Talking Heads: Michael Bodaken, President, National Housing Trust

9 min read

“Energy efficiency is win, win, win.”

We’re in Michael Bodaken’s office.  It has an L-shaped standing desk; shovels with brass engravings; and posters from jazz concerts and the LA Lakers basketball team.

Bodaken was born and raised in Storm Lake, Iowa, studied history at the University of Iowa and received his legal degree from Peoples College of Law in 1979. After 11 years as a Legal Aid lawyer specializing in housing, he was appointed Housing Coordinator-Deputy Mayor for the City of Los Angeles. Under this leadership, the City of Los Angeles dramatically increased its housing funding and created a Housing Department and Housing Commission.

In 1993, the National Housing Trust offered Bodaken a position in Washington, D.C. as its Executive Director.  Bodaken’s major goal in moving to Washington, D.C. was to fulfill the Trust’s stated mission: to act as a leading affordable housing preservation organization whose policy recommendations were informed by practice. Today, NHT is the only national nonprofit engaged in housing preservation through public policy advocacy, real estate development, and lending. NHT and its affiliates have helped save more than 25,000 affordable rental apartments across the country and leveraged more than $1 billion in financing to protect and improve affordable rental homes.

In 2013, NHT received a MacArthur Award for Creative and Effective Institutions citing the Trust’s “unique role as both policy advocate and developer, focused on preserving affordable rental housing,” and its leadership in “energy efficiency retrofitting of affordable housing throughout the United States.”

Bodaken lives in Maryland with his wife of 27 years. Their son, Alex, teaches at an inner city school.

TCA: After more than 40 years in the business, how do you maintain such passion for affordable housing?

Bodaken: In the mid-1970s, I was a VISTA volunteer in Topeka, Kansas and worked at organizing residents in newly built, privately owned, subsidized housing.  I was able to work with tenants every day. They shared their frustrations and dreams with me. Their apartments were “home” to them. Ever since then, I have had somewhat of an aversion to calling apartments “units.” Work-ing with them changed my life and opened a much larger world to me. I’ve loved my work in affordable housing ever since.

TCA: If you could say just one thing to a developer or owner of multiple-unit affordable housing….

Bodaken: It would be, “The largest variable expense you can control is your energy costs. And you really can lower these costs.  You should know three things: your annual utility bills; your major utility bills for each of your buildings; and how to measure changes in utility usage and bills.”  And then I’d add, “You may not think of energy costs as something you can control, or you may think that controlling these costs is expensive, but I urge you to take another look.”

TCA: Is it that straightforward?

Bodaken: It is, and it’s even better when you consider the societal benefits that accrue from energy efficiency. Increasing energy efficiency in affordable, multifamily housing creates healthier living environments, lowers resident utility bills, reduces owner operating expenses, frees capital for building improvements, and sustains affordable housing.

TCA: But what if tenants are responsible for their own utility bills?

Bodaken: Who pays what bills is not unimportant, but it’s not dispositive. Even if tenants pay their own utility bills—the so-called “split incentive” issue—owners still have common areas and other energy-related expenses that make efficiency worthwhile.

TCA: Were you seeking such efficiencies when the National Housing Trust and partners started “Energy Efficiency for All”?

Bodaken: The Trust is a non-profit organization devoted to protecting and improving existing affordable rental homes. We’ve partnered with the Energy Foundation, Elevate Energy, and Natural Resources Defense Council to offer expertise in affordable housing, energy efficiency, community development, finance, and utility engagement. We collaborate with state and local groups across the country, delivering tools and resources that help increase energy efficiency investments in their states’ affordable multifamily housing.

TCA: Why energy? Why now?

Bodaken: What the National Housing Trust does is inherently green. We preserve housing, and the older the building, the greater the potential for energy efficiency.  To focus on efficiency saves money for owners, saves money for tenants, and saves money for state governments. It’s a win, win, win. In addition, utilities cut back on their base-load demands, and funders and governments find it attractive to do something about climate change. So it’s a win for the environment, too.

And don’t forget, when we talk about energy, we’re talking about water, too.  Not just hot water, but efficiency that keeps water bills down.”

TCA: What’s been your own experience with this?

Bodaken: NHT owns and operates 3,000 affordable apartments and has been involved in more than $1.5 billion in financing for existing affordable housing. We’re hands on, and we know what cuts costs. Our annual utility bill is over $2 million. Cutting that by 20 percent means that each and every year we have an ongoing “energy efficiency annuity” to fund our policy and housing development teams.

