Earlier this year, everything seemed set for a major renovation to make two Chicago apartment buildings for mostly lower-income elderly residents more energy efficient. An affordable-housing organization had secured a federal loan, a state loan and money from private investors.
But the project, which was to start in a few weeks and include the installation of solar panels, is on hold after the federal Department of Housing and Urban Development delayed funding a critical $5.4 million loan that it had previously approved.
“Things are in limbo,” said Aaron Gornstein, chief executive of the Preservation of Affordable Housing, a Boston-based firm behind the Chicago project that operates in more than a dozen states. “Everything has been held up.”
Housing advocates say the industry has received no explanation from HUD about the holdup, but they believe the program, known as the Green and Resilient Retrofit Program, was probably targeted because it encouraged the use of green energy, something President Trump has often mocked.
A HUD spokeswoman, Kasey Lovett, said in a statement on Thursday that the program was being reviewed to ensure it was carried out consistent with the housing agency’s core mission to promote affordable housing.
“The previous administration’s extreme energy-efficiency crusade diverted valuable resources, including funding, from the department’s mission,” Ms. Lovett said. “The department is evaluating options to ensure rural, tribal and urban communities have the resources they need, which are not solar panels.”
Mr. Gornstein said the federal loan was a critical piece of the roughly $33 million in financing his organization had cobbled together to pay for the renovations on the two Chicago buildings, known as Corcoran Place. Together they have 94 units, and one of the buildings is nearly a century old. Now it’s unclear when the construction will happen. Dozens of energy-efficient projects across the country that had loans approved by HUD are also at risk, housing advocates said.
The Green and Resilient Retrofit Program, included in the Biden administration’s 2022 Inflation Reduction Act, was supposed to provide financing for renovations on older apartment buildings for people who are poor, elderly or veterans. Providing about $1 billion in grants and up to $4 billion in loans, the program was part of an effort to help building owners upgrade aging properties to make them more energy efficient and better resistant to the impact of climate change.
Some housing advocates say the Trump administration is misguided in regarding the program solely as a “green” initiative. They say the combination of grants and loans gives property owners the money they need to overhaul buildings. The energy-efficiency aspects not only save money for owners by reducing operating costs, they argue, but also enable owners to keep rents low for residents.
“This is not some program about feelings and ideology,” said Julia Gordon, who was an assistant secretary for housing during the Biden administration.
For affordable housing projects in particular, money is often required from multiple lenders and investors to get the work started. The loss of any one funding source can upend the whole project.
Denise Muha, executive director of the National Leased Housing Association, which represents operators of affordable apartment buildings that receive federal assistance, said property owners were concerned about how little information HUD was providing on the status of previously approved projects that had not yet been funded.
“I am hoping that once they understand what they are doing” they will put the projects back on track, Ms. Muha said.
Her association said nearly 300 projects had been approved to receive a total of $1.2 billion in grants or loans.
Separately, the Environmental Protection Agency announced on Tuesday that it was canceling a $20 billion allocation for climate and clean energy programs after freezing that money for weeks.
The work on the Corcoran Place apartments in Chicago was supposed to be extensive. The project would replace all windows and install a new roof with solar panels. Each apartment would get a new heating and cooling system, toilets and appliances.
In total, Mr. Gornstein’s organization has 19 projects that had received approval for up to $70 million in financing from HUD but are now on hold. The projects are in buildings that are fully occupied, he said. He estimated the work would generate jobs for about 2,300 people.
Erika Poethig, a board member on the Illinois Housing Development Authority, said the loss of federal money for the Corcoran Place project could be devastating.
“Our funding partner, the federal government, is reneging,” said Ms. Poethig, who is an executive with the Civic Committee and Commercial Club of Chicago and a former Biden administration official. “In theory they could get the money elsewhere, but that is very hard.”
