Rebuilding After Katrina: Smart Energy Choices
EXECUTIVE SUMMARY
Energy efficiency has been part of the American lexicon since 1978 when the Energy Policy Act was first enacted. Since then, energy efficient homes and increased use of renewable energy resources have become the norm in states like New York and California. Policies and programs have supported these statewide efforts while $847 million in federal funding has recently been allocated to help homeowners across America build better homes. Still, some parts of the country continued to use outmoded housing codes and practices even when it was no longer considered sustainable. The Gulf Coast region of Louisiana, Mississippi, and Alabama was such a place. There is no way to know how many of the homes in the Gulf Coast region were inefficient prior to the hurricane. However, the gap between best practice and actual practice was revealed as Hurricane Katrina came ashore along the Gulf Coast and many Americans glimpsed the sub-standard housing that been the status quo in the region for years.
Yet in this disaster, there is an opportunity synchronous with recent changes in building policies. For example, in September 2005, the new Energy Policy Act was passed by Congress into law. The International Code Council (the ICC, an agency setting the standards for U.S. buildings) likewise upgraded its IECC 2006 codes for new homes . And the government-sponsored ENERGY STAR program of the United States Environmental Protection Agency (EPA) amended its guidelines for new homes in October 2005 . Luckily, the policies for a 'right rebuild' are in place. Now, a sound financial justification for making 'smart energy choices' is needed since 310,353 new single family homes must be built in the affected regions immediately.
By using a complex suite of DOE-2 modeling analyses along with climate, census, and emergency management data from Louisiana, Mississippi, and Alabama, this paper makes the case for an energy efficient rebuild. This modeling compared the impacts of rebuilding homes that may have been built to minimum building codes (as a baseline for comparison) versus four increasingly more energy-efficient standards . While the 'quick payback' scenario illustrated the fastest payback considering the initial investment, the 2006 ENERGY STAR New Homes Guidelines showed the most reasonable short-term payback with larger savings over time. For example, the initial investment of $900 million to rebuild 310,353 homes to the ENERGY STAR guidelines would have a payback of just 7.5 years-much less than the term of the mortgage.
Due to the increased quality of the home and short return-on-investment, the ENERGY STAR scenario is recommended as the minimum threshold for single family homes during the rebuild. Additionally, the annual electricity savings (using this scenario) would avoid the equivalent of one South Carolina nuclear plant , and reduce greenhouse gas emissions equivalent to taking 51,221 cars off the roads.
BACKGROUND
The Hurricane Hits
On August 29, 2005, at 6:10 a.m., a Category 4 hurricane made landfall near Buras, Louisiana, with 145 mph winds. By 9:00 a.m., New Orleans' Lower Ninth District was under 8 feet of water and a path of destruction the size of the United Kingdom had been created and leaving 1.5 million people without power . The number of parishes affected in Louisiana was 31, in Mississippi 47 counties were affected, and in Alabama 8 counties saw damage to their single family housing units of 2.1 million . Of the total population of 6 million people in the affected areas, an estimated 1.5 million were evacuated from Louisiana alone and hundreds of thousands had set out on the largest transmigration across America since the Dust Bowl of the 1930s. By October 2005, an estimated 2.2 million people had registered for aid from the Federal Energy Management Agency (FEMA) and 416,852 people were still without power in Texas and Louisiana .
In four short hours, a city fondly called 'the Big Easy' by Americans became a site of vast difficulty as events compounded the tragedy. In weeks, the consequences of Katrina created a death toll of nearly 1,281 . Many who perished were among America's most economically-challenged (the average per capita income of those affected by the hurricane was around $17,000 ). The scope and scale of the healing process and the rebuild is monumental. An estimated 160,000 new single-family homes will need to be built in the coming months in New Orleans alone, with a grand total of 310,353 single family homes needing to be built in the three states.
OVERVIEW OF SINGLE FAMILY HOUSING IN THE GULF COAST AREA
Brief History of the Gulf Coast Areas' Single Family Housing
After the Civil War, men known as 'carpet baggers' came into the Gulf Coast region, taking advantage of a ravaged countryside and its people. In the 140 years since the Civil War, the Gulf Coast region was populated and an estimated 2 million single family homes built in the affected region. By 2000, the average cost of those homes was $71,685, nearly $48,000 less than the average single-family home in America . These homes were not only cheaper than the typical U.S. house, they were also older, with an average build-date of 1975.
The people in the Gulf Coast areas affected by Hurricane Katrina were more vulnerable than the average populace in America. The percent of the population living on incomes at or below the poverty line in the parishes and counties affected by the hurricane was 19% of the population. The average age of those homes was not only three decades but the relative energy efficiency (as compared the national average) was lower than the norm. The Gulf Coast region hit by Hurricane Katrina had a history of lagging behind the rest of the country in terms of infrastructure, housing quality, and economic robustness. In short, the region was ripe for the kind of disaster the hurricane wrought.
After Hurricane Katrina, a new breed of 'carpet baggers' set upon the Gulf Coast region, once again attempting to take advantage of a ravaged countryside and weary populace. But unlike the post-Civil War years, today's opportunists are local. Suppliers from drywall to roofing materials are inflating material costs and large-scale builders are vying to hire every able-bodied worker capable of swinging a hammer. Yet some large retailers are taking an active stewardship role in the reconstruction. For example, The Home Depot and its suppliers have partnered to donate nearly $1.2 million of products to those areas in need, along with $4 million in donations from the Home Depot Foundation . Meanwhile, Congress is seeking to pass bills to shield contractors from litigation that might result from workers in this polluted, dangerous area that is today's Gulf Coast. The time to anticipate the impacts of smarter choices for the rebuild is now.
METHODOLOGY
Datasets and Modeling Software
Housing characteristics, including construction type, architectural characteristics, and quantity of construction from the 86 counties and parishes in the three hardest-hit states (Louisiana, Mississippi, and Alabama) were gleaned from 2000 Census Bureau data. Modelers established a baseline of what existed pre-Katrina using DOE-2 modeling software to compare the economic and environmental benefits of rebuilding in an energy efficient manner. For the ease of modeling a representative sample, only single-family homes units were considered since 67% of the homes destroyed were this housing type. Means Cost Data aided in modeling the 'per unit cost to rebuild' each home for each scenario. NAHB data described the housing starts projections for 2005-2010 while additional economic characteristics for the region were gathered from the 2000 U.S. Census.
Codes and Standards
The codes climate in these three states gave a snapshot of what would be practical to expect during the rebuild. As of August 29, 2005