Multifamily energy upgrades address income gap

Thursday, April 21, 2016

Advocates for American low-income households are calling for more flexible financing options to improve energy efficiency in apartment buildings. A newly released survey of energy costs in 48 major U.S. cities pegs median annual earnings for low-income residents of multifamily housing at just below US $22,000 (CAD $27,900) with a median annual utility expenditure of US $1,032 equating to 5 per cent of income.

In comparison, apartment dwellers with higher incomes paid a median of 1.5 per cent of their annual incomes for energy utilities — a gap analysts attribute to quality of the housing stock on top of economic disparity. Based on utility expenditures per square foot, authors of Lifting the High Energy Burden in America’s Largest Cities conclude 35 per cent of low-income households’ excess cost ratio relates to the energy performance of their dwellings.

The report cites other findings from one of its sponsor organizations, the Energy Efficiency for All coalition, that estimate “energy efficiency in multifamily affordable housing could realistically cut the sector’s electricity usage by as 26 per cent, based on data from a sample of states.” Given this potential, the report recommends low-interest financing and/or on-bill financing to reduce building owners’ upfront costs for energy retrofits, and reiterates 10 best practices the American Council  for an Energy-Efficient Economy has identified to support take-up of programs for multifamily energy upgrades.

“More than two-thirds of the multifamily rental market consists of households that have an annual household income of less than $50,000. Yet residential energy efficiency programs administered by states and utilities have historically focused on single-family, owner-occupied housing,” the report observes.

The report also promotes expanded data collection to inform program design and evaluation, and argues in favour of tracking non-energy program benefits — such as health, safety and economic development spinoffs — which would often significantly improve the benefit-cost ratio.

“Increasing investments in energy efficiency can help improve energy affordability for all of America’s households, renters and owners alike, and this is especially critical for low-income renters whose energy burdens are more than three times higher,” maintains Khalil Shahyd of the Energy Efficiency for All coalition.

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