---------------------------------------------------------------------------
    \26\ https://www.congress.gov/bill/115th-congress/house-bill/3590/
text.
    \27\ https://www.americanbar.org/groups/environment_energy-
resources/publications/trends/2011_12/march_april/
environmental_justice_title_vi_civil_rights_act/.
---------------------------------------------------------------------------
           Support H.R. 3923, the Environmental Justice 
        Act.\28\ Requires Federal agencies to address environmental 
        justice, to require consideration of cumulative impacts in 
        certain permitting decisions, and for other purposes.
---------------------------------------------------------------------------
    \28\ https://www.congress.gov/bill/116th-congress/house-bill/3923/
text.
---------------------------------------------------------------------------
Creation Jobs with Career Opportunities for Workers
           Support H.R. 4061, the Blue Collar and Green Collar 
        Jobs Development Act.\29\ Directs the Secretary of Energy to 
        establish and carry out a comprehensive, nationwide, energy-
        related industries jobs program.
---------------------------------------------------------------------------
    \29\ https://www.congress.gov/bill/116th-congress/house-bill/4061/
text.
---------------------------------------------------------------------------
           Support H.R. 4148, the Green Jobs and Opportunity 
        Act.\30\ Requires the Secretary of Labor, in consultation with 
        the Secretary of Energy and Secretary of Education, to submit a 
        report on current and future trends and shortages in the clean 
        energy technology industry to achieve a clean energy economy, 
        and to provide grants to establish and enhance training 
        programs for any occupation or field of work for which a 
        shortage is identified.
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    \30\ https://www.congress.gov/bill/116th-congress/house-bill/4148/
text.

    Ms. Castor. Thank you very much.
    Mr. Wright, you are recognized for 5 minutes.

                    STATEMENT OF ROY WRIGHT

    Mr. Wright. Good morning, Chair Castor, Mr. Graves, and 
members of the committee. I am Roy Wright. After years of 
leading FEMA's work on flood insurance and disaster resilience, 
today I have the honor of leading the Insurance Institute for 
Business and Home Safety.
    We know that severe weather disrupts lives, displaces 
families, and drives financial loss. The forces of Mother 
Nature will not be constrained, yet much of the damage that is 
caused by these severe weather events is avoidable. The 
catastrophic disasters of 2017 and 2018 make this plain. These 
experiences focused the public's attention and should drive 
climate adaptation.
    IBHS knows that putting proven building science solutions 
in place now will reduce disaster losses in the future. Given 
its important societal and economic benefits, adaptation is a 
public health objective, a humanitarian obligation, and a sound 
fiscal strategy. It touches both fiscal economics and 
environmental justice.
    First, how do we prevent avoidable losses, preventing the 
avoidable portion of the damages that disasters ravage on homes 
and communities? Simply, we need to narrow the path of damage. 
For example, the zone of the strongest winds for a Cat 4 
hurricane will cause destruction, there is no question about 
it. Yet the damages that can occur at 120-miles, 110-, 100-
miles-an-hour wind can be significantly reduced.
    To that end, we spend a lot of time talking about roofs, 
that most basic level of need. When the roof fails because of 
severe weather, it kickstarts a cascade of failures. When the 
roof fails, we see damages in homes, we see disruptions in 
businesses, it breaks up families, it derails careers, it 
destroys the financial security of a family.
    All too often, these policy discussions miss the most 
vulnerable populations in our Nation--the disabled, elderly, 
low-income, and other disadvantaged people who are less likely 
to prepare for disasters, evacuate safely, avoid the physical 
and psychological trauma. Frankly, they are less likely to 
recover quickly and fully.
    Those who live in rental units are dependent on landlords 
and public housing agencies for structural loss prevention. 
This places an even higher priority on adaptation measures that 
prevent avoidable damage to the places where they live and 
work.
    Understanding this, Habitat for Humanity created the 
Habitat Strong program, which is built to our FORTIFIED Home 
standard. We are particularly proud of the performance of the 
five Habitat Strong homes that were affected by Hurricane 
Michael. They stood strong against those fierce winds of that 
Cat 5 in 2018. The only reported damage to these single-family, 
1,200-square-foot homes was a single piece of lost siding.
    At the State and local level, it clearly begins with the 
building code, but today I want to focus on the Federal side. 
Last year, Congress enacted two pieces of legislation that will 
reduce the severity of disasters and the amount of taxpayer 
funds directed towards recovery.
    Chief among them is the Disaster Recovery Reform Act. 
Though its implementation has been too slow by FEMA, the DRRA 
will deliver the largest investment by the Federal Government 
to buy down the risk of natural disasters prior to the 
devastation occurring.
    That is important, yet insufficient. Resilience and 
adaptation cannot be funded by the government alone. That is 
neither feasible nor responsible. Any practical agenda requires 
an emphasis on individual Americans leaning in and taking 
action, making their own investments.
    Congress needs to move forward with a homeowners disaster 
resilience tax credit for making improvements on their own that 
buy down the risk of future disasters. This holds potential 
across every State in the Union, whether your principal risk is 
wildfire, hurricane, high wind, earthquake, flooding, or severe 
winter weather.
    And where States are doing the right thing and funding 
their own grants, Congress needs to eliminate the tax penalties 
associated with implementing those catastrophic loss resilience 
programs. Alabama, North Carolina, and California would 
immediately benefit, and this could incent other States to lean 
in with their own resources.
    Americans are not powerless against severe weather and 
changes to the climate. It is possible to reduce the damage 
inflicted today and in the future. We know it is practical, 
affordable, and just makes plain good sense.
    I appreciate the opportunity to share these thoughts with 
you today, and I look forward to the questions from the 
committee.
    [The statement of Mr. Wright follows:]
                              ----------                              


                        Testimony of Roy Wright

  President and CEO, Insurance Institute for Business and Home Safety

   Before the U.S. House of Representatives, Select Committee on the 
                             Climate Crisis

        Solving the Climate Crisis: Cleaner, Stronger Buildings

                            October 17, 2019

    Members of the Select Committee, thank you for the opportunity to 
speak with you today about the importance of the built environment as 
we think about ways to adapt to the adverse effects of future climate 
conditions. My name is Roy Wright, and I am President & CEO of the 
Insurance Institute for Business & Home Safety (IBHS). IBHS is a 
501(c)(3) organization, enabled by the property insurance industry's 
investment, to fund building safety research that leads to real-world 
solutions for home and business owners, helping to create more 
resilient communities.
    Severe weather disrupts lives, displaces families, and drives 
financial loss. IBHS delivers top-tier science and translates it into 
action so we can prevent avoidable suffering, strengthen our homes and 
businesses, inform the insurance industry, and support thriving 
communities.
    The forces of Mother Nature will not be constrained, yet much of 
the damage caused by severe weather is avoidable. If the devastating 
hurricanes, wildfires, and other disasters of 2017 made the case for 
resilience, those of 2018 underscored the urgency of IBHS' mission and 
the importance of these questions to the Nation.
    The perils we study at IBHS are part of the natural world in which 
we live, but social and economic disasters occur when these perils meet 
human populations that live or work in harm's way. In order to break 
the cycle of destruction, it is essential to address all aspects of the 
building performance chain: where you build, how you design and 
construct, and how well you maintain and repair. As a building science 
institute, IBHS focuses on the ways that weather behaves, what makes 
homes and businesses vulnerable, and how our buildings can be better 
protected. We exist to help ensure that the places where people live, 
learn, work, worship, and gather are safe, stable and as strong as the 
best science can equip them to be.
The Importance of Adaptation
    The goal of climate change adaptation is to take actions today to 
reduce losses tomorrow. Recognizing that we can't predict specific 
weather events next month, much less over the next several decades, 
IBHS knows that putting proven building science solutions in place now 
will reduce disaster losses in the future. Given its important societal 
and economic benefits, adaptation is a sound fiscal strategy, public 
health objective, and humanitarian obligation. It touches both fiscal 
economics and economic justice.
    Moreover, the same actions that protect buildings also protect the 
environment, by reducing the massive amounts of post-disaster debris 
that can overwhelm landfills and lessening the release of carbon 
dioxide and other greenhouse gases generated when buildings burn.
Adaptation: From Research to Action
    In order to prioritize our efforts on the initiatives that best 
advance our mission, IBHS thinks about adaptation through three lenses: 
Lead with the Roof; Solve with Research on Vulnerability and Loss; and 
Prevent Avoidable Damage.
            1. Lead with the Roof
    When you think about a home, ``having a roof over your head'' is 
the most basic level of need. Yet this protection can be threatened by 
severe weather. When roofs fail, they can kick-start a cascade of 
failures such as water infiltration, projectile damage, and destruction 
of rooftop equipment, resulting in as much as 70-90 percent of insured 
residential losses from some disasters. As startling as these insurance 
statistics may be, they fail to capture the broader human consequences 
resulting from roof failures--damaged homes and businesses that disrupt 
daily life, break up families, derail careers, and destroy financial 
security.
    To end this path of destruction and dislocation, IBHS's highest 
priority is to understand what makes roof systems vulnerable and how 
roofing materials, their supply chain, and installation methods can be 
improved to reduce roof-related damage. Our studies show one easy way 
to achieve this is by applying tape over the roof deck's joints before 
the underlayment is applied (this is called a ``sealed roof deck''). 
The process costs only several hundred dollars for a typical roofing 
installation but can save tens of thousands of dollars in the event the 
roof cover is blown off during a high or prolonged wind event. The 
sealed roof deck is the most cost-effective and accessible component of 
the FORTIFIED Home building standard developed by IBHS to provide 
design and construction specifications for home- and business owners 
who wish to improve their resilience beyond the mandatory levels 
outlined in state and local building codes. IBHS also believes that 
standard model building codes would be improved by incorporating a 
cost-effective sealed roof deck requirement. Similarly, wildfire codes 
should reflect best practices to resist ignition through the roof 
system.
    From a communications perspective, it is important to educate home 
and business owners to pay more attention to their roof and to 
understand how to extend its life and reduce the likelihood of storm-
related damage. IBHS knows that small investments today can prevent 
large losses in the future--but we have to find ways to get people to 
pay attention and take action.
            2. Solve with Research
    The core perils studied at the IBHS Research Center are wind, wind-
driven rain, hail, and wildfire, all relevant to today's hearing 
because they could become more frequent and destructive with a changing 
climate. The design of our Research Center--with 105 fans capable of 
generating wind speeds approximating the gusts of a Category 3 
Hurricane--provides unique capabilities to replicate real world weather 
conditions. We also have made significant, long-term investments in 
equipment that allows us to create the ember showers that are the 
leading cause of home ignitions from destructive wildfires. And, we 
have developed a unique capability to replicate the density, hardness, 
and kinetic energy of natural hailstones in order to assess the 
durability and damageability of asphalt shingles and other products. 
IBHS' best-in-class science fills knowledge gaps to achieve significant 
social and economic benefits across all regions and demographics of 
America.
    IBHS brings the ability--through experimental testing, field 
research, and analytics--to understand the pathology behind the damage 
caused by our core perils and identify where building protection 
strategies can have a real-world impact. To reduce damage, we need to 
understand it. In this regard, observing damaged homes and businesses--
whether during post-event field investigations or through other 
external data sources such as aerial imagery--helps IBHS to identify 
vulnerabilities and design experimental testing to more fully 
understand the sequence of events that leads to damage. Results 
captured in the lab are coupled with data gathered in the field to 
understand and demonstrate what makes buildings vulnerable, cost-
effective ways to prevent damage, and how to reduce loss when damage 
cannot be fully avoided.
    In choosing specific research projects, we are driven by our 
mission of translating our research into action. That means that we 
choose science that can shape building codes and standards, evolve our 
FORTIFIED program, influence building professionals and products, 
improve consumer choices, and advance sound public policy solutions. At 
a fundamental level, consumers deserve to have confidence that the time 
and financial investments they make in resilience will live up to their 
reasonable expectations. Our research demonstrates that home and 
business resilience is available at a range of price points, and that 
poor choices or inaction can result in damage or destruction when 
severe weather strikes. Over the longer term, understanding the 
importance of resilience as part of climate change adaptation will 
amplify our research for future generations.
            3. Prevent Avoidable Damage: Public Policy Levers
    At IBHS, we call this ``narrowing the path of damage.'' For 
example, in a Cat 4 hurricane, the zone of the strongest winds will 
cause destruction, yet the damage caused by bands of 100, 110, or even 
120 mph winds can be significantly reduced. Similarly, the strongest 
areas of EF3, EF4, and EF5 tornadoes will see destruction, yet damage 
in the outer bands with winds equal to EF0, EF1, and EF2 can be reduced 
by building better.
    Building codes are an important part of this focus. Historically, 
codes focus on life safety, but through proper application, they also 
can reduce the disruption natural hazards have on our lives. Yet, 
adoption and enforcement are not uniform across the country, or even in 
some of our most hazard-prone states.
    Last year, Congress enacted two pieces of legislation to advance 
that recognize the need for long-term investments to reduce the 
severity of disasters and the amount of taxpayer funds directed toward 
recovery:
     The Bipartisan Budget Act of 2018 included new cost-share 
incentives for states to invest in resilience. Prior to the new law 
being passed, the Stafford Act generally provided a 75% federal share 
for state assistance and reimbursement. The new mitigation provision 
amends the Stafford Act to provide an increased federal share (up to 10 
percent more) to states and territories that undertake eligible 
mitigation actions, such as: adopting current building codes, 
developing an approved mitigation plan, investing in insurance, 
participating in the Community Rating System, and/or providing 
financial incentives for mitigation projects like tax breaks or 
credits. The increased federal cost-share incentive will be implemented 
using a sliding scale.
     The Disaster Recovery Reform Act (DRRA) of 2018 creates 
several new mitigation policies, such as:
           Allowing states and local governments to use FEMA 
        Pre-Disaster Mitigation (PDM) grants to facilitate the adoption 
        and enforcement of building codes.
           Incentivizing states and local governments to adopt 
        the latest model code.
           Authorizing the President to set aside six percent 
        of the total amount of disaster recovery grants awarded from 
        the Disaster Relief Fund, for deposit into FEMA's PDM fund. The 
        new funds represent a fundamental shift in the way the federal 
        government prepares communities for future storm events.
    As important as these federal measures are, they will not advance 
adaptation unless states understand how these funds can be applied to 
make homes, businesses, and communities less vulnerable to the severe 
weather scenarios that play out at the IBHS Research Center. It is 
critical to connect the dots between these new federal grant 
opportunities and bricks and mortar state programs that can strengthen 
the built environment for the future. We have partnered with the 
BuildStrong Coalition to provide technical assistance in making these 
connections.
    The DRRA, once fully implemented, will deliver the largest 
investment by the Federal government to buy down the risk of natural 
disasters now and in the future. While the advancement, enactment, 
implementation, and oversight of the DRRA are ably handled by the House 
Committee on Transportation and Infrastructure, this Select Committee 
can highlight the importance of projects to strengthen home and 
businesses and protect communities from climate change.
    While DRRA represents a new era in disaster mitigation policy at 
the federal level, there are additional steps Congress can take to 
assist homeowners and small businessowners with disaster preparedness. 
One idea is to remove the tax penalty for individuals and businesses 
that benefit from state-based catastrophe-loss mitigation programs. 
H.R. 2053 the ``Catastrophe-Loss-Mitigation Incentive and Tax Parity 
Act of 2019'' would eliminate tax lability for amounts received as part 
of certain state-funded grant programs. Several states sponsor these 
types of successful mitigation programs, including the California Bolt 
+ Brace program for strengthening buildings located in earthquake prone 
areas, and the Strengthen Alabama Homes program, which provides grants 
funds to upgrade to a FORTIFIED Roof. On the individual side, 
bipartisan legislation pending in both the House and Senate, known as 
the SHELTER Act, would provide up to a 25% tax credit for eligible 
expenses paid by individuals and businesses for purchases that help 
reduce potential damage from hurricanes, flooding, and other forms of 
natural disaster. These types of proposals empower and reward states 
and individuals who take action into their own hands--ultimately 
contributing to overall community resilience.
            4. Vulnerable Populations
    In making these investments, it is critical to protect our nation's 
most vulnerable populations. According to sociological research, 
disabled, elderly, low income, and other disadvantaged people are less 
likely to prepare for disasters, evacuate safely, avoid physical or 
psychological trauma, or recover quickly and fully. This reality places 
an even higher priority on adaptation measures that prevent avoidable 
damage to the places they live and work.
    Despite media images of lavish beachfront mansions, low income 
residents account for a meaningful percentage of the population in many 
coastal communities and other areas thatface climate risk, often in the 
most vulnerable housing. Those who live in rental units are dependent 
on landlords or public housing agencies for structural loss prevention 
measures. And, low-income homeowners are more likely to take a ``do-it-
yourself'' approach to maintenance or rely on neighborhood handymen to 
keep costs down. These local contractors may be unlicensed, undertake 
work without obtaining building permits, and be unaware of science-
based loss prevention measures.
    This is one of the reasons IBHS supports strong and up-to-date 
building codes. These codes are regulatory requirements that establish 
the minimum acceptable construction standards necessary to protect 
people and property from natural hazards, interior fires, and other 
causes of loss. They are particularly important for low-income 
homeowners and tenants, who may lack the clout to require a builder or 
landlord to take loss prevention into account. Building codes also 
provide consistency in building standards and trigger processes, such 
as public inspections, that help ensure that the structural elements of 
a building are up to current standards. It is critical to make sure 
that strong building codes not only are enacted but also enforced.
    One place where the congruence of policy initiatives, strengthened 
building codes, and grassroots education has led to large-scale 
homeowner action is in south Alabama, where more than 12,000 homes have 
received a FORTIFIED designation. The progress in mitigation began in 
the wake Hurricanes Ivan and Katrina (which hit the Gulf Coast in 2004 
and 2005 respectively) and has surged with several key innovations. The 
State of Alabama enacted legislation which provided benefits to 
homeowners who built or retrofitted their homes to the FORTIFIED 
standard and later expanded the applicability of those benefits. The 
state's coastal communities understand their particular risk and 
regularly update their building codes--many have even adopted an 
additional ``coastal supplement'' which brings their code up to the 
FORTIFIED level. Public/private partnerships paired with a grassroots 
educational campaign helped to educate homeowners, legislators, and 
builders on the importance of resilient construction.
    In 2016, the State launched Strengthen Alabama Homes, a State-
funded program that provides grants to help homeowners retrofit their 
roofs to the FORTIFIED standard. So far, over 1,600 homeowners have 
received the grant, and over 3,000 more are on the waiting list. The 
attention generated by the grant program, coupled with grassroots 
education and stronger codes created an environment in which mitigating 
your home against hurricanes is becoming common practice, and the real 
estate market has taken note. A collaborative study led by the 
University of Alabama shows homes with a FORTIFIED designation are, on 
average, valued 7% higher than homes without the FORTIFIED proof of 
resilience. This shows innovative building science standards and 
techniques can not only provide protection but can also add value.
    Interestingly, the first significant step in Alabama's path to 
resilience was taken by a local Habitat for Humanity affiliate. The 
organization built one of the state's first FORTIFIED homes and worked 
closely with another nonprofit, Smart Home America, to promote the idea 
that that resilience wasn't only smart; it was affordable too. This 
helped to dispel the common misconception that mitigation and resilient 
construction are cost prohibitive to working families.
    As we consider mitigating buildings against severe weather caused 
by shifting climate risks, it is important to note that we are also 
protecting homeowners from a costly disruption of their daily lives. 
Understanding this, Habitat for Humanity, at the national level, 
created the Habitat Strong program, which mirrors the FORTIFIED Home 
standards. They have partnered with several IBHS member companies and 
universities to help homeowners achieve these stronger protections and 
have seen some of their homes tested by severe weather. We are 
particularly proud of the performance of the five Habitat Strong homes 
in Panama City, Florida, which stood strong against the fierce winds of 
Hurricane Michael in 2018--the only reported damage to any of the homes 
being a single piece of loose siding.
    Other national nonprofits such, as Team Rubicon and SBP, see the 
importance of protecting the homes and financial stability of low to 
moderate income homeowners and are also incorporating FORTIFIED's 
protections into their building designs. Another group, My Strong Home, 
is an innovative benefit corporation which provides lending solutions 
to help coastal residents become more resilient. They require homes to 
meet the FORTIFIED standard to ensure the company's investment is 
protected, and in turn provide homeowners with construction, financing, 
and insurance options that are designed with affordability and long-
term protection in mind.
    While a FORTIFIED home offers great protection, we, at IBHS 
recognize not all coastal residents can upgrade their homes to this 
level, in the near term. So, we designed a user-friendly ``hurricane 
ready'' guide, which details different actions homeowners can take, at 
a variety of price points. On the high end, impact resistant doors and 
windows add a level of protection and eliminate the need for a 
homeowner to install hurricane shutters before each storm. More 
modestly, as I said earlier, a few hundred dollars can provide a sealed 
roof deck, which can prevent very costly damage caused by water-
intrusion. The guide also includes tasks as simple as cleaning gutters 
or securing outdoor furniture, which both can help residents reduce the 
risk of damage in an easy and accessible manner. One of the most 
successful hurricane-preparedness campaigns IBHS ever launched showed 
people how to potentially save their home without spending a penny. It 
simply encouraged people to shut their interior doors during a 
hurricane. This one simple task could save a home by isolating pressure 
if the building envelope were breached (the message went virial before 
Hurricane Irma in 2017). So, as you can see there are a variety of 
stages of resilience that together can help homeowners be better 
protected today and adapt to climate change. IBHS is committed to 
studying and promoting each of these, in an effort to help homeowners 
and communities across the country to better weather the storm.
    In closing, I would like to thank you for the recognizing the 
importance of climate adaptation and the critical role IBHS research 
plays to help strengthen the built environment. Americans are not 
powerless against severe weather--it is possible to reduce the damage 
inflicted today and in the future. We know it is practical, affordable, 
and just plain good sense to construct and retrofit buildings to be 
strong enough to defend against these threats. I appreciate the 
opportunity to share some of our ideas with you today.

