Achieving deep carbon reductions in rental properties is complicated because building owners often have little incentive to invest in energy efficiency when their tenants are the ones who foot the utility bills, an obstacle known as a “split incentive.”
For this study, StopWaste and Franklin Energy surveyed and interviewed local government staff from 26 California jurisdictions to understand the characteristics of their rental housing inspection programs. Because we did not identify any California jurisdictions that have energy efficiency requirements as part of their rental housing inspection program, we also interviewed staff in three cities outside of California that do have rental housing inspection programs with a focus on energy efficiency. Those cities are Boulder, Colorado, New York City, and Austin, Texas. We identified key considerations for jurisdictions exploring the idea of a rental housing ordinance with energy efficiency requirements and organized ordinance feasibility considerations into four steps:
- Evaluate the baseline rental housing characteristics and existing policies.
- Assess the resources needed for development, implementation and enforcement.
- Consider potential impacts on renters.
- Evaluate approaches to program design.
This report does not categorically recommend the adoption of housing inspection ordinances with energy efficiency requirements because these policies are resource-intensive to implement and could cause tenant displacement in tight real estate markets. However, jurisdictions considering ways to protect and improve the quality of their rental housing stock can draw on a wealth of information we have presented.
