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Energy-efficient homes save their occupants money through lower energy bills. These savings might be capitalized into higher home sale prices. They also improve the household’s net cash flow, which might make households better able to pay mortgage debt. The U.S. Department of Energy (DOE)’s Home Energy Score (HES) assigns a 1-10 score to homes and estimates annual energy bills based on modeled energy consumption. In this paper we investigated the relationship between HES metrics and two housing market outcomes: home sale price and mortgage performance. We found that the relationship was only statistically significant in places with a mandatory HES assessment at the time of sale. Using a sample of 26,291 home sales that occurred after HES assessments, we found that a one-point increase in HES in these locations was associated with a 0.5% increase in sale price, and an increase in $100 of estimated annual energy bills was associated with a 0.4% decrease. This magnitude of effect is consistent with estimated magnitudes of home sale premiums for other green or energy-efficient home certifications in the literature. We also found that a one-point increase in HES was associated with a 5.5% reduction in the odds of a loan going 30 days delinquent if the loan originated after the assessment occurred. Similarly, we found that a $100 decrease in estimated annual energy bills was associated with a 2.3% decrease in the odds of a loan going delinquent if it originated after the assessment occurred. Our results suggest that HES provides a valuable signal for housing market transactions in specific situations.

This paper presents new results on the link between energy factors and commercial mortgage default. First, we summarize results from an empirical analysis of the impact of source energy use intensity (EUI) and electricity prices on mortgage default. We used a unique data set that merges building-level energy use data from city benchmarking ordinances and financial data for commercial mortgages on the same buildings. We found that building source EUI and electricity price are statistically and economically associated with commercial mortgage defaults.Next, we present five case studies on the impact of energy use and price variations on default risk: three office buildings, a hotel, and a multi-family residential building. We use the empirical model coefficients to compute the default risk impacts due to variations in source EUI and electricity price over the course of the mortgage term. We found that variations in source EUI could raise or lower the default rates in these properties by between 5% and 40%, depending on the property type and geography. Electricity pricing has an even greater effect – roughly 60% change in default rate in the Denver area and nearly 90% in northern California. Finally, we propose an energy risk score that lenders can use to assess energy risk and inform mortgage terms. The score is being developed and piloted in collaboration with three mortgage lenders. We conclude with implications of this score as a market signal and mechanism for incentivizing energy efficiency investments through the commercial mortgage channel.

Prior studies have shown that energy use is related to commercial mortgage defaults. This report presents the results of a new and tractable methodology to estimate the association between energy use and mortgage pricing sensitivity - specically the origination contract rate and points - of oce and multifamily mortgages. Source Energy Use Intensity (Source EUI) is our key energy eciency measure of interest due to its increasing availability through local energy eciency benchmarking programs and thepotential ease of its construction from the utility bills of commercial buildings. Based upon an empirical model of mortgage default transitions for a sample of 610 securitized office and multifamily mortgages from Trepp, we simulate the loan-by-loan mortgage prices using a four factor dynamic model with: i) a measure of Source EUI that is scaled to the the net operating income of the property, called Scaled Source EUI, ii) the Electricity Price Gap, the cumulative dierence between expected and actual realized electricity prices, iii) loan-to-value ratio, and iv) the 10-year LIBOR rate. We find a statistically signicant positive association between mortgage default and Scaled Source EUI and a statistically signicant and negative association between the Scaled Source EUI of buildings and the simulated market prices of the mortgages written on those buildings. We then derive two sensitivity measures with respect to changes in Scaled Source EUI: i) the sensitivity of mortgage points to a 1% change in Scaled Source EUI; ii) the sensitivity of the mortgage coupon to a 1% change in Scaled Source EUI. We nd that sensitivity of mortgage points to 1% shocks to Scaled Source EUI is 7.71 and 4.0 basis points respectively for oce and multifamily loans. We nd that the sensitivities of mortgage coupons to 1% shocks to Scaled Source EUI is 2.10 and 0.84 basis points respectively for office and multifamily loans.

Prior studies have shown that energy use is related to commercial mortgage defaults. This report presents the results of a new and tractable methodology to estimate the association between energy use and mortgage pricing sensitivity - specically the origination contract rate and points - of oce and multifamily mortgages. Source Energy Use Intensity (Source EUI) is our key energy eciency measure of interest due to its increasing availability through local energy eciency benchmarking programs and thepotential ease of its construction from the utility bills of commercial buildings. Based upon an empirical model of mortgage default transitions for a sample of 610 securitized office and multifamily mortgages from Trepp, we simulate the loan-by-loan mortgage prices using a four factor dynamic model with: i) a measure of Source EUI that is scaled to the the net operating income of the property, called Scaled Source EUI, ii) the Electricity Price Gap, the cumulative dierence between expected and actual realized electricity prices, iii) loan-to-value ratio, and iv) the 10-year LIBOR rate. We find a statistically signicant positive association between mortgage default and Scaled Source EUI and a statistically signicant and negative association between the Scaled Source EUI of buildings and the simulated market prices of the mortgages written on those buildings. We then derive two sensitivity measures with respect to changes in Scaled Source EUI: i) the sensitivity of mortgage points to a 1% change in Scaled Source EUI; ii) the sensitivity of the mortgage coupon to a 1% change in Scaled Source EUI. We nd that sensitivity of mortgage points to 1% shocks to Scaled Source EUI is 7.71 and 4.0 basis points respectively for oce and multifamily loans. We nd that the sensitivities of mortgage coupons to 1% shocks to Scaled Source EUI is 2.10 and 0.84 basis points respectively for office and multifamily loans.

