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Warmer Homes, Richer Neighborhoods

How USAID and HFHI united neighbors to heat their homes, reduce their energy bills, and strengthen their communities

 

“I’m always finding some excuse to be the last one at work because it’s warmer there. I’m fed up with high bills and chilly rooms.” — Lile Kike, Skopje, North Macedonia

“I could not afford to heat our house last year. I just turned on the stove for 20 minutes in the kitchen to make it possible for everyone in the family to sit around the table for breakfast.” — Nona Nalbandyan,Yerevan, Armenia

“When I first moved in here, the windows were old, and we covered them with blankets to stop the wind.” — Ivana Georgievska, Skopje, North Macedonia

 

Low income housing in Yerevan, Armenia. / Habitat for Humanity

These stories are all too common in Europe and Eurasia, where housing for low income residents and retirees is dominated by 1960s era apartment blocks. When the Communist bloc collapsed, a wave of privatization swept across the region. Sadly, the governance structures and financial mechanisms required to maintain these buildings did not immediately follow. The massive state institutions charged with repairs during the Soviet period no longer existed.

Many residents of these aging apartment blocks are already struggling with daily expenses. In North Macedonia, for example, 25.7 percent of the population was considered unable to keep their homes adequately warm according to Eurostat data from 2016. This way of life is perilous in a part of the world where winters are long and dark, with temperatures routinely dipping to 20–30 degrees Fahrenheit (-6 to -1 degree Celsius).

 

Building with shattered windows prior to retrofit, Yerevan, Armenia. / Habitat for Humanity

As heat escapes through the cracks in the walls and ceilings, the cost of heating a building — and keeping the lights on — rises by as much as 20 to 30 percent. The situation becomes particularly dire during the winter months, when the price for heat is too high for many people to bear.

As housing prices and energy bills continued to rise through the 1990s and into the 2000s, residents of these crumbling structures had few places to turn. Fearing the impact of skyrocketing housing costs on already fragile communities, USAID and Habitat for Humanity stepped in.

Starting in 2011 in North Macedonia and expanding into Armenia, and Bosnia and Herzegovina, USAID works with Habitat for Humanity in Europe and Eurasia to help create the financial mechanisms, public awareness, organizations, and local government buy-in needed to empower residents to organize for better, healthier, more affordable neighborhoods.

USAID’s partnership with Habitat for Humanity is far from traditional development. Directly retrofitting every apartment block would have been prohibitively expensive. It would also have taken decision-making out of the hands of the residents.

USAID and Habitat for Humanity chose a different course. Habitat reached out to homeowners to inform them about how much money they were losing per month in unnecessary energy bills. Those who expressed interest in retrofitting their homes found a partner in Habitat.

 

 

Homeowner’s Association meeting in Banovici, Tuzla Canton, Bosnia and Herzegovina. / Habitat for Humanity

 

The key to success turned out to be a combination of community organizing and burden sharing. Residents had to pool their own resources, request a loan from a bank, and consistently pay down that loan as a community. Habitat helped neighbors organize and agree on a refurbishment plan. Now they only needed a financing partner.

In North Macedonia, Habitat set up its own loan fund to demonstrate that homeowner’s associations are reliable clients. In Bosnia and Herzegovina, residents started out financing the repairs through personal savings and local government subsidies facilitated by Habitat. In Armenia, Habitat worked directly with banks to craft loans tailored for homeowner’s associations.

To understand the success of the partnership between Habitat for Humanity and USAID, one only needs to visit these neighborhoods.

 

Above: Views before and after a building with shattered windows in Yerevan, Armenia, received a retrofit. Below: A building with shattered windows prior to and after a retrofit, in Tuzla Canton, Bosnia and Herzegovina. / Habitat for Humanity
In North Macedonia, where I served as acting country representative, at least 62 buildings in eight municipalities have received retrofitting, impacting more than 1,900 homeowners. In Armenia, 18 buildings (519 housing units, 1,500 residents) have been repaired. More importantly, this work so impressed the Yerevan Municipality that its leaders are considering co-financing retrofits on 900 additional units.

And in Bosnia and Herzegovina, four buildings (49 housing units, 133 residents) have been retrofitted. Now local governments in the Tuzla Canton have developed an action plan to retrofit 973 more homes. The plan will provide subsidies to match loans and other funds raised by homeowners associations.

 

A happy resident of a Habitat for Humanity-repaired home. / Habitat for Humanity

 

Beyond the numbers, Habitat for Humanity has forged a market ecosystem where homeowners, banks, and government officials work together to create healthier, more affordable housing for some of the most vulnerable populations in the region. In the process, they have also created a model which can be replicated across Europe and Eurasia because it benefits everyone in that system.

Banks now have a tested way to work with potential new customers via their homeowners associations. By pitching in now, local governments reduce the likelihood of having to invest a greater sum down the road to retrofit buildings, build new housing, or increase subsidies for electricity bills. Homeowners are empowered to take control of their own future and feel a renewed sense of pride in their homes and communities.

Most importantly, residents are welcoming the extra they find in their pocketbooks. According to Habitat, retrofitting has cut energy bills for low income homeowners by up to 50 percent.

 

 

“The difference is obvious after the windows installation in the lobby. Most of the day the boiler is switched off. This year it is very warm in the winter.” — Alaverdi Toumasyan, Yerevan, Armenia

 

 

“It feels like I’m in a dream with the roof done. It’s about time and the feeling is incredible.” — Milenko Lukich, Tuzla Canton, Bosnia and Herzegovina

 

“I never believed that our building was going to end up looking like this…it is a thousand times better, a thousand times….” — Meho Mehinovich, Tuzla Canton, Bosnia and Herzegovina

 


USAID’s partnership with Habitat for Humanity has important policy implications. Educating the public about how energy efficiency personally impacts them is a small but important step towards insulating the region from internal and external energy shocks, especially those perpetrated by foreign malign actors seeking to leverage energy access in exchange for political deference. And for those countries looking to join the European Union, which has exacting standards for energy efficiency, this new approach establishes important protocols now that may help down the road.

 

Image result for Gretchen Birkle

About the Author

Gretchen Birkle is the Deputy Assistant Administrator for the Bureau for Europe and Eurasia and was the Acting Country Representative in North Macedonia.

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