This post is by Eli Shepherd, a program leader with the Iowa City, Iowa program.
This summer, the Iowa City Summer of Solutions (ICSoS) Our Power project hosted two public forums on rental energy efficiency issues. With all stakeholders working collaboratively- tenants, landlords, utilities, city officials, and community members- we developed a comprehensive list of barriers to energy efficiency for both tenants and landlords, as well as possible solutions. We then, with the help of a local energy efficiency consultant, developed a comprehensive recommendation to Iowa City City Council based on the most feasible solutions. Kira Stoller of the ICSoS Our Power team then prepared and presented our recommendation to council during the community comment period at the most recent council meeting and we will continue to communicate with the city in order to, with any luck, implement much if not all of our recommendations. Without further ado, here is what we came to council with, hope you like it!Council Speech Intro Good evening, I am here representing Our Power, a project of the local nonprofit Iowa City Summer of Solutions. Our Power began in the summer of 2012 with the goal of increasing the community’s awareness of energy efficiency resources that are available to help people reduce their energy usage and save money on their utility bills. This year the project decided to focus specifically on rental properties. Dealing with the issue of energy efficiency in this context presents quite a challenge since the nature of landlord-tenant relationships is such that only one of the two parties benefits from any type of efficiency upgrade. Tenants often bear utility expenses, yet they cannot make the types of improvements necessary to significantly reduce energy bills and landlords do not have an incentive to invest in these upgrades when the returns go to the tenants. In cases where landlords do pay for utilities, the tenants have no financial incentive to use energy responsibly. This is referred to as a split incentive and it is currently hindering the city’s efforts to reduce its carbon footprint. Findings In an effort to brainstorm potential solutions to this split incentive, Our Power held two public forums that were attended by a variety of community members. Based on the feedback that we received at the forums we determined that a comprehensive solution to address the split incentive must: influence the market by creating a demand for energy efficient housing in Iowa City and incentivize energy efficiency by making it a financially sound option for landlords. Request Our Power requests that Council take an active role in addressing the issue of energy efficiency in local rental properties and proposes a two-fold solution to deal with the split incentive issue. Recommendations
Develop a standard form that discloses a rental property’s utility consumption history and describes completed energy efficiency projects. Information from the form could be used to develop a certification program which designates levels of energy efficiency of rental properties. This would help create a market incentive for property owners to invest in energy efficiency and would allow them to differentiate their units based on such upgrades.
Establish an energy improvement fund to aid landlords in making properties more efficient. A revolving loan fund could be made available to landlords who receive an energy audit from an approved source. The intent of such a program is to help landlords make the decision to invest in energy efficiency, even when they do not receive the benefit of lower utility bills.