identifying and assisting hard- to-reach...

© 2017 Water Research Foundation. ALL RIGHTS RESERVED. No part of this presentation may be copied, reproduced, or otherwise utilized without permission.

Identifying and Assisting Hard-to-Reach Customers

Water Research Foundation Project #4557 and Denver Water Affordability Assessment

WRF 4557: Research Team

Scott Rubin (Independent Attorney)

Roger Colton (Fisher, Sheehan, and Colton)

13 Participating Utilities

Jonathan CuppettResearch Manager

• Who are the H2R?

• What are their affordability challenges?

• Why do utilities want or need to reach them?

• What are the available options for assisting these customers?

• How can utilities successfully implement a customer assistance program for the H2R?

Research Questions

• Do not receive a bill directly from utility

• Most live in multi-family housing (80%) or single family rentals (13%)

• Most pay for water and wastewater through rent

Who are the hard-to-reach?

Who are the hard-to-reach?

Receive water bill

66%

Pay bill through rent or condo fee

18%

"No-charge"16%

0%

10%

20%

30%

40%

50%

Less than$10,000

$10,000 to$14,999

$15,000 to$19,999

$20,000 to$29,999

$30,000 to$39,999

$40,000 to$49,999

$50,000 to$69,999

$70,000 ormore

% o

f util

ity h

ouse

hold

cus

tom

ers t

hat a

re H

2R

Who are the hard-to-reach?

The lower your income, the more likely you are to pay for water and wastewater through rent

What are the affordability challenges of the hard-to-reach?

Average annual water/wastewater

costs% of after tax income

All households $800 2.28%

Single-family owners $834 2.06%

Single-family renters $788 2.97%

Multi-family households $688 2.50%

Housing cost burden • All U.S. households: 32%• H2R multi-family: 44%• H2R SF renters: 38%

What are the affordability challenges of the hard-to-reach?

Work DIRECTLY with the H2R and their landlords• Discounts to landlords• Vouchers• Discounts through energy utility• Discounts for affordable housing

What are the available options?

Work DIRECTLY with the H2R and their landlords• Conservation

• Savings can be significant• Partner with energy utilities• Target housing units rather than households

• Shrink the H2R population• Sub-metering• Make single-family renters establish an account

What are the available options?

Provide INDIRECT assistance• Raise awareness/support existing

assistance programs (EITC, LIHEAP, SNAP, WRAP)

• Partner with community organizations to support low-income households

What are the available options?

1. Why? Your primary objective for reaching the H2R.

2. Who? Identifying and understanding characteristics of the H2R in your service area.

3. Constraints? Internal, community, and state regulations/policies that govern what you can and can’t do.

4. What are the available options?

5. Help? Who and how are others in the community working with this population?

How can we determine if and how to help the H2R?

Denver Water Affordability Assessment: Hard-to-Reach Households and Affordable Housing

Denver is booming

$49,611$50,544

$52,778 $52,635

$55,700

$58,735

$61,105

$55,084$53,885 $53,701 $53,831 $54,398

$56,479

$57,617

$45,000

$47,000

$49,000

$51,000

$53,000

$55,000

$57,000

$59,000

$61,000

$63,000

2010 2011 2012 2013 2014 2015 2016

MHI

(201

6 U

SD)

Denver U.S.

All Households Households <60% of MHI ($36,663)

No charge for water 8% 15%

Pay through rent/condo fee 32% 42%

Pay directly for water 60% 44%

Hard-to-reach households

Higher percentage of hard-to-reachhouseholds in lower income groups

Median Household Income

All households $61,105

Single-family $86,835

Multi-family $42,234

Owner-occupied $85,947

Renter-occupied $44,348

Hard-to-reach households have significantly lower incomes

Multi-family households use and pay less for water

Annual WATER bill MHI

Average water bill as % of household

income

Single Family (Inside City) $469 $86,835 0.54

Multi-family (Inside City) $175 $42,234 0.41

The fallout from the boom

18

Cost of living index(compared to national baseline of 100)

Overall 128Grocery 98Health 107Housing 185Utilities 94Transportation 97Miscellaneous 104

Notes: Denver Metropolitan Area includes the City and County of Denver, City of Aurora, and nine suburban counties. The utilities category includes natural gas and other fuels, electricity, telephone, water, and other public services.

84%

57%

39%

29%

17%

76%

53%

37%

28%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Less than $20,000 $20,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 or more

Owners Renters

High housing costs exacerbate affordability issues

Households in lower income categories pay a high percentage of their income for housing

• Most affordable housing tenants do not see water bill

• Affordable housing limits amount landlords can charge for rent and utilities

• Increases in water costs often cannot be passed on to tenants

• If not the landlord could need to defer maintenance on the building or take other measures to absorb cost increase

Affordable Housing Impacts

• SDC efficiency credit pilot program - 20% discount on SDC to developers who implement water conservation measures

• One-time cancellation and payment extension for shut-offs

• Payment arrangements

• Connecting customers with outside resources

• Pilot program with Mile High United Way - one-time emergency bill relief

• Efficiency programs

Ongoing Efforts

ContactJanet Clements: jclements@coronaenv.com

Fletcher Davis: Fletcher.Davis@denverwater.org

Questions?

22

Owners, 49%

Renters, 51%

High percentage of renters and multi-family households

Single family, 55%

Multi-family, 44%

Households earning < $40,000 per year

Percent of total service area households 32%Single-family renters 13%Multi-family households 58%Percent hard-to-reach ~53%Average household size 1.8Owner costs/income (mean) 48%Renter costs/income (mean) 60%

Households Facing Affordability Challenges

In general, households earning less than $40,000per year likely face affordability challenges

• Denver Water’s SDCs one of the lowest in metro area

• Relatively small portion of development costs

• Reduction in corporate income tax means less incentive for investors in LIHTC credits, potentially less money available for affordable housing deals.

• Forcing developers to pay attention to smaller costs as they work harder to finance deals

Affordable Housing Impacts: SDCs

• Many households with “no charge” may live in affordable housing.

• ~13% of renters are HUD-subsidized (18,926 units)

• Rent determined based on income (i.e., most will pay 30% of their income), and in many cases, water costs are included in total.

Affordable Housing Impacts