Apartment owners have a novel way to increase demand for their property. Prospective renters said they are more likely to choose an energy-efficient home when they can compare rental units’ energy costs, a service now only available in select US areas.
The American Council for an Energy-Efficient Economy (ACEEE) conducted a study with 2,455 renters. When energy usage information was available, renters selected the most efficient listings 21% more than alternatives. On average, renters were willing to increase their monthly rent by 1.8% for a one-unit increase in energy score (on a scale from 1 to 10), which would translate into more than $400 of additional annual revenue for landlords for an average-priced rental unit.
Few Energy Efficiency Programs Focus on Renters
Currently, only a few cities, like Chicago, Boston, San Franciscos, and a few states, Colorado and Minnesota, in the United States have various programs designed to increase energy efficiency and disclose more energy information to renters. None mandate disclosure of such information at the time of a listing.
Consequently, potential renters typically do not know how much they will have to pay in energy costs, which have been rising. Low-income households are hit hard because they are more likely to rent than own and pay a higher percentage of their income on energy bills
Municipal or state policies could require that landlords disclose efficiency information in rental listings. The change would provide more information for tenants, so they make more informed choices. Also, it could entice building owners to make energy-saving improvements. Right now, such programs are in an early stage of development.
Currently, little to no energy efficiency information is available to renters. They seem willing to pay more for such data, but a number of steps have to be taken before such practices become common.