6 ways to solve the ‘renter’s dilemma’ for home energy
by Jonathan Hiskes.
Watching a skillful home-energy
inspector explore
a leaky house last week left me with a distinct sensation:
envy.
As the inspector went
through the process, showing the homeowner how insulation, foam sealing, and
other improvements would save money on heating bills, I realized I want some of
that sweet
weatherstripping action for my house. But my wife and I have a simple and
common dilemma: we rent. We’re not going to pay for house improvements because
we might not live there for long and won’t profit from the increased property
value. Our landlord won’t shell out for much because he doesn’t pay heating and
electricity bills—we do.
This renter’s dilemma
is a real barrier to getting more homes weatherized (which, in case you haven’t
heard, is a
fan-flipping-tastic policy that helps out cash-strapped residents, saves
energy, and creates building-industry jobs). Renters tend to have lower
incomes, so they could use the savings more.
So I put out a
call a few days ago asking for proposals for cracking this nut. Wouldn’t
you know, some decent ideas came back. None of the proposals are a magic
potion, which means it’s worth trying out a bunch of strategies. Starting with
three steps tenants can take:
1. Talk to landlords about what they can do. Sounds obvious, but
it’s an important place to start, and something not all energy-conscious
tenants have done (guilty). A coworker got her landlord to pay for
weatherstripping of doors simply by asking.
This may work for only
the cheapest improvements. “Most landlords are looking for ways to recoup their
electricity costs,” Tom Harrison of the efficiency products shop Energycircle.com told me. “A few say
they want to help their residents conserve. And I don’t doubt them, but to be
honest, of the several I have spoken with directly, they are all Canadian—seriously.”
2. Threaten to leave. If you’re a desirable tenant, owners might
prefer to pay for some improvements than spend time and money looking for new
tenants (The Alliance to Save Energy has a good
list of specific improvements to consider.)
3. Ask about “green leases.” In this arrangement, an owner agrees
to pays for improvements (say, $2,000 for attic insulation), then raises the
lease ($50 a month) to recoup the cost. If the improvement saves an average $65
month in heating costs, the renter comes out ahead and the owner recovers the
investment in a few years.
Commercial properties,
where the energy bills and potential savings can be much higher, are leading the
way with this model. It works better in theory than in practice. For one, it’s
difficult to predict how much savings a set of improvements will create. Also,
real-estate lawyers tend to be focused on closing deals, not taking a risk on
some “green” model they’ve never heard of. So green leases haven’t gotten a lot
of traction.
Now three steps that
policymakers and utilities could take:
4. Ignore renters and weatherize owner-occupied housing first. This
counterintuitive idea comes from David Goldstein, energy
program co-director at the Natural Resources Defense Council. The U.S. needs
home efficiency now, he says, so it should focus on the easiest target. As the
weatherizing industry matures, it will develop trained workers, cost-saving
innovations, and road-tested quality standards that it can then use to solve
the tougher problem of rental housing.
5. Create an energy scoring tool—an MPG for buildings. Certain
uncles of mine will ask how my car’s doing—including what mileage it’s
getting—at holiday gatherings. An “MPG for homes” would encourage people to
think and talk about home efficiency in the same way. Ratings would become a
factor in housing searches in the way Walk
Score has—which would encourage landlords to weatherize rental
properties. There are several rating systems out there, including a new
1-10 Home Energy Score from the Department of Energy that may or may not be
too simplistic. The key is for some rating system to become widely understood
and trusted.
6. Institute on-bill financing. Perhaps the most promising tool. Utility
companies pay for a retrofit, then recover the money by adding a surcharge to
the home’s electricity or heating bill. For the renter, the lower energy cost
balances out the surcharge—which is why this model has been marketed as “pay
as you save.” (It works when the owner pays utilities too.) It’s a sister to
the Property
Assessed Clean Energy model, in which municipalities run the program and
the surcharge is attached to property-tax bills.
Pilot programs in Kansas,
Hawaii and New Hampshire have had success with the PAYS model, and it figures
into the “green new deal” of the UK’s coalition government. The main holdup
elsewhere has been utilities that say their billing systems aren’t equipped to
handle this kind of financing. If that sound like a weak excuse … it is. The
American utility industry, remember,
spends less on R&D each year than the pet-food industry does. It’s going to
take some prodding to get it to offer PAYS financing.
The keys, efficiency
geeks have learned, are to make improving a home hassle free for residents, to remove
the barrier of high upfront costs, and to make debt “stick” with a property—so if an owner sells or a renter moves out, the new tenant gets both the energy
savings and the remaining payments. On-bill financing would do all of these. It’s
worth trying out.
Related Links:
U.S. homes are right-sizing and greening
Understanding the smart meter backlash
Which has a bigger footprint, a coal plant or a solar farm?
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