Passive Building Gains Popularity

Passive building is ideal for affordable housing funders and developers


As recently as 2012, Passive House Institute US (PHIUS) had certified only a dozen projects that met its rigorous energy conservation standard. Most were single-family homes built by environmentally conscious, forward-looking owners, who were willing to pay what back then could be a 20% premium compared to a conventional home.

Since then, passive building has gained traction and has grown exponentially. PHIUS has fully or pre-certified hundreds of projects, including 4,800 living units, and a total of 5,000,000 square feet. This explosive growth is owed largely to two factors.

First, in 2015, PHIUS worked with Building Science Corporation under a U.S. Department of Energy Grant to create the PHIUS+, climate specific standard. By cost optimizing for climate, the PHIUS+ standard made passive building affordable, while retaining strict energy targets.

Second, partly owed to No. 1, affordable housing funders and developers have realized that building to the PHIUS+ passive building standard is a perfect match for affordable housing developers, operators and residents. Over the past few years, PHIUS has certified 60 multi-family projects, comprising nearly 4,000 units and 1.4 million square feet.

Predictably low utility bills are attractive to everyone, but they’re all the more so to residents who qualify for affordable housing. What’s more, passive buildings are especially resilient, and can “coast” for long periods of time during power outages, keeping residents comfortable. Passive buildings also feature constant ventilation, ensuring superb indoor air quality.

For all these reasons, passive buildings are attractive to operators who are in it for the long haul and know they’ll see the payback in energy savings.

For developers, two factors have driven adoption. First, more and more states are incentivizing affordable housing developers to build to the PHIUS+ passive standard. The federal government issues tax credits for affordable housing via the Low Income Housing Tax Credit program, operated by the U.S. Department of Housing and Urban Development. These credits are then doled out by state agencies that set their own criteria for awarding the credits. Because the credits can subsidize a major portion of construction costs (up to 70%), the competition for the credits is fierce. Every point matters.

Each state uses its own point system known as a Qualified Allocation Plan (QAP) to choose projects proposed by developers. In 2014, a group of architects led by Tim McDonald—who had successfully built passive townhouses in Philadelphia—began working with the Pennsylvania Housing Finance Agency (PHFA) to incentivize energy efficient construction. The PHFA eventually offered 10 points out of its 120-point QAP for projects seeking passive building certification.

That eventually resulted in dozens of affordable passive projects being built in Pennsylvania. It also led the way for other states to adopt similar incentives to build to the passive standard.

Another driver of growth in the affordable housing market has been a steady decrease in cost. That has come largely through architects and construction crews getting multiple projects under their belts, becoming progressively more proficient. Besides getting more efficient at air sealing and other techniques, they’ve adopted innovative floor plans and other cost-saving methods. In addition, more manufacturers are producing more high-performance building components, so the cost of premium doors and windows, for example, has decreased. Today, in some cases, projects are coming in at no premium at all. On average, the cost premium is around 2%.

That’s a small price to pay considering the energy savings. A New York developer with a portfolio of affordable multifamily units, including a passive building, shared utility data for heating and cooling with PHIUS. This allowed comparing the lone PHIUS+ passive building to conventional buildings.

Compared to the biggest energy using building (the least efficient) in the portfolio, the PHIUS+ passive building used 75% less energy. Compared to the next most efficient building in the portfolio, the PHIUS+ project used a third less energy. Overall, the PHIUS+ building used 60% less energy than the average of all the other buildings.

As more states write the passive standard into their QAP and as costs continue to decrease, the multifamily passive building sector promises to continue to make passive building more and more commonplace.

Michael Knezovich serves as PHIUS Communications Director. His career has spanned journalism, technical writing, and marketing communications. He was part of a startup team that transformed Spyglass, Inc. from a scientific data visualization software company to an Internet software company, and helped lead a successful IPO.

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