Photo courtesy of Action Housing Inc.

By Mitra Nourbakhsh, Pittsburgh Business Times

$4 billion. That’s the amount of Inflation Reduction Act (IRA) funding the City of Pittsburgh is set to be able to access over the next decade to upgrade the city’s housing stock and make it less of an energy burden.

It’s an historic investment, but far from a simple cash influx. The IRA is made up of a series of tax credits and grants. There’s a lot of funding available, but it is another whole endeavor to figure out how to access and allocate the money most efficiently so it goes as far as possible for the people who need it most.

Before the IRA was passed in 2022, an average of $2 billion per month of clean electricity investment was available for Energy Communities like Pittsburgh. After the act was passed, that number nearly doubled.

But even though it has been almost two years since the IRA went into effect, a lot of the implementation dollars have not yet made it to the ground. 

The City of Pittsburgh and a number of housing organizations are working together to tackle that challenge head-on.

“All the federal funding decisions have not been made yet, and we don’t really know how much is coming to this region through who or when,” said Sarah Ralich, senior energy and construction manager at Action Housing Inc. “But we have been trying to build capacity as implementers in Allegheny County, so we’re ready to hit the ground running when funding does come to get it out to homeowners in the region.” 

Two initiatives are in the works: The City of Pittsburgh’s Energize Pittsburgh and an even more early stage plan to create an online hub for low-income homeowners to see, all in one place, the resources they can access to improve their homes. 

Energize Pittsburgh, launched in April, is the city’s pilot program, designed to use the $4 billion of federal funding to help low-to-moderate income, single-parent homeowners in certain neighborhoods spend less household income on utilities by reducing their energy burden.

The program is a partnership between eight Pittsburgh-area organizations, including Duquesne Light Co., Action Housing and Sustainable Pittsburgh. It is very much under construction, however, and much of the funding has not yet been secured.

“At this time we are finalizing our MOU and are learning more about our housing pool for our pilot program,” Maria Montano, communications director for the City of Pittsburgh, said in a written statement. “These are critical items we need prior to pursuing funding.”

Ralich said Action Housing will be doing on-the-ground work through Energize Pittsburgh, including energy efficiency retrofits like weather proofing or fuel switching, converting natural gas appliances to heat pumps and solar installations. 

“We’re the largest implementer for the state weatherization program in Pennsylvania, so we have been doing a lot of this type of work,” Ralich said. “It’s just going to be able to expand our reach.”

That is not the only integrative step being taken, however. Ralich said her organization was asked to be a part of Energize Pittsburgh because it is part of a broader mission to coordinate resources and programs with other housing organizations to create a “one-stop-shop” for low-income homeowners to understand the opportunities at their disposal.

This “hub” project is just in its beginning stages; the partners do not yet have branding, specifics or anything written in stone. Ralich said they are aiming for a 2025 rollout. 

“We need to wait on some additional funding decisions and timelines to really understand the full scope of what we’re going to be able to offer,” she said. 

These initiatives are a response to the challenges that come with massive, complicated federal funding packages. It takes a concerted effort to understand what kinds of funding the organizations are looking at. The Inflation Reduction Act guidebook is almost 200 pages long, most pages home to a different program, credit or funding opportunity. 

There is an entire job dedicated to studying and communicating how best to leverage the IRA. The man who has it is Brian Regli, executive director of the Office of Critical Investments in the governor’s office. 

In a meeting organized by the Housing Alliance of Pennsylvania, Regli gave a hypothetical to illustrate the potential impact of the IRA: Pretend a $10 billion nuclear power plant was built in Indiana County, he said. In its simplest form, the Commonwealth of Pennsylvania would make back $3 billion of the $10 billion investment. By stacking tax credits on top of that, like using domestically manufactured materials and building an affordable housing complex adjacent, that $3 billion refund could rise to $7 billion. 

To make a $10 billion investment cost just $3 billion is incredibly valuable, but Regli’s example also shows how important — and convoluted — it is to tap into every possible avenue.

The key is collaboration, according to Rebecca Aguilar-Francis, COO of Rebuilding Together, a nonprofit that provides sustainable home renovation and repairs at no cost to low-income homeowners. Aguilar-Francis said while her organization has received federal funding in the past, it is usually in smaller amounts for smaller projects, like the yearly HUD grant to do renovation work for veterans. 

The complicated federal funding from the IRA makes it crucial for multiple organizations to work together. For example, Aguilar-Francis said the Allegheny County Lead Safe Homes program often asks Rebuild Together to, for example, fix the roof of a house before it starts lead remediation so the $20,000 doesn’t go to waste because of a leaky roof.

Or, Rebuild Together will refer homeowners to the URA Residential Façade Improvement Program to complete the cosmetic repairs it doesn’t have the budget for.

“When we’re building partnerships, we’re working with different partners to really understand who’s going to do this part best and not pretending that we have the capacity to do all of it,” Aguilar-Francis said. “That’s why our partners exist, so we can say, ‘Listen, we’re really good at this piece. And then once we’re done with this piece, we’re going to pass it on to you.’”

The “hub” project will put those resources at homeowners’ fingertips. Energize Pittsburgh will formalize the collaboration between sustainability organizations.

“We want to make sure that we’re working as closely as possible and as efficiently as possible,” Aguilar-Francis said. “And that we are really able to make repairs that are meaningful, not just cosmetic.” 

Although the programs are just in their early stages and funding has not been distributed, there is a potential looming time crunch. If Republicans were to take the presidency and both chambers of Congress in November, they might aim to partially repeal the IRA, according to reporting by The Hill. Tax credits might be restricted, and the administrative capacity of the agencies involved could be hollowed out.  

With that possibility in mind, Ralich said her goal is for the money to be signed over to implementers in Allegheny County before a potential administration change takes place. That would give everyone involved the confidence that it isn’t going anywhere. 

“I’m fairly certain that those larger contracts will hopefully be negotiated and signed by the winter,” Ralich said. “But realistically, I don’t know if we’ll be able to get implementation dollars on the streets in Allegheny County until 2025.”

Fundamentally, the IRA has catalyzed a period of tremendous growth in these industries and put sustainability at the forefront of the conversation.

And making housing more energy efficient is a win-win for everyone involved. Homeowners save on utility bills; Ralich recalled one case where simply replacing someone’s furnace dropped their monthly bill from $500 to $100. Domestic manufacturing is encouraged, housing and construction organizations are employed, and theoretically, the environment is saved.

“It gives us a lot of … I don’t know what the word is. I’ll say energy,” Aguilar-Francis said. “It does give us a lot of energy because it feels like, okay, there’s this big shift in focus now to housing, especially in Pennsylvania.”

Mitra Nourbakhsh is a student at Northwestern University and one of 10 Pittsburgh Media Partnership summer interns. Mitra is interning with the Pittsburgh Business Times.

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