Imagine a world in which all of our homes make efficient use of energy. We get a lot of bang from every bit of electricity that powers appliances and lighting. We don’t have to worry about seasonal swings in temperature because of good insulation and sealing around apertures into our abodes. Our home feels reliably comfortable and healthy, giving us a platform from which to thrive in our lives.
Sadly, that’s not the Virginia of today, especially in the case of low-income apartment renters. As a result of inefficiency of their homes, based on income, the utility bills for affordable housing residents are typically 10x higher than for higher-income households. Imagine that burden instead!
Thankfully a new, groundbreaking energy-savings potential study from the Energy Efficiency for All project examined the 12 percent – 385,000 households — of our housing stock is in the affordable multifamily category. It finds that state regulators and the electric and gas utilities they control could cut electricity usage in those households by 28 percent, reduce gas usage by 19 percent, with huge returns on those investments. Specifically, Virginians would get nearly three times as much back for every dollar we invest in improving these properties.
The returns include reduced bill arrearages, improvements in health, increased resident comfort and higher property values.
Seems like a no-brainer, right?
Further, consider the overall benefits to housing affordability. Utility costs are a huge part of the cost structure for rental housing, as you can see from the graph below (Source: Lee, Christopher, 2012 Survey of Operating Income & Expenses in Rental Apartment Communities [Executive Summary] (Arlington, VA: National Apartment Association, 2012).
So improving the units in these buildings – and even better, buildings as a whole as best practices indicate should be the focus – is a big step towards keeping housing affordable for renters. This is a big issue in Virginia and nationally, with rents pinching households everywhere.
And for readers who might own not rent, remember we’re all in this together. Many of today’s renters are tomorrow’s buyers. So the whole housing market is jeopardized by our rental housing challenge.
Why on earth aren’t state officials and utilities tackling this challenge? In a word, because it’s hard. To be clear, energy-efficiency is not that difficult; the Commonwealth just hasn’t committed to it yet, as you can see from the low ranking in this nationally recognized scorecard of state energy-efficiency programs. But even those states that excel in energy efficiency have been leaving a lot of potential energy savings in multifamily housing on the table. This has admittedly been a struggle compared to work with single-family housing improvements.
That’s why Energy Efficiency for All also wrote a Program Design Guide with best practices from states across the country. It’s a grab-bag of great ideas for state officials and the utilities they regulate. Some that are worth considering in the Commonwealth include:
- Establishing a goal to capture all cost-effective efficiency in multifamily affordable housing;
- Improving building owners’ access to energy usage information;
- Developing programs specifically targeted to multifamily affordable housing;
- Structuring incentives for whole-building savings; and
- Building partnerships with key local market participants.
Let’s get to work!