A new brief from the Urban Institute (UI), by Rebecca Marx and Vivian Liu, takes a close look at the ways in which American cities are promoting emergency efficiency upgrades in local housing with incentives and regulations. At a time when “affordability” seems to be a topic of the day – and many Americans are living from paycheck to paycheck – this is a very timely piece of research. 

As the UI explains, “Across the country, local governments are grappling with issues of energy inefficiency in residential buildings, especially in aging rental stock. Inefficient energy systems and un-weatherized housing can lead to higher energy consumption, higher energy bills, and unsafe living conditions, increasing the chances of renters experiencing poor health and housing insecurity.

“Pursuing energy-efficiency upgrades in rental units can be difficult because landlords may not be motivated to pay for energy upgrades for which they will not receive the benefits of lower bills and more comfortable spaces,” according to the brief.

Though few cities have developed programs and policies to help deal with this issue, the UI found a few, from which it drew important lessons for others.

The brief was “adapted from a longer feasibility study to help stakeholders in Rochester, NY.” That study looked into “energy  efficiency upgrades in one-to-four-unit housing.” It featured information from Boulder, Colorado and Cincinnati, Ohio, about requirements and incentive programs. Other lessons came from New York towns and cities, including Albany, Ithaca and New York City, based on plans or implementation of “energy-efficiency solutions” for renters.

The research led to four significant approaches that can help with this pressing issue:

• Housing quality assessments, which “help stakeholders better understand upgrade needs and technical barriers to upgrades. They can also increase transparency around housing quality to inform residents making lease or purchase decisions about their full housing costs, including energy bills—and about what comfort or safety issues they might expect.”

• “Targeted education and outreach,” which is aimed at different audiences and “can promote understanding of what’s at stake in relation to housing quality and energy efficiency and build support for adopting measures that address safety, health, and affordability challenges.”

• “Programs designed to encourage upgrades and retrofits to existing rental stock.” This includes “improved insulation, air sealing, more energy-efficient appliances, and better HVAC systems.” These “are typically supported by monetary incentives, including capped grants or matching grants.”

  
  

  The brief explains that current incentive programs help property owners to prioritize “and can be “structured to encourage the most cost-effective or most efficient improvements.” Affordability clauses are used in some rental property programs to keep grant recipients from coupling improvements with raised rents.

• “Energy-efficiency requirements are enforceable standards that builders and property owners must meet. They are often enforced through inspections and penalty fees. They can be designed prescriptively to require specific upgrades or can be performance-based, setting limits on emissions. Requirements are usually paired with incentives to support the necessary upgrades.”

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