TCA: Does anything like LEED certification for affordable housing, or even the more recent notion of LEED ND, which focuses on the “green” aspects of an entire neighborhood, exist?”

Bodaken: Yes, we are using a number of green certifications already. For the rehabilitation of existing affordable, multifamily buildings, we’ve found that Enterprise Green Communities Standards is the most effective. We’ve also, per state housing agency requirements, met Earth-Craft standards. Our office is LEED Silver certified but we haven’t found LEED ND to be particularly pertinent to the rehab of existing, affordable, multifamily housing.

TCA: Energy efficiency is more than cutting utility bills. Aren’t state and federal tax credits, especially energy-related credits, important?

Bodaken: It depends on what type of energy savings you are seeking. For example, we are not using any federal or state incentives for the energy efficiency measures we install at our properties. Energy efficiency retrofits pay for themselves. On the other hand, where the owner wants to install renewables, such as solar roofs on  properties, yes, both the federal government and some states provide important incentives available to affordable housing owners.

TCA: All this is happening now in affordable, multifamily housing because…?

Bodaken: As our society increasingly realizes the benefits of energy efficiency, affordable, multi-unit housing has largely been overlooked. But in the last few years, three major things have happened. State housing finance agencies are requiring more energy efficiency because they realize it is essential if they are to solve long-term operating issues for properties in which they invest. Advances in solar technology and other technologies, like lights and energy efficient appliances, have driven costs way down. And finally, all kinds of energy use and cost measurements are available that were not around only a few years ago.

TCA: What other “green” or energy-related changes do you have underway?

Bodaken: We are greening our entire portfolio. We’ve embraced the Better Buildings Challenge and have created NHT Renewable to get solar on affordable housing roofs.

TCA: The National Housing Trust says one of its major goals is for “low income individuals and families to live in quality neighborhoods with access to opportunities.”  How does preservation of housing near transit fit into that mission?

Bodaken: Living in affordable housing near transit is certainly one way to define quality neighborhoods. Notably, in 20 major cities across this country, over  250,000 HUD- assisted multifamily apartments are located within one-quarter mile of a major transit stop. We absolutely must make the preservation of this unique stock one of our highest priorities. NHT has researched this topic and on its own purchased and rehabilitated  hundreds of apartments in Washington, D.C. that are within walking distance of a local Metro stop. That enables heads of families access to their jobs and seniors access to community centers and health care facilities.

TCA: How is “Energy Efficiency” for All doing and what problems must it overcome?

Bodaken: I’m very proud of our collaboration with NRDC, Energy Foundation and Elevate  Energy. We’ve made all types of progress in the following areas:

(1) secured millions in additional private utility funding in nine states (CA, IL, MD, MI, MN, MO, NY, PA, and RI); (2) expanded and improved energy efficiency programs in these same nine states; (3) built a national network of housing and energy efficiency organizations dedicated to making rental housing more energy efficient; and (4) engaged with affordable housing owners to increase the demand for energy efficiency resources for existing, affordable housing. The problems we must overcome are: (1) reluctance of some utilities to observe and take advantage of the energy savings potential in multifamily housing; (2) owners’ concerns that these energy improvements are “beside the point” or “won’t pay”; and (3) doing a much better job communicating the non-energy benefits of energy efficiency, such as better health for the residents.

TCA: You mentioned NHT Renewable. How does that fit in?

Bodaken: NHT previously focused on how we mitigate or decrease our energy costs through the installation of energy efficiency measures at our properties. Those measures could be a new HFAC, CFL lighting, low-flow water fixtures, etc. NHT Renewable takes our commitment to marrying housing and the environment to a new level: NHT Renewable is established to have affordable housing owners develop, own and maintain solar on their properties over the long haul. We just installed solar on 10 affordable buildings in Washington, D.C., the largest such installation in the D.C. metro area; we’re contemplating doing more buildings in Washington, D.C. right now.

TCA: What’s your next step?

Bodaken: We want to take the NHT Renewable model on the road to states where developers can basically copycat our model. We’re speaking to owners in California, the District of Columbia, Maryland and Minnesota right now. Now is the time for these owners to make the installation as the federal tax credit for solar is set to reduce to one-third of its present value by December, 2016.