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Iowa bill would give apartment-seekers more information on energy bills

Downtown Des Moines, Iowa, as seen from the west terrace of the Iowa Capitol complex. Lawmakers here are considering a bill that proponents say would encourage owners of large rental properties to invest in making their buildings more efficient.  Photo by Jason Mrachina / Flickr / Creative Commons

Iowa lawmakers are considering a bill that would require owners of large rental buildings to disclose typical utility costs to apartment-seekers.

The legislation has momentum in large part due to a Des Moines-area property manager who has been a champion for energy efficiency in his buildings.

“Rental housing is the low-hanging fruit” of energy efficiency, said Keith Denner, president of Professional Property Management. The problem is that property owners often aren’t rewarded for those investments. Residents are typically the ones who realize the cost savings, and they rarely have the information to factor utility bills into rental decisions.

House Study Bill 635 would require owners of apartment buildings with at least 12 units to calculate the average monthly cost of utilities — gas, electricity and water — among units with the same number of bedrooms. The owner then would have to provide that information to potential residents before a lease is signed.

Denner, whose company owns or manages about 2,000 rental units in and around Des Moines and nearby Ames, spent many hours in recent years pitching the idea to lawmakers, even as they voted in 2018 to gut requirements for utility-funded energy efficiency programs. The bill passed the state Senate 47-1 last March, and this week received a hearing in a House subcommittee. 

State Sen. Zach Nunn, a Republican from suburban Des Moines, said it appeals to lawmakers across the political spectrum.

“They see it as a way to save money, both for renters and landlords,” Nunn said.

Kerri Johannsen, who lobbies on energy issues for the Iowa Environmental Council, said the bill would allow apartment-seekers to “vote with their feet and choose less overall expensive rentals,” giving property owners incentive to reduce energy bills.

“I believe this will have an impact when landlords are faced with choices about what types of investments to make in their properties,” Johannsen said.

Iowa would join just a handful of other states, including California, Hawaii, Maine and New York, that have energy disclosure laws specific to rental apartments, according to the American Council for an Energy-Efficient Economy. Hannah Bastian, a research analyst with the organization, sees indications of growing interest in utility bill disclosure requirements.

“A lot of cities are expressing interest and exploring this,” she said. “They may become much more prevalent in the next few years.”

Iowa’s bill departs from others, she said, because it is focused on disclosing expected costs for a specific unit as opposed to a whole building’s energy use.

The Iowa Landlord Association opposes the bill. Andrew Lietzow, its executive director, called it “a huge waste of time” for apartment managers and said it wouldn’t provide any meaningful information for residents. He said apartment-seekers can already contact the local utility to learn past usage patterns.

Other opponents of the bill include the Iowa Association of Realtors, the Iowa Association of Municipal Utilities, and the Iowa Association of Electric Cooperatives. Utilities MidAmerican Energy and Alliant Energy are listed as undecided.

While the bill would require property owners to provide information, it would not require efficiency upgrades. And that, in Denner’s view, is the bill’s magic. “No landlord has to spend one penny,” Denner said. “But they’re going to want to … because they will want to report the lowest number they can.”

When developing multifamily housing, Denner said he settles for nothing less than “extreme efficiency,” with thicker walls, higher quality windows, and high-efficiency boilers, water heaters, appliances, and lighting. He said apartment-seekers often come to him because of the company’s reputation for efficiency.

The distinction between his buildings and other rental properties would become more apparent if lawmakers approve the bill he is promoting, which he said would not create any additional government bureaucracy.

“It’s going to be self-enforcing. If the landlord doesn’t comply, the tenant gets $100 dollars,” he said. And should the resident have to go to court to obtain the money, the property owner would have to pay an additional $500, which would go toward a fund to help low-income Iowans pay their utility bills.

Denner said, “Isn’t that poetic?”

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