Madison prioritizes projects located in amenity-rich areas near transit as well as projects embracing the City’s commitment to energy efficiency, renewable energy, decarbonization, and sustainable building design. Madison aims to incentivize new developments with a wider distribution of low-income units across the city and preserve existing low-income housing units to ensure long-term affordability and sustainability.

To receive an AHF loan, applicants must also apply for Focus on Energy’s Energy Design Assistance (EDA) offering, which provides a custom energy analysis of the proposed project. EDA provides incentives for developers to implement energy-saving strategies based on individual project characteristics, presented as a bundle of strategies delineated as “good,” “better,” and “best” in terms of energy and cost savings. Incentives are determined by how much energy is saved compared to a baseline scenario set by the state standard code ASHRAE 90.1-2013.

Uno Terrace benefitted from both incentive programs. Developer Sean O’Brien has used EDA with all his projects, and as each one has been completed, he has improved his goals for energy efficiency. For Uno’s, the City of Madison awarded Northpointe Development $1.35 million toward the 64-unit affordable rental development in 2020. O’Brien and his team elected to move forward with the “best” bundle option, which included strategies on efficient lighting, improved heating and cooling, and more. This resulted in over $39,000 in annual energy savings and over $26,000 in Focus on Energy incentives.

“Northpointe has worked with Focus on Energy on many projects over the past few years, and we would certainly recommend others do as well,” says O’Brien. “The program team has been a great resource in educating our team in what seems to be a rapidly changing environment. They also help us to understand the options that are available and their long-term benefits.”

The Uno project also included two unique attributes aiding in its energy efficiency and sustainability. Rather than demolishing a historic building on the acquired property, the project decided to engage in adaptive reuse. The building was moved to a new foundation and given updates to create a community room for the apartment complex. O’Brien has been involved in reuse projects in the past, citing community support and uniqueness as reasons for tackling the overhaul. The project also implemented 29 kW of rooftop solar, for which they received several incentives, including one from Focus on Energy.

O’Brien is an avid supporter of using energy efficiency strategies for affordable housing projects. Madison construction costs continue to rise, creating a roadblock for affordable housing developments. Energy efficiency strategies lower long-term operational costs, of which affordable housing projects must be conscious as costs can only be passed onto tenants up to the rent limit.

Lara Bakker, Energy Advisor for the project, explains, “When we consult for affordable housing, I point out that energy efficiency lowers the utility bills. Lower utility bills are especially important for people with lower incomes because utility bills are a much bigger burden on their budget. During our results meetings, we focus on the annual energy cost savings rather than the one-time incentive payment to the building owner.” O’Brien is also a proponent of keeping up with technological advances and the latest strategies for Northpointe projects.

The partnership between the City of Madison’s CDD and Focus on Energy helps the city achieve both its affordable housing and sustainability goals. Madison is striving to reach 100% renewable energy and net-zero carbon emissions by 2030, which housing projects can help achieve. In addition, an action item for the City’s Climate Forward plan is to lower utility bills for low-income renters. Uno Terrace Apartments is an example of how these two programs work synergistically to maximize incentives, contribute to city goals, meet community needs, and foster local prosperity.