Can cities make landlords care about energy efficiency?

As the federal government retreats from climate action, cities and states have increasingly stepped in to reduce emissions and address the crisis. But new research reveals that these efforts often fail to reach renters – one of the largest and most vulnerable segments of the housing market – leaving a persistent void in local climate policy.

According to a Redfin analysis of Census Bureau data, about a third of U.S. households are renters — about 46 million in total, and they tend to have lower incomes. Yet many rebates, incentives and other programs aimed at improving energy efficiency or switching away from fossil fuels in a home are aimed at homeowners, even though it’s usually renters who pay the utility bills.

These programs often focus on improvements such as installing heat pumps or higher efficiency appliances, or improving insulation. But because property owners typically don’t cover daily energy costs, they have little incentive to make these investments, even if they reduce emissions and tenant bills. Economists call this dilemma a “shared incentive,” and Dovev Levine, who directs the New England Municipal Sustainability Network — a group of about 40 municipalities collaborating — says this dilemma is not uncommon.

“The issue of shared incentives comes up at every meeting,” he said.

Researchers at Binghamton University in New York wanted to better understand how state and local governments are approaching this problem. They surveyed dozens of officials from across the country and published their findings earlier this month in the journal Energy Research & Social Science. Only about half of the 59 officials surveyed said their agencies were proposing initiatives to improve the energy efficiency of rental housing.

“Many significant improvements remain pending,” said Kristina Marty, a Binghamton professor and co-author of the study. “We’re sort of pushing this kind of very important sector out of the residential market. »

This doesn’t shock Levine. What he finds more surprising is that combating the problem remains “a fairly new effort.” Tenants aren’t always a priority for city planners and managers, but Stefen Samarripas, who works on local policy issues at the American Council for an Energy-Efficient Economy, a nonprofit, says that has started to change over the past decade.

“I’ve noticed that more and more local governments are starting to question this idea,” he said, noting that progress has been particularly visible in recent years. “I think there’s been a lot more interest and importance.”

Samarripas has seen municipalities implement a number of effective strategies. One approach is to work with homeowners when they make replacements, repairs or renovations and encourage them to choose more efficient options. If a furnace breaks down, for example, state or local governments can help reduce the cost of installing a heat pump.

It is also important to highlight the benefits of efficiency in common areas. “In many rental properties, there will be energy costs that the landlord will be responsible for,” Samarripas said. While weatherproofing a building can go a long way to saving tenants money, homeowners also stand to gain.

Financing also plays a key role. Alachua County, Florida pays up to $15,000 for available efficiency improvements based on the qualifications of the tenant or owner. Minneapolis provides up to $50,000 per building. Other jurisdictions also offer low or no interest financing to help you.

Even when help is available, navigating these resources – or even discovering them – can be difficult. Last fall, Boston launched an “Energy Saver” program that offers one-on-one consultations to help address this challenge. The city expects to generate $300 million in profits from this initiative by 2027.

Sometimes, however, even the biggest incentives aren’t enough. Marty’s study found that 13 jurisdictions have turned to regulation to address this problem. In most cases, the laws only applied to new construction or major renovations, although some targeted existing housing stock. Burlington, Vermont, was not included in this latest research, but in 2021 the city passed an ordinance requiring rentals to become incrementally more efficient.

“Despite the rebates, we haven’t seen much change,” Jennifer Green, director of sustainability for the Burlington Electric Department, said of the decision to go the regulatory route. “It’s one of the tools in the government’s toolbox.”

This tactic won’t work everywhere. In Florida, for example, state law prohibits local governments from requiring property owners to make efficiency improvements. Samarripas nevertheless hopes that tenants will be increasingly taken into account as municipalities develop climate policies.

“I’m optimistic that we can solve these problems,” he said, emphasizing the ingenuity of the government officials he worked with. “These folks have really gotten creative and worked to be creative and innovative in how they approach this problem.”