STIMULUS AND HOUSING

The plan to stimulate the sagging national economy, crafted by Congress and the president this week, focuses largely on giving checks to middle- and low-income people. The hope is that they will spend the money, and quickly, which in turn will stimulate the economy, which is heavily tied to consumer spending.

As the stimulus bill took shape, some lawmakers suggested helping people pay their heating bills. While that would certainly provide timely assistance, a step further might have been taken: boosting federal and state programs that provide low-interest loans for home repair, especially repair designed to make a house more energy-efficient.

Maine, with some of the oldest and most poorly maintained houses in the U.S., is a case in point. A recent Bangor Daily News story examining the plight of a family in Milo struggling to heat its older home after energy prices rose steeply provides an example: “The windows in the sparsely furnished home are cracked, holes in the roof leave a skating rink on the kitchen floor on rainy days, groundwater rushes through the cellar like a river, and there is no insulation to help prevent the heat from a wood stove and an oil furnace from escaping through the cracks into the winter air.” The family burned 100 gallons of oil every three weeks, it estimated.

It is critically important for the federal government to fund the Low Income Home Energy Assistance Program at a baseline that realistically matches the annual need. But it is also critical to help financially strapped homeowners insulate, repair, upgrade windows and doors and install more efficient heating systems. LIHEAP rules require that 15 percent of funding be set aside for weatherization programs, which seek to plug the holes in poorly insulated houses so the fuel assistance money doesn’t – literally – go out the window. But directing more money into home repairs, perhaps through low-interest loans, makes sense.

“Investing in weatherization would be a ‘three-fer,’ at least,” said Dale McCormick, director of the Maine State Housing Authority. The homeowner uses less fuel so less money leaves Maine (and the U.S.) to foreign oil suppliers; the small, locally based contracting businesses that do the repairs make money; and the family keeps more of its money which it can then spend on other goods and services, which circulates money through the area. Middle-income households spend about 6 percent of their earnings on heating, but low-income families spend 24 percent and the elderly spend 19 percent, Ms. McCormick said, so saving on heating bills can translate to substantial discretionary spending.

Among its initiatives to shore up the state’s rickety dwellings, Maine State Housing is working to help replace the 4,000 pre-1976 mobile homes serving as residences. Built to a lower energy standard, the mobile homes often had 1-inch-thick walls, providing little room for insulation.

Failing to invest in better-insulated and more energy-efficient housing is an opportunity missed.