    Ms. Castor. Terrific.
    Well, I want to thank all of our witnesses for your 
compelling testimony. The entire committee has been looking 
forward to getting into this subject, and I appreciate your 
direct and concrete policy recommendations.
    Let me start with Ms. Landreneau.
    You mentioned that in the 2009 Recovery Act it provided 
strong incentives for local jurisdictions and States to adopt 
the most recent model energy codes for buildings. Could you 
expand on the type and value of incentives given? Did they 
work? I think everyone would rather create incentives than 
adopt mandates.
    You also mentioned that Congress could use tax incentives 
to encourage States and cities to adopt building codes focused 
on performance. Can you explain how you would structure these 
type of incentives?
    Ms. Landreneau. Thank you.
    So, yes, on the 2009 Recovery Act, the incentives required 
the States to develop a plan to implement the 2009 energy code. 
They had to have it in place by 2017, so there was not an 
expectation that it would be adopted overnight.
    They basically provided training, workbooks, code books, a 
lot of resources, but the States had to show up and meet them 
halfway. They had to put a lot of their own effort and 
investment into the program as well.
    There was an application process, and about 24 States were 
selected in that process. And $3.1 billion, I believe, was used 
to fund that effort. And I do believe it is the reason that 88 
percent of the country is now at least on the 2009 energy code. 
So it was highly successful.
    The Federal Government can certainly lead by example in 
terms of outcome-based requirements and performance 
requirements by sending a market signal with its own funding--
that is, whether it is procuring its own buildings or offering 
tax incentives to have either high-performance metrics, energy 
use intensities, or even zero-carbon/zero-energy expectations 
for things like the low-income tax credit, low-income housing 
tax credit, or historic preservation tax credit, or other 
incentives that already exist.
    Ms. Castor. And you mentioned that States and cities are 
using transparency and benchmarking. I actually saw the 
sustainability officer for the city of Orlando pulled up his 
laptop and showed me how they are benchmarking buildings across 
their community and helping, partnering with them to lower 
their AC bills and become more energy-efficient.
    So these policies often rely on national tools maintained 
by the feds, though. I know we passed some laws--I authored 
one--about benchmarking in Federal buildings. We have a lot of 
real estate under control of the Federal Government.
    Could you describe the Federal resources that are being 
used in partnership with cities and States and how these tools 
are helping them to enact building performance standards?
    Ms. Landreneau. Absolutely.
    Energy Star Portfolio Manager is being used by dozens of 
cities around the country for the benchmarking and transparency 
legislation. That is backed by data collected in the Commercial 
Building Energy Consumption Survey.
    There are tools such as EnergyPlus, a modeling tool created 
by the Department of Energy, that help owners make decisions 
about investment in energy performance improvements.
    The Building Technologies Office helps identify new 
technologies and programs that would help improve building 
performance. There is also a building code assistance program 
that helps States with implementing new building codes.
    So there are countless programs across the Department of 
Energy and other agencies that help cities with benchmarking 
and transparency as well as the private sector with 
implementation.
    Ms. Castor. Well, it is not business as usual anymore; it 
is about carbon reduction. And in order to the avoid the worst 
impacts of the climate crisis, we have to act with urgency.
    So, Ms. Saul Rinaldi, what tools do you recommend to us 
that would have the biggest bang for the buck and help us 
reduce carbon pollution?
    Ms. Saul Rinaldi. One of the key things we need to see is 
really strong investment. The upfront costs for energy 
efficiency are very staggering for some households. So the 
HOMES Act, which Mr. Welch has been working on with Mr. 
McKinley, has at different times had $6 billion focused on 
supporting homeowners updating their homes. This would provide 
rebates to homeowners.
    We are talking really--it does need a lot of resources so 
that we can advance a lot of energy savings. I mean, the fact 
of the matter is that energy prices are often so low in some 
parts of the country that the technology cost really creates a 
bigger upgrade than really will pay for itself. It will pay for 
itself if you include all of the carbon savings and the 
environmental impact, but a homeowner--asking them to do all of 
this for all of us is a bit much.
    So that is why we say, you know, look at the HOMES Act to 
provide rebates. Look to 25C tax credit, which--increase that 
so that homeowners--it is the only tax credit on the books that 
is for actual homeowners that they can take to upgrade their 
homes. Also 179D, that tax deduction for commercial buildings 
and commercial building owners to update their buildings. I 
mean, these are some of the key issues that we need.
    Another thing is building codes. Strong building codes 
address some of the landlord-tenant issues because the 
buildings are built correctly in the first place. That, of 
course, is a State issue, so just supporting that at the 
Federal level, usually through appropriations to the Building 
Technologies Office to support the technology that is needed.
    Ms. Castor. Terrific.
    Mr. Carter, you are recognized for 5 minutes.
    Mr. Carter. Well, thank you, Madam Chair. I appreciate it.
    And I appreciate all of you being here.
    Just a quick question. Anybody know what the number-one 
forestry State in the Nation is?
    Mr. Rutland. Georgia.
    Mr. Carter. That would be Georgia. That is correct. Good 
answer.
    And in the First Congressional District that I have the 
honor and privilege of representing, we have a very competitive 
timber market. And it is something that we are very proud of 
and something that we certainly work hard toward making sure 
that we have sustainable forests and making sure that it is a 
robust and vibrant system.
    And, of course, we know how advantageous it is in the fight 
against climate change. I mean, timber draws carbon out of the 
atmosphere. It is very important. Not only that, but it helps 
with clean water. A vibrant forest helps with clean water. It 
helps with wildlife habitat and all these different things.
    In fact, in the State of Georgia, the annual value of the 
ecosystem services provided by private forests alone is valued 
to be over $37 billion. So obviously it is a big part of our 
economy.
    And we know that throughout the United States that the 
annual amount of carbon that is stored by forest products is 
over 70 million tons. So this is extremely important.
    And I wanted to ask you, Mr. Rutland--you are from our 
neighboring State of Alabama, and I am sure you would live in 
Georgia if you could, but you are in our neighboring State of 
Alabama, and you are in this business. And I have worked very 
closely with the home builders and have for quite a while. Wood 
products, you use them extensively of in your business, I am 
sure, in your industry. How closely is your industry tied to a 
robust, working forest?
    Mr. Rutland. Well, first, while I got your question right 
about Georgia, I do want to say ``War Eagle'' in your 
neighboring State, so----
    Mr. Carter. We are off to an inauspicious start here.
    Mr. Rutland. I apologize for that, sir.
    As far as our--the timber industry is very tied, obviously, 
to the home-building industry. We rely on good-quality timber. 
And we thank you for the timber that you grow in Georgia and 
the timber that is grown in Alabama as well. And it is a big 
part of the workforce in both of our States. It is a very 
important product.
    Mr. Carter. Are there advantages to building with wood 
products?
    Mr. Rutland. Absolutely. It is certainly very flexible, 
very easy to use. There are a lot of things that you can do 
with lumber, I would agree.
    Mr. Carter. Any other type of building materials that 
impact climate change as much as wood does, as much as lumber 
does?
    Mr. Rutland. I am not sure I can answer that question.
    Mr. Carter. The answer is, no, there is not.
    Mr. Rutland. Sure.
    Mr. Carter. You talked about energy efficiency quite 
extensively in your testimony. And energy-efficiency 
advantages, are they tied directly to wood products?
    Mr. Rutland. I would believe so, yes, sir.
    Mr. Carter. Absolutely. You are aware that the natural 
thermal resistance and the embodied energy that makes this 
easier to insulate these homes to higher standards--which, of 
course, is important as well.
    There is also--and, Mr. Wright, I will go to you for this. 
There is also--in commercial buildings, we have been using a 
new green building trend that is called mass timber. I don't 
know if you are familiar with that or not.
    Mr. Wright. I am.
    Mr. Carter. Good. We have two buildings in the State of 
Georgia that are commercial buildings that have been built that 
are very notable, one at Georgia Tech, and then there is 
another one in Atlanta that is the largest-square-foot wood-
built building in the United States.
    What are some of the advantages that commercial buildings 
could have in using wood as a building material?
    Mr. Wright. So, while we don't make specific calls on which 
products go down that, I do think that, as you look at the tall 
wood approach, you look collectively, by which you have the 
engineers and architects going, what are the best products for 
that structure? And when you do that, how does that service the 
functional needs of that building, as well as the kind of work 
you would do to make sure that it is energy-efficient? Which, 
in so many ways, yes, affects carbon and also affects the cost 
of operation.
    Mr. Carter. And I get that, and I understand that. And, 
certainly, in the private sector it is a business decision, but 
we have to all agree that it has an impact on climate change, 
as well, and on our environment.
    Mr. Wright. Most assuredly, the products and materials that 
are used on each one of those structures has an impact, and 
when you are collectively looking at it, you have to make the 
best choice.
    Mr. Carter. Should the impact on the environment enter into 
a business decision like that?
    Mr. Wright. I think, for many companies, they look 
collectively in terms of their own cost and how it serves into 
the broader needs of the communities they live in.
    Mr. Carter. And that is very important, and I appreciate 
that approach, because we are never going to solve this problem 
without the buy-in from the private sector. So that is why this 
is so important.
    And thank you, Madam Chair, and I yield back.
    Ms. Castor. Ms. Bonamici, you are recognized for 5 minutes.
    Ms. Bonamici. Thank you very much.
    Thank you to our witnesses. This has been a great 
discussion today.
    I am from Oregon. The Oregon Department of Energy has 
identified 43 percent of the total energy used in my home State 
is from buildings, about 23 percent residential, 19 percent 
commercial.
    We know that both residential and commercial buildings are 
notoriously challenging to decarbonize. I think we have heard a 
lot of great ideas today about doing that, and we have a 
responsibility to help with that.
    In 2017, Oregon's Governor Brown signed an executive order 
that developed clear requirements for newly constructed 
buildings to become more energy-efficient by 2023. It created a 
pathway for building codes to reach Zero Energy Ready standards 
by 2032.
    And I wanted to follow up on my colleague from Georgia, who 
is just walking out the door. I wanted to follow up and invite 
him out to see--in the district I am honored to represent, the 
First Tech Federal Credit Union has the country's largest 
cross-laminated timber structure. About 650 people work in that 
building.
    A lot of our companies are turning to mass timber as an 
alternative to steel and concrete. And we know that cross-
laminated timber, especially when harvested using sustainable 
forest practices, can sequester and store massive amounts of 
carbon dioxide.
    So we are going to get in touch. We are going to work on 
this.
    Mr. Carter. Thank you.
    Ms. Bonamici. And we know these State and regional 
commitments are important, but Federal efforts are critical, as 
well, to be complementary.
    Dr. Shahyd, thank you so much for identifying and 
especially focusing on the impact on low-income families. 
Hillsboro, Oregon, is also home to the largest certified 
multifamily Passive House building in North America, with 57 
units of affordable housing built to Passive House standards, 
where they saved about 90 percent on their heating and up to 70 
percent on their overall energy use. And it was built into how 
they planned the building. And, of course, it cost a bit more 
at the outset, but the savings are recouped pretty rapidly.
    So, Dr. Shahyd, in your testimony, you noted that for every 
dollar invested in energy efficiency for low-income families, 
$2 are put back into the economy through energy savings and 
increased income from job creation. And you also acknowledge 
that the Department of Energy's Weatherization Assistance 
Program can't meet current demand.
    How can Congress better incentivize and support those 
innovative residential weatherization and energy-efficiency 
practices, especially for low-income families?
    Dr. Shahyd. Yes. Thank you for your question.
    There are a number of bills on the table now. One is the 
reauthorization of the Weatherization Assistance Program, which 
is sitting there, which also includes a new innovation fund, 
which, actually, for the first time, allows local contractors, 
working with DOE program offices, to actually create new 
incentive programs, to create new approaches to actually 
dealing with some of those hard-to-reach sectors in the market. 
And we didn't have that before.
    I think one of my colleagues actually mentioned the Blue 
Collar to Green Collar Jobs Act, which is from Congressman Rush 
of Illinois, which is really the first time--because, usually, 
when we think about green jobs, I think the image that comes to 
most people's minds is someone on a rooftop installing a solar 
panel. But energy efficiency, real construction jobs are really 
the overwhelming majority of what green jobs are----
    Ms. Bonamici. Absolutely.
    Dr. Shahyd [continuing]. Actually going to look like.
    Ms. Bonamici. Terrific. I want to get another question in.
    To Ms. Rinaldi, in the Pacific Northwest, Bonneville Power 
Administration and Portland General Electric conducted a 3-year 
smart water heater pilot program to find ways to better manage 
clean energy production and grid loads. So there are 277 water 
heaters that were equipped with a communication port. So it 
allowed the utilities to use the water heater as a battery, and 
by sending load-shifting requests directly to the water heater, 
they can heat the water at a time of day or night when the 
energy costs are lower instead of on demand when the costs are 
higher.
    So, in your testimony, you discuss these kinds of 
technologies and the value of smart-grid-interactive efficient 
homes. So what are the current barriers to the demonstration 
and deployment of these grid-interactive efficient buildings, 
and what investments can help support them?
    Ms. Saul Rinaldi. Thank you, and thank you for the 
question. And since I only have 35 seconds, I do talk about 
this in the report, so I do have some of those answers.
    But the electrification, which is something that is being 
discussed quite frequently now, it is really an interesting 
policy mix with the idea of grid-interactive buildings, because 
then our buildings can become like power plants. Like, that is 
exactly what was happening in Oregon in that system. We also 
are looking to do other opportunities for heat pumps.
    But I would say that one thing the Federal Government can 
do is provide access to utility data. One thing which is very 
difficult is for contractors and providers to actually get 
access to the utility data from the homeowner in a secure and 
private way--and that is possible--so that they can, kind of, 
create those better systems and those better connections 
between the grid and the homes and be able to model the home 
and its energy use better.
    So that would be my quick answer.
    Ms. Bonamici. Thank you. My time has expired.
    Ms. Castor. Mr. Griffith, you are recognized for 5 minutes.
    Mr. Griffith. Thank you, Madam Chair. This is a great 
panel, so let me see what I can get done in my 5 minutes.
    Mr. Wright, I do appreciate what you said about making sure 
we build things with the right materials and try to get it 
right. I had the opportunity, as a part of my committee work 
with Energy and Commerce, to go to the Virgin Islands and to 
Puerto Rico after the hurricanes, and it was fascinating.
    In the Virgin Islands, only 10 of their telephone poles 
survived the storm and didn't need to be replaced. Those were 
the only 10 on the island that were composite material 
telephone poles, as opposed to your standard wood, which Mr. 
Carter might not like to hear, but there are great advantages 
to different things in different places. So I thought that was 
important.
    Dr. Shahyd, you talked about one of our challenges--and it 
is a challenge--affordable housing and energy bills and how do 
we balance the two out.
    And that brings me to you, Mr. Rutland. So, in your 
testimony, you said that the median new home price increases by 
$1,000--if it increases by $1,000, it displaces about 127,000 
households from the market.
    Now, this is particularly troubling in a region like mine, 
in an area like mine. I represent central Appalachia and those 
portions of Virginia where our household income is less than 
the national average and even less than the Virginia average as 
a whole.
    So what do we do to try to make sure that we have some 
homeowner-friendly approaches that will ensure families aren't 
getting priced out of the market?
    And I would say to Ms. Rinaldi, one of the problems I have 
in my district, although it may work for the vast majority of 
the middle class, is that rebates and tax credits don't work if 
you don't have the money in the first place to get the rebate 
back from or you don't have enough income that the tax credit 
does you a whole lot of good.
    But, Mr. Rutland, what do you think we can do in that 
regard?
    Mr. Rutland. Sure. Well, thank you.
    We are in a housing affordability crisis. I see it every 
day. We build entry-level homes, and we build luxury homes.
    We find that the majority of the public are very interested 
in energy-efficient homes and resilient homes. The problem 
comes when they start pricing it, when we start showing them 
what it costs to do some of the things that they have seen on 
TV, they have heard friends talk about, they have seen in 
forums like this.
    And so we price it and we offer them those options and show 
them. And many, many times, that is the first thing that they 
cut. They would rather see the granite countertops or the 
hardwood flooring.
    Mr. Griffith. Do you have any data that tells us where that 
breakpoint is on the price and how long they are willing to 
look at a repayment? So, if they spend $1,000 now, how long are 
they willing to get the payback on that? Is there a number out 
there that tells us when we reach that tipping point?
    Mr. Rutland. We have found as a company that typically our 
homeowners live in their homes no more than 7 years. So if they 
can get that paid back in 5, then they are willing to pay for 
it, but if it is 10 or longer, they are not.
    Mr. Griffith. All right.
    Let me switch gears. Earlier this year, we had a report 
that we have 3 billion fewer birds than we had in 1970. The 
Guardian reported in a report also--the report on the birds was 
a couple of weeks ago; the Guardian report was from April of 
this year--that buildings are killing up to a billion birds a 
year in the U.S. Some numbers are less than that, but that is 
what we are looking at.
    So when we go in to retrofit these buildings for energy 
costs--and I guess I will go to you, Ms. Landreneau--did I get 
it correct?--and just say--and I noticed in some of your 
pictures in your report, a lot of those buildings had glass. 
Glass increases the energy costs if it doesn't have protective 
film or if it doesn't have a solar energy use to it. And we can 
add, for little or no cost--if you are putting the film on for 
energy reasons, you can put in bird-safe building technology.
    Is that a part of you all's plans as well?
    Ms. Landreneau. There is bird-safe technology, some of 
which is not even visible to humans----
    Mr. Griffith. That is right.
    Ms. Landreneau [continuing]. But birds can see it. And, 
absolutely, that can be integrated with film that is being 
applied to existing buildings.
    Mr. Griffith. And so we can not only work on the energy 
efficiency in a building but we can also keep them from being 
deathtraps for the birds that migrate through the United 
States. Isn't that true?
    Ms. Landreneau. Absolutely. And it is a fantastic proposal.
    Mr. Griffith. And do you know what some of those features 
that LEED encourages to meet these ends? Do you know some of 
those?
    Ms. Landreneau. There is a pilot credit for bird-safe 
design. And the District of Columbia's Green Construction Code, 
which just went out for its second round of public comment and 
should be adopted by the end of the year, has this also as an 
elective.
    Mr. Griffith. And so, as we are looking at energy-efficient 
legislation, we should also protect the birds, wouldn't you 
agree?
    Ms. Landreneau. Absolutely. Absolutely.
    Mr. Griffith. Anybody disagree?
    Thank you very much. No disagreement.
    I yield back.
    Ms. Castor. Well, thank you.
    In fact, the Audubon Society has a new tool on their 
website I recommend to everyone. Of course, they issued a 
recent report that said the climate crisis is causing an 
unfortunate and stunning impact to the loss of bird species.
    And I recommend the tool on their website that demonstrates 
the loss of bird species across the globe. You can localize it 
for your own community and analyze the difference between 
inaction here in the United States on climate or actual, bold 
climate action. And there is a significant, significant 
difference.
    At this time, I will recognize Mr. Huffman for 5 minutes.
    Mr. Huffman. Thank you. Thank you, Madam Chair.
    That was a really interesting line of questioning. I didn't 
realize we were going to be trying to solve multiple problems 
together, but I thought that was a really thoughtful point from 
Mr. Griffith. I appreciate it.
    Ms. Landreneau, I would like to ask you about something 
many of the communities in my district are considering, and 
that is, as they look at their own local ordinances and 
policies, they are thinking about the fact that we have this 
climate problem, and most people would agree that the first 
thing you do when you are in a hole is stop digging, so they 
are considering local ordinances to prohibit new fossil-
dependent construction.
    Would you agree that that is a pretty good idea? And how 
feasible is it at this point? Do we have to have fossil-
dependent buildings, going forward? Is it possible to be cost-
effective and also have no new fossil construction?
    Ms. Landreneau. There are just a couple of jurisdictions 
that have banned fossil fuels in new construction, so gas or 
coal or heating oil-powered equipment.
    There are some effective programs at the, sort of, State 
level in certain regions that are helping with replacement of 
equipment in buildings, going to electrification in existing 
buildings or with new construction.
    But it is absolutely possible to ban natural gas in new 
construction. And it is essential, if we want to get to carbon-
neutral buildings, that we do go to electrification that also 
makes buildings more resilient and more flexible with the grid.
    Mr. Huffman. So there is no reason why we need to continue 
building fossil-dependent structures at this point.
    Ms. Landreneau. That is correct. There is no reason.
    Mr. Huffman. So let's talk about something in your 
testimony that really jumped out at me. Half the country is 
operating on antiquated building codes, where certainly we are 
building a lot of new fossil-dependent structures but probably 
also a lot of really inefficient structures as well.
    What can we do about that? What are your thoughts about a 
Federal policy that might address that?
    And I guess the related question I had is: If we can't 
incentivize States to modernize and evolve on this, is this 
something that perhaps the insurance industry could step in 
and, you know, sort of, go around them in a way that forces 
those changes?
    Ms. Landreneau. I mean, I certainly think replicating the 
2009 program that incentivizes States to adopt the latest 
energy code would be a great model to follow. The 2021 code 
will be published next year, and just jumping on that and 
saying, you know, adopt the latest code.
    To the Congressman and Congresswoman who have departed, the 
2021 code in its entirety, including the IBC, has removed 
barriers to tall timber construction. So it allows for low-
embodied-carbon buildings, which is also very critical to 
meeting our low-carbon goals.
    So I would say, any kind of incentives that help 
jurisdictions adopt the absolute newest code as quickly as 
possible would be fantastic.
    I can't speak for the insurance industry, but, yes, I think 
they could certainly go around legislation and say, we will 
only ensure high-performance buildings.
    Mr. Huffman. Maybe I will ask Mr. Wright that same 
question.
    Mr. Wright. The insurance industry is a vast industry, so I 
think it is hard to pigeonhole one piece on it.
    What I will tell you is, companies evaluate risk. And one 
of the factors--I have more than 100 insurers that are members 
of IBHS. Building codes are essential. And they are essential 
because they help them understand what is the baseline of risk, 
and to the degree that the elements of the building code reduce 
the risk going forward, you would see that translate back 
through the balance of their product.
    Mr. Huffman. Okay. Thank you.
    Ms. Saul Rinaldi, I want to ask you about building 
retrofits. And others are welcome to chime in on this, because 
I know we have a lot of expertise on this panel.
    So the benefits of a retrofit program have been discussed. 
I think we all pretty much get that. But actually making it 
happen in any kind of a timely way is an almost overwhelming 
proposition when you think about it.
    So I want to ask you to describe for us what a deep 
decarbonization building retrofit program, not a goal--goals 
are easy--but a program, would actually look like. And if there 
are some examples out there, I would love to hear about it.
    Ms. Saul Rinaldi. Sure. Well, there are some deep 
decarbonization, meaning moving to net-zero and 
electrification.
    Well, one thing that you need to do is have cold weather 
heat pumps or, if you are in a certain climate zones--because 
one of the issues is a climate zone when we are looking at 
electrification and being off of carbon and not using those 
hydrocarbons to heat the home. So if you are in the Northeast 
or in New England, we need to look at the cold weather heat 
pumps and making sure that those are there.
    The homes have to be really well-insulated, so there need 
to be policies to either ensure they are there for the new home 
or that they are in a retrofit situation. You have tax 
incentives or rebate programs to help deal with those up-front 
costs to get some deep energy-efficiency insulation and also to 
support the contractors who are putting those in.
    Again, it is those training programs, making sure that they 
know how to install the solar panels, how to do air sealing and 
insulation, how to do duct sealing, how to do that in the 
correct way. Because sometimes it is the manner in which the 
building is retrofit that really gets you the most energy 
efficiency out of that.
    And also let's not forget smart technologies. You need 
smart meters and smart technologies, smart thermostats to 
really help control the house and be able to interact with the 
grid so that you are able to provide that generation when it is 
needed and pull back when it is not.
    And I also want to note the labeling programs to make sure 
that that homeowner is going to get the return on their 
investment. There are some private labeling programs, like 
Pearl Certification. There are public ones, like the Home 
Energy Score. And there is the SAVE Act, which helps people get 
that money back when they are doing their retrofit, of their 
refinancing and making sure that the energy bills are included 
in that, so the value of the home, so it is not just the 
granite countertops but it is also all the energy measures that 
actually add value in the resale.
    Mr. Huffman. Thank you.
    Thank you, Madam Chair, for the extra time.
    Ms. Castor. You bet.
    And since everyone lives now with their phone attached to 
their bodies, it would make sense if that technology to the 
smart grid to control your home thermostat or your business was 
available to everyone.
    Ranking Member Graves, you are recognized for 5 minutes.
    Mr. Graves. Thank you, Madam Chair.
    I was just looking down at my phone. I heard Congressman 
Carter say that Georgia was the top forestry State, and I 
wanted to ask him about the metric, because I was very curious 
about that. And I am convinced it has to do with the ratio of 
trees per people with funny accents, but maybe I am wrong. And 
