Refining Public Housing Utility Estimates for HUD
Challenge: The U.S. Department of Housing and Urban Development (HUD) Utility Allowance Model (UAM) estimates utility usage for families in select HUD rental assistance and housing programs. The model uses an algorithm to estimate the expected utility usage for a tenant occupying a housing unit with a specific location, characteristics, and utility services, as well as a specified set of utility rates.
HUD requires a regularly refined and updated model to continue accurately and fairly projecting utility consumption, so that it may reimburse tenants for these costs. HUD must also provide evidence to support its efforts to promote and improve the energy efficiency and sustainability of our nation’s federally assisted housing stock.
In order to facilitate more accurate implementation of utility allowance projection, HUD also needs to provide a web-based UAM for Public Housing Authorities (PHAs) across the U.S. to use in determining utility usages. Additionally, the agency requires an updated Utility Allowance Guidebook, which was originally designed in 1998 as an optional tool to provide general information and guidance in the interpretation of the governing Federal regulations.
Solution: In this project, Summit is assisting HUD Office of Policy Development and Research (PD&R) to conduct model development and utility survey. During the model development phase, our team uses our model validation protocol to help HUD PD&R validate the current UAM. Summit is also developing a web-based model hosted on a Federal website, providing PHAs and building owners with a tool to easily and accurately project utility allowances based upon geographic, building, and unit characteristics. Our team is also updating HUD’s Utility Allowance Guidebook to be a usable document in this process.
During the utility survey phase, our team applies statistical techniques to design and develop a statistical sample of tenants in the Low Income Housing Tax Credit program and PHAs that disburse utility allowances. We are assessing the UAM's impact on utility allowance using best practices in energy and water usage modeling, and using this information to update the current UAM to ensure that all facets of utility consumption are accounted for.
This project is especially important because a model that produces biased or otherwise inaccurate estimates of utility costs may over-subsidize some families, while overburdening others. By ensuring the robustness and accuracy of the UAM, Summit’s strong modeling and sampling methods support HUD’s main goal of providing equitable, affordable housing.