Cities100: Toronto - Affordable Loans for Home Efficiency Upgrades

Two new loan programs in Toronto offer homeowners an affordable option to retrofit their property to improve energy efficiency and water conservation.

The Challenge

The residential building sector accounts for 44% of Toronto’s greenhouse gas emissions, and the city has more than 1 million housing units that were largely built before 1980, when no energy efficiency requirements were included in the building code. Through its low-cost loan initiative, the city enables homeowners to undertake more affordable and much-needed building retrofits.

The Solution

In 2014, Toronto launched two innovative loan programs: Home Energy Loan Program (HELP) and High-Rise Retrofit Improvement Support Program (Hi-RIS). Offered with no upfront costs and at a low interest rate, the loans target energy efficiency and water conservation upgrades in single-family houses and rental apartment buildings. Crucially, the cost of improvements is repaid over time via fixed installments linked to the property tax bill, meaning the loan is tied to the land not the owner, in case of sale. The program also has equity considerations, as owners’ eligibility is not dependent on traditional credit ratings but their rate of municipality repayment. So far, $5.4 million in low-interest loans have been committed to 111 energy projects. The programs’ “one-window” service makes the process as easy and streamlined as possible for participants, allowing access to utility incentives, energy advisors, and customer support in addition to financing. Furthermore, HELP and Hi-RIS are self-sustaining financially and do not impact the city’s taxpayers, as about 60% of the operating budget has been raised from third-party sources and the remainder is recovered directly from program participants through an administrative fee.

Environmental Benefits – Results from the first year of the pilot indicate an estimated energy savings of 25% and 28% for HELP and Hi-RIS participants, respectively.

Social Benefits – With full rollout, Hi-RIS can improve the quality of housing for up to 549,000 residents, which represents 21% of Toronto’s population.

Economic Benefits – For the vast majority of completed HELP and Hi-RIS projects, the future energy cost savings are greater than the upfront capital borrowed and financing costs.

About Cities100

In its second year, Cities100 – presented by C40 Cities Climate Leadership Group (C40), Sustainia and Realdania – showcases leading solutions to urban climate challenges in ten sectors, ranging from solid waste management to transportation. For the first time, this year’s publication features solutions that address the nexus of climate change and social equity.

Available online and in print, Cities100 provides stakeholders an accessible format to explore achievable solutions for climate action in cities, and will be a useful tool for relevant groups ranging from impact investors and development organizations, to mayors and city governments.  You can access the full Cities100 2016 publication online here and read more about how may­ors will de­liver the aims of the Paris Agree­ment in a fore­ward by Anne Hidalgo, C40 Chair and Mayor of Paris, here.