I hope he hears that.
    Ms. Saul Rinaldi, I want to thank you for bringing your 
children here today. Growing up, my parents, we would have 
hurricanes, I would have, like, a 140 fever, the school would 
be closed, and my mom would still make me go. So I appreciate 
you bringing your kids today.
    And what your mom is doing is very important. And I am glad 
you all are able to be here to see her.
    Mr. Wright and Mr. Rutland, you both make mention of 
legislation that we enacted last year in October. And I want to 
be clear, this was bipartisan legislation, the Disaster 
Recovery Reform Act.
    It has important provisions in it, like, for example, 
trying to shift this paradigm or narrative from, let's come in 
after disasters and pick up all the pieces and spend an absurd 
amount of money--we have spent $1.7 trillion since 1980 
responding to disasters. And it tries to flip that narrative, 
that whole paradigm over. Let's lean forward, let's be 
proactive, whether it is the mandatory funding on the Pre-
Disaster Mitigation Program that ultimately was enacted in an 
appropriations bill but it was part of----
    Mr. Wright. Right.
    Mr. Graves [continuing]. Disaster Recovery Reform Act; 
whether it was the incentive in lowering the cost share for 
disasters from 75/25 to 80/20 or perhaps even 85/15 under 
certain scenarios if the States or localities carried out 
resiliency measures ahead of time; for the first time ever, 
defined the term ``resiliency,'' ``resilience,'' and looking at 
how we rebuild, making sure that in the aftermath of a disaster 
we don't rebuild the same thing the same way, which was just 
stupid. And you know this better than anybody. We would come 
and pay for the same structure over and over again.
    Mr. Wright. Uh-huh.
    Mr. Graves. Can you both comment, Mr. Wright perhaps 
starting, on your thoughts on what that ultimately is going to 
do? Could you expand on your testimony?
    And, Mr. Wright, you say in here, ``The DRRA, once fully 
implemented, will deliver the largest investment by the Federal 
Government to buy down the risk of natural disasters now and in 
the future.''
    Could you talk a little bit more about that and, sort of, 
the repercussions and how it perhaps shifts the paradigm on 
proactive versus reactive?
    Mr. Wright. Yeah. The DRRA--and, as you appropriately said, 
there are a couple provisions that ended up on different 
vehicles going forward in appropriations acts and the like. But 
it dedicates money on the front side. Because in my prior job 
and so many times in your district, including that no-name 
storm in 2016, people would give lip service to reducing risk. 
They would look at the impact of the disaster, they would see 
how it ravaged a community, and says, ``We could have done 
something to make this better ahead of time,'' and there were 
endless speeches about how----
    Mr. Graves. Hindsight is 20/20.
    Mr. Wright. Right?
    Mr. Graves. Yeah.
    Mr. Wright. And says, so put the money there on the front 
side.
    Congress did its lifting. I think FEMA has been too slow to 
get it to the point of implementation. But there is a really 
important next step on this----
    Mr. Graves. You always defended FEMA's time periods when 
you worked there, I just want to make note. But please 
continue.
    Mr. Wright. I may have a bit more liberty to share my 
personal opinion today than I may have in the past, for sure.
    Mr. Graves. I am sorry. Go ahead.
    Mr. Wright. But I look at that and says, those grant 
programs are 75 percent Federal, 25 percent State or local. And 
one of my concerns with the implementation of that, going 
forward, is, are States and localities ready to start putting 
investments that are there? Because maybe we did all the right 
things and Congress put the vehicles in place and put a pot of 
money there, but if we haven't looked at finding what needs to 
take place--and so we watched this in Alabama, where the State 
has a grant program that is in place. California has done this. 
North Carolina.
    Here is the irony of it. If the State has a grant program 
for mitigation, it is taxable income and they get a 1099. If it 
is a FEMA grant program for the exact same activity----
    Mr. Graves. Wow.
    Mr. Wright [continuing]. It is not taxable. You know, you 
are like, wait a second here. If we are trying to make this 
more than just the Feds have to pay all the bills, we have to 
take some of these other barriers out and let States innovate, 
let local communities drive down this point.
    And at the end of it, after they got the grant, whether it 
was--that could accomplish energy efficiency as well as 
resilience, they shouldn't be rewarded with a 1099 at the end 
of the year.
    Mr. Graves. That is a good point.
    Mr. Rutland, do you care to add?
    Mr. Rutland. Sure. First, just let me say I am very 
sympathetic to disasters in your State. My sister-in-law's home 
was destroyed twice in your State and was displaced. So I am 
very sympathetic to that.
    I am also very sympathetic to something that I saw in May 
of last year. I went and toured Jacksonville, Alabama, when an 
F3 tornado went through it and destroyed a lot of Jacksonville 
State and a lot of homes around the area. It was amazing to me 
to see the homes that were constructed in the 1990s and 1980s 
and the 1970s that were gone. There was nothing but slab 
standing. The homes that had been built since 2006, when some 
major code revisions were done to address resiliency, those 
homes fared very well. The homes that were built to the 2012 
code fared very, very well.
    So I think our focus may ought to be on existing homes, 
structures that were built in the late 2000s, 1990s, and 
beyond--or going back.
    Mr. Graves. Thank you.
    I yield back.
    Ms. Castor. Ms. Brownley, you are recognized for 5 minutes.
    Ms. Brownley. Thank you, Madam Chair, and thanks for 
holding this hearing.
    Thanks for all of you who are here today. We appreciate it 
very, very much. I think this is a really important topic when 
we are talking about the climate crisis and where we need to 
get to.
    The building codes just astonish me, learning about how 
we--the process, just in and of itself, happening every 3 
years. And cities and States and counties don't have an 
obligation, really, to do anything once you have gone through 
this huge process.
    And I feel like the home, for most families, is their 
largest asset. And you can choose to build a home or have a 
home that is going to cost you more and more and more over a 
30-year period, or you can have a home that is going to save 
you money over and over and over again over 30 years. Some have 
equated it to it is like having an interest-only mortgage, if 
you are not doing anything to your home, because of the 
increasing costs of owning the home.
    And so I guess, you know, Ms. Landreneau, you talked about 
the building codes in your testimony and what could be done in 
terms of improving those processes, and I appreciate that. So I 
guess, just in terms of the process, not requiring commitments 
necessarily--well, I guess requiring commitments is definitely 
part of it. But just in terms of a process and who is involved 
in terms of creating those codes, do you see any changes that 
can be made there to improve the outcome of compliance with 
building codes? If that makes any sense whatsoever.
    Ms. Landreneau. In the code development process or----
    Ms. Brownley. Yeah.
    Ms. Landreneau [continuing]. The local process?
    Ms. Brownley. I mean, it seems as though, in the code 
development process--and correct me if I'm wrong--it is more, 
the folks that are involved in that, the stakeholders that are 
involved in that, I think many of them, perhaps, don't have an 
interest in getting a really performance-based building code.
    Ms. Landreneau. I am on the International Energy 
Conservation Code for commercial buildings, so I can't speak 
for all of the committees. I think the residential energy 
conservation code is made up a little bit differently.
    Our code committee this year, I think, was comprised of 
many people who were interested in seeing a more progressive 
energy conservation code. We had folks from D.C., Department of 
Consumer and Regulatory Affairs, from the city of Seattle, New 
York. But we do have to look at cost impact and the reason for 
the code changes. We can't just adopt whatever we want. We have 
to be very pragmatic.
    You know, I do think there are architects, there are 
engineers, there are manufacturing associations, there are 
people, members of the building industry that are involved. I 
do think it should be a balanced committee that is looking at 
these issues.
    However, anyone can propose an amendment. The committee 
votes on those. They are out for public comment. But the final 
vote is made by IECC members, which are primarily code 
officials. And should that vote be made up of a larger body so 
that stakeholders such as homeowners or building owners are 
also voting on those code outcomes? Perhaps. It is a limited 
voting population.
    Ms. Brownley. And how do we better educate the consumer 
just so that they understand the economic impacts, you know, of 
perhaps even, in terms of building a new home, building a 
smaller home so you can afford some of the other elements that 
you can put in to provide those cost savings over the period of 
time of ownership?
    You know, I feel like we talk a lot about the environmental 
impacts, which are really important, but I think, at the end of 
the day, the consumer really understands the economic impacts 
better.
    Ms. Landreneau. Absolutely. I think more disclosure, more 
transparency. Buildings should be labeled with what code they 
are built under. Just the benchmarking policies alone have been 
really helpful for people to be able to look up buildings and 
see how they are performing. But the more transparency we can 
get in our built environment, I think the more the consumer 
will know.
    Ms. Brownley. And, Ms. Saul Rinaldi, if we met, across the 
country, the highest standards in building codes and energy 
efficiencies and, you know, with regards to retrofits and all 
the smart technology out there, if we were doing all of that, 
how would you quantify that contribution to the overall goal of 
reducing temperature by 2 degrees Celsius by 2050?
    Ms. Saul Rinaldi. Well, I----
    Ms. Brownley. You have 10 seconds.
    Ms. Saul Rinaldi. Yeah. I don't know that I can do that 
back-of-the-envelope calculation, but----
    Ms. Brownley. It would be a significant--I mean, it would--
--
    Ms. Saul Rinaldi. It would be significant. Well, the 
ACEEE----
    Ms. Brownley. There are so many--yeah.
    Ms. Saul Rinaldi. The ACEEE report said that buildings can 
contribute to a third of the 50 percent reduction just from 
energy efficiency alone. That is not including all the 
renewables you were talking about.
    Ms. Brownley. Yeah. That is pretty significant.
    So thank you, Madam Chair. I yield.
    Ms. Castor. Sure thing.
    Mrs. Miller, you are recognized for 5 minutes.
    Mrs. Miller. Thank you, Chairwoman Castor.
    And thank you all for being here today.
    In 2016, West Virginia suffered devastating floods which 
destroyed homes, schools, roads, and whole communities, and it 
resulted in the death of 23 people.
    As our communities have started to recover, we have 
recognized the need for rebuilding with resilience. This helps 
ensure, should catastrophic--and they will--weather events 
happen again, our infrastructure is prepared so that the 
storms' impacts are not quite so disastrous.
    That being said, we need to focus on the solutions that 
prioritize choice for consumers and ensure low costs. My State, 
geographically, is quite different from Alabama and Louisiana. 
One-size-fits-all Federal regulations are not the way to 
accomplish our goal of not only energy efficiency but 
resilience. We need to engage with our States, localities, and 
private sector to ensure that any solutions that are 
implemented are tailored to our individual communities.
    Mr. Rutland and Mr. Wright, how have your respective 
industries taken proactive steps to ensure structural 
adaptation and resilience for natural disaster events?
    Mr. Rutland. Well, I couldn't agree with you more on 
several of your points, as far as the need to improve on the 
resiliency and that our States are very, very different and so 
one size does not fit all. So any type of Federal mandate that 
affects all States would just not be appropriate.
    In Alabama, we have tried to adopt the code as we saw fit 
for the things that would help improve our homes, and, as a 
company, we have tried to go a step ahead. But we understand 
the importance of it, at the same time while balancing that 
housing affordability crisis that we are in and trying to make 
sure that we can provide housing that people can afford.
    Mrs. Miller. Okay.
    Mr. Wright. And I think that we look at these elements, 
because of the way that different kinds of weather events play 
out across the country, what are those, kind of, universal 
pieces and then how does it apply?
    So, in the case of West Virginia, clearly, there is a 
flooding element there, and that has to do with where the water 
goes. And sometimes elevating work, sometimes it doesn't, given 
the way that the topography of the State works.
    But we look at the kind of impact that roofs have. So the 
convective storms--we watched this with tornadoes, probably at 
the lower end but still high wind, and derechos. And so, yeah, 
so much of it is about what was already built. That was one of 
the numbers earlier, in terms of the homes that were already 
built back in the 1960s, 1970s, 1980s, 1990s. How do we help 
those folks?
    Well, one of the elements is, when we are recovering from 
these disasters, let's make sure we are putting it back in a 
way that we don't expect to have to pay for it again.
    And, secondly--and I think this is the real opportunity in 
front of us--the next innovation in resilience has to be 
affordability. We have to find ways to address these things, 
whether it is around the roof, it is how the external pieces of 
the building come together, the envelope--how do we do that in 
ways that address both? Because the way that you protect your 
roof and you seal your roof deck and the way you deal with your 
openings and windows are the exact same things that drive down 
your energy bills and your utilization of those pieces.
    Those pieces, frankly, are universal, but then they then 
need to be applied to the context in West Virginia, in Alabama, 
in California, which will all have very different experiences 
with it.
    Mrs. Miller. Well, I know many of our homes were built--I 
have a farmhouse that was built in the 1880s. A lot of the 
houses were built in the 1940s.
    How have home builders worked to make energy efficiency and 
resiliency affordable for home buyers?
    Mr. Rutland.
    Mr. Rutland. Well, again, what we have tried to do is give 
them choices and give them a menu, if you will, of options to 
choose from so that they could upgrade, again, trying to stay 
in that affordable price range.
    You know, it was mentioned earlier that you pay for it over 
30 years. Most people don't stay in their home 30 years. Most 
people stay in their home 5 to 6 or 7 years. And so you have to 
make that payback attainable sooner. So you have to have 
solutions that make that attainable sooner.
    Mrs. Miller. In your testimony, you stated, ``NAHB 
estimates that nearly 25 percent of the final cost of a single-
family home and more than 30 percent of the cost of a 
multifamily home is due to government regulation at all levels 
of government.''
    Can you elaborate on that?
    Mr. Rutland. Well, it starts with the land development. It 
starts with, in our State, ADEM. It starts with the regulations 
that we have that add cost to putting that lot, putting those 
streets and gutters in.
    And then it starts with the unnecessary codes in so many 
points and regulation that restricts us from coming up with new 
and inventive ways--smart technology, smart thermostats, things 
like that--that would help us be able to offset other 
regulation and code.
    Mrs. Miller. Thank you.
    I yield back.
    Ms. Castor. Thank you.
    Mr. Casten, you are recognized for 5 minutes.
    Mr. Casten. Thank you, Chair Castor.
    Thank you all for coming here today.
    I am always struck that we have either a great opportunity 
or a great embarrassment and, if we are honest, probably both, 
that comes from the fact that so many of our trading partners 
use so much less energy per dollar of GDP than we do, with 
existing technology, with standards of living that are 
comparable to our own. And that means we have an enormous 
opportunity and, if we are honest, an enormous amount of shame 
that we haven't gotten there already.
    As my colleagues know, I spent 20 years in the clean-energy 
and energy-efficiency world before I got here. And the non-
nerdy way to describe that is this great joke that all my 
colleagues used to like to tell about an economist who walks 
down the street with his grandmother, and he sees a 20-dollar 
bill on the ground, and he keeps on walking. And his grandma 
says, ``Aren't you going to go pick up the 20-dollar bill?'' 
And the economist says, ``No. We live in a perfect economy. If 
the 20-dollar bill existed, somebody would have picked it up 
already.''
    I tell you that story to start with a question for you, Ms. 
Rinaldi. When homeowners are making a decision about investing 
in thicker insulation or a more efficient light bulb or a 
better water heater, all the things they could do, what kind of 
payback do they typically require? Do they get their money back 
in 4 years, 3 years, 2 years? How much do they need to really 
see an uptick of those investments?
    Ms. Saul Rinaldi. Well, I think that there is--I have 
generally been told by contractors that 3 years is a good--you 
know, for a large investment. But, obviously, the faster the 
payback, the better. That is the reason why I noted earlier the 
need for incentives, just to help reduce that payback. Because 
the faster the payback, the more likely they are going to take 
that option.
    I do think there are other opportunities, which is to give 
them an additional value, whether it is making sure these are 
in the MLS systems or that they have a certification or other 
things that can provide visibility and transparency to the 
upgrades so they can brag about it. I think that is another 
piece.
    Mr. Casten. So 3 years is awesome. My experience was that 
we used to tell our salespeople, if you can't see a way through 
to a 2-year payback, don't waste your time, because we don't 
have enough time to send salespeople out.
    But let's just stay with 3 years.
    Ms. Saul Rinaldi. Okay.
    Mr. Casten. On a compounded basis, that is like a 25-
percent return on your investment. We have retirees and savers 
and people putting aside for a rainy day who fantasize about 
getting 7-, 8-, 9-percent compound returns. And what you are 
saying is that homeowners walk away from 20-, 25-percent 
returns every day.
    Ms. Saul Rinaldi. Yes.
    Mr. Casten. Dr. Shahyd, talk a little bit about the split-
incentive problem, if you would, between when the building 
owner and the person who pays the utilities are two separate 
people.
    Mr. Shahyd. Yep. Thank you. Yes, because I feel like much 
of the conversation so far has been focused on homeowners, but 
renters also face these burdens and are particularly 
vulnerable.
    And so the split incentive, as you mentioned, when the 
building owner doesn't pay the utilities, so has no incentive 
to invest in the continued maintenance or, really, the upgrade 
of that building, and so just allows it to deteriorate. And if 
you are a renter, you obviously don't want to, you know, put 
your own money into a place that you don't own.
    And so a couple of things, you know, that we have done is, 
one, just working with utilities to improve the incentive to 
the building owners, basically making it more cost-effective 
for them to want to invest into their home; but then also 
working with them to quantify what is the benefit to the 
building owner of actually investing in your home.
    Well, one of them is that people will actually want to stay 
there and not just use the apartment as a way station to 
something better. And so, if you are an owner of the property, 
you want to have full occupancy, you want to have, you know, 
continuous occupancy of the unit, which is where you get your 
investment and your return back.
    And so being able to quantify, you know, what that is. And 
we have worked with building owners across the country who have 
seen improvements where, you know, they have trouble renting 
units, to units that are now on a waiting list because so many 
people wanted to get in.
    Another thing that you can do is, as some cities and States 
have, have renter ordinances where renters can actually see the 
energy score of the apartments that they are actually looking 
to rent. So they can use that as part of their decisionmaking 
in where they want to rent, which also makes an incentive for a 
building owner to say, okay, I want to have a much more energy-
efficient----
    Mr. Casten. So if I could just wrap up, with the little bit 
of time I have left, I am delighted with both of your answers, 
and I want to come back to that this is both an opportunity and 
some shame. Because I don't want any of us to fall for being 
that dumb economist anymore. And we know we have this 
opportunity.
    We know, you know, Mr. Rutland, as you eloquently pointed 
out, people look at the first cost of the house. They don't 
look at what it is going to save them down the road.
    And we have legislation that educates consumers. We have 
building codes. We have tax incentives. And if we are really 
honest, they ain't enough. Because we are not capturing that 
win-win that will lower CO2 and put more money in 
our pockets. And until we maximally capture that win-win, none 
of us should sit here saying that we economically can't go 
after CO2 reduction.
    And so, if you all have thoughts--and I am out of time. But 
if you have your one--if you get to be king and you have one 
policy that would really make a difference and bring us up to 
the level that our trading partners are already at, please 
submit them for the record and keep us educated. Thank you.
    Thank you, and I yield back.
    Ms. Castor. Mr. Palmer, you are recognized for 5 minutes.
    Mr. Palmer. And I am Mr. Palmer, not Mr. Graves. So I don't 
want any confusion there.
    A couple of things that I want to talk about.
    One, Mr. Wright, you said that the grants from the States 
for mitigation are taxable. Are those Federal grants that are 
administered by the States, or are those State-originated 
grants?
    Mr. Wright. If you are using State money appropriated by 
the State legislature. If it is appropriated by the Feds, it is 
not taxable. So you take something--like, the State of Alabama 
has their product----
    Mr. Palmer. Okay. That is what I am looking for, because I 
think that is something we need to look at. I am sure it is 
going to be on an individual State basis how to do this.
    But on another area, there is the Low Income Household 
Energy Assistance Program, LIHEAP. That money is administered 
to the States as a grant. I think in Alabama it is through 
ADECA, the Alabama Department of Economic and Community 
Affairs. And I think we need to look into that and see whether 
or not that money is used for mitigation. It is supposed to be 
assisting low-income households to pay their energy bills.
    Mr. Wright. Sir, very simply on this, to the degree that 
there is Federal money that is flowing, my understanding is 
none of that is taxable. It is when it is only a State----
    Mr. Palmer. In the last fiscal year, we sent $3.65 billion. 
$54.2 million of that went to Alabama. Florida got $96.8 
million. Now, that is up over--right at 21 percent from 2016. 
So we are putting quite a bit a money out there.
    Also, I want to respond to something that was in your 
testimony about rural households and manufactured housing. I 
think your number is a little bit high on the percentage of 
rural people who live in manufactured housing. I grew up in 
rural Alabama, pretty much dirt-poor. I lived in a house that 
my dad built. It had cardboard between the two floors. We 
heated it with a coal heater and cooled it with a box fan in 
the kitchen window. So I know a little bit about living in a 
low-income household.
    But I also, when I was in college, worked in manufactured 
housing as a summer job and as a night job. And the energy 
efficiency from manufactured housing has tremendously improved. 
Now, I know Mr. Rutland might not appreciate me speaking up for 
manufactured housing. And manufactured housing is no longer--I 
think you said it is delivered on a flatbed truck. That is not 
exactly accurate either. It is delivered by a truck, but there 
are manufactured houses that are delivered on a flatbed truck 
that look like any other house. And you see them not only in 
rural areas but you will see them in suburban areas and urban 
areas.
    So I just wanted to make that point, that the technology 
that is going into building these homes is substantially 
different from what it was years ago when you just saw one 
being pulled down the highway. And there is a major emphasis on 
energy efficiency.
    And there was also a point made that rural customers pay 
more for electricity than suburban or urban customers. And I 
checked with Alabama Power, and all customers, all residential 
customers, pay the same rate. What you run into is a percentage 
of disposable income.
    And I looked up a Tax Foundation report on the cap-and-
trade bill that was before Congress in 2009. Had that passed, 
the people who are in the bottom 20 percentile of income would 
have paid five times as much for their energy as people in the 
top 20 percent.
    So I just want to make some clarifications here, that the 
policies that we are discussing here have ramifications and a 
cost, and you have to take that into account.
    And I know that is important to you, Mr. Rutland, when you 
are building a home, the affordability of the home and the 
ability of the purchaser of that home to maintain the 
household, including the energy costs.
    In your testimony, you say that the NAHB estimates that 
nearly 25 percent of the final cost of single-family homes and 
more than 30 percent of the cost of multifamily homes is due to 
government regulations at all levels of government.
    If we want people to buy newer homes and more energy-
efficient homes and safer homes, you know, to be able to 
withstand a storm, wouldn't it make sense if there were fewer 
mandates and that the regulations were clearer and more concise 
in your ability to build an affordable home?
    Mr. Rutland. Absolutely. I couldn't agree with you more.
    Mr. Palmer. That is one of the things that we are trying to 
work on. It is not that we want to get rid of regulations. We 
want to get the regulations down so that we get rid of the 
obsolete and the duplications and the contradictions and work 
this out so that we can build safe products at an affordable 
cost.
    The other issue is--and, Mr. Wright, listening to your 
testimony too--is mitigation. I ran a think tank for 25 years. 
Prior to that, I worked for two international engineering 
companies. And the codes are different in different States. 
When we would build a project in California, we had to take 
into account earthquakes. So when you are putting together your 
engineering plan for structures, you had to take that into 
account.
    Mr. Rutland, if you are building a home on the coast, you 
are building under different regulations there. So we are not 
going to be talking about one size fits all.
    And we also have to take into account where you build the 
home. If you are building on the Gulf Coast, then you are 
basically accepting the risk that your home might be damaged or 
destroyed.
    So when you are building a home, you take all that into 
account. Is that correct?
    Mr. Rutland. Absolutely. In my local area, there are two 
different soil types, so we have to build differently in just 
10 miles from each other.
    Mr. Palmer. Well, I think I am out of--no, I have a minute 
and 30 left.
    Ms. Castor. No, you are over.
    Mr. Palmer. Oh, I am? Well, I didn't see the clock.
    Ms. Castor. Do you have one quick comment or question?
    Mr. Palmer. No, I appreciate the panel. And I think we are 
moving in the right direction in terms of our engineering 
expertise to build houses that can survive storms, that are 
also energy-efficient.
    And, with that, I will yield back.
    Ms. Castor. Perfect.
    Well, thanks to all the witnesses.
    And, Mr. Palmer, you had me hearkening back to 10 years ago 
during the debate of the Waxman-Markey bill, which was a 
substantial carbon-reduction bill. When the nonpartisan 
Congressional Budget Office analyzed the cost to low-income 
families, they actually found that Waxman-Markey and tackling 
the climate crisis at that time would reduce the burden on 
hardworking families across America.
    So that is our challenge moving forward, to craft policies 
that reduce carbon pollution, build resiliency, reduce risk, 
create jobs, and make sure that the burden is properly placed.
    And, at this time, I would like to submit a few reports, 
without objection.
    The first report is the ``Energy Efficiency Jobs in 
America'' report. 2.3 million Americans work in energy 
efficiency. This was released by E2 in September.
    Next, the National Institute of Building Sciences, the NBI, 
New Buildings Institute report, ``Implementing an Outcome-Based 
Compliance Path in Energy Codes: Guidance for Cities.''
    Next, the American Institute of Architects, ``Understanding 
Codes Change Proposal.''
    And, finally, a letter, October 16, 2019, from PG&E.
    Without objection, these are entered into the record.
    [The reports follow:]

