When temperatures drop in the Southeast – as occurred this past week – many residents turn up their thermostat to stay warm and comfortable. Unfortunately, this is not a luxury that all can afford. For low-income households, including multifamily households, the proportion of household income spent on energy – their energy burden – can be up to three times as much as higher-income households. Low-income households tend to live in less energy-efficient homes, and while increased energy burdens can affect these households year round, extreme temperatures in the winter and summer can result in a high energy burden for those that can least afford it.
One of the best ways to reduce this energy burden is by targeting multifamily buildings with energy efficiency investments. SACE has been working with partners throughout the Southeast – including Advanced Energy, the American Council for an Energy Efficient Economy (ACEEE), Energy Efficiency for All (EEFA) and the Southeast Energy Efficiency Alliance (SEEA) – to bring the region’s multifamily stakeholders together and work towards solutions to reduce the energy burden for low-income and multifamily households. According to a report published by SEEA in 2016, nearly 25% of the households in the Southeastern United States live in multifamily buildings, defined as those with at least two, and typically more than four, dwelling units. While some multifamily units are owner-occupied, the majority – over 95 percent – are occupied by tenants who do not have an incentive to invest in improvements to a property they do not own.
The landlord-tenant split incentive dichotomy is a persistent challenge, especially in the energy sector. Property owners have little to no incentive to invest in energy efficient technologies without the guarantee of a high return on investment. And although many renters, especially in multifamily affordable housing units, experience high energy burdens, there is not a clear pathway to help overcome the reality that renters have no incentive – and very little capital – to invest in efficiency improvements for a property owned by someone else.
North Carolina’s Multifamily Energy Efficiency Collaborative
Addressing this contradictory set of self-interests requires a greater understanding of the barriers being faced in the multifamily sector and a diverse group of stakeholders dedicated to finding solutions. In late 2016, a group of 40 energy efficiency and multifamily stakeholders came together to start down the path of finding these solutions at North Carolina’s first Multifamily Energy Efficiency Summit, a day long event led by SACE, ACEEE and Advanced Energy that brought together diverse points of view, experiences and ideas. The goal was to come to a consensus on how to advance energy efficiency in the hard-to-reach multifamily market. Driven by a common objective to increase participation in existing multifamily energy efficiency utility programs and modify programs and policies to improve their performance and impacts, the group worked together to understand barriers and identify potential solutions. At the end of the day, the group left the meeting with a five point plan to expand the use of multifamily energy efficiency programs in North Carolina.
1. Improve Collaboration
Improve coordination and collaboration among all organizations that provide services and resources to North Carolina’s multifamily market. These organizations include financial institutions, developers, utilities, regulators, government agencies and community organizations.
2. Enhance Education and Outreach
Identify education and outreach opportunities and develop strategies to engage key multifamily stakeholders – tenants, managers, property owners and contractors – in energy efficiency education and program marketing.
3. Clarify Language and Centralize Solutions
Develop a centralized online portal for all multifamily resources that includes clarifying language, the alignment of common interests, centralized resources and solutions, and streamlined messaging for all multifamily stakeholders.
4. Renew Focus on Regulatory and Policy Changes
Review and revisit regulation and policies affecting utility and related multifamily programs to align policy objectives for all stakeholders.
5. Improve Data Access and Information
Enable the sharing of full and accurate data and information about markets, housing, programs and services to target properties with the highest energy burdens. Include metrics to measure progress and success.
The temperatures in the Southeast have started to rise again for now, but the focus on improving the region’s housing stock – especially in the multifamily sector – will continue. Interested in learning more or being a part of the NC Multifamily Energy Efficiency Collaborative working groups? Email me at [email protected].