The Importance of Energy Efficiency in Rental Housing

By: Carmen Lorentz, Lakes Region Community Developers Executive Director & Dana Nute, Resilient Buildings Group President
 
Imagine if you will, a happy little family.  There’s a single mother with two children and although she works full time, her income coupled with the ever-rising cost of living continues to make it difficult for her to make ends meet.  So, to ease the burden, she and her family move into a less expensive apartment. It’s not as nice, but she can more easily afford the rent. Great! Problem solved, right? Turns out, it’s not quite that simple.

That single mother may be saving on her rent, but statistics show that her energy burden (the percentage of gross household income spent on energy costs), is likely to be higher. According to the Department of Energy's Low-Income Energy Affordability Data (LEAD) Tool, the national average energy burden for low-income households is 8.6%.  That’s three times higher than for non-low-income households which is estimated at 3%. 

The reason why is that people of low-income don’t have a lot of choices when it comes to housing, so they tend to live in older buildings that are not energy-efficient. So even though they can least afford it, the cost to heat and cool their homes is higher, in relative terms, than for people who can afford to live in more modern, energy-efficient homes.  

During the month of June, the Department of Housing and Urban Development (HUD) organizes National Healthy Homes Month to “increase awareness of housing related health and safety hazards…and the overall principles of a healthy home, especially in low-income populations.” This year, for National Healthy Homes Month, we’d like to raise awareness about the importance of energy efficiency in rental housing.

Our goal at Lakes Region Community Developers (LRCD) is housing stability for our tenants because we believe that quality, stable housing is a platform for people of low income to build their own pathway to economic security. As one of our tenants so eloquently said, “A stable home was the base I needed to pursue the life I wanted for myself and my kids. Without a safe, stable home, it is hard to do anything more than try to survive.”

We have seen first-hand that fluctuating electric bills can jeopardize housing stability. It is common for tenants who first move into one of our older apartment buildings during the summer to have difficulty paying their rent when the cold weather sets in and their utility bills go up. People who live on the edge financially rarely have savings they can rely on to accommodate changes in their monthly budget. Our tenants are lucky because we have staff available to help them find resources to get caught up. Most renters are not so fortunate.

A few years ago, we made it a strategic priority to invest more time and resources into making our apartments as efficient as possible so that our tenants don’t experience significant fluctuations in their monthly household costs. As a landlord with bills of our own to pay, we figured if our tenants are doing well, then we will do well. And that thinking is definitely paying off. We absolutely see better rent collections at the properties where we have made investments in energy efficiency.

Other landlords may read this and think, “But LRCD is a non-profit, so they can pay for all this with grants and donations. I can’t do that!” We are happy to tell you that is not true. There are many programs available that can help landlords improve the energy efficiency of their properties.

Resilient Buildings Group (RBG) is a New Hampshire company whose mission is to scale up the number and quality of high-performance, low-energy-use, resilient buildings in New England. RBG specializes in analyzing the needs of a building and packaging various financing programs together to make a project financially beneficial for the building owner. RBG has provided this service to LRCD on several projects, including our rehabilitation of a 40-unit apartment complex in Ashland in 2020, and a 25-unit complex in Meredith which is under construction right now.

Even if you’re not a landlord who provides housing to people of low-income and even if you’ve never had trouble paying your electric bill, there is still reason for you to care about energy efficiency in rental housing. Commercial buildings, such as apartment buildings, use a lot of energy. You can think of energy efficiency as a carbon free source of energy because whatever measurement of energy we don't use, is one that we don't have to burn fossil fuels for. Most people think of adding renewable energy like solar or wind as the best way to make a building more “green.” But basic energy efficiency improvements like adding insulation, sealing cracks, installing new windows or doors create the same outcome while often costing less.

So if you are concerned about climate change, please consider supporting organizations that improve energy efficiency in rental housing, like LRCD or your local Community Action Program agency. We don’t typically fundraise like traditional environmental organizations, but we make a big difference in local efforts to reduce carbon emissions.