Ryan Kristoff | Director of Grant Programs
Mr. Kristoff grows the organization by securing the funding and partnerships necessary to build new programs, expand to new geographies, and add services to its one-stop shop.
THE 30,000-FOOT VIEW
Unsurprisingly, ICAST’s 2023 has primarily focused on the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL). We have been collaborating with federal agencies such as the U.S. Depts. of Agriculture, Energy, and Housing and Urban Development (USDA, DOE, and HUD), as well as the Environmental Protection Agency (EPA), to help them understand the need for clean energy solutions in multifamily affordable housing (MFAH) and the value of prioritizing this sector. ICAST’s relationships with these agencies predate IRA and BIL by many years, and we hope to assist in streamlining program delivery and optimizing benefits for MFAH.
The big story in 2024 will be funds moving from the federal government into the states and the program planning processes accompanying that. Dollars will be hitting communities at different times throughout the year, and ICAST has been working with state and Tribal governments to develop plans that ensure benefits for underserved populations. Through this process, streamlining and improving coordination of existing program networks and infrastructure will be crucial to effectively utilizing the influx of funding.
DEEP DIVE
IRA and BIL:
· Timing: Broadly speaking, the funds are moving slower than planned. States are already struggling to spend BIL allocations that have already been dispersed, and the federal government keeps pushing back deadlines to release additional funds from IRA. Government bodies at both levels are experiencing growing pains while trying to hire the necessary staff to administer the new programs. Implementation should speed up as agencies increase their staff capacity and more guidance is provided about how each program will be run and how to meet core requirements around Build America Buy America and Justice40.
- The BIL provided $3.2 billion for the Weatherization Assistance Program (WAP), and while these dollars are starting to move, States have only received part of their allocations and will not see the remainder until they can demonstrate progress with their first allotment. Many States are behind on deployment and are concerned about a future Congress potentially retracting the funds.
- Most of the awards to date have been smaller funding amounts that are easier to get out the door, but some larger programs are also progressing. The EPA closed the application period for its $27B Greenhouse Gas Reduction Fund (GGRF), and the awards—to states, nonprofits, tribes, and municipal governments—should be announced early next year. The application period for planning grants under EPA’s Climate Pollution Reduction Grants program came and went earlier this year, and the billions of dollars for implementation will likely start hitting communities in mid-2024 (with this implementation grant funding currently open for competition). The DOE has begun soliciting states’ plans for implementing the Home Energy Rebate Programs. Determining when these dollars will be available is a little more challenging to estimate the timeline, as states have a large window of time to submit their plans, and the DOE has given them significant flexibility with program design.
Key Grant Program Evolutions and Updates:
- Focus on MFAH: More states have been realizing that, by dedicating their WAP funds to MFAH, they can effectively expend their large BIL WAP allocations. There have been challenges getting these MFAH-specific programs set up, however, due to the limited familiarity with multifamily as well as process-related bottlenecks at both federal and state levels. With input from ICAST and other stakeholders, the DOE is working to streamline the MF program approval process. Many states are also learning that multifamily may provide a streamlined and cost-effective opportunity for expending their allocations for efficiency rebates under the DOE’s new Home Energy Rebate Programs. This could potentially open up billions of dollars for MFAH.
- Accessibility: Some agencies and programs are faring better in this area than others. The DOE is generally trying to make its grant program applications more streamlined and reduce application requirements by simplifying the process with certain tools, such as templates. HUD’s Green and Resilient Retrofit Program, however, has primarily attracted larger MFAH owners with the resources (e.g., time, capacity) to apply for the grants. Smaller properties are having a more challenging time working with the program. However, HUD has multiple funding rounds to give these smaller organizations time to participate.
- Justice40: Nearly all IRA grant funding is subject to Justice40 requirements, requiring 40% of the benefits to flow to disadvantaged communities (DAC) that are marginalized, underserved, and overburdened by pollution. Adhering to these requirements includes community benefits planning, community and labor engagement, and working with environmental justice principals. The language and requirements vary somewhat across agencies, but the substance is largely unchanged. (It is worth noting, however, that many states are increasing their program focus on DACs and low-income communities even when not required.)
- Leveraging funding: Federal agencies are working to coordinate their funding programs and, thus, make it simpler to leverage and braid funding from various programs. This process can become exponentially complex as the sources of funds utilized per project increase. So, while braiding is not a new concept, the organizations that attempt it rarely take it to its full potential. IRA and BIL present a unique opportunity to dramatically improve upon existing best practices for this process.
Challenges:
- Inflation: The high and variable inflation rate of the past few years has significantly increased and fluctuated the costs of MFAH development, green rehabilitation, renewable energy, and energy storage projects. This creates difficulty for anyone pursuing these types of projects, but it is especially problematic for grant programs that plan a budget for projects that end up taking a long time to complete due to regulatory issues. In the space between budgeting and construction, costs can increase by up to 30-40%, potentially sinking a retrofit project, solar/storage installation or affordable housing development. Braiding funding, in addition to bridge financing (i.e., taking out a loan repaid with federal incentives when available), can address this issue. Additionally, the resulting “greening” of the properties via beneficial electrification and renewables will increase their efficiency and value.
- Tribal funding: The funding dedicated to Tribes can be disjointed, especially for smaller Tribes without significant capacity. For example, while the GGRF’s Solar for All funding bucket has a carve-out for Tribes, there is no comprehensive plan for ensuring nationwide access. The DOE Home Energy Rebate programs have a Tribal allocation. Still, it is a small portion of the full program amount (approximately $9 billion).
- Solar: Funding for low-income-community solar projects is high, but often, state legislation undermines or effectively blocks solar projects. Many states do not have virtual net metering or they prohibit community solar, which is crucial for reducing the financial and technical barriers that typically undermine MFAH solar projects. There is still significant resistance to onsite solar from investor-owned utilities because it can reduce their revenues and put additional strain on their infrastructure. Another concern is that many solar companies are pushing loans or leases of solar systems, which can help low-income families decarbonize but does very little to help them monetarily. This practice is being driven by emerging and existing green banks.
The short version: ICAST has our work cut out for us in 2024.