By Krista Carter-Bowen 
 
Following Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad, issued by President Biden in January 2021, Federal Policy continues to evolve as Climate Change is becoming a hot topic.  
 
HUD’s August 26, 2022 memo, Guidance on Considering Climate Change in Environmental Assessment (EA) Factors for Multifamily Projects, provides guidance on the background, applicability and timing, and the process of assessing foreseeable climate impacts as part of the EA Level of review. 
 
EBI Consulting’s HEROS Manager, Krista Carter-Bowen helps answer the 5 crucial questions you should be asking about how EBI is addressing HUD’s Climate Change requirements. 

What does HUD’s climate change memo specifically address?

According to the memo, “The Environmental Assessment eGuide applies to all new construction projects and to substantial rehabilitation projects that require an EA level review. The eGuide does not apply to refinance or rehabilitation actions that are Categorically Excluded from NEPA.

Applications already submitted (including those in the queue) do not need to update the environmental review to include the new EA factors. In addition, this memo introduces a transition period for new applications to include climate change EA factors.

After December 1, 2022, EA level applications must discuss reasonably foreseeable climate impacts over the life of the mortgage and address mitigation measures that would be prudent to implement at the construction stage.”

 

Where can HUD’s eGuide be found and what does it provide?

The HUD eGuide can be accessed on their website. The eGuide helps you navigate all portions of EA Levels of Review for your project. Each factor and category has modules you can navigate through to find relevant guidance and information.

How does EBI plan to assess climate risk and potential mitigation measures?

EBI will perform a Climate Risk Review (CRR) and review the FEMA National Risk Index (NRI) tool for specific climate hazards within the census tract. Once a specific climate hazard is identified as “relatively high” or “very high”, EBI will utilize the additional tools for a more comprehensive discussion of specific hazards, as well as potential reasonably foreseeable future hazards during the life of the mortgage (typically 30-40 years).

EBI will then assess each climate risk and mitigate as necessary utilizing various mitigation measures, such as FEMA flood maps, current ongoing site-specific practices and maintenance, site safety plans, and other actions potentially specified within the community’s emergency planning documents and community resilience plans. EBI will work closely with the site development team, borrowers and lenders to come up with a reasonable solution for any climate risks identified.

If higher levels of mitigation are required by HUD, EBI has compiled multiple mitigation measures based on specific climate risks and will recommend appropriate measures within the HEROS for further discussion in a more comprehensive Climate Risk Analysis (CRA) and incorporated into the construction and design plans. Once these are included, EBI will include these specifications within the HEROS to be submitted at FIRM Application.

When should developers and clients begin incorporating climate risk reviews into their projects?

We recommend that developers, borrowers and clients begin using the CRR as soon as possible to ensure climate risks are evaluated prior to FIRM Application. Incorporating this during concept meeting or pre-application will help ensure potential climate risks and mitigation measures are incorporated into your project from the outset.

Timing is key so architectural plans are not changed at the last minute.

Remember, per the HUD memo, “After December 1, 2022, EA level applications must discuss reasonably foreseeable climate impacts over the life of the mortgage and address mitigation measures that would be prudent to implement at the construction stage.”

 

What additional climate risk reporting does EBI offer?

Green MIP

For borrowers utilizing FHA-insured financing, this incentive is intended to encourage multifamily property owners to adopt higher, more energy-efficient and sustainable standards for construction, rehabilitation, repairs, maintenance and property operations compared to traditional approaches. Owners are incentivized to implement measures that result in projects with greater energy and water efficiency, reduced operating costs, improved indoor air quality and resident comfort, and reduced overall impact on the environment. For properties that have already achieved a green building standard and are refinancing with this lower MIP premium, proceeds can be used for additional efficiency upgrades.

Climate Risk Analyses (CRAs) and Climate Change Risk Assessments (CCRAs)

EBI also offers more comprehensive climate risk reports, CRAs and CCRAs, where we assess specific hazards on a site-by-site basis with site-specific mitigation measures. These reports detail the physical climate risks due to the property’s region and determine if there are climate risks associated with the project.

Climate Risk Design

In addition to the resource conservation, energy efficiency and general sustainability measures typically addressed as part of a Green MIP effort, we can help with site-specific climate risk mitigation recommendations. Ideally, this review occurs at the beginning of the design process, although actionable feedback can potentially be expected even in the later stages of design. The earlier a review is performed, the more cost-effective options will be available.

Want to learn more?

Our HEROS and climate risk experts like Krista Carter-Bowen can help you as you begin to include climate risk assessments into your process. Reach out today to hear how EBI can help you!