Utility Allowances, Energy-Efficiency, and Renewables in Affordable Housing

Affordable housing programs usually establish restrictions on tenant rent contributions – either income-based rents or formula rents. In either case, tenant contributions must cover both rent and a reasonable amount of basic utilities. Where utilities are tenant-paid, tenants must receive a credit toward their total rent contribution known as a “utility allowance” to ensure compliance with the program’s rent limitations. Although details vary among specific programs, the basic standard for utility allowances is to approximate “reasonable consumption,” using current utility rates. Therefore, an allowance may not cover each tenant’s actual utility costs. Allowances must usually be reviewed annually, and adjusted for significant changes. Inadequate allowances can impose hardship on tenant’s capacity to pay for other necessities, such as food, medical care, and rent, and ultimately result in unnecessary evictions and terminations.

Where utilities are tenant-metered, tenants pay every dollar of their energy bills, regardless of allowance levels. Inefficient units, systems or appliances cost tenants more to operate, and often fail to deliver health, safety and comfort. Tenants have important interests in what energy-related efficiency measures or renewables are provided and their actual impact on utility allowances and total rent and utility expenses. NHLP is working to ensure that state and federal policies governing energy improvements in affordable multifamily properties reflect tenants’ needs.

Manuals, Guidebooks, and Reports

Toolkits and Resources

  • To help states create programs that provide the most meaningful assistance to low-income households, the National Consumer Law Center (NCLC) and the National Housing Law Project (NHLP) have created a special Resource for Advocates, IRA Home Energy Rebates State Program Design Recommendations. The Resource is intended to help advocates promote state plans that prioritize low-income homeowners and tenants and work intentionally with existing state and federal programs to reduce consumers’ costs and increase consumer protections. This IRA Home Energy Rebates Resource for Advocates outlines issue areas that advocates for low-income consumers and tenants should prioritize when providing stakeholder input into the state rebate plans. We provide citations to the IRA law creating the rebate programs where applicable, as well as to the DOE guidance. Some parts of this resource cover aspects of the state plan that are mandatory, but will need attention to detail in the implementation. Other portions of this resource focus on areas where the state has the flexibility to go beyond the IRA guidance and direct more funds to low-income consumers or be more protective of consumers.
  • DOE’s Consumer Protection Best Practices for the IRA (2024). The recommendations in this memo were mostly sourced from NHLP and NCLC. NHLP and NCLC will continue to work with the
    Department of Energy to further develop and refine essential consumer protections.
  • Advocating for Higher Utility Allowances in Federally Subsidized Housing: A Practical Guide (2007). This guide, written for tenant advocates by NHLP and the Legal Aid Society of Hawaii, helps advocates identify, develop and litigate basic cases where allowances have not been updated to account for recent significant rate increases. The Guide’s appendices include spreadsheets to simplify required calculations, as well as sample information and demand requests, and pleadings. Appendices are no longer linked on the guidebook. Please reach out to nhlp@nhlp.org if you would like access.
  • Sample Records Act Request. A first step in determining whether utility allowances are adequate.

Fact Sheets and Brochures


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