                       Submissions for the Record

                      Representative Kathy Castor

                 Select Committee on the Climate Crisis

                            October 17, 2019

    ATTACHMENT: Energy Efficiency Jobs in America. E2, 2019.
    This report is retained in the committee files and available at: 
https://www.e2.org/wp-content/uploads/2019/09/Energy-Efficiency-Jobs-
in-America-2019-Full-Report.pdf.

    ATTACHMENT: Implementing an Outcome-Based Compliance Path in Energy 
Codes: Guidance for Cities. National Institute of Building Sciences, 
2017.
    This report is retained in the committee files and available at: 
https://cdn.ymaws.com/www.nibs.org/resource/resmgr/docs/OBP-
CityLevelGuide.pdf.

    ATTACHMENT: Understanding Code Change Proposal CE264-19: Zero Code 
Renewable Energy Appendix. The American Institute of Architects, 2019.
    This report is retained in the committee files and available at: 
http://content.aia.org/sites/default/files/2019-08/
Guidance_Document_for_Building_Code_Officials_CE264-19.pdf.

    [The letter follows:]
                              ----------                              


                       Submission for the Record

                      Representative Kathy Castor

                 Select Committee on the Climate Crisis

                            October 17, 2019

                                                  October 16, 2019.
The Honorable Kathy Castor
Chair, House Select Committee on the Climate Crisis
U.S. House of Representatives
H2-359 Ford House Office Building
Washington, D.C. 20515

The Honorable Garret Graves
Ranking Member, House Select Committee on the Climate Crisis
U.S. House of Representatives
H2-361 Ford House Office Building
Washington, DC. 20515

Dear Chairman Castor and Ranking Member Graves:

    Pacific Gas and Electric Company (PG&E) writes to thank you for 
scheduling an upcoming hearing entitled, ``Solving the Climate Crisis: 
Cleaner, Stronger Buildings.'' In advance of this hearing, PG&E 
respectfully requests the opportunity to submit this letter for the 
hearing record.
    PG&E is one of the largest combined natural gas and electric 
utilities in the United States. Based in San Francisco, with more than 
24,000 employees, the company delivers some of the nation's cleanest 
energy to nearly 16 million people--or one in 20 Americans--throughout 
a 70,000-square-mile service area in Northern and Central California.
    PG&E appreciates the time and consideration the House Select 
Committee on the Climate Crisis is devoting to the important matter of 
how to reduce the carbon footprint of our nation's buildings while 
improving resilience to the increasing threats of climate change.
    Meeting the challenge of climate change is central to PG&E's vision 
of a sustainable energy future. Consistent with our vision, PG&E is 
significantly reducing its greenhouse gas (GHG) emissions and 
environmental impacts from our operations, in partnership with 
California and beyond. In 2018, over 80 percent of electricity 
delivered to PG&E customers was GHG-free.
    According to the California Air Resources Board's 2019 GHG 
Inventory, the electric sector accounts for 15 percent of statewide GHG 
emissions, whereas the transportation sector accounts for 41 percent of 
GHG emissions and the commercial and residential building sector 
accounts for 12 percent of GHG emissions.
    This success serves as a foundation to help decarbonize other 
sectors. Notably, PG&E is helping to reduce emissions in the 
transportation sector by investing in alternative refueling 
infrastructure and customer incentives to adopt electric vehicles, 
while PG&E's energy efficiency, demand response and distributed 
generation programs are helping to reduce emissions from buildings in 
our service area.
    Energy efficiency is a core part of California's efforts to reduce 
greenhouse emissions and promote customer affordability, and PG&E has 
been a key partner in implementing many of these programs. In 1976, 
PG&E became the first utility in the nation to offer energy efficiency 
programs to our customers. Since California's institution of energy-
efficiency policies and utility-directed programs began in the 1970s, 
the state's per capita electricity consumption has remained nearly 
flat, while the rest of the United States has increased by about one-
third.
    Today, PG&E is continuing this leadership in offering our customers 
various assessment tools and programs to determine how best customers 
can maximize energy savings, and multiple rebate and assistance 
programs to incentivize adoption of more efficient homes, products and 
behaviors. A few examples of these programs include:
           In order to reduce the financial barriers to energy 
        efficiency, PG&E provides mostly small- and medium-sized 
        businesses and local governments with zero-interest loans to 
        support energy efficiency updates. In 2018, PG&E provided 
        nearly 800 loans cumulatively worth $37.6 million.
           PG&E operates two Energy Centers and supports a Food 
        Service Training Center, offering energy efficiency education 
        and training programs for building professionals, including 
        architects, designers, engineers, contractors and technicians. 
        In 2018, PG&E held more than 485 classes, 100 technical 
        consultations and 170 outreach events focused on educating and 
        training these professionals on energy-efficient design and 
        practices.
           In 2018, PG&E provided nearly 147,000 customers a 
        Home Energy Checkup, which provides customers personalized 
        information on how they use energy and how they could be saving 
        more.
           More than 200,000 residential customers and 150,000 
        larger commercial and industrial customers participate in 
        various PG&E demand response programs. For example, PG&E's 
        SmartAC program allows PG&E to send a signal to a PG&E-provided 
        device on a customer's air conditioner, cycling the AC to use 
        less energy. Over 112,000 customers participate in the program, 
        which last year provided 61 MW in potential load reduction.
           PG&E is also very active at the federal and state 
        levels to advocate for stronger building codes and appliance 
        and product standards. Notably, PG&E supported California's 
        goal for all newly constructed residential buildings to be zero 
        net energy (ZNE) by 2020.
    Thanks to these energy efficiency programs, in 2018 PG&E helped 
customers save approximately $300 million on their energy bills and 
avoid the emission of more than 284,000 metric tons of carbon dioxide.
    In addition to PG&E's energy efficiency and demand response 
programs, PG&E is also helping to reduce the carbon footprint of our 
buildings by providing our customers a variety of tools and resources 
for those who want to use solar energy and other distributed energy 
resources. In 2018, PG&E reached nearly 400,000 interconnected solar 
systems, representing about 20 percent of all private rooftop solar in 
the United States. During the year, PG&E connected 77 percent of 
customers' private solar systems to the electric grid within three 
days. PG&E also offers incentive programs for low-income solar, solar 
thermal water heating, fuel cells, wind, battery storage and other 
advanced technologies.
    Long-term decarbonization goals will also need to address the use 
of natural gas in buildings. In California, this transition has been 
focused on the promotion of appliance electrification (e.g., upgrading 
to an electric heat pump) and changes to local building codes requiring 
new construction to be all-electric. PG&E has recently supported 
efforts in Berkeley, San Luis Obispo and other California 
municipalities to transition away from natural gas infrastructure in 
new buildings. PG&E supports these local governments taking such action 
in cases where it is cost effective, and welcomes the opportunity to 
avoid investments in new gas assets that might later prove 
underutilized as local governments and the State of California work 
together to realize long-term decarbonization objectives. Beyond new 
construction, PG&E believes a multi-faceted approach is needed to cost-
effectively achieve California's broader economy-wide long-term GHG 
reduction objectives, including both electrification and decarbonizing 
the gas system with renewable natural gas and hydrogen.
    The transition of California's gas system will create various 
affordability, reliability and workforce challenges that will need to 
be addressed. In September, Gridworks issued a report entitled 
``California's Gas System in Transition: Equitable, Affordable, 
Decarbonized, and Smaller,'' which identifies challenges in managing a 
transition away from natural gas and provides a series of 
recommendations that policymakers should consider proactively to 
minimize the impacts this transition will have for customers, workers 
and communities. PG&E provided input to Gridworks for this report, 
along with IBEW Local 1245, state regulators, environmental 
organizations, consumer advocacy organizations and others. A copy of 
the report is attached to be included in the hearing record.
    As we work to decarbonize the building sector, we must also invest 
in the resilience of our communities. Many of the communities and 
customers PG&E serves in California are already experiencing the 
consequences of climate change, including more frequent extreme 
weather, rising sea levels, increased drought, extreme heat and longer, 
more severe wildfire seasons. In response, PG&E is working to design, 
influence and implement policies that measurably and demonstrably 
increase the resilience of the company's assets and operations, and 
support climate resilience in the communities we serve.
    At the community level, PG&E is investing $2 million over five 
years through the Better Together Resilient Communities grant program 
to support local climate resilience initiatives. This grant program 
provides eligible local governments, educational institutions and non-
profits $100,000 for projects that increase community resilience to 
various climate risks, including heat waves and wildfires. The 
competitive process evaluates applications by criteria including how 
the project assists disadvantaged communities and provides measurable 
benefits.
    Furthermore, PG&E is working to integrate long-term climate 
resilience into the company's core processes by incorporating long-term 
climate projections into infrastructure planning. By planning today for 
the projected changes in heat, precipitation, sea level rise and other 
conditions that will occur in California in the coming decades, PG&E 
can avoid increased maintenance or replacement costs and be better 
prepared to continue providing safe, reliable, affordable, clean energy 
into the future.
    While PG&E is taking steps today to plan for the future, bolstering 
our nation's resilience in the face of increased extreme weather and a 
changing climate will require multiple sectors, communities and 
governments at all levels working together. To this end, PG&E believes 
there are many supportive actions the Federal Government can take to 
promote resilience in local communities and buildings, including:
           Encouraging public-private partnerships to design, 
        develop, and fund resilience projects;
           Establishing voluntary resilient zoning and building 
        codes and standards, using the LEED certification program as a 
        model, and providing incentives for customers and communities 
        in disaster-prone areas to adopt the standards;
           Incorporating climate resilience in future federal 
        spending and planning decisions to maximize infrastructure 
        lifespans;
            Funding for local climate resilience planning and 
        implementation.
    Thank you for convening the hearing and for the opportunity to 
submit this letter for your consideration. PG&E welcomes the 
opportunity to serve as a resource to you and the Select Committee as 
you evaluate opportunities to reduce the carbon footprint of the 
building sector and increase the resilience of our communities.
            Sincerely,
                                             Jessica Hogle,
                          Vice President, Federal Affairs and Chief
                           Sustainability Officer PG&E Corporation.

    Attachment: Gridworks, ``California's Gas System in Transition'' 
(Available at: https://gridworks.org/wp-content/uploads/2019/09/
CA_Gas_System_in_Transition.pdf).

    Ms. Castor. I would like to remind everyone that the Select 
Committee on the Climate Crisis currently has a request for 
proposals, a request for information out. We want your ideas on 
how we reduce CO2 in the atmosphere and build more 
resilient communities across America.
    You can find that on our website at climatecrisis.house.gov 
or follow us on Twitter, @climatecrisis.
    Without objection, all members will have 10 business days 
within which to submit additional written questions for the 
witnesses. I ask our witnesses to please respond as promptly as 
you are able.
    [The information follows:]
                              ----------                              


                 United States House of Representatives

                 Select Committee on the Climate Crisis

                      Hearing on October 17, 2019

      ``Solving the Climate Crisis: Cleaner, Stronger Buildings''

