How Cities Can Improve Homes

Residential Policies to Promote Economic Development, Improve Health, and Reduce Carbon Emissions

The way we use energy makes a big difference in our lives in how safe, comfortable, and productive we are. In addition to impacting our individual lives, energy use in homes makes up a large part of energy use in the United States. The residential sector accounts for 20 percent of US carbon emissions. Fortunately, cities are at the forefront of helping to make sure that homes are more efficient and comfortable.

Cities are Leading the Fight Against Climate Change

Over 3,600 US states, cities, and businesses have pledged support for the Paris Agreement. These actors can drive emissions down almost to the targets set by the United States during COP21 in Paris by 2025.

Graph from Fulfilling America’s Pledge: How States, Cities, and Businesses are Leading the United States to a Low-Carbon Future, 2018

While reducing energy use in residential buildings plays a key role in meeting these goals, historically, this has been a hard sector to tackle. Residential buildings are decentralized, which makes it difficult to implement programs at scale. There are over 135 million housing units in the United States that are influenced by a variety of factors including local and state laws, climate, and economic context. However, cities can pass several types of policies that serve the unique needs of their constituents and drive progress on climate goals while potentially creating jobs and saving residents money on utility bills.

Policies to Reduce Emissions in the Residential Sector

Rocky Mountain Institute’s Residential Energy Plus team has been working with cohorts of cities and partner organizations such as the New Buildings Institute, Earth Advantage, and USDN to provide technical support and action-planning to help these cities develop and pass three specific policies that reduce emissions in the residential sector. As shown by the map below, nine cities and one state have passed one or more of these residential policies and an additional seven cities and one state are in progress. Learning from the progress of other cities can help other states and cities implement these specific policies and scale their collective impact.

Here are some of the policies that cities have been adopting:

  1. Rental efficiency standards

Almost 70 percent of residential properties were built before an energy code was in place, and as a result, existing residential properties, on average, are 30 percent less efficient than newly constructed residential properties. This means that tenants are burdened with living in less efficient and less comfortable homes while paying higher utility bills. Low-income customers in particular are burdened with higher energy costs and live in disproportionately less energy efