Tenants and landlords can both save with energy efficiency upgrades

Talk about a win-win. The U.S. Environmental Protection Agency (EPA) and government-backed mortgage provider Freddie Mac recently agreed on a plan that will cut carbon emissions and at the same time make rental housing more affordable.

The plan will make it easier and cheaper for property owners to get loans for energy efficiency upgrades. This is a big deal because studies estimate that increasing the efficiency of U.S. multifamily rental properties could deliver as much as $9 billion in energy savings by 2020. It could also reduce greenhouse gas emissions by 35 million metric tons – the equivalent of taking 7.2 million cars off the road or shutting down 10 coal-fired power plants.


With studies showing that rental properties are generally less efficient per square foot than owner-occupied homes, helping renters and their landlords save energy (and money) is a key step toward reducing overall U.S. energy use.

The EPA-Freddie Mac initiative, part of the president’s Climate Action Plan, also will make available more data on energy and water use in multifamily properties. Tenants will better understand the energy costs of living in a particular home, letting them make more informed decisions. And owners will have a new incentive to make their properties more efficient, and therefore more appealing to potential renters. Additionally, property owners and tenants alike will be able to see how efficient their properties are compared to others.

EPA and Freddie Mac aren’t the only ones working to address this challenge. C2ES, through the Make an Impact program, has launched a web-based effort to reach out to renters with customized energy efficiency information. (Read about it in this blog.)

In addition, energy utilities across the country are launching efficiency programs specifically targeting the 20 million American households in multifamily residences. According to a recent study of 50 of these programs by the American Council for an Energy-Efficient Economy, a solid majority (38) offer rebates and incentives for energy-saving investments. In addition, 16 programs provided direct installation, and 20 provided comprehensive “whole building” approaches for retrofits or new construction.

It makes sense to focus on the energy efficiency of rental properties. Since the end of the housing bubble several years ago, the number of housing units occupied by renters has shot up while owner-occupied homes have declined. Today, roughly one-third of Americans live in apartments in multifamily buildings. Austin, Texas, is a prime example of the potential. The area’s population has increased 40 percent over the last 10 years and about half of residents rent their homes.

Moreover, tenant demand for efficiency seems to be growing. A 2013 survey showed that 65 percent of renters consider energy-efficiency features important in deciding what apartments to rent, and 57 percent said the same about environmentally friendly features.

Providing owners with incentives to make their rental properties more energy efficient – and renters with the tools to understand energy costs and reduce them – will go a long way in reducing energy use, protecting the environment, and saving money.