New NRDC Study Highlights the Big Potential for Energy Efficiency in Affordable Multifamily Housing

The potential for cost-effective energy savings in the rental apartments where millions of low-income Americans live is substantial – as much as 32 percent for electricity and 24 percent for natural gas. That’s the good news out today in a new analysis NRDC has released with our partners in the Energy Efficiency for All project. In fact, in the states we studied— Georgia, Illinois, Maryland, Michigan, Missouri, New York, Pennsylvania and Virginia — renters, landlords, utilities and regulators who take advantage of opportunities to save energy can create benefits worth $2.90 to $3.50 for every dollar invested. That’s a giant bang for the buck.

These findings are great news for the stakeholders involved but they are also good for the general public in ways you may not realize.

First, the advantage to low-income renters: Many of them spend 20 percent or more of their incomes on energy, often forcing them to choose between paying light or heating bills or for food and medicine. And, often health costs for these residents are higher because drafty rooms and mold from leaking water create unhealthy conditions. Upgrading the energy efficiency of these homes will mean improved health and comfort along with lower bills. For landlords, boosting the efficiency of their buildings and apartments can help them save big money on one of their largest expenses—energy. And, they can enjoy the pluses that come from having more financially stable tenants.

For utilities and regulators, these potential energy savings also offer major opportunities. Individual measures like switching out inefficient light bulbs, caulking windows and insulating water heaters can save millions collectively. Upgrades in thousands of apartments can help utilities and regulators lessen the strain on electric grids in metropolitan areas where many low-income renters live. For utilities, that, in turn, means lower costs, fewer outages, and happier customers. (Also, more bills paid on time.) And for both utilities and regulators, beefing up the energy efficiency of hundreds of thousands of apartments can help meet the important carbon-pollution reduction targets that are part of the EPA’s Clean Power Plan to cut greenhouse gas emissions from existing power plants.

When renters in affordable buildings save money on energy, what we in the field wonkily call non-energy benefits start to accrue to us all. Improved health outcomes for residents, particularly those with asthma and other respiratory diseases, mean significantly fewer taxpayer dollars are spent on healthcare. (Taxpayers cover more than 40 percent of the nation’s almost $3 trillion in healthcare bills through programs like Medicare and Medicaid.) We also reduce the number of emergency services calls our fire departments and EMTs receive: When homes are poorly insulated, tenants forced to used stoves and dangerous space heaters to keep their apartments warm sometimes cause fires. Likewise, low-income tenants can face heat stroke and other heat-related health problems if they can’t afford to keep their homes cool in the hottest parts of the summer.

Then there are the climate benefits. Less energy used means less carbon pollution. And that means fewer dangerous heat waves, fewer severe hurricanes, fewer lake-parching droughts and fewer out-of-control wildfires. The benefits of all that should be self-evident.

For years, though, when it has come to state- and utility-funded energy efficiency programs, the rental homes where low-income people live have been neglected. For many in the field, it has been much easier to upgrade single-family homes and businesses. But our findings – released along with a best-practices guide for utilities and regulators – show that utilities in every service territory in the states we studied can benefit from energy efficiency programs that target the apartment buildings where low-income tenants live.

The savings are out there waiting for us to harvest. Our nation, our renters, our landlords, our utilities and our regulators will reap some amazing benefits when we do.