400 M Street Apartments

Low Income Housing

The Challenge

An affordable multifamily housing property located in Southeast DC required an energy efficiency upgrade. Built 7 years ago, this building houses low income tenants. The building manager was looking for opportunities to save money without adding additional debt. This property is part of HOPE VI program administered by the US Department of Housing and Urban Development (HUD). Units within the building are individually metered and the tenants’ electricity bills are subsidized through the HUD utility allowance program. Project goals included:

  • Reduce energy costs
  • Improve overall building performance
  • Reduce operating costs

The Solution

PACE financing was especially attractive for this market segment because the property tax assessment repayment mechanism can be accounted for as an operating expense and not debt. Property manager immediately recognized the advantages of PACE. While the initial interest was in solar only, dialogue with DC PACE program staff expanded the scope of improvements to include a number of energy efficiency measures, such as lighting improvements and controls system. The following characteristics of PACE were especially appealing to the property owner:

  • Tax-assessment nature of PACE financing
  • Zero up-front cash investment
  • Immediate positive cash flow
  • Long-term financing

The Details

Property Type

  • Apartment
  • Size 112,000 sq. ft.

Installed Measures

  • Energy use reduction of 15%
  • 37KW solar installation will provide 3.5% of required energy
  • Lighting Improvements and Controls system
  • Project included energy control training for building managers

PACE Financing

  • Amount: $340,000
  • Term: 20 Years
  • Capital Provider: Eagle Bank
  • Annual Net Benefit: $40,000
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