                        Questions for the Record

                            Anica Landreneau

                            Senior Principal

                     Director of Sustainable Design

                                  HOK

                       the honorable kathy castor
1. Why are some of your clients, like hospitals, airports, and 
        universities, opting for electric space and water heating? What 
        are some of the benefits they have experienced? What policies 
        do we need to support building electrification?
    Energy efficiency and renewable energy are critical first steps to 
achieving a low carbon built environment. Another critical element is 
the electrification of buildings. While Renewable Portfolio Standards 
(RPS) are addressing the combustion of fossil fuels at the utility 
level, it is important to also address the consumption of fossil fuels 
on site at the building and central plant. This means replacing fossil 
fuel-based cooking, water heating, space heating and cooling equipment 
and co-generation equipment with electric equipment.
    In many cases natural gas or coal is used in large central plant 
facilities serving multiple buildings, particularly at hospitals, 
airports, universities and other campuses or networks that serve our 
communities. Eliminating onsite combustion of fossil fuels can have co-
benefits such as improved safety, indoor air quality and grid 
flexibility. When these facilities and campuses convert to all-electric 
systems, they are more grid flexible (energy can run both ways, 
depending on time of day pricing), renewable-ready and zero energy-
ready. This flexibility and adaptability to alternative energy sources 
helps them to be more resilient, capable of safely storing energy for 
emergency scenarios, and better prepared for the future.
    Congress can offer incentives, such as tax deductions where 
applicable, for the replacement of fossil fuel-based equipment in 
existing facilities, particularly water heaters, furnaces, boilers and 
space heating/cooling equipment (i.e. heat pumps), or rebates (for non-
profit institutions) to buy down the cost premium for first-time 
installation of electric equipment. Studies indicate regional state-led 
incentive programs \1\ have been successful to date.
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    \1\ http://www.aceee.org/sites/default/files/publications/
researchreports/a1803.pdf.
---------------------------------------------------------------------------
    Congress can also revisit a Federal law \2\ which often precludes 
state action on efficiency and emissions. In 1975 Congress enacted the 
National Appliance Energy Conservation Act (NAECA) to set national 
standards for equipment like heaters, boilers and rooftop air 
conditioners, but this legislation also disallows states and other 
jurisdictions from setting more stringent local standards on these 
products. The International Code Council (ICC), the states, and or 
cities that adopt stretch energy codes, are still strictly limited in 
how much efficiency they can achieve in the products covered by NAECA. 
Innovative U.S.-based manufacturing companies could be created by 
demand for high performance heating and cooling equipment should more 
stringent state and local requirements be permitted. The performance 
cap or ceiling created by NAECA suppresses such innovation.
---------------------------------------------------------------------------
    \2\ Federal Preemption as a Barrier to Cost Savings and High-
Performance in Local Codes (NBI, 2017).
---------------------------------------------------------------------------
2. How could all-electric buildings save consumers money upfront and 
        over the lifetime of the buildings? What barriers prevent 
        developers and owners from building electric-only buildings?
    When the local energy grid can support the entirety of building 
loads (i.e. both heat and power demands), an all-electric building can 
save the consumer money upfront, offsetting the cost of an electric 
heat pump by eliminating the costs of gas boilers and natural gas 
connections. In some cases, the length of connection to a natural gas 
line is quite long and therefore the savings by eliminating the gas 
connection are substantial.
    In other cases, if there is insufficient capacity in the local grid 
to handle both power and heating needs, and if the utility forces the 
developer or consumer to bear the cost of adding an additional 
transformer, substation or other electric infrastructure, then that 
cost could pose a barrier to all-electric construction. Other barriers 
may include cultural or social preferences for cooking with natural 
gas. If any natural gas infrastructure is provided, even for nominal 
uses, then the savings for eliminating natural gas aren't realized.
    Over the lifespan of the building, an all-electric system has 
greater capacity for grid flexibility (energy can run both ways, 
depending on time of day pricing), is renewable-ready and zero energy-
ready, is capable of safely storing energy for grid harmonization or 
emergency scenarios. This can substantially lower a home or building 
owner's costs to operate over the lifespan of the building.
    Natural gas is a finite resource that already utilizes 
environmentally harmful extraction methods such as fracking. As 
resources become scarcer the cost for this resource will rise. An all-
electric building can be completely powered with renewable energy, 
which already outpaces coal in states like Texas \3\ and the ``cost of 
renewable energy is now falling so fast that it should be a 
consistently cheaper source of electricity generation than traditional 
fossil fuels'' as early as 2020 according to International Renewable 
Energy Agency's (IRENA) Renewable Power Generation Costs in 2017 
report. Renewable energy at utility scale already costs less to build 
and these savings can be passed on to consumers: ``Costs for most coal 
plants ranged between $33-111/MWh. Costs in 2018 for solar were between 
$28-52/MWh. Wind power costs varied more widely, based on location, 
coming in at $13-88/MWh, said the coal-cost report.'' \4\
---------------------------------------------------------------------------
    \3\ https://www.cnn.com/2019/07/25/us/texas-wind-energy-trnd/
index.htmlhttp://www.ercot.com/content/wcm/lists/172485/
DemandandEnergy2019.xlsx.
    \4\ https://energyinnovation.org/wp-content/uploads/2019/04/Coal-
Cost-Crossover_Energy-Innovation_VCE_FINAL2.pdf.
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3. In your testimony, you mentioned that several cities and states are 
        adopting net zero energy and net zero carbon building codes and 
        goals. You also referenced the Zero Code appendix to the 2021 
        model energy code currently being developed. What can the 
        Federal government do to incentivize the adoption of net zero 
        building codes and goals?
    Congress can incentivize states and cities to be early adopters of 
Zero Energy and Zero Carbon codes by supporting the staff and 
permitting infrastructure, public education and engagement programs, 
annual benchmarking and reporting infrastructure and the development of 
shared tools and lessons learned.
    There are existing models and vehicles for this kind of support. 
For example, the American Recovery and Reinvestment Act (Recovery Act) 
of 2009 provided the State Energy Program (SEP) with $3.1 billion of 
resources, requiring required states to develop a plan for achieving 
compliance with codes equal to or greater than the 2009 IECC and ASHRAE 
Standard 90.1-2007 in at least 90% of new and renovated residential and 
commercial buildings within eight years (by 2017). The U.S. Department 
of Energy provided workforce training, code manuals and other tools. 
While the Recovery Act SEP funding represents an unprecedented level of 
federal support for energy code implementation, the requirements also 
called for an extraordinary level of commitment and planning from 
participating state and local entities. This incentive program is 
likely a major factor leading 88% of the U.S. to at least be on the 
2009 energy code or a later edition now. This is a model for a program 
that could be developed around zero energy or zero carbon codes, 
providing workforce training, code manuals and other tools to states 
and local jurisdictions willing to accelerate the adoption of these 
advanced building standards.
    Congress can also direct federal spending through existing programs 
to focus on zero energy and zero carbon goals, such as the Building 
Technologies Office (BTO), the development and maintenance of free/open 
source energy modeling tools such as EnergyPlus and renewable energy 
sizing tools such as PVWatts, and most importantly, the Building Energy 
Codes Program, which can provide training and technical assistance, 
assess savings impacts, and administer a help desk specific to model 
zero energy codes.
    Congress can maintain and increase Federal tax incentives for 
Renewable Energy technologies, including energy storage. As more 
production comes online, the ability to store energy and control how 
and when it flows onto the grid will be critical to maintaining our 
infrastructure and energy autonomy.
    Congress can also link existing Federal tax incentives (or restore 
lapsed tax incentives) to Zero Energy and Zero Carbon goals. By 
leveraging existing financial incentives but tying them to Zero Energy 
or Zero Carbon, Congress not only uses its buying power to reduce 
carbon emissions in the built environment but also creates a replicable 
framework that smaller jurisdictions can emulate and normalizes the 
expectation of performance outcomes.
    Examples of existing or recently lapsed tax incentives include:
          The Low-Income Housing Tax Credit (LIHTC) gives incentives 
        for the utilization of private equity in the development of 
        affordable housing aimed at low-income Americans. LIHTC 
        accounts for 90% of all affordable rental housing created in 
        the United States today. Congress can incentive zero energy or 
        zero carbon low income housing.
          The Federal Historic Preservation Tax Incentives Program 
        (HTC) provides a 20% Federal tax credit to property owners who 
        undertake a substantial rehabilitation of a historic building 
        in a business or income-producing use while maintaining its 
        historic character. HTC is designed to not only preserve and 
        rehabilitate historic buildings, but to also promote the 
        economic revitalization of older communities in the nation's 
        cities and towns, along Main Streets, and in rural areas. HTC 
        has leveraged over $162 billion in private investment in 
        historic rehabilitation and generating almost 2.7 million jobs. 
        Congress can incentivize zero energy or zero carbon historic 
        restoration and preservation projects. In addition to the 20% 
        Historic Preservation credit, Congress can resurrect a lapsed 
        10% tax credit for the restoration of non-historic buildings. 
        This tax credit should be linked to zero energy and zero carbon 
        renovation projects.
    The tax deductions for commercial buildings have expired, effective 
December 31, 2017. The tax deduction of up to $1.80 per square foot was 
previously available to owners or designers of commercial buildings or 
systems that saved at least 50% of the heating and cooling energy as 
compared to ASHRAE Standard 90.1-2007 (or 90.1-2001 for buildings or 
systems placed in service before January 1, 2018). Partial deductions 
of up to $.60 per square foot could be taken for measures affecting any 
one of three building systems: the building envelope, lighting, or 
heating and cooling systems. Congress could reinstate a commercial 
building tax deduction for zero-ready, zero energy or zero carbon 
buildings.
    The Federal Energy Policy Act of 2005 established tax credits of up 
to $2,000 for builders of new energy-efficient homes. This tax credit 
has also expired,\5\ effective December 31, 2017. Congress could 
reinstate the tax credit for zero-ready, zero energy or zero carbon 
homes.
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    \5\ https://www.energystar.gov/about/federal_tax_credits/
federal_tax_credit_archives/tax_credits_home_builders.
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4. Can you discuss the potential scale of embodied carbon emissions in 
        new construction? What are the emissions and climate benefits 
        of low embodied carbon building materials, such as cross-
        laminated timber? How can the Federal government help 
        incentivize the use of low carbon materials and encourage other 
        ways to reduce embodied emissions?
    Globally we must phase out fossil fuel CO2 emissions in 
the built environment by 2050 in order to stay ``well below 2 +C--
preferably 1.5 +C--warming above pre-industrial levels'', but new 
research from the IPCC, the UN, and the scientific community stresses 
the critical importance of a 2030 milestone: if we do not achieve a 45-
55% reduction in total global emissions by 2030 we will have lost the 
opportunity to meet the 1.5/2 +C warming threshold and climate change 
will become irreversible. The immediate focus for embodied carbon 
reductions must therefore be on the next decade.
    Annually, the embodied carbon of building structure, substructure, 
and enclosures are responsible for 11% of global GHG emissions and 28% 
of global building sector emissions. Eliminating these emissions is key 
to addressing climate change and meeting Paris Climate Agreement 
targets.
    Under a business as usual scenario, embodied carbon in buildings 
constructed globally between 2020 and 2050 could exceed 250 gigatons 
(GtCO2). This is half of the 500 GtCO2 global 
carbon budget we must stay within to stay within a 20 +C temperature 
rise and nearly three quarters of the 340 GtCO2 global 
carbon budget we must stay within to stay within a 1.50 +C temperature 
rise.
    Of the 173 billion square meters (1.86 trillion square feet) of new 
buildings we will construct between 2020 and 2050, approximately 52% of 
associated carbon emissions (130 GtCO2) in that time frame 
will be derived from embodied carbon, and 48% of associated carbon 
emissions (120 GtCO2) will be derived from operating carbon.
    Looking more narrowly at the critical window between 2020 and 2030, 
under a business as usual scenario, approximately 72% of associated 
carbon emissions in that time frame will be derived from embodied 
carbon, and 28% of associated carbon emissions will be derived from 
operating carbon. This is because embodied carbon emissions are `front 
loaded' and although they average out over the life span of a building, 
we are concerned with the `time value of carbon' when it is 
particularly critical that we stay under a total 500 GtCO2 
carbon limit
    Buildings are complex systems. There is no such thing as a wholly 
concrete building; it requires steel reinforcement. There is no such 
thing as a wholly steel building; it requires concrete footings and 
foundations. And there is no such thing as a wholly mass timber 
building; it requires steel fasteners and concrete footings and 
foundations. We need all materials in our palette, and we need to 
decarbonize them all. There are ways to decarbonize concrete, by 
replacing cement with fly ash or blast furnace slag, or using a carbon 
sequestration technology such as Carbon Cure,\6\ or using a cement 
manufactured with a coal replacement product \7\ that is processed in 
an aerobic digestor and that reduces landfill waste. There are ways to 
select steel products with lower embodied carbon, based on 
manufacturing location, methods and fuel sources. And there are an 
increasingly wide variety of mass timber products, such as cross 
laminated timber that are inherently a lower embodied carbon material.
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    \6\ https://www.carboncure.com/.
    \7\ https://biohitech.com/renewables/.
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    Perhaps even more importantly, over one third of the solutions 
described in the Paris Accord are described as `natural climate 
solutions'. If the construction industry specifies significantly more 
timber products, it could lead to increased land use for forestry. Much 
of the cement and steel used in the U.S. is manufactured and milled 
overseas. But wood products actually are a robust domestic industry and 
have the potential to grow should the market signal increasing demand.
    Historically code barriers, cost premiums and a lack of workforce 
familiarity or experience with mass timber construction have been 
barriers to increase specification. Fortunately the 2021 International 
Building Code (IBC) has removed barriers to 12- and 18- story tall wood 
buildings (exposed structure, and concealed behind fire proofing, 
respectively).
    Congress can incentivize states and cities to adopt IBC 2021 by 
supporting the staff and permitting infrastructure, public education 
and engagement programs, and the development of shared tools and 
lessons learned.
    There are existing models and vehicles for this kind of support. 
For example, the American Recovery and Reinvestment Act (Recovery Act) 
of 2009 provided the State Energy Program (SEP) with $3.1 billion of 
resources for workforce training, code manuals and other tools. This 
could be replicated around IBC 2021 with particular emphasis on Mass 
Timber construction.
    Congress can also direct federal spending through existing programs 
to focus on low embodied carbon goals, such as the Building 
Technologies Office (BTO), the development or expansion of free/open 
source embodied carbon modeling tools, and the Building Energy Codes 
Program, which could partner with industry leaders to develop a 
framework for an embodied carbon model code, or an integrated operating 
and embodied carbon code.
    Congress can also link existing Federal tax incentives (or restore 
lapsed tax incentives) to low embodied carbon goals. By leveraging 
existing financial incentives but tying them low embodied carbon, 
Congress not only uses its buying power to reduce carbon emissions in 
the built environment but also creates a replicable framework that 
smaller jurisdictions can emulate and normalizes the expectation of 
performance outcomes.
    Examples of existing or recently lapsed tax incentives include:
          The Low-Income Housing Tax Credit (LIHTC) gives incentives 
        for the utilization of private equity in the development of 
        affordable housing aimed at low-income Americans. LIHTC 
        accounts for 90% of all affordable rental housing created in 
        the United States today. Congress can incentive the use of Mass 
        Timber or other low embodied carbon materials for low income 
        housing.
          The tax deductions for commercial buildings have expired, 
        effective December 31, 2017. The tax deduction of up to $1.80 
        per square foot was previously available to owners or designers 
        of commercial buildings or systems that saved at least 50% of 
        the heating and cooling energy as compared to ASHRAE Standard 
        90.1-2007 (or 90.1-2001 for buildings or systems placed in 
        service before January 1, 2018). Partial deductions of up to 
        $.60 per square foot could be taken for measures affecting any 
        one of three building systems: the building envelope, lighting, 
        or heating and cooling systems. Congress could reinstate a 
        commercial building tax deduction for Mass Timber or other low 
        embodied carbon building materials for commercial buildings.
5. In your testimony, you outlined several policies that could reduce 
        emissions in the building sector. In your opinion, which 
        policies would be most impactful and should be prioritized?
Policy Priority 1: address existing buildings through transparency and 
        benchmarking
    The model energy code addresses new construction and planned 
alterations projects that require a permit. Planned construction 
activity triggers the code. Buildings with no planned construction 
activity are not typically addressed by energy codes.
    In most established U.S. cities, 80-90% of the buildings that will 
be consuming energy in 2050 already exist. U.S. cities only see 1-2% 
turnover (renovation or replacement) of building stock every year on 
average. And yet, in cities, buildings represent on average 50-75% of 
GHG emissions inventory. Buildings are the single largest opportunity 
to meet climate goals. Therefore, building codes alone won't address 
the issue of emissions in the built environment. Other complementary 
policy solutions, such as energy transparency and benchmarking, as well 
as building performance standards are required.
    Energy benchmarking and transparency ordinances have been adopted 
by over two dozen jurisdictions across the country, making publicly and 
privately-owned building annual performance data available to 
jurisdictions and the public. These policies currently encompass nearly 
92,000 properties \8\ at 11 billion square feet of floor area \9\ 
reported every year. Through transparency alone these cities are seeing 
an average of 4-13% energy improvement in their existing building 
stock. Just starting to use the benchmarking and reporting tools, such 
as EnergyStar Portfolio Manager, shining a light on building 
performance, and introducing a comparative metric has already inspired 
improved operations and maintenance as well as investment in energy 
efficiency.
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    \8\ https://www.buildingrating.org/graphic/us-number-properties-
covered-annually.
    \9\ https://www.buildingrating.org/graphic/us-building-area-
covered-annually.
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    Congress can incentivize states and cities to adopt transparency 
and benchmarking policies, by co-funding staff or providing resources 
and tools, particularly when policies are linked to a national 
benchmarking platform such as the U.S. Environmental Protection Agency 
(EPA) EnergyStar Portfolio Manager tool. Congress can also incentivize 
building owners by providing financial incentives (tax incentives or 
rebates) for energy audits, retro-commissioning, deep green retrofits, 
systems or component replacement, and building operator training 
programs.
    Investment in Energy Efficiency is investment in local jobs and the 
local economy. Building improvements focused on improved energy 
efficiency in existing building stock cannot be shipped overseas. They 
are labor intensive and site-specific projects, driving the creation of 
local jobs in construction, renovation, installation, operations and 
maintenance.\10\ According to the 2019 U.S. Energy and Employment 
Report, Energy Efficiency produced more new jobs in the United States 
in 2018 than any other energy sector, and accounted for more than 2.3 
million jobs overall, as compared with about 534,000 in renewable 
energy and about 200,000 in coal.
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    \10\ Energy Efficiency in Buildings: the key to Effective and 
Equitable Clean Energy Action for Cities (IMT).
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Policy 2: address existing buildings through building performance 
        standards
    Once jurisdictions have established transparency and benchmarking 
infrastructure with its annual communication channels between building 
owners and a building performance oversight agency, it is easier to put 
a building performance standard into place. Cities may want to require 
building owners to take additional steps beyond just reporting 
performance such as improving buildings that exceed carbon intensity, 
energy- or water-consumption thresholds or fall below peer building 
EnergyStar scores.
    There are a small number of jurisdictions that have already passed 
building performance standards, but many more are looking at similar 
policies to address their existing building stock. The next most likely 
jurisdictions to pass similar policies will be those with existing 
transparency and benchmarking policies already in effect.
    Congress can incentivize states and cities to adopt Building 
Performance Standards, particularly when policies are linked to a 
national benchmarking platform such as the U.S. Environmental 
Protection Agency (EPA) EnergyStar Portfolio Manager tool. Support may 
include co-funding staff or providing resources, tools and training for 
jurisdictions.
    Congress can continue to support the development and improvement of 
energy simulation tools that aid building owners in making financial 
investment decisions, as well as EPA EnergyStar Portfolio Manager 
platform, and ensure it remains relevant by maintaining funding for the 
Commercial Building Energy Consumption Survey which populates the 
database on the backend.
    Congress can leverage the National Laboratories and the U.S. 
Department of Energy Building Technologies Office (BTO) to provide 
demonstration and field validation of advanced technologies so that 
American businesses may foster innovative solutions to our building 
energy challenges, these technologies may become shelf-ready and cost-
competitive, and building owners may confidently employ these 
technologies in existing buildings to improve their performance.
    Congress can also incentivize building owners by providing 
financial incentives (tax incentives or rebates) for energy audits, 
retro-commissioning, deep green retrofits, systems or component 
replacement, and building operator training programs.
Policy Priority 3: modernize code enforcement
    The International Energy Conservation Code (IECC) is in use or 
adopted in 48 states, the District of Columbia, Puerto Rico and the 
U.S. Virgin Islands. The model code is updated in three-year cycles, 
supported by research and analysis conducted by industry stakeholders 
and U.S. Department of Energy (PNNL). The model building code is a 
powerful and far reaching tool, however many jurisdictions do not have 
the personnel or fiscal resources to adequately ensure compliance with 
energy requirements. Codes are only as good as they can be and are 
enforced, which is why the next policy priority focuses on enforcement.
    Congress can provide resources to state and local governments in 
many ways. Congress can provide assistance to jurisdictions who wish to 
convert to an e-plan review process or to leverage integrated 
technology solutions that work with Building Information Modeling (BIM) 
design tools to facilitate virtual inspections through Augmented 
Reality (AR), Virtual Reality (VR) or drone site visits, all of which 
can streamline the permitting and inspection process and creates more 
efficient use of staff resources, enabling better code enforcement 
procedures and more consistent code updates.\11\
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    \11\ Disruption, Evolution, and Change: AIA's vision for the future 
of design and construction (AIA, 2019).
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    Congress can also incentivize jurisdictions to adopt the latest 
codes by offering to co-fund staff or provide training for code 
officials using the existing U.S. Department of Energy (DOE) energy 
code training modules. There was a highly successful Federal program in 
the wake of the last recession with the 2009 American Recovery and 
Reinvestment Act that provided free training and 2009 IECC code books 
and workbooks along with strong incentives for all jurisdictions to 
adopt the 2009 IECC.\12\
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    \12\ http://bcapcodes.org/topics/federal-funding/.
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Policy Priority 4: incentivize outcome-based codes
    Congress can incentivize states and cities to be early adopters of 
outcome-based codes by supporting the transition of staff and 
permitting infrastructure, public education and engagement programs, 
annual benchmarking and reporting infrastructure and the development of 
shared tools and lessons learned. Outcome-based codes establish a 
target energy use level or energy allowance, then require measured and 
reported actual energy use in relation to that target once the building 
is completed and occupied. At a minimum, an outcome-based energy code 
requires 12 consecutive months of post-occupancy performance within the 
allowed energy or carbon budget, typically within the first 18-36 
months of use to normalize for weather and allow for commissioning. If 
the building doesn't meet performance requirements, the builder or 
owner forfeits a financial penalty.
    By focusing on the outcome, code officials and communities can be 
assured that requirements are being met while not incurring additional 
enforcement burdens. Outcome-based codes mean that there would be less 
reliance on design documentation to obtain a permit, alleviating the 
pressure on a diminishing code enforcement workforce and freeing that 
workforce up to focus on building lifecycle performance policies such 
as transparency (annual benchmarking) and building performance 
standards. Typically, communities that are prepared for an outcome-
based code already have adopted public and commercial building 
benchmarking policies, thus establishing an annual communication 
channel between building owner and building performance oversight 
agency.\13\
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    \13\ Implementing an Outcome-Based Compliance Path in Energy Codes 
(NIBS, NBI; 2017).
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    This simplification of the energy code would allow for more rapid 
escalation of performance expectations without the burden of retraining 
the entire code enforcement workforce every code cycle. It will also 
link escalation design expectations to more rigorous oversight of 
construction quality and ongoing performance optimization as an 
integral part of operations and maintenance activities. The National 
Institute of Building Sciences (NIBS) and New Building Institute (NBI) 
have provided energy code appendix language in the guide Implementing 
an Outcome-Based Compliance Path in Energy Codes to help jurisdictions 
interested in moving towards an outcome-based code.
Policy Priority 5: incentivize zero carbon buildings
    The 2021 model energy code includes a Zero Code appendix, a 
platform that jurisdictions can opt into to incentivize or make 
mandatory for certain building types or sizes to help them meet their 
climate goals. As an appendix it is built into the code enforcement 
framework of the IECC but is voluntarily adopted by jurisdictions and 
could be adjusted locally to align with a step code or other local 
programs. The provisions contained in this appendix will become 
mandatory when specified as such in the jurisdiction's adopting 
ordinance.
    The Zero Code appendix to the 2021 IECC is constructed to require 
that new commercial, institutional, and mid- to high-rise residential 
buildings install or procure enough renewable energy to achieve zero 
net carbon annually.\14\ The appendix encourages on-site renewable 
energy systems when feasible but also supports off-site procurement of 
renewable energy through a variety of methods. This appendix does not 
allow renewable energy to be traded off against the energy efficiency 
required by the 2021 IECC. Buildings are required to comply with the 
2021 IECC using either the prescriptive or performance approach. When 
the prescriptive approach is used, the renewable energy that must be 
installed or procured is specified based on building type and climate 
zone.
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    \14\ Understanding Code Change Proposal CE264-19 Zero Code 
Renewable Energy Appendix (AIA, 2019).
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    Once the IECC 2021 model code is published Congress can offer 
incentives to state and local governments to increase speed of adoption 
and encourage use of the Zero Code appendix.\15\ Congress can 
incentivize states and cities to be early adopters of Zero Energy and 
Zero Carbon codes by supporting the staff and permitting 
infrastructure, public education and engagement programs, annual 
benchmarking and reporting infrastructure and the development of shared 
tools and lessons learned.
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    \15\ https://architecture2030.org/wp-content/uploads/ZERO-Code-RE-
Appendix-Fact-Sheet.pdf.
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    Congress can also link existing Federal tax incentives to Zero 
Energy and Zero Carbon goals. By leveraging existing financial 
incentives but tying them to Zero Energy or Zero Carbon, Congress not 
only uses its buying power to reduce carbon emissions in the built 
environment but also creates a replicable framework that smaller 
jurisdictions can emulate and normalizes the expectation of performance 
outcomes.
    Congress can maintain and increase Federal tax incentives for 
Renewable Energy technologies, including storage. As more production 
comes online, the ability to store energy and control how and when it 
flows onto the grid will be critical to maintaining our infrastructure 
and energy autonomy.
6. Recent reporting has revealed that the National Association of Home 
        Builders has the ability to select 4 out of the 11 members of 
        the residential code committee, based on a formal quid pro quo 
        agreement with the International Code Council. How has this 4-
        vote block affected the code development process and the energy 
        efficiency and resilience outcomes of the codes adopted? What 
        reforms to the code development process would you recommend, if 
        any?
    The code update process typically involves a Code Development 
Committee (CDC) that is formed by qualified applicants representing a 
broad range of stakeholders. These stakeholders may include code 
officials, members of the building product or material manufacturing 
community (or representative associations), members of the architecture 
or engineering community, code consultants, and in the case of the 
residential code, home builders. The residential code is unique in 
this, as commercial developers and contractors are not typically 
engaged in the code development process. Anyone can propose code 
amendments, however the bulk are proposed by Code Action Committees 
(CACs) who have a vested interest in improving the code. Individual 
stakeholders who have identified unclear language, unintended barriers 
to good design or construction, inherent conflicts or other challenges 
within the code also propose amendments. There are some proposed 
amendments in every code cycle that attempt to `roll back' the 
requirements or stringency of the code. It is the Code Development 
Committee's role to protect the intent and integrity of the code.
    While it has been evident that the residential energy code 
committee has had disproportionate representation by the National 
Association of Home Builders (NAHB), it was not evident until recently 
that this was a formal agreement. The agreement with the International 
Codes Council (ICC) was that having this significant representation or 
voting block on the committee would be in exchange for promoting the 
adoption of the i-codes, including the energy conservation code, with 
states and local jurisdictions.
    The NAHB has leveraged this voting block to attempt to roll back 
much of the progress made in the residential energy code over the last 
couple of cycles, and other stakeholders have had to work in earnest 
merely to try to keep the code holding steady. For example, the update 
from the 2015 to 2018 residential energy conservation code only saw a 
nominal improvement:
           1.97 percent energy cost savings
           1.91 percent source energy savings
           1.68 percent site energy savings
    At the same time the commercial energy conservation code was 
advancing at four times the pace of the residential energy code. This 
is similar to the trajectory of the 2012 to 2015 energy code update and 
the 2018 to 2021 energy code update (in the 2021 code cycle the 
residential energy code improved by about 3% while the commercial 
energy code improved by about 12%). For three cycles in a row the 
commercial energy code has progressed at four times the rate of 
residential code because of the stranglehold NAHB has on the code 
development committee.
    Ultimately it is the consumers who pay the price for inefficient 
homes, not only in energy bills but in thermal discomfort and poor 
indoor air quality and health impacts as well.
    A better thermal envelope allows for passive survivability, or 
habitable human conditions with the loss of power. Increased r-values, 
lower u-values, and improved air tightness retain heat in the winter 
(when winter storms may knock out power) or prevent heat gain in the 
summer (when tropical storms, hurricanes or drought-driven fires may 
knock out power). Residents can stay in their homes without power for 
many more when their homes are built to more efficient standards.
    Despite this quid pro quo, allowing the NAHB to maintain a 
significant voting block on the residential energy code development 
committee, thereby holding back code progress, in exchange for its 
support, the NAHB and its membership have not worked with jurisdictions 
advocating for the adoption of the latest energy codes. NAHB and its 
membership have actively lobbied against adoption of the latest codes, 
decrying them as too stringent, too difficult, too much of a cost 
burden, despite the fact that NAHB has barely allowed the residential 
energy code to make any changes at all in nearly a decade.
    No single organization or entity should be able to have such a 
large influence on the code development process. Nor should there be 
any quid pro quo arrangements that trade votes for influence or 
support. This has clearly been an ineffective arrangement with the 
energy code AND consumers losing on both sides of the deal.
    Although the code hearings and public comment process are public, 
the final votes are only open to ICC members, primarily comprised of 
code officials. Even code development committee members cannot vote if 
they are not code officials. It seems that both the development 
committee and the final vote are lacking in representation from the 
most important constituencies: the people who actually must live in 
these homes. If not actual home buyers or home owners, then 
associations that represent them (REALTORs, etc.) who can advocate for 
that stakeholder population. Other advocates from the community may 
also be able to represent these concerns and issues on the committee as 
well as in the final vote.
                      the honorable garret graves
 1. Your testimony highlighted the role that buildings play in global 
        emissions--40 percent. Could you elaborate on the role that the 
        Department of Energy's Building Technology Office plays in 
        finding new construction techniques that may make a difference 
        not just for Californians, but also residents of developing 
        nations?
    The Building Technologies Office (BTO) supports the development and 
implementation of residential and commercial building energy codes by 
engaging with government and industry stakeholders, and by providing 
technical assistance for code development, adoption, and compliance. 
Through advancing building codes, we aim to improve building energy 
efficiency, and to help states achieve maximum savings. Through the 
Building Energy Codes Program, BTO:
           Assesses the savings impacts of model energy codes, 
        calculating energy, cost and carbon savings to inform 
        jurisdictions and the public
           Coordinates with key stakeholders to improve model 
        energy codes, including architects, engineers, builders, code 
        officials, and a variety of other energy professionals
           Reviews published codes to ensure increased energy 
        savings, such as the International Energy Conservation Code 
        (IECC) and ASHRAE 90.1
           Tracks the status of energy code adoption across the 
        U.S. and provides technical assistance to states implementing 
        updated codes
           Provides a variety of educational and training 
        resources and assists states working to measure and improve 
        code compliance
           Administers a Help Desk to assist individual code 
        users with questions about energy codes
    BTO also sponsors an Emerging Technologies (ET) Program that 
fosters the development of cost-effective, energy-efficient 
technologies and helps introduce those technologies into the 
marketplace. ET funds and directs applied research and development 
(R&D) for technologies and tools that support building energy 
efficiency. The BTO provides demonstration and field validation of 
advanced technologies so that American businesses may foster innovative 
solutions to our building energy challenges, these technologies may 
become shelf-ready and cost-competitive, and building owners may 
confidently employ these technologies in new and existing buildings to 
improve their performance.
    BTO develops and maintains open source Whole-Building Energy 
Modeling (BEM) tools such as EnergyPlus and Open Studio. These are 
versatile, multipurpose tools that are used in new building and 
retrofit designs, code compliance, green certification, qualification 
for tax credits and utility incentives, and real-time building control. 
BEM is also used in large-scale analyses to develop building energy-
efficiency codes and inform policy decisions. These energy simulation 
tools are vital support to aid building owners in making financial 
investment decisions. They provide timely feedback on first cost, 
energy cost savings and simple payback analysis, as well as load 
reduction and first cost tradeoffs for cost neutral high-performance 
construction.
    By providing model code assistance, tools and resources are made 
available including cost effectiveness studies, technical training and 
implementation guides that many developing nations would not be able to 
produce on their own. These tools and resources enable developing 
nations, many of whom are constructing billions of square feet of new 
buildings over the next few decades, to adopt and enforce a higher 
caliber of building and energy code. This results in safer, more 
resilient buildings, as well as lower global carbon emissions, which 
makes us all safer.
    By fostering emerging technologies and proving their effectiveness, 
BTO is able to introduce technologies that ultimately become shelf-
ready and cost-competitive, not just in the U.S. but in developing 
nations. By providing access to open source Whole-Building Energy 
Modeling (BEM) tools such as EnergyPlus and Open Studio, BTO enables 
designers and building owners to make construction decisions informed 
by first cost, energy cost savings and simple payback analysis, as well 
as load reduction and first cost tradeoffs for cost neutral high-
performance construction. Simulation in concert with lower energy, 
lower carbon technologies contribute to lower carbon construction in 
developing nations. They result in safer, more resilient buildings, as 
well as lower global carbon emissions, which makes us all safer.

