As heating costs rise in the winter, new research from Binghamton University, State University of New York, reveals a cold truth. Renters – who make up about ⅓ of the US population – are missing out on energy efficiency improvements that could lower their bills, make their apartments more comfortable and improve their health.
The study, “Still Muddling Through: Local Sustainability Leaders and Energy Efficiency in Rental Units,” was published in Energy Research and Social Sciences. It looks at how local governments across the country grapple with this widespread challenge.
More than 90% of renters in the United States pay at least a portion of their energy bills themselves, with nearly three-quarters paying the entire cost. But this causes tension between tenants who want to save money on their bills and landlords who are responsible for making most of the energy efficiency upgrades.
“Tenants don’t own the building, so they can’t put in insulation, they can’t put in better appliances, and so they have difficulty controlling energy use or costs. And the people who have the power and the money to make energy efficiency upgrades — landlords — they don’t reap the financial benefits,” said George Homsey, associate professor and director of environmental studies at Binghamton University.
As a result, landlords often don’t make these upgrades, and tenants are actually left out of the cold. Renters can make small improvements themselves, such as installing plastic sheets on windows, but these often have only a superficial effect on reducing bills or heating cold units.
“The number one energy upgrade we should make to our homes is adding insulation to the walls and ceilings, upgrading doors and windows, etc.,” Homsy said. “These types of improvements save a lot of money. It makes a home more comfortable. But you have to own the building to make these types of upgrades. And that’s the challenge we face.”
It’s known as the “split incentives” issue, and it has real implications beyond reducing expensive bills and making a place more comfortable, said Christina Marti, co-author and professor of public administration and policy at Binghamton University.
“Tenants have higher rates of asthma and are more likely to have other health problems from living in these substandard housing,” Marty said. “And so it’s not only inequitable that homeowners can spend less money per square foot on energy. Renters’ inability to improve the efficiency of their units also really impacts their quality of life.”
To examine this issue, Binghamton researchers conducted one of the first studies to explore this challenge from the perspective of local government sustainability leaders across the United States. The team interviewed 59 municipal and county government officials, focusing on policies and projects across jurisdictions to promote greater energy efficiency in rental units.
Based on these interviews, the researchers identified several initiatives that these communities offer to increase efficiency. However, most of these efforts were likely to help only a small percentage of rental units in a jurisdiction. Among the factors contributing to these issues, researchers noted landlord reluctance to make basic upgrades, poor rental housing stock, hesitancy to participate among renters, and program design issues. (For example, some programs restrict support for rental units in public housing or buildings focused on low-income families).
“These energy efficiency upgrades are expensive investments that ultimately increase the value of buildings long-term. But, as you can imagine, if the landlord’s focus is on making a profit, they won’t be excited to make these improvements, especially if they don’t know how long they’ll own the building,” Marty said. “One person talked about a homeowner who is charging $5 to change a light bulb. If they’re going to charge $5 to change a light bulb, they’re not going to install a state-of-the-art heat pump.”
Another major issue, Marty said, is that some energy efficiency programs are open to all residents of a community, but in practice, only homeowners are often able to take advantage of them because of how they are designed.
“These programs can, in theory, help a renter, except in reality, because renters then have to get permission from their landlord, no one will actually take advantage of them. A lot of renters are wary of doing anything that could create tension with their landlord and potentially jeopardize their housing,” Marty said. “So these programs exist, but most renters will never be able to benefit from them. Instead, they’re primarily helping homeowners. For example, governments typically subsidize the installation of solar panels – not that it’s not good to subsidize solar panels – but who can afford solar panels? Someone who owns their home and can afford solar panels. That’s not a renter.”
Researchers have highlighted some promising strategies that some jurisdictions are using to improve rental unit efficiency, such as incentive zoning, partnering with nonprofits to reach vulnerable populations, and incorporating energy efficiency into rental licensing programs.
“You can start a rental licensing program, or take what already exists and add energy conservation requirements to it,” Homsy said. Many communities have rental licensing programs that require inspections of units every few years to ensure code compliance. “It has worked well in one of the communities we studied. Landlords in this jurisdiction have to improve the energy efficiency of their buildings as part of the rental licensing process, but they can do it in a way that is easiest for them. The flexibility can bring landlords along. The program has ultimately improved the energy efficiency of thousands of units.”
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