Energy Efficiency and its Effect on Affordable Housing

Energy Efficiency and its Effect on Affordable Housing

According to the U.S Department of Energy, “Thirty-five percent of all households now rent, and more than 60% of all rental housing, totaling 30 million households, is in the multifamily sector.” (1)  

Many of the more affordable multifamily properties were built decades ago. These properties are likely to be energy-inefficient which leads to higher energy cost burdens for residents. Approximately 24% of U.S. renters now spend more than 50% of their annual income on housing and utility expenses alone. For low-income and minority tenants, the share of their income devoted to energy bills can be as high as 7.2%. This can contribute substantially to the overall financial burden of renters and have negative effects on housing stability. (2)

As the multifamily housing market grows, only approximately 1 in 10 are considered affordable for many renters. Energy efficiency upgrades in multifamily rental properties can be an effective strategy to slow this trend and preserve housing affordability.

Improving Energy Efficiency Is Good Business for Multifamily Properties

A comprehensive, strategic approach to energy management can improve the energy efficiency of U.S. multifamily properties by 15-30%. Whether you pay these utility costs directly or not, improving energy efficiency across your multifamily properties can lower costs of living and increase comfort for your tenants. Energy efficiency improvements will also lower your operating costs, increase the value of your properties, and make them more marketable. (3)

Tips for Improving Energy Efficiency and Affordability

  • Consider replacing older appliances with energy-efficient products such as ENERGY STAR rated equipment and appliances (see EPA’s ENERGY STAR product rebate finder).
  • Purchase energy-efficient products in bulk. Affordable housing developers often purchase products on an as-needed basis in small quantities from retailers. However, many have found that they can often save money by purchasing products directly from product manufacturers or wholesalers, some of which offer discounts on bulk purchases (see U.S. HUD)
  • Help renters learn how to maximize the benefits of energy efficiency improvements by offering educational opportunities on how to properly operate a home to minimize utility costs. This is especially critical for influencing the behavior of residents when energy costs are paid by the property/building owner.
  • Engage in training sessions for property owners, developers, and facility management/maintenance teams supporting efforts to improve energy efficiency in affordable homes. Check with organizations such as EEFA (Energy Efficiency For All) and local governments to see if they sponsor and coordinate these types of training sessions. Some of these organizations also provide local contractors and housing organizations with information on energy efficiency features and overall approaches to improving energy efficiency in affordable housing.


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