                            References Page

Graphs, charts, diagrams courtesy of Architecture 2030, except where 
noted.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                        Questions for the Record

                           Kara Saul Rinaldi

   Vice President, Government Affairs, Policy, and Programs, Building

                         Performance Association

                       the honorable kathy castor
1. In your testimony, you outlined several policies that could expand 
        the use of energy efficiency in the building sector. In your 
        opinion, which policies would be most impactful and should be 
        prioritized?
    There are five barriers to advancing energy efficiency that need to 
be addressed in unison for maximum impact, and the associated benefits 
of reduced emissions, cost savings, and improved health and safety: (1) 
valuing energy efficiency, (2) upfront costs, (3) accurate measuring 
and modeling, (4) a shortage of trained workers, and (5) equity. 
Congress should prioritize policies that together can address all of 
those challenges and make the greatest impact to increase energy 
efficiency in the building sector.
          1. Valuing energy efficiency. Often the energy efficiency 
        upgrades that result in the greatest energy savings cost the 
        most--costs that most homeowners simply cannot afford without 
        some level of certainty that they will be able to get a return 
        on their investment. Without appropriate consideration in the 
        appraisal, real estate, and mortgage lending processes for 
        energy efficiency upgrades and the value and cost savings that 
        they provide, homeowners cannot recoup the value of their 
        energy efficiency investments at the time of sale or 
        refinancing. Improving valuation of energy efficiency will help 
        homeowners get a fair payback for investments that save energy 
        and reduce emissions, and it will drive future demand for these 
        improvements.
          Sensible Accounting to Value Energy (SAVE) Act (114th_HR 614, 
        Rep. Murphy, Rep. Jolly/113th_S 1106, Sen. Bennet, Sen. 
        Isakson). The SAVE Act would require HUD to develop and issue 
        guidelines to all federal mortgage agencies to implement 
        enhanced loan eligibility based on energy cost savings due to 
        efficiency upgrades. This would help to address this issue of 
        valuing energy efficiency by ensuring consideration and proper 
        valuation of energy efficiency measures in the mortgage lending 
        process. In the 116th Congress the SAVE Act is included in the 
        Energy Savings and Industrial Competitiveness Act (HR 3962, S 
        2137).
          2. Upfront costs. Energy efficiency helps homeowners and 
        building owners save money on their monthly utility bills and 
        improve the comfort, health, safety, and resiliency of their 
        homes--providing a significant payback on investment. However, 
        upfront costs remain a significant barrier preventing low and 
        moderate-income households from completing energy efficiency 
        upgrades. Furthermore, the energy efficiency measures that can 
        achieve the most energy savings, such as whole-home insulation 
        and air sealing and upgrading to an efficient HVAC system, 
        often have the highest upfront costs. Congress should support 
        residential incentives that reduce the upfront cost of energy 
        efficiency improvements to allow more Americans to access the 
        efficiency market.
          Home Owner Managing Energy Savings (HOMES) Act of 2019 
        (116th_HR 2043, Rep. Welch).\1\ The HOMES Act would create a 
        Grant Program for rebates to residential efficiency customers 
        with a network of rebate aggregators, as well as grants for 
        quality assurance and a pilot on pay for performance. This 
        legislation would lower the barrier of high upfront costs for 
        energy efficiency measures that can achieve substantial energy 
        savings and help more middle-income Americans make efficiency 
        upgrades to their homes. This bill is going through additional 
        changes to include lessons from state programs.
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    \1\ Updated version pending introduction.
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          25C tax credit. Residential tax incentives are critical to 
        reducing the upfront cost of energy efficiency improvements. 
        The 25C tax credit is the only residential energy efficiency 
        tax credit provided to consumers. Congress should support a 
        forward-looking extension of a tax credit for residential 
        energy efficiency upgrades and improve the 25C credit by 
        updating goals and transitioning the credit into a permanent 
        performance-based instead of prescriptive incentive.
          179D tax credit. Key to advancing commercial energy 
        efficiency is an extension of the 179D Energy Efficient 
        Buildings tax deduction that will help support owners and 
        investors in retrofitting existing buildings, as well as in 
        constructing new above-code buildings. Congress should pass a 
        forward-looking extension of 179D that would provide the 
        certainty needed for consumers, manufacturers, contractors and 
        others to fully capitalize on the incentive. Congress should 
        also modernize the tax credit with updates that reflect the 
        current market of high-efficiency equipment and building 
        technologies.
          3. Accurate measuring and modeling. Energy usage 
        information--especially granular interval data provided by 
        smart meters--is a key tool for advancing energy savings in 
        buildings. Smart meter data can be used to identify cost-
        effective energy-saving opportunities, measure the performance 
        of specific energy efficiency measures, and drive behavior 
        changes and efficiency investments that achieve measurable and 
        verifiable energy savings. However, utilities control that data 
        and, in many cases, do not readily provide access to customers 
        or allow them to grant access to third party providers who 
        could provide data analysis, actionable insights, and 
        recommendations. Congress should act to encourage and support 
        the adoption of best practices and policies to allow consumers 
        to access and share their own electricity and natural gas data.
          Access to Consumer Energy Information Act or the E-Access Act 
        (116th_discussion draft, Rep. Welch). Would allow DOE to 
        facilitate customers' access to their own electricity and 
        natural gas data, adds consumer access to energy use and price 
        data to State energy conservation plans, and provides for 
        establishment of voluntary guidelines with access to third 
        parties according to a protocol established by the Secretary.
          4. Trained worker shortage. Across the country, jobs in 
        energy-efficient lighting, HVAC, insulation and air sealing, 
        and energy management technology are available, but in many 
        markets trained professionals are in short supply. Employers in 
        energy efficiency, especially in the construction trades, are 
        experiencing difficulty hiring new employees due to a shortfall 
        of workers with the necessary experience, training, and 
        technical skills to fill these jobs, according to the 2019 U.S. 
        Energy and Employment Report. The energy efficiency industry is 
        comprised mainly of small businesses--a large majority have 
        fewer than 20 employees.\2\ Small energy efficiency businesses 
        need resources to help train new hires and provide ongoing 
        education to existing employees, keeping them up to date on 
        certifications and trained in the latest technologies and 
        health and safety practices. To prepare more American workers 
        for quality jobs in energy efficiency and drive further growth 
        in this industry, Congress should act to support workforce 
        development and jobs training.
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    \2\ https://e4thefuture.org/wp-content/uploads/2019/09/Energy-
Efficiency-Jobs-in-America-2019.pdf.
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          Blue Collar and Green Collar Jobs Development Act of 2019 
        (116th_HR 4061, Reps. Rush and Hudson). Directs DOE to 
        prioritize education and training for energy and manufacturing 
        jobs and would establish an energy workforce grant program. 
        Grant program would provide assistance to businesses in the 
        energy efficiency and renewable energy industries that are 
        seeking to educate and train new hires and existing employees, 
        with priority to small businesses. Similar to S 2393, Clean 
        Energy Jobs Act (Sen. Heinrich).
          5. Equity. There are a number of unique barriers preventing 
        low-income and other vulnerable households from accessing 
        energy efficiency improvements, when these households could 
        stand to benefit most from the cost savings and health and 
        safety benefits provided by energy efficiency. High upfront 
        costs, creditworthiness requirements, and split incentives 
        between renters and landlords to invest in energy efficiency 
        upgrades can prevent lower-income customers from accessing 
        energy efficiency services. Many low-income homes also face 
        issues such as mold, leaky roofs, asbestos, and other 
        deteriorated conditions that can prevent installation of 
        important efficiency measures. Congress should improve low-
        income access to energy efficiency by supporting and expanding 
        the Weatherization Assistance Program (WAP) which helps low-
        income and rural families, seniors, and individuals with 
        disabilities make lasting energy efficiency improvements to 
        their homes.
          Weatherization Enhancement and Local Energy Efficiency 
        Investment and Accountability Act (116th_HR 2041, Rep. Tonko, 
        Rep. Rush, Rep. Kaptur). This legislation would reauthorize the 
        Weatherization Assistance Program, helping low-income citizens 
        make important improvements to increase the energy efficiency, 
        health, and safety of their home, save money, and improve their 
        quality of life. It would also update and strengthen the 
        program: supporting innovation in weatherization practices 
        through a new competitive grant and modernizing the program to 
        incorporate the latest cost-effective technology and services--
        including renewables and smart energy management technologies.
    Congress should prioritize these five pillars to create a holistic 
approach that addresses key barriers to advancing energy efficiency. 
Each of the above policies is needed to ensure that the others can have 
the greatest impact and, enacted together, they would create a robust 
and mutually reinforcing strategy to significantly expand the use of 
energy efficiency in the building sector.
2. Why is it important to focus on retrofitting existing buildings as 
        opposed to just focusing on increased efficiency of new 
        construction?
    Simply put, we cannot reach the emissions reductions needed from 
the building sector to achieve net zero emissions by 2050 without 
addressing existing buildings. Estimates suggest that roughly half of 
the buildings that will be in use in 2050 have already been built \3\ 
and, already, much of America's building stock is aging and 
inefficient. Therefore, retrofitting the existing building stock is key 
to decarbonizing the building sector. Approximately half of all 
commercial buildings in the U.S. were constructed before 1980. In the 
residential sector, over 70% of our nation's housing stock was built 
before 1990, with almost 40% older than 1970.\4\ These older buildings 
waste energy, costing more to heat and cool and making them an outsize 
contributor to greenhouse gas emissions. To reduce the carbon footprint 
of our buildings--which are currently responsible for 31% of all U.S. 
greenhouse gas emissions \5\--we must focus on the sizable 
opportunities to increase efficiency in existing buildings.
---------------------------------------------------------------------------
    \3\ https://aceee.org/blog/2019/05/deep-retrofits-financing-needs-
play.
    \4\ https://www.eia.gov/consumption/residential/data/2015/hc/php/
hc2.3.php.
    \5\ Total combined emissions from the residential and commercial 
sectors with electricity-related emissions distributed. https://
www.epa.gov/sites/production/files/2019-04/documents/us-ghg-inventory-
2019-main-text.pdf.
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    Focusing on retrofitting existing homes is also key to ensuring 
that American families across the country are part of and benefit from 
the transition to a decarbonized economy. The occupants of the vast 
majority of homes in the U.S. experience comfort problems, health 
issues, and/or high utility bills.\6\ Energy efficiency retrofits can 
address these problems, and improve the health, wellbeing, and 
financial security of Americans, while simultaneously reducing carbon 
emissions and increasing the resiliency of homes in the face of climate 
change. Numerous studies have illustrated the health and safety 
benefits of energy efficiency retrofits, including significant 
improvements in asthma symptoms, reduced thermal stress, and improved 
overall physical and mental health.\7\ \8\ Energy efficiency also 
improves a home's resilience, which is increasingly important in the 
face of climate change, and the increasingly frequent and devastating 
storms, extreme weather, and wildfires that will accompany it. 
Efficiency measures that improve the durability of homes and minimize 
residents' exposure to wind, moisture and temperature extremes are 
critical to keeping people safe through a storm or power outage. 
Focusing on existing buildings is also an equity issue, as many 
families cannot afford to buy new homes being built to the latest 
energy codes.
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    \6\ https://www.building-performance.org/sites/default/files/0819-
EE-high-performing-homes-blueprint-v8.pdf.
    \7\ https://weatherization.ornl.gov/wp-content/uploads/pdf/
WAPRetroEvalFinalReports/ORNL_TM-2014_345.pdf.
    \8\ https://e4thefuture.org/occupant-health-benefits-of-
residential-energy-efficiency/.
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    With the cost savings, non-energy benefits to households, and 
societal benefits including reduced emissions and economic growth, 
energy efficiency retrofits are a win-win and an essential strategy for 
addressing the climate crisis. According to the U.S. Department of 
Energy, every $1 invested in weatherization generates $4.50 in energy 
and non-energy benefits to the home and community and supports local 
employment.\9\ Furthermore, the National Renewable Energy Laboratory 
(NREL) estimates that cost-effective measures could reduce total 
residential electric energy use in single-family homes by 21.9%; use of 
gas, propane and other bulk fuels by 24%, and total carbon emissions in 
the single family housing stock by 24%.\10\ Focusing on retrofitting 
existing buildings will improve the lives of Americans, while creating 
jobs and helping us reach our climate goals.
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    \9\ https://www.energy.gov/sites/prod/files/2018/03/f49/WAP-fact-
sheet_final.pdf.
    \10\ Wilson, Eric, Craig Christensen, Scott Horowitz, Joseph 
Robertson, and Jeff Maguire. 2017. Electric End-Use Energy Efficiency 
Potential in the U.S. Single-Family Housing Stock. National Renewable 
Energy Laboratory.
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3. How can the Federal government encourage public-private partnerships 
        to reduce emissions from Federal buildings?
    There is significant opportunity to reduce carbon emissions and 
simultaneously save American taxpayer money by improving the energy 
performance of federal buildings. Energy Savings Performance Contracts 
(ESPCs) are an innovative and successful model for public-private 
partnerships to improve energy efficiency of federal buildings. ESPCs 
allow federal agencies to procure energy savings and facility 
improvements with no up-front capital costs or special appropriations 
from Congress and provide savings guarantees, reducing government risk. 
Studies by the Oak Ridge National Laboratory show that actual cost 
savings exceed guaranteed savings for many ESPC projects allowing 
significant cost savings to accrue to the government, while also 
reducing emissions.\11\ Congress should promote and support the 
expanded use of ESPCs to reduce emissions from federal buildings.
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    \11\ https://info.ornl.gov/sites/publications/Files/Pub41816.pdf.
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    The Federal Energy Management Program (FEMP) is an important 
program that oversees and facilitates the implementation of ESPC 
activities, providing crucial assistance, guidance, and training to 
federal agencies to implement successful projects. FEMP staff help 
agencies use ESPCs in several ways: advising agencies on scoping, 
procurement, and performance requirements for energy conservation 
measures (ECMs); helping agencies select third-party ESCOs; finalizing 
contracting terms and project approval; and monitoring project 
implementation and performance.
    FEMP is the program manager for the critical ESPC contracting tool 
used by federal agencies for the implementation of ESPCs--the U.S. 
Department of Energy (DOE) Indefinite Delivery Indefinite Quantity 
(IDIQ), Multiple Award, Energy Savings Performance Contract. This 
contract has historically been instrumental in achieving the 
aforementioned energy and cost savings as well as job creation outcomes 
for the nation. Since the inception of the DOE IDIQ ESPCs in 1998, 411 
projects have been awarded and approximately $6.6 billion has been 
invested in federal energy efficiency and renewable energy 
improvements. These improvements have resulted in approximately 573 
trillion Btu in life cycle energy savings and over $15 billion in 
cumulative energy cost savings for the federal government.\12\
    Congress should enable more of these successful public-private 
partnerships through the following pieces of legislation:
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    \12\ https://www.energy.gov/eere/femp/awarded-doe-idiq-energy-
savings-performance-contract-projects.
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Legislation
           Federal Energy and Water Management Performance Act 
        of 2019 (S. 1857, Sen. Murkowski, Sen. Manchin): Would 
        reauthorize the Federal Energy Management Program (FEMP) at $36 
        million and improve federal energy and water requirements.
           Energy Savings and Industrial Competitiveness Act of 
        2019 (S. 2137, Sen. Portman, Sen. Shaheen; H.R. 3962, Rep. 
        Welch, Rep. McKinley): Would reauthorize the Federal Energy 
        Management Program (FEMP) at $36 million and improve federal 
        energy and water requirements. It extends energy use reduction 
        goals and would expand the scope of existing energy standards 
        for new federal buildings to include major renovations.
           Energy Savings through Public-Private Partnerships 
        Act of 2019, (S. 1706, Sen. Gardner, Sen. Coons; H.R. 3079, 
        Rep. Welch): Would encourage the increased use of ESPCs in 
        federal facilities by addressing barriers and increasing the 
        use of energy efficiency and distributed generation.
Federal Appropriations
    Congress should also ensure adequate funding for the following 
programs to continue to improve the performance and cost savings for 
federal buildings:
           Federal Energy Management Program (FEMP). In 
        addition to reauthorizing this important program (S. 1857), 
        Congress should ensure continued adequate funding for FEMP 
        including carveouts for the Assisting Federal Facilities with 
        Energy Conservation Technologies (AFFECT) program which 
        provides grants to federal agencies to support the use of 
        ESPCs, to achieve energy savings and implement other important 
        climate-related measures like resiliency that might not 
        generate utility bill savings.
           U.S. General Services Administration (GSA) Office of 
        Federal High-Performance Buildings. Through ESPCs, construction 
        and leasing policies, and other public private partnership 
        models GSA has saved millions of dollars. GSA has reported, for 
        example, that sustainable building standards helped GSA avoid 
        more than $250 million in energy and water costs from 2008 to 
        2014.\13\ These programs save taxpayers money while reducing 
        energy-related carbon emissions and should continue to be 
        funded by Congress to ensure continued progress.
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    \13\ https://app_gsagov_prod_rdcgwaajp7wr.s3.amazonaws.com/
GSA_FY_2015_SSPP_Final.docx.
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4. How can we ensure that the advancement of residential energy 
        efficiency helps all Americans, especially low-income 
        households?
Access to Efficiency Improvements for All Income Levels
    Policies aimed at retrofitting the over 115 million homes across 
the country will not only help reduce carbon emissions from the 
nation's residential building stock, but will also help homeowners save 
money on their monthly utility bills and improve the comfort, health, 
safety, and resiliency of their homes. Reducing monthly energy costs of 
homes is something that will benefit every American, as energy costs 
often represent the second or third largest recurring cost of 
homeownership, depending on location (behind mortgage and in some 
markets property tax). However, upfront costs remain a significant 
barrier preventing low and moderate-income households from completing 
energy efficiency upgrades. Meanwhile, nearly one-third of U.S. 
households reported facing a challenge in paying energy bills or 
sustaining adequate heating and cooling in their homes in 2015, with 
even higher rates among low-income and racial minority households.\14\ 
Low-income households also face the highest energy burdens, paying 7.2% 
of their household income on energy, more than three times the 
percentage that higher income households pay.\15\ Energy efficiency is 
an underutilized strategy that can help reduce these high energy 
burdens. Congress should advance policies to ensure Americans of all 
income levels, especially low-income households, have access to 
residential energy efficiency measures.
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    \14\ https://www.eia.gov/todayinenergy/detail.php?id=37072.
    \15\ https://aceee.org/research-report/u1602.
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    To ensure equity, we need to provide robust funding for low-income 
energy efficiency programs. It is critical that Congress continue to 
support and expand the Weatherization Assistance Program (WAP).\16\ I 
was the lead author of a 2017 report,\17\ published by the Home 
Performance Coalition (now the Building Performance Association), that 
offered recommendations for improvements to WAP, opportunities for 
streamlining, and ways to encourage the use of private sector 
contractors. Some of these ideas are included in the Weatherization 
Enhancement and Local Energy Efficiency Investment and Accountability 
Act (HR 2041) which would reauthorize and make updates to the program. 
This bill has passed out of Committee this year and awaits a floor 
vote. The Building Performance Association urges Congress to act on 
this important legislation. We also encourage consideration of the full 
list of recommendations from the 2017 report (Appendix A).
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    \16\ Since 1976, WAP has helped make more than 7 million homes more 
efficient, saving the average recipient about $4,200 over the lifetime 
of their home.
    \17\ https://www.building-performance.org/sites/default/files/
Weatherization%20%26%20HP%20Recommendations%20Report2.pdf.
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    Congress should also create incentives to support low- to moderate-
income families who don't qualify for low-income weatherization 
programs. The HOMES Act (HR 2043) \18\ would help middle-income 
Americans make efficiency upgrades to their homes and incentivize 
investments that can achieve substantial energy savings. Furthermore, 
incentives are often targeted to ``owner-occupied'' buildings. To 
encourage landlords to upgrade their properties, I recommended removing 
this requirement from incentive programs as the tenants will benefit 
from the energy savings.
---------------------------------------------------------------------------
    \18\ Updated version pending introduction from Rep. Welch.
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Job Opportunities for Communities Across America
    Advancing residential energy efficiency will also create quality 
local jobs in communities across the country. According to this year's 
``Energy Efficiency Jobs in America'' \19\ report from E4TheFuture, the 
energy efficiency sector employs 2.3 million Americans, twice as many 
workers as the entire U.S. fossil fuel industry, and energy efficiency 
is leading the nation's energy economy in new job creation. A 
significant portion of energy efficiency jobs in the U.S. are in the 
residential sector, and approximately 56 percent of energy efficiency 
jobs involve construction and repairs. These are the contractors--the 
``boots on the ground''--installing energy efficiency products and 
technologies and working to reduce energy waste in homes and buildings 
across the country. These jobs are, by their very nature, inherently 
local and cannot be exported. Energy efficiency workers work in their 
own communities and earn a livable wage while helping homes and 
businesses reduce energy waste and save money. Policies that encourage 
investment in energy efficiency can further advance growth in this 
industry, creating even more well-paying jobs all across the country 
and generating economic opportunity for Americans through the 
decarbonization transition.
---------------------------------------------------------------------------
    \19\ https://e4thefuture.org/wp-content/uploads/2019/09/Energy-
Efficiency-Jobs-in-America-2019.pdf.
---------------------------------------------------------------------------
    Congress should promote greater access to job opportunities in the 
growing energy efficiency industry and provide resources to communities 
for workforce development. A comprehensive, nationwide program is 
needed to improve education and training for workers in the energy 
efficiency industry, including manufacturing, engineering, 
construction, and building retrofitting jobs. This is exactly what the 
Blue Collar and Green Collar Jobs Development Act of 2019 (HR 4061) 
would create. One of the main pillars of HR 1315 is an energy workforce 
grant program, which would provide assistance to businesses in the 
energy efficiency and renewable energy industries that are seeking to 
educate and train new hires and existing employees. Importantly, the 
legislation would give priority to eligible businesses that recruit 
employees from local communities, minorities, women, foster children, 
persons who are transitioning from fossil energy sector jobs, and 
veterans; and would support critical on-the-job training and reskilling 
for workers. Congress should pass HR 1315 to prepare more American 
workers--especially transitioning workers, minorities, and members of 
low-income communities--for quality jobs in energy efficiency.
5. How can energy-efficiency in buildings make a transition to building 
        electrification more successful?
    Energy efficiency is critical to achieving electrification goals, 
particularly in cold weather climates where a poorly insulated, 
inefficient building would not be able to maintain its temperature with 
a traditional electric heat pump. Importantly, building electrification 
only leads to decarbonization if the electricity used is carbon-free, 
renewable energy. Coordinated delivery of energy efficiency and 
electrification improves outcomes in many ways:
          1. Technology advancement. Energy efficiency programs have 
        been instrumental in advancing high-efficiency technologies, 
        including air and ground-source heat pumps and heat pump water 
        heaters. Northeast Energy Efficiency Partnerships, with support 
        from many efficiency program administrators, maintains a cold-
        climate specification and list of air-source heat pumps that 
        perform well in cold climates, even in the coldest states.\20\ 
        These high-efficiency heat pumps, coupled with energy 
        efficiency improvements in the building envelope, make it 
        possible for buildings to switch to electric heat.
---------------------------------------------------------------------------
    \20\ There is widespread availability of cold-climate heat pumps, 
which ensure that the equipment performs well in cold climates and 
doesn't, for example, kick into electric resistance mode. NEEP 
maintains a cold-climate spec and associated product list: https://
neep.org/ASHP-Specification. There are 4,775 products listed from more 
than 24 manufacturers in all configurations: single-zone, multi-zone, 
ducted, ductless. Cold states like Vermont and Maine have high rates of 
adoption of ductless mini-split heat pumps because the customer 
economics are really compelling for customers using expensive 
unregulated fuels (oil, propane). In Vermont, there are examples of 
high-performing efficient homes built to Passive House standards that 
are 100% heat pump heated.
---------------------------------------------------------------------------
          2. Workforce development. The contractors who install energy-
        efficient equipment are now adding heat pumps to their 
        businesses, and the trade ally networks currently supported by 
        efficiency programs are expanding to support building 
        electrification. Efficiency programs are key partners for 
        recruitment, training, and quality assurance of building 
        electrification contractors, making whole-building energy 
        efficient a part of the business model.
          3. Customer experience. Efficiency programs have strong 
        skills in customer engagement, and know-how to design programs 
        that overcome barriers to customer adoption of new 
        technologies. They are well-positioned to help customers 
        navigate an increasingly complicated set of energy options, 
        including electrification of buildings and transportation.
          4. Reduced electric system costs as the building and 
        transportation sectors electrify. To effectively reduce 
        emissions, building electrification will need to be coupled 
        with a transition to clean, decarbonized electricity 
        generation. By lowering demand, energy efficiency will ease the 
        speed and scale of investment in renewable and low-carbon 
        energy resources needed to support this transition. Efficiency 
        lowers overall energy demand and demand flexibility (dynamic 
        efficiency, demand response, and smart technology) allows for 
        the shifting of load. Together, these strategies both curb the 
        increase in electricity demand as more end uses are powered 
        with electricity and shift load to allow for grid stability. 
        This will lower requirements for new electricity generation and 
        transmission through the transition, saving money on power 
        plant construction and grid buildout.
          5. Grid stability and reliability. Building electrification 
        will affect the timing and seasonality of peak demand. For 
        example, in cold climates, as heating load is electrified, 
        power systems may to become winter peaking with significantly 
        higher demand during the coldest times of the year). Energy 
        efficiency is needed to help effectively manage the peak load 
        impacts of new electricity demand; lowering baseload demand and 
        supporting load shifting through energy efficiency ensures that 
        peaks are not as high, improving reliability. Mitigating grid 
        stress and supporting stability through energy efficiency can 
        reduce the risk of brownouts and rolling blackouts. That grid 
        reliability is increasingly important as more buildings 
        electrify (and depend on electric power for heating and 
        cooling).
          6. Better performance of electrified buildings. Creating a 
        tight building envelope lowers heating and cooling loads and 
        allows highly efficient electric heat pumps to meet the full 
        heating and cooling needs for more homes and businesses. Super-
        insulated homes can be heated entirely with heat pumps, and it 
        is becoming increasingly possible for heat pumps to fully 
        replace fossil fuels, even in cold climates, through emerging 
        whole-house heat pump systems and air-to-water systems.\21\ In 
        the case of a power outage that would cut off electrified 
        heating and cooling systems, building envelope improvements 
        like high-performance insulation, air sealing, and strong leak-
        resistant windows also help to ensure that homes remain safe 
        and comfortable, allowing people to shelter in place. Finally, 
        an efficient, well-sealed home also enables demand flexibility 
        allowing timing of space heating or cooling to be shifted in 
        order to maximize the use of renewable energy while still 
        maintaining comfortable conditions.
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    \21\ This is possible even in the coldest states.
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                               Appendix A

Weatherization and Home Performance: Recommendations for Mutual Success 
        and Collaboration
    1. The U.S. Department of Energy (DOE) Residential Building 
Integration Program, working together with the Office of Weatherization 
and Intergovernmental Programs, should support the adoption and use of 
the Building Performance Institute's (BPI)--2101 Standard Requirements 
for a Certificate of Completion for Residential Energy Efficiency 
Upgrades (``Home Performance Certificate'') as a strategy for 
documenting upgrades (and resulting energy savings) funded by WAP. A 
BPI-2101-compliant certificate that is issued to homeowners that 
receive weatherization assistance can be used as reference document by 
real estate agents, appraisers, and other professionals during the home 
sale process.
    2. The DOE Residential Building Integration Program, working 
together with the Office of Weatherization and Intergovernmental 
Programs should promote the use of smart home technologies in 
weatherization as a way of reducing program costs, streamlining EM&V, 
and providing real-time feedback on performance to weatherization 
contractors and program participants. Data from smart home devices can 
be used to support traditional EM&V, reducing the costs of evaluation 
and providing real-time or near real-time feedback to contractors, 
programs, and program participants on performance. Programs can then 
use this information to target resources to high energy users. 
Contractors can use this information to better understand the results 
of their work and communicate to customers the value of weatherization.
    The DOE Residential Building Integration Program, working together 
with the Office of Weatherization and Intergovernmental Programs and 
the Office of Electricity Delivery and Energy Reliability, should 
consider establishing a pilot program in FY 2018 and FY2019 in multiple 
states to test new models for streamlining and maximizing resources. 
The pilot would aim to test auto-M&V41 and utilize home energy 
management devices, such as smart thermostats and smart meters that are 
enabled to provide near real-time data to programs to demonstrate if a 
project was successfully completed. By utilizing an auto-M&V system, 
the pilot would test the current 100% quality control currently used by 
WAP in an effort to reduce both costs to the program and burden on the 
contractors and homeowners.
    3. The DOE Office of Weatherization and Intergovernmental Programs 
should work to ensure that training and technical assistance is offered 
to all contractors that make a commitment to work in the WAP program. 
The training should be consistent with industry best practices. In 
addition, the WAP provider should consider a stipend for private sector 
contractors to equalize the time-cost of participation in training.
    4. The DOE Residential Building Integration Program, working with 
Department of Commerce's Small Business Administration, should work to 
advance small business loans to states that are focused on energy 
efficiency contracting and training to complement the WAP programs.
    5. In FY2017 and FY2018, there should be a series of national 
dialogues among private contractors and members of the Weatherization 
network for the purpose of developing a better understanding of WAP 
programs by contractors, and identifying best practices and shared 
interests between the two groups that can become the foundation to 
improve the alignment of residential energy efficiency programs. This 
dialogue should take place in connection with existing national or 
regional conferences where contractors and members of the WAP network 
will be in attendance (to avoid unnecessary costs).
    6. The DOE Office of Weatherization and Intergovernmental programs 
should be authorized to streamline the process for approving energy 
efficiency measures for inclusion in the Weatherization Assistance 
Program to advance innovative pilot programs and quickly approve 
adoption of new technologies for the benefit of low-income clients.

                        Questions for the Record

                             James Rutland

                               President

                            Lowder New Homes

           On behalf of National Association of Home Builders

                      the honorable garret graves
1. Considering capital stock rollover rate, if the U.S. adopted net-
        zero building codes today, how long would it take for all homes 
        in the U.S. to be built to today's standards?
    There are roughly 137 million homes in the United States. While 
some are built to achieve net zero, the overwhelming majority currently 
are not. To get all the homes in the U.S. to net zero would be a 
daunting task given the need to not only accommodate and rehouse 
existing families, but to also provide new housing to newly-formed 
households. This challenge would be further exacerbated by the current 
low rate of production and slow replacement rate. Finally, the funding 
needed to finance the increased up-front costs associated with zero net 
energy would make such an undertaking effectively prohibitive.
    While there are no statistics that indicate how long it would take 
to replace the existing housing stock, inferences can be made. 
According to NAHB's forecast, 250,000 single-family starts per year are 
currently built to replace older homes. According to the latest 
American Community Survey tables from the Census Bureau (for calendar 
year 2017), there are slightly under 93 million single-family homes in 
the U.S. If all single-family homes were built to a net-zero standard 
going forward, and if the rate of 250,000 per year remains constant 
(which is unlikely; for one thing, building to a net-zero standard 
would likely increase costs and slow down housing production & 
replacement), it would take just over 370 years to achieve a 100 
percent net-zero stock of single-family homes in the U.S. The attached 
article provides additional detail about actual replacement statistics.
2. How does residents' behavior act as a barrier to the builder's 
        taking the opportunity to make improvements in the structural 
        envelope of a building to enhance its energy efficiency?
    Builders can implement a host of techniques and install numerous 
products to improve the energy efficiency of the homes they build. Just 
because a home is built well, does not mean it will perform well. 
Predicted energy savings are based on idealized occupant behavior. The 
habits of real people and families can vary dramatically from these 
hypothetical conditions. The best of intentions to save energy can 
quickly be negated when occupants are not conforming to the anticipated 
behavior. For example, seemingly trivial things such as opening 
windows, setting thermostats significantly above/below set points, 
operating humidifiers, using a large number of electric devices (plug 
loads), etc. can significantly impact overall energy savings. In 
addition, not only can energy efficient designs be more sensitive to 
occupant behavior, but the impacts of that behavior can also impact 
other performance attributes of the home.
    Regarding building envelopes, the focus should be on much needed 
innovation in cost-effective window technologies. Further, increases in 
requirements for opaque assemblies (i.e., structural envelope) will 
come at substantial costs with little benefit in energy savings. The 
levels of insulation and air sealing for opaque assemblies required in 
the latest model energy codes have already past the inflection point 
where the upfront cost outweighs the long-term benefit.
3. Mr. Rutland, in your testimony you noted that new building codes 
        often reflect national averages that aren't always true for 
        local conditions. Can you give some examples of how attempts to 
        use building standards that are good for California or 
        Massachusetts can do more harm than good for a home built in, 
        say, Alabama?
    The model building codes are meant to be a starting point for the 
state and local governments to use when developing their building codes 
and are intended to be amended to fit state and local conditions. But 
because they are created to be generally applicable, they can over or 
understate risks and, hence, include provisions that may be 
inapplicable, unrealistic or unnecessary for certain areas. For 
example, the hazard maps for wind, snow, and earthquakes in model 
building codes and national standards incorporate a variety of modeling 
assumptions and simplifications that enable the maps to be generated on 
a national scale. As such, they can overstate hazards in certain areas 
of the country.
    A good example is the risk of earthquakes in the Central and 
Eastern US, where the defining events in Memphis (1811-1812) and 
Charleston (1886) happened before seismographs and other accurate 
methods of measuring earthquake magnitudes existed. Absent real data, 
the magnitude of these events that is assumed in the modeling that 
generates the modern seismic hazard maps is conservatively estimated. 
Because the modeling process itself adds more conservatism since the 
mapped ground motions are intended to represent an event with a low 
probability of being exceeded, more structures are drawn into the risk 
area and, hence, must comply with additional code requirements. This 
raises the cost of construction and harms housing affordability by 
forcing homes to be over-designed for events that are extremely 
unlikely to occur over the life of a home in those areas. Similar 
challenges can be faced when addressing risks for flooding and other 
hazards, as well as for certain water and energy efficiency features, 
among others.
4. What are some of the biggest hurdles states face in adopting and 
        implementing newer building codes?
    There are four major hurdles that states may encounter when 
adopting new building codes, and especially when attempting to update 
to every new edition of the model codes:
           Lengthy and Varied Code Adoption Processes. For 
        states and local jurisdictions, adopting building codes and 
        standards typically requires following a legislative or 
        rulemaking process, including posting of notices, holding a 
        legislative hearing, or hosting building code council meetings. 
        In some states, the codes process is legislatively scheduled to 
        only happen every other year and in many instances, the code 
        adoption and amendment process can take 12 to 18 months or 
        more. Not only are these processes time-consuming, they also 
        come with a cost. Further, personnel are needed to examine and 
        suggest revisions, data is needed to support proposals, and the 
        public must be invited to participate.
           Code Official and Builder Training and Education. 
        Every time a code is adopted, building officials and inspectors 
        need training and education on the changes from the previous 
        edition(s) so they can understand those changes and 
        consistently enforce them. Builders and designers need training 
        too. There can be significant costs for building departments to 
        set up this training or for their staff to attend such 
        training, let alone the cost for the design and construction 
        community.
           Impact of New Codes on New Home Construction. 
        Adopting updated codes can significantly increase cost of 
        construction due to more stringent requirements. Especially in 
        the realm of energy efficiency and mechanical/plumbing/
        electrical, changes, recent editions of the code have had the 
        effect of requiring the use of specific insulation products, 
        window types, ventilation systems or electrical systems in such 
        a way that both raises the cost of construction and provides a 
        financial boon to the manufacturers who angled to get their 
        products into the code. Amidst the current housing 
        affordability crisis, most State and local governments are 
        seeking ways to reduce, not increase, the cost of housing for 
        their constituents.
           Consistency within the Codes and with Other State/
        Local Requirements. Code provisions have a way of changing back 
        and forth from cycle to cycle as new data on hazards, new 
        research, or field experience is brought to the process. Also, 
        because codes are developed in silos (i.e. structural design, 
        energy efficiency, and fire prevention are all covered in 
        different codes and debated by different committees), there are 
        often conflicts between and even within the codes and standards 
        when significant new requirements are introduced. Sometimes it 
        takes a cycle or two to resolve the conflicts such that one 
        aspect of building performance is not negatively impacted by 
        changes in another aspect of construction. For example, the 
        upcoming 2021 International Residential Code has finally 
        incorporated changes to address moisture and durability issues 
        created by significant increases in insulation levels and 
        building air tightness required by the 2012 energy codes.
          Similarly, given the number of statutes, standards, codes, 
        ordinances and other requirements imposed at the state and 
        local levels, there is a need to ensure that any new code or 
        code provision is consistent or at least compatible with the 
        regulations that are already on the books. Because many of the 
        codes overlap with zoning, stormwater, and other mandates, 
        completing such a review can be significant.
5. Could you explain the change in cost to construct a fossil-free 
        building? In your opinion, would most homeowners be able to 
        afford those upgrades?
    A building that uses near-zero or zero fossil fuel resources to 
operate would involve a combination of multiple modifications requiring 
detailed coordination at the design and construction phases. Many of 
these technologies have not been adopted by the market and require 
further development and evaluation before mainstream implementation is 
possible. Unless the market is given time to absorb these innovations 
at a reasonable pace, the outcomes could be counter-productive, leading 
to substandard performance and potentially public's rejection of these 
technologies. Moreover, the industry and the market have not yet 
determined the optimum balance of technologies that would achieve 
fossil-free or near-free solutions. Although various combinations of 
future technologies can be envisioned, they would vary greatly by 
climate and market.
    Unlike LED lights that have become ubiquitous, most building 
innovations that would enable fossil-free living are not one-for-one 
substitutes where the older version gets simply replaced with a next-
generation gadget. Instead, this type of change would impact the entire 
building system, which would require a ``ground-up'' re-envisioning of 
the design and building process and the operation/occupancy. Any such 
modification would come at a significant premium that would include 
both the price of the products/systems/material and the added costs of 
installation. The increased costs will lead to significant impact on 
the price of the home that many home buyers will not be able to afford. 
This price increase will particularly impact the home buyers in the 
affordable and move-up segments of the market.
    The other side of the fossil-free living equation is where the 
building's power comes from. Even for buildings with some on-site 
generation, the grid-supplied power will remain an integral element of 
the building's function. Fossil fuels remain a large source of 
electricity generation in the country. As long as the electricity mix 
produced at the utility level includes a portion of fossil fuel 
generation, the building will not be a fossil-fuel-free building.
    Electricity generation by source is shown below.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    

    For more information on NAHB's economic report on older homes: 
http://eyeonhousing.org/2019/01/more-homes-needed-to-replace-older-
stock/.

                        Questions for the Record

                             Khalil Shahyd

                         Senior Policy Advocate

              Healthy People/Thriving Communities Program

                   Natural Resources Defense Council

                       the honorable kathy castor
1. In your testimony, you mentioned that low-income households and 
        communities of color often have higher energy burdens than 
        average families, frequently caused by poor maintenance of 
        older, less efficient buildings. What are the main challenges 
        preventing energy efficiency investments in these communities? 
        How can the Federal government help address these challenges?
    Of the more than 25 million households that earn $25,000 or less, 
roughly two-thirds are renters (including 1.2 million families in 
public housing) and one-third are owners. Over 30% of the U.S. 
population and over 25% of U.S. households live in multifamily 
buildings. Yet when we talk about possible energy efficiency 
improvements in the residential sector, these households are rarely 
considered with resources and program capacity devoted to middle- and 
upper-income single-family homes.
    However, there is an enormous opportunity in making energy 
efficiency accessible to low income families. A Federal investment of 
$5 billion a year over 10 years could achieve 25 percent to 40 percent 
energy savings in up to 25 million residential units, cut up to 50 
million tons of CO2 emissions and create hundreds of 
thousands of green jobs annually when fully implemented.
    These households still face multiple barriers to accessing 
efficiency services, which can be grouped into four (4) primary 
categories; Economic, Social, Health and Safety, and Policy barriers.
    I. Economic barriers include:
           High upfront costs, creditworthiness requirements. 
        the largest barrier to retrofitting multifamily arises from the 
        absence of capital for the upfront cost of an energy retrofit. 
        Federal policy arbitrarily separates energy improvements from 
        capital improvements in both public and assisted housing, 
        missing an opportunity to integrate energy use into capital 
        reinvestment planning and analysis HUD buildings undergo for 
        refinancing.
           Split incentives: Renters face a unique barrier by 
        fact that they don't own the dwelling or unit they reside in. 
        In typical, unsubsidized multifamily housing with individual 
        meters, resident interest in lower utility costs is often 
        thwarted by owner disinterest in making energy efficiency 
        investments that can't be directly recouped through savings. 
        Split incentives exacerbate the upfront capital problem by 
        placing the burden on the tenant, or relying on the owner who 
        receives little of the savings benefit for making the energy 
        investments.
           Small and medium sized owners need special 
        assistance: Many retrofit programs that target rental housing 
        aren't suitable to small and medium sized owners who don't own 
        a great deal or large scale of properties. These owners tend to 
        be individual or private owners with very limited capital to 
        meet upfront cost.
    II. Social barriers:
           Communication and trust: Implementing a successful 
        energy efficiency program in rental housing requires a great 
        deal of information sharing between tenants, building owners 
        and program administrators. Lack of trust between tenants and 
        building owners or managers can reduce the likelihood of 
        participation.
           Scheduling difficulties: completing an energy 
        efficiency retrofit can cause a disruption to the lives of the 
        tenants even a disruption of their occupancy in the unit until 
        repairs are completed. Trust is required so they know they will 
        be allowed to stay and return, to their home without a 
        subsequent increase in cost to them, straining already 
        stretched household budgets.
           Language and literacy barriers: Increasingly 
        language and literacy issues are becoming factors making the 
        deployment of services difficult, in addition to immigration 
        status which may keep some households from applying for any 
        formal services or supports.
    III. Health and safety barriers:
           Age of housing and deferred maintenance: 64% of all 
        U.S. housing was built before 1980, and many of the homes 
        relied upon by low income households for housing have not 
        received regular maintenance or repair. The combination of age 
        and deferred maintenance of the housing stock increases the 
        cost of providing basic energy efficiency retrofits when those 
        cost are expected to be recouped through savings. This is 
        especially true if a home or building is in need of roof 
        repair. A compromised roof would nullify many of the benefits 
        of the energy retrofit, and when the cost are measured against 
        the potential savings of a project, a leaky roof makes the home 
        or apartment ineligible for energy efficiency financing.
           Local climate and building materials: Deferred 
        maintenance combined with local climatic and building material 
        quality can add additional burdens to affordable housing. Many 
        low-income homes in humid climates face issues such as mold 
        that create health hazards that would be exacerbated by energy 
        retrofits that ``lock-in'' mold causing material in a highly 
        sealed building envelope. Similarly, older homes built with 
        asbestos, lead paint and pipes can also create health hazards 
        that would increase unless addressed in conjunction with an 
        energy retrofit. However, most efficiency programs offer very 
        little support if any for incorporating these areas into the 
        retrofit portfolio. Nationwide, up to 15 percent of homes may 
        be unable to access weatherization services due to these and 
        other health and safety issues.
    IV. Policy barriers:
           HUD Capital restrictions: Federal policy arbitrarily 
        separates energy improvements from capital improvements in both 
        public and assisted housing, missing an opportunity to 
        integrate energy use into capital reinvestment planning and 
        analysis HUD buildings undergo for refinancing.
           Energy benchmarking: is a critical requirement for 
        understanding energy usage and knowing where potential savings 
        can be gained. However, without a national benchmarking 
        strategy, service providers are reliant on local governments to 
        implement benchmarking ordinances that vary in quality and 
        scope of data collected.
           Cost/Benefit testing: Utilities are increasingly 
        relied upon to provide financing for energy efficiency services 
        as a customer benefit to rate payers for utility services. Low 
        income families pay into the utility rate system often at a 
        higher rate per square foot than their higher income 
        counterparts. However, they rarely receive an adequate share of 
        utility rate-payer financed efficiency investments in return. 
        This is often due to cost/benefit testing requirements, 
        regulated at the state level, requiring utility programs to 
        meet a cost/benefit threshold set by the regulator. Due to the 
        deferred maintenance of many affordable housing units and other 
        cost issues, low income housing often has difficulty meeting 
        that threshold making those properties effectively ineligible 
        for services.
           Fragmentation: At the federal level, energy 
        efficiency dollars and programs are administered by HUD, DOE, 
        HHS, Treasury who must then coordinate with a myriad of state 
        and local housing and energy financing agencies. These 
        disparate public agencies are charged with governing affordable 
        housing operations and capital improvements on the one hand, 
        and energy efficiency, tax, and utility policy on the other. 
        Fragmentation, influences program delivery for example by 
        requiring ``door-to-door'' income verification of DOE 
        weatherization assistance program eligibility. This cumbersome 
        step, can often discourage program services to be applied to 
        multifamily properties were many low-income families live. 
        Fragmentation also exacerbates shortages and bottlenecks in 
        workforce training and employment.
    The primary federal programs to increase energy efficiency in homes 
for very low-income people are a patchwork of small, poorly funded and 
in some cases, poorly designed initiatives. Within each, however, are 
elements that could be improved and expanded with potential for greater 
impact.
    The primary programs that fund or administer energy efficiency at 
the federal level are the DOE Weatherization Assistance Program; EPA 
Energy Star Programs, HUD Energy Performance Contracting, and LIHEAP 
Emergency Energy Assistance program which states can apply a portion of 
its allotted annual LIHEAP budget (up to 15%) to address high energy 
burdens through increased efficiency.
    The Federal government can improve energy efficiency services by:
           Increasing funding levels of Federal energy 
        efficiency programs to meet certain efficiency benchmarks and 
        goals over time.
           Create more coordination among various Federal 
        programs, in particular in the areas of program eligibility, 
        benchmarking and savings verification.
           Create a national standard for utility cost/benefit 
        testing that properly values societal and non-energy benefits 
        of energy retrofits for low income households.
           Mandate the inclusion of energy improvements as an 
        aspect of capital refinancing plans under HUD
           Create national benchmarking database and require 
        rental units to make available energy usage data that can be 
        utilized by potential tenants to determine housing options. 
        This would create an incentive for building owners to 
        investment in improving energy efficiency.
2. In addition to reducing carbon emissions, what are some of the 
        public health benefits of energy-efficiency upgrades of 
        multifamily housing?
    Achieving the health benefits of energy efficiency updates requires 
attention to the various social determinants of health and how housing 
quality drives many of those outcomes. There is an overall decline in 
life expectancies in the 21st century despite the increased spending on 
medical care and it is likely that the inability of the nation to 
address physical and social determinants of health have contributed to 
this problem. Efficiency provides a unique opportunity to improve those 
outcomes for individual families and for the population at large.
    Social determinants of health (SDOH) are defined by World Health 
Organization (WHO) and by Healthy People 2020 as the conditions in the 
environments in which people are born, live, learn, work, play, 
worship, and age that affect a wide range of health, functioning, and 
quality-of-life outcomes and risks.
    Social and economic factors, such as affordability, restrict 
housing and neighborhood options for low-income households often giving 
them few options but to reside near or in proximity to hazardous sites 
as these locations are often the housing of last resort. In addition, 
energy insecurity that leads to utility shutoffs leaving families 
(particularly the elderly and young) vulnerable to weather conditions 
while forces tradeoffs in meeting basic needs such as housing, food and 
health care.
    Energy efficiency can also reduce exposure to indoor and outdoor 
pollutants and particulate matter that lead to respiratory illnesses, 
absences from school or work and longer term health conditions that 
accumulate over time.
    Better Indoor Air Quality: leads to reduced concentration of poly-
cyclical aromatic hydrocarbons (PAH), hydrocarbons, aldehydes, carbon 
monoxide (CO), sulfur dioxide (SO2), nitrogen oxides (NOx), and 
particulate matter (PM) in the home
    Weatherization and Efficiency Can: Lower Incidence of CVD related 
Emergency Room visits, Reverse adverse respiratory symptoms such as 
COPD, Eliminate CO poisoning hospitalization and death, Reduce coronary 
heart disease deaths
3. In your testimony, you describe some of the unique challenges faced 
        by residents of rural areas. Many of these communities depend 
        on non-profit electric cooperatives for their power. How can 
        Congress make sure that rural communities are able to access 
        energy-efficiency upgrades?
    Rural communities face unique challenges for maintaining and 
upgrading homes and residential buildings. Particularly those areas 
serviced by smaller utility coops who may not be able to finance 
efficiency programs internally.
    Federal policies that can help rural communities include expanding 
the USDA Rural Energy Savings Program. This program ``provides rural 
electric cooperatives and other rural utilities with zero-percent loans 
to launch or expand energy efficiency financing programs for their 
members. Beneficial electrification and renewable energy projects are 
also eligible.''
    In addition to ensuring financing for existing federal programs, 
the Federal government can support efforts that increase partnerships 
with local community based and regional organizations that support 
enhanced efficiency programs. These organizations can reduced cost of 
program implementation through outreach, program marketing, workforce 
training and needs assessments at the community level.
    Couple financial resources with technical assistance to make 
efficiency improvements. Help customers conduct energy audits, identify 
energy efficiency measures, and work with qualified contractors to 
conduct selected improvements.
    Particular emphasis in rural communities needs to be to scale up 
resources devoted to retrofitting or replacing manufactured homes, as 
these housing types are overly represented in rural communities.
    Require and support better program evaluation of small electric 
coop programs and services to optimize resources and results. Many 
rural co-ops have worked with partners to evaluate their programs. For 
example, EEtility's EM&V of the PAYS on-bill tariff programs offered by 
Ouachita Electric and Roanoke Electric provides data on the 
effectiveness of these programs. Similarly, Delta Montrose Electric 
Association (DMEA), Midwest Energy, and the city of Springfield, 
Missouri, all hired evaluators to review their programs. Additionally, 
in 2016, Cooperative Energy, a G&T co-op in Mississippi, collaborated 
with Advanced Energy (AE) to develop a two-year Residential Retrofit 
Pilot Study examining the impact of three types of retrofit measures.
4. In your testimony, you outlined several policies that could reduce 
        emissions in the building sector. In your opinion, which 
        policies would be most impactful and should be prioritized?
    To avert the worst impacts of climate change, our policy must 
ensure both the reduction of emissions that cause climate change and 
also support people's capacity to adapt and thrive in a post carbon 
world. In order to act on climate change while also addressing the 
threat of rising inequality, we must accelerate action on all fronts 
and in particular create a more supportive policy environment for 
affordable housing and accelerate residential energy efficiency. We 
need Congressional action to lead our nation in its response to climate 
change and to realize the enormous benefits of these investments. 
Through decisive action, Congressional leaders can address the dual 
crisis of affordable housing and climate change, while producing 
hundreds of thousands of clean jobs and alleviating the negative health 
impacts of indoor and outdoor air pollution.
    Addressing these core policy areas will enable affordable housing 
and low-income families to be engaged as partners in actions that 
contribute to meaningful emissions reductions by reducing household 
energy use and demand.
    The Federal government should endorse and establish a national 
Energy Efficiency Resource Standard that would create a wider incentive 
for reducing energy use in buildings and homes.
    Key policies congress should support toward these outcomes that 
will influence the affordable housing sector most are;
    Preserving Affordable Housing
           Expand the National Housing Trust Fund from $367m 
        now to $3.5 billion/year. Affordable housing is in short supply 
        across the country, and this is one of the newer sources of 
        funding to improve it. Ensure that energy use assessments and 
        benchmarking are incorporated into refinance requirements. The 
        support can be used to reduce energy use and increase 
        resiliency of housing, depending on state allocation plan 
        requirements. But the need vastly outstrips the funding 
        currently available.
           Support and utilize S. 1703 the Affordable Housing 
        Credit Improvement Act (AHCIA) and S. 1288 the Clean Energy for 
        America Act to enable Low Income Housing Tax Credit (LIHTC) 
        properties to take advantage of tax incentives available for 
        energy efficiency investments. The LIHTC is the largest and 
        most successful tool for creating and preserving affordable 
        housing. The Clean Energy for America Act amends the Internal 
        Revenue Code of 1986 to provide tax incentives for increased 
        efficiency investments in retrofitting existing and new 
        residential and commercial buildings.
           Support H.R. 4307, the Build More Housing Near 
        Transit Act. The legislation would require major transit 
        projects using Federal Transit Administration (FTA) New Starts 
        capital investment grant funding to incorporate an evaluation 
        of housing development near transit station areas as a part of 
        the application process.
    Lowering Household Energy Cost
           Support reauthorization of S. 983, the 
        Weatherization Enhancement and Local Energy Efficiency 
        Investment and Accountability Act. This bill reauthorizes the 
        DOE WAP, creates a new innovation fund for special projects.
           Support S. 185 the Investing in State Energy Act. 
        This bill would require that the Department of Energy (DOE) 
        distribute funding appropriated for WAP and SEP by Congress to 
        implementing agencies within 60 days.
           Support the Green New Deal for Public Housing Act. 
        The bill would create seven new grant programs that public 
        housing agencies (PHAs), tribes or tribally designated housing 
        entities, and Native Hawaiian housing entities can apply for 
        under a single application. Some grants focus on workforce 
        development while others address building and unit upgrades 
        such has energy-efficient windows, improved insulation, pipe 
        replacement to improve water quality, and new appliances. Grant 
        programs would also facilitate community energy generation in 
        public housing to make public housing energy self-sufficient 
        and empower residents to vote to determine how to utilize any 
        profits.
    Improving Indoor Air Quality and Health
           Support H.R. 3590, the Environmental Justice and 
        Civil Rights Restoration and Enforcement Act. This bill 
        reinforces that Federal agencies are to comply and be held 
        accountable to the Title VI Civil Rights Act and that 
        disparities and outcomes shown to have disparate impact must be 
        address through Environmental Justice actions. This bill gives 
        communities the legal tools to hold Federal agencies including 
        the Environmental Protection Agency (EPA) accountable to 
        unequal burdens.
           Support H.R. 3923, the Environmental Justice Act. 
        Requires Federal agencies to address environmental justice, to 
        require consideration of cumulative impacts in certain 
        permitting decisions, and for other purposes.
    Creation Jobs with Career Opportunities for Workers
           Support H.R. 4061, the Blue Collar and Green Collar 
        Jobs Development Act. Directs the Secretary of Energy to 
        establish and carry out a comprehensive, nationwide, energy-
        related industries jobs program.
           Support H.R. 4148, the Green Jobs and Opportunity 
        Act. Requires the Secretary of Labor, in consultation with the 
        Secretary of Energy and Secretary of Education, to submit a 
        report on current and future trends and shortages in the clean 
        energy technology industry to achieve a clean energy economy, 
        and to provide grants to establish and enhance training 
        programs for any occupation or field of work for which a 
        shortage is identified.

                        Questions for the Record

                               Roy Wright

                               President

            Insurance Institute for Business and Home Safety

                       the honorable kathy castor
1. IBHS researches and tests building standards, installation 
        practices, and the quality of material found across the country 
        and determines how variations affect the ability of a structure 
        to withstand a variety of hazards. Building codes play an 
        important role in how this type of research is translated in 
        meaningful ways across our communities. Can you help the 
        Committee better understand the role of building codes related 
        to resilient construction practices and how your research can 
        lead to stronger, sustainable, and resilient homes and 
        businesses?
    IBHS strongly supports the statewide adoption of building codes and 
standards, strong local enforcement of the codes, and training and 
licensing of building officials, builders and contractors. It is 
important to understand that building codes were developed first and 
foremost for the purpose of life safety--that is, to ensure safe 
electrical wiring and gas lines, basic structural integrity, and to 
reduce internal fire hazards. However, damage reduction that results 
from the adoption and enforcement of building codes helps to keep 
people in their homes and businesses following a natural or man-made 
disaster, reduces the need for public and private disaster aid, and 
preserves natural resources and the built environment.
    The importance of strong, well-enforced building codes was clearly 
demonstrated in 2017. Over a two-month period from August through late 
September, three devastating hurricanes (Harvey, Irma, and Maria) each 
caused more than $1 billion in damages, and collectively affected 25 
million Americans, or almost 8 percent of the U.S. population, 
according to the Federal Emergency Management Agency (FEMA). Hurricane 
Irma, in particular, provided a real-world test of the strong statewide 
building code now in Florida, with homes built to modern Florida 
building codes faring much better than those built before major code 
changes were implemented. In other areas of the country, like 
California, building codes focus on the threat of earthquakes and 
wildfires. Unfortunately, many states have not prioritized adopting 
modern codes or allow local jurisdictions to ``opt-out'' of certain 
sections of the code. This piecemeal approach among states and 
jurisdictions can lead to compromised building safety standards, 
varying enforcement regimes, and unpredictable permitting processes. 
When entire communities utilize a common set of base rules for 
construction, it leads to safer buildings and more predicable 
construction practices. Critical to ensuring building codes function 
properly is proper enforcement as a building code is only effective if 
there is enforcement and inspection to verify that construction is 
completed according to the code requirements.
    Building codes provide benefits beyond keeping people and property 
safe. Studies have found that investing in stronger building can save 
the homeowner and taxpayer significantly during a hazard. Recent 
research shows that improvements to the Florida building code have 
reduced windstorm losses by up to 72% and that for every $1 of 
additional construction costs $6 in losses were saved.
    While much of IBHS' work focuses on preventing avoidable damage 
before it occurs, it is equally important to build back better. 
Congress should demand that communities receiving grant or programmatic 
assistance for pre-disaster mitigation or those in the recovery process 
rebuild in smarter, stronger, and sustainable ways. At a minimum, this 
means states should have a up to date, statewide, and strongly enforced 
building codes. In areas of the state where known vulnerabilities 
exist, congressional funds should demand even more advanced building 
standards.
2. Can you comment on how energy-efficient and resilient building 
        practices work hand-in-hand?
    Energy efficiency and resilient construction practices can work 
together to build clean, efficient, and strong homes. One of the most 
visible examples of the nexus between energy efficiency and resilience 
is use of an impact resistant window, which can provide protection from 
flying debris in areas that are vulnerable to winds while 
simultaneously providing excellent thermal insulation, reducing energy 
costs and consumption. Similar insulation benefits can be realized with 
a spray foam sealed roof deck, which have high R-values and can provide 
an extra water barrier when the roof cover fails.
    Perhaps the greatest return on energy efficiency value realized 
when building strong homes is their long-lasting durability. The vast 
energy consumed by the manufacturing and transportation of building new 
homes--and disposal of debris following a storm--can be greatly reduced 
by taking small steps to prevent avoidable damage.
3. In your testimony, you discuss two pieces of tax legislation: one 
        for state-run grant programs and the other for home and 
        business owners that undertake mitigation activities. Could you 
        tell us more about these bills and how they would help 
        adaptation?
    First of all, I would like to congratulate Congress for taking bold 
action last year by advancing two of the most significant pieces of 
disaster mitigation legislation in decades: The Bipartisan Budget Act 
of 2018 and the Disaster Recovery Reform Act of 2018. While these laws 
represent a new era in disaster mitigation policy at the federal level, 
there are additional steps Congress can take to assist homeowners and 
small businessowners with disaster preparedness. One idea is to remove 
the tax penalty for individuals and businesses that benefit from state-
based catastrophe-loss mitigation programs.
    H.R. 2053 the ``Catastrophe-Loss-Mitigation Incentive and Tax 
Parity Act of 2019'' would eliminate tax lability for amounts received 
as part of certain state-funded grant programs. Several states sponsor 
these types of successful mitigation programs, including the California 
Bolt + Brace program for strengthening buildings located in earthquake 
prone areas, and the Strengthen Alabama Homes program, which provides 
grants funds to upgrade to a FORTIFIED Roof. We know it is 
unsustainable for the federal government to be the sole leaders on 
mitigation.
    Where states are contributing their own funds, it is important for 
the federal government to recognize and reward those actions, not 
penalize them. Similarly, on the on the individual side, bipartisan 
legislation pending in both the House and Senate, known as the SHELTER 
Act, would provide up to a 25% tax credit for eligible expenses paid by 
individuals and businesses for purchases that help reduce potential 
damage from hurricanes, flooding, and other forms of natural disaster. 
These types of proposals empower and reward states and individuals who 
take action into their own hands--ultimately contributing to overall 
community resilience.
4. Congress has allocated a lot of money to disaster recovery through 
        HUD CDBG-DR. Recently another $6.8 billion was made available 
        for mitigation in several states, including Florida, Texas, 
        California, Georgia, and Louisiana. How can the Federal 
        government ensure that states are using disaster recovery funds 
        to rebuild in ways that reduce risks from future disasters?
    Congress should require communities receiving grant or programmatic 
assistance for pre-disaster mitigation to rebuild in smarter, stronger, 
and sustainable ways. At a minimum, this means states should have up-
to-date, statewide, and strongly enforced building codes. In areas of 
the state where known vulnerabilities exist, congressional funds should 
demand even more advanced building standards. Specifically, Congress 
should urge the use of the FORTIFIED Home standard when appropriating 
CDBG-DR or MIT funds for new homes.
    Habitat for Humanity created the Habitat Strong program, which 
mirrors the FORTIFIED Home standards and provides low-to-moderate 
income families with resilient and affordable housing. Recently, five 
Habitat Strong homes in Panama City, Florida stood strong against the 
fierce winds of Hurricane Michael in 2018--the only reported damage to 
any of the homes being a single piece of loose siding.
    As mentioned above, the IBHS FORTIFIED program has shown its 
effectiveness with the five Habitat Strong homes in Panama City, 
Florida. We also saw success of the FORTIFIED building standard in 
North Carolina following Hurricane Dorian. Hurricane Dorian threatened 
close to 1,000 FORTIFIED homes in coastal North Carolina in August 
2019. Many of these homes were FORTIFIED by grants made available from 
the North Carolina Insurance Underwriters Association (NCIUA). Dorian 
had sustained winds that were as high as 90 mph along the barrier 
islands, including the Outer Banks, where most of North Carolina 
FORTIFIED designations are located. NCIUA has received just five roof-
related claims from their 400+ insureds with FORTIFIED roofs, only two 
of which reported water intrusion. FORTIFIED Roof kept the water out 
for 99.5% of homeowners who have invested in a stronger, sealed roof. 
Federal programs that fund housing should take a cue from this example 
and ensure taxpayer investments are protected.
    We urge Congress to incentivize the adoption and use of higher 
building standards, such as FORTIFIED Home, when federal funds are at 
stake.
Wildfire
    Recently, IBHS joined ICC to urge FEMA to require the use of the 
International Wildland Urban Interface Code as a Minimum Standard for 
disaster loans and grants. Wildfires have destroyed more than 35,000 
structures within the past decade. Our comments state, in part, ``The 
wildland urban interface (WUI) is an area of particular wildfire risk, 
and one-third of all U.S. homes are now located there. One study found 
that the WUI has increased from 1990 to 2010, now affecting 43.4 
million homes (a 41% increase), and covering 770,000 km (a 33% 
increase), making it the fastest growing land use type in the 
conterminous U.S. Yet despite the seriousness of this hazard, FEMA's 
Policy does not address wildfire resilience.'' Congress should continue 
its oversight role of FEMA to ensure these types of policy changes are 
made at FEMA.
5. In your testimony, you mentioned Habitat for Humanity and said 
        several of their strong homes did a great job holding up during 
        Hurricane Michael. It's great to hear that programs like this 
        are protecting vulnerable populations--the ones who can least 
        afford to be displaced from their home or job after a disaster. 
        Could you tell us more about the Habitat Strong program? How 
        can the Federal government incentivize more innovative 
        solutions to help vulnerable populations become more resilient?
    The Habitat Strong program was developed by Habitat for Humanity 
International (HFHI) to provide resources and recommendations for 
weather-resilient construction to Habitat affiliates across the 
country, with the goal of reducing damage to homes owned by the 
families served by Habitat being able to return to their normal lives 
as quickly as possible after a disaster. One of the primary 
recommendations to affiliates nationally has been the IBHS FORTIFIED 
standards. Working with funding partners, including many IBHS member 
companies, HFHI has been able to provide a number of grants to 
affiliates for resilience improvements, specifically for FORTIFIED 
Roof, Silver or Gold designations. There are some affiliates that have 
not pursued a designation, but have begun implementing the standards, 
as was the case in the homes that faired so well in Hurricane Michael.
    IBHS would recommend that all homes built and all roofs replaced 
with federal dollars meet the standards set forth in FEMA's Wind 
Retrofit Guide. At a minimum, we would suggest that HUD encourage its 
grantees to do this, in the same manner it encourages grantees to build 
and retrofit to Energy Star standards.
                      the honorable garret graves
1. You mention in your testimony the successes seen from programs 
        instituted in Alabama. Was this program directed by any mandate 
        at the federal level?
    There was no federal mandate or federal dollars for the programs 
instituted in Alabama. The successes here were realized from a 
multifaceted approach, including a suite of state legislation providing 
incentives and setting FORTIFIED as the resilience standards for the 
state, the establishment of a grant program to retrofit existing homes, 
robust coastal codes and a grassroots education effort that helped to 
create a culture of resilience and facilitated the widespread adoption 
of the FORTIFIED program for both new construction and reroofing.

                            References Page

I. What are the main challenges preventing energy efficiency 
        investments in these communities? How can the Federal 
        government help address these challenges?
    ``Energy Efficiency as a Tool for Preservation of Affordable Rental 
Housing''
    https://www.rand.org/content/dam/rand/pubs/research_reports/RR2200/
RR2293/RAND_RR2293.pdf
    ``Strengthening Energy Efficiency Programs for Low-Income 
Communities''
    https://www.c2es.org/site/assets/uploads/2017/07/strengthening-
energy-efficiency-programs-low-income-communities.pdf
    ``Bringing Home the Benefits of Energy Efficiency to Low-Income 
Households''
    https://community-wealth.org/sites/clone.community-wealth.org/
files/downloads/paper-s-williams08.pdf
    ``Energy Efficiency in Affordable Housing: A Guide to Developing 
and Implementing Greenhouse Gas Reduction Programs''
    https://www.epa.gov/sites/production/files/2015-08/documents/
affordable_housing.pdf
    ``Less Is More: Transforming Low-Income Communities Through Energy 
Efficiency''
    https://www.habitat.org/sites/default/files/2015-habitat-for-
humanity-shelter-report.pdf
    ``U.S. Multifamily Energy Efficiency Potential by 2020''
    https://sahlln.energyefficiencyforall.org/sites/default/files/
Final_MF_EE_Potential_Report_Oct_2009_v2.pdf
    ``Apartment Hunters: Programs Searching for Energy Savings in 
Multifamily Buildings''
    https://assets.ctfassets.net/ntcn17ss1ow9/2SDF7iesWCJ3WaqziVqI0j/
b419917f34a58d83ae78dbbb7c88e0be/e13n.pdf
    ``Scaling the Nationwide Energy Retrofit of Affordable Multifamily 
Housing: Innovations and Policy Recommendations''
    https://www.urban.org/sites/default/files/publication/26846/
1001482-Scaling-the-Nationwide-Energy-Retrofit-of-Affordable-
Multifamily-Housing-Innovations-and-Policy-Recommendations.PDF
II. In addition to reducing carbon emissions, what are some of the 
        public health benefits of energy-efficiency upgrades of 
        multifamily housing?
    ``A New Prescription for Healthy Building Retrofits''
    https://www.nrdc.org/experts/michele-knab-hasson/new-prescription-
healthy-building-retrofits
    ``Achieving Health and Social Equity through Housing: Understanding 
the Impact of Non-Energy Benefits in the United States''
    https://www.energyefficiencyforall.org/resources/achieving-health-
and-social-equity-through-housing-understanding-the-impact/
    ``Energy Savings Plus Health: Indoor Air Quality Guidelines for 
Multifamily Building Upgrades''
    https://www.energyefficiencyforall.org/resources/energy-savings-
plus-health-indoor-air-quality-guidelines-for-multifamily/
III. In your testimony, you describe some of the unique challenges 
        faced by residents of rural areas. Many of these communities 
        depend on non-profit electric cooperatives for their power. How 
        can Congress make sure that rural communities are able to 
        access energy-efficiency upgrades?
    ``Reducing Up-front Costs for Rural Energy Efficiency Projects''
    https://aceee.org/sites/default/files/rural-upfront-costs.pdf
    ``The USDA Rural Energy Savings Program (RESP) Overview and 
Update''
    https://www.naseo.org/Data/Sites/1/resp-basic-presentation-10-31-
2018-coates.pdf
    ``Bridging the rural efficiency gap: expanding access to energy 
efficiency upgrades in remote and high energy cost communities''
    https://link.springer.com/content/pdf/10.1007%2Fs12053-019-09798-
8.pdf
    ``The High Cost of Energy in Rural America: Household Energy 
Burdens and Opportunities for Energy Efficiency''
    https://www.energyefficiencyforall.org/resources/the-high-cost-of-
energy-in-rural-america-household-energy-burdens-and/

    Ms. Castor. Thank you very much.
    And the hearing is adjourned.
    [Whereupon, at 10:43 a.m., the committee was adjourned.]