Purpose: Operating in both traditional schools and alternative learning systems (ALS) requires organizations to have a strong understanding of what drives the cultural acceptance of violence and the capacity of the local populace to find peaceful solutions. This paper explores the results from a formative social network analysis (SNA) study on out-of-school youth (OSY) in the Philippines for educational programming in crisis settings. SNA views relationships in terms of nodes and ties--nodes are the individual actors in networks, and ties are the relationships between the actors. As part of a process evaluation, SNA can shed light into the "black box" of how and why people and groups interact. Design/methodology/approach: Study data came from a survey of 1,006 youth between the ages of 18-24, in a cluster-randomized sample from eight municipalities in Mindanao, Philippines. The survey captured information on demographics, acceptance of violence, resilience and the relationships between youth/voluntary organizations, as well as between youth/trusted contacts ("alters"). These data were transformed into findings using both descriptive techniques and regression analysis. Findings: This paper finds that among Mindanao youth, the patterns connecting OSY with organizations, trusted contacts, acceptance of violence and resilience are extremely complex. The evidence paints a picture of OSY who are disconnected with institutional support, largely confined to their barangays (villages/neighborhoods) and surrounded by people who have overlapping roles as neighbors, relatives and friends. The analysis fails to outline a single, unified picture and instead reveals a tapestry of disparate points. More abstractly, SNA as a methodology captures a unique slice of the complexity of youths' lives and how aspects of this complexity evince the need for more effort to be put into adapting OSY programming to local conditions. The results also support previous research highlighting how push and pull factors combine in uniquely individual ways that defy general demographic patterns. Demographic variables, for example, explain little of the variation in youths' perceptions of violence and resilience, despite the strong significance of gender, age and urban/rural residence in most models. Variables for ethnicity and religion, in contrast, generally did not significantly influence acceptance of violence or perceived resilience. Social implications: From the constellation of findings, this study posits the following conclusions--regarding future development projects, practitioners can use SNA to better understand the complex patterns of influence on OSY at the community level. There is still ample opportunity to broaden and deepen institutional engagement with Mindanao's OSY population. Programs hoping to involve OSY should expect to dedicate special time, attention and resources to their recruitment, education and training. Regarding the design of interventions, programs focusing on mitigating or addressing violence/violent extremism should acknowledge the complexity of social networks. Education programs should thus be explicit about specific desired outcomes, elaborating how they intend to mitigate which types of violence and under what circumstances for which subgroups of youth. Originality/value: Regarding future research and evaluation, the study demonstrates how SNA, as an innovative monitoring and evaluation method, can map and measure human and organizational relationships, both visually and mathematically. The suite of methods under the SNA umbrella deserve greater attention and use by those seeking to learn about what works in providing quality educational services in crisis settings.

Language ability has been associated with emotion regulation (ER) ability. Children on the autism spectrum have greater rates of language delays and lower ER ability. Despite this, autism traits have not been considered or controlled for in past research. This study therefore examined the association between language ability and ER in young children with and without autism traits. An exploratory analysis was also conducted to examine the types of ER strategies used by young children with autism traits compared with young children without such traits. Ninety mother–toddler dyads participated in the study. Results showed greater receptive language ability was significantly associated with greater parent-reported ER ability both when children with, and children without, autism traits were included in the sample. Furthermore, greater expressive language ability was significantly associated with greater observed ER but only when children with autism traits were excluded from the analysis. These findings have clinical implications for early intervention development for both children with and without autism traits. [ABSTRACT FROM AUTHOR]

This paper presents new results on the link between energy factors and commercial mortgage default. First, we summarize results from an empirical analysis of the impact of source energy use intensity (EUI) and electricity prices on mortgage default. We used a unique data set that merges building-level energy use data from city benchmarking ordinances and financial data for commercial mortgages on the same buildings. We found that building source EUI and electricity price are statistically and economically associated with commercial mortgage defaults.Next, we present five case studies on the impact of energy use and price variations on default risk: three office buildings, a hotel, and a multi-family residential building. We use the empirical model coefficients to compute the default risk impacts due to variations in source EUI and electricity price over the course of the mortgage term. We found that variations in source EUI could raise or lower the default rates in these properties by between 5% and 40%, depending on the property type and geography. Electricity pricing has an even greater effect – roughly 60% change in default rate in the Denver area and nearly 90% in northern California. Finally, we propose an energy risk score that lenders can use to assess energy risk and inform mortgage terms. The score is being developed and piloted in collaboration with three mortgage lenders. We conclude with implications of this score as a market signal and mechanism for incentivizing energy efficiency investments through the commercial mortgage channel.

The commercial real estate mortgage market is enormous, with almost half a trillion dollars indeals originated in 2015. Relative to other energy efficiency financing mechanisms, very littleattention has been paid to the potential of commercial mortgages as a channel for promotingenergy efficiency investments. The valuation and underwriting elements of the business arelargely driven by the “net operating income” (NOI) metric – essentially, rents minus expenses.While NOI ostensibly includes all expenses, energy factors are in several ways given short shriftin the underwriting process. This is particularly interesting when juxtaposed upon a notinsignificant body of research revealing that there are in fact tangible benefits (such as highervaluations and lower vacancy and default rates) for energy-efficient and “green” commercialbuildings.This scoping report characterizes the current status and potential interventions to promotegreater inclusion of energy factors in the commercial mortgage process. It includes the results ofa literature review and extensive stakeholder discussions with 40 lenders, owners, serviceproviders, advocacy organizations and others.We present the following key findings related to current status of energy factors in the mortgageprocess:● Energy efficiency is generally not a motivating factor for lenders. It is typicallyconsidered a very small piece of the overall risk profile. Furthermore, the commercialmortgage loan process involves high stakes, which creates a disincentive to do anythingthat deviates from the shortest path to “getting the deal done”.● Although energy costs are part of the NOI calculation, there is currently very limitedawareness and analysis of their impacts in underwriting.● Underwriting is not standardized across the industry and lenders have considerablediscretion in underwriting practices.● The Property Condition Assessment (PCA), a detailed engineering report that lendersusually require, generally does not include information on energy performance.Furthermore PCAs are often ordered too late to influence the basic mortgage terms.● Most appraisals do not consider existing or planned energy efficiency features inproperty valuation, and have limited if any access to this information.● There have been several studies claiming a positive impact of energy factors on buildingvalue, but many owners have not been able to discern this in their own portfolios.● Context matters: all real estate is local. The impact of energy factors on valuation varysignificantly by location, building type, quality, and current market conditions.Overall, current commercial mortgage practices do not fully account for the risks andopportunities that may be associated with the energy-use of buildings. As a consequence,energy efficiency is not properly valued and energy risks are not properly assessed andmitigated. Commercial mortgages are a large lever and could be a significant channel for2scaling energy efficiency investments. We present seven potential interventions to properlyaccount for energy factors in the commercial mortgage lending process:1. Demonstrate to lenders how and where energy factors “move the needle” on the keyunderwriting metrics, such as default risk, NOI (and thus, implicitly, valuation, LTV andDSCR), and economic or functional obsolescence.2. If intervention #1 is successful, provide simple, seamless ways to incorporate energyfactors into underwriting - ideally as simple as a score to characterize energy factorrisks.3. Include energy performance in the PCA and move it up in the process. If PCAs includedinvestment-grade information on energy efficiency opportunities, they could be used tofacilitate funding for improvements through the mortgage loan.4. Owners need to demand consideration of energy performance by appraisers andlenders and provide the data.5. Include energy metrics more explicitly in ARGUS software. Given ARGUS’s widespreaduse in the real estate industry - it’s a de facto standard - a possible intervention would beto introduce more explicit energy metrics into its analytics package.6. Get appraisers to properly value energy factors. There are already several efforts underway on this front, including DOE’s Appraisal Working Group.7. Consider interventions in ancillary products and services such as mortgage insurancepremium discounts for energy efficient buildings.These interventions are technically feasible and could have significant impacts, with benefits tolenders and owners. However, it is also true that the nature of the mortgage lending process –with multiple stakeholders, high stakes and risk aversion – does not lend itself easily tochanges. Therefore, these interventions will need to be piloted carefully and modestly withhighly motivated early adopters. Wider deployment will likely require aggressiveeducation/awareness efforts and stakeholder engagement and support through relevantindustry organizations.

Commercial mortgages currently do not fully account for energy factors in underwriting and valuation, particularly as it relates to the impact of energy costs and volatility on an owner’s net operating income. As a consequence, energy efficiency is not properly valued and energy risks are not properly assessed and mitigated. Commercial mortgages are a large lever and could be a significant channel for scaling energy efficiency investments. A pilot analysis of loans with different mortgage contract structures and locations showed that when energy cost volatility was included in mortgage valuation, a 20% reduction in energy use resulted in a 1.3% average increase in mortgage value. This suggests that the explicit inclusion of energy use and volatility in mortgage valuation can send a strong price signal that financially rewards and values energy efficiency in commercial properties.This paper presents findings from a scoping study addressing energy factors in commercial mortgages. First, we present a review of current practices as it relates to incorporating energy factors into commercial mortgage underwriting and valuation. Next, we detail the impacts of energy factors on property values, net operating income and mortgage valuation. Building operational practices alone can result in energy use variations from -17% to 87%. Finally, we present a set of proposed interventions to properly address energy factors in commercial mortgages, based on extensive discussions with stakeholders including mortgage originators, underwriters, building owners and regulators.