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My name is Khalil Shahyd. I am a Senior Policy Advisor on Equity, Environment and Just Communities with the
The Infrastructure Crisis Plaguing American Cities
No place in America is more emblematic of how these interweaving crises are made worse due to deteriorating infrastructure than
Two consecutive storms hit the city and led to prolonged freezing temperatures, causing pipes to burst. Thousands of residents were under a boil-water advisory, which wasn't lifted until
But these storms did not cause this health and human rights crisis in
Yet the city was left to fend for itself to pay the cost of deferred infrastructure maintenance with an estimated
What happened in
At a time when access to clean water, to wash hands and sanitize surfaces, literally meant life and death due to COVID-19, too many households were left with their survival compromised and threatened.4
Almost two years ago, an analysis by NRDC found that nearly 30 million people in
It also found that 5.5 million people received their drinking water from systems that had levels of lead that exceeded
Additional analysis revealed that lead-related violations were not equally distributed across populations./6
Startlingly, the analysis found that in
In America, most investment in infrastructure--about 3 out of every
They fund and finance infrastructure through a combination of taxes, borrowing, and user and beneficiary charges.
The largest potential threat to the cost of financing infrastructure will come from increasing the cost for states to borrow through municipal debt. On a basic level, states and local governments borrow by issuing municipal debt that enjoy special the status of paying interest that is not subject to federal taxes (and often not subject to the state's income tax, as well)./10
The muni debt market is huge--about
For cities like
Ideally, infrastructure investments serve as a shared foundation for economic, environmental, and public health between different neighborhoods and municipalities. However, as racism drives a zero-sum view of federal policy, infrastructure is often neglected, unevenly and poorly maintained or intentionally overlooked in particular places, leading to a lack of access, affordability, and safety for many communities of color./12
The Housing Crisis is an Infrastructure Crisis
Most people in the
The pace at which the rental housing industry is developing new units is significantly slower than the number of rental housing needed in the next 10 years, meaning the gap in rental housing supply versus the demand for rental homes is only going to widen.
The shortage of affordable housing in major
This translates into a
Affordable housing infrastructure also helps local economies and creates jobs by leveraging public and private funds to increase earnings, increase tax revenue, and put people to work. Just one year of construction on 100 affordable rental units can generate
As affordable housing becomes more difficult to access and rents continue to increase, the creation of more affordable homes is necessary. With the affordable housing crisis affecting every state, county, and city in the nation, it is critical now more than ever for
But making housing affordable is not enough on its own.
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 of the housing stock. These homes tend to waste energy so that low-income families pay more per square foot than higher income residents. The result is that nearly one-third of households in
As if rising cost of housing were not enough, poor and low-income Americans are increasingly reliant on older housing units, leaving them more vulnerable to major weather disasters such as hurricanes; as well as flooding, wildfires, and other climate-related emergencies. These climate related events place vulnerable housing stock at risk of destruction, leading to the displacement and destabilization of families and communities and increasing the likelihood that they will experience--or be trapped in--poverty.
To avert the worst impacts of climate change, our policies must ensure both that emissions that cause climate change are reduced and that people can live in safe, affordable housing.
Two federal energy efficiency tax incentives--for energy efficient new homes (section 45L of the tax code), and existing home energy retrofits (section 25C), can help prepare our nation's housing infrastructure to address climate change while creating jobs and more stable communities. However, these incentives expired at the end of 2020 and must be updated and reauthorized. In addition, expired Section 45M should be re-purposed to incentivize the installation of high-efficiency heat pump space and water heaters.
Residential New Construction Incentive: We recommend updates to Section 45L, concerning new home construction, as it is dramatically outdated and in need of modernization. The model energy code has made significant advances in energy efficiency in recent years, and incentives must be updated to promote further energy savings and innovation in new construction. We support the leadership on this issue by
There is opportunity to further strengthen this bill, leading to even more carbon and energy savings. NRDC proposes an additional "bonus" incentive of
Existing Home Efficiency Improvements: We also recommend the following updates to Section 25C, which provides support for homeowner energy efficiency improvements and has a track record of promoting investments that lower homeowners' energy bills while creating good jobs for contractors and manufacturers. This is particularly important at this moment in time, when the energy efficiency industry has been devastated by the effects of the Covid-19 pandemic. The efficiency sector has had job losses impacting more than 10 percent of its workforce since the pandemic began. Once again, legislation from
The energy efficiency sector is in desperate need of financial stimulus, to restore and strengthen the strong local jobs created by installing efficient equipment and products. As such, we urge that the incentive amount be doubled for the next few years, from the
This committee should work to reduce emissions as quickly as possible, on behalf of every American. That means, long term, full value extensions of the investment tax credit and production tax credit, establishing standalone investment tax credits for high voltage transmission and energy storage, eliminating the cap for the electric vehicle tax incentive and upgrading the charging incentive, as well as critical updates to a slate of energy efficiency credits - mentioned above - and reviving the 48C manufacturing credit.
Ensuring Low-income Renters Get the Help they Need
Long term, full value extensions of the investment tax credit and production tax credit are a vital tool to ensuring our housing stock is prepared for the challenge of climate change because they provide needed capital for the preservation and repair of existing housing. However, the limits of those incentives to projects targeting homeowners and new construction, will limit their effectiveness for providing relief to our nation's lowest income households.
Additional measures like integrating renewable energy and energy efficiency tax incentives with the Low-Income Housing Tax Credit (LIHTC) incentive will be vital to ensure our most vulnerable families who contribute the least to climate change are not left behind by investments to build anew.
The LIHTC encourages private investment in the production and preservation of affordable rental housing. Maximizing the energy and water retrofits of LIHTC properties is a cost-effective way to reduce energy and water consumption, improve the financial performance of properties, and create healthier, more comfortable homes for residents, particularly for residents of multi-family buildings.
There are two primary ways renewable energy tax credits (RETC) can be combined with LIHTC to maximize the benefits to low-income residents and property owners.
First, suppose a housing provider installs a solar array on the roof of its housing property and it uses the electricity to power the property's common areas (for example, hallways, wash rooms, and parking lots). This is considered a residential use and would make the cost of the solar array eligible for both the RETC and the LIHTC.
As another example, suppose that a housing provider installs a solar array on its roof, and then uses the electricity to reduce the tenants' electric bills. This is also a residential use and would make the cost of the solar facility eligible for both the RETC and the LIHTC.
One approach to doing so is to provide an additional incentive for clean energy projects that benefit communities who live in places with high levels of pollution or long-term poverty or who face high levels of unemployment due to recent or planned closure of fossil fuel and nuclear power plants or fossil fuel extraction and processing facilities.
A "whole of government" approach to addressing the climate crisis and its related challenges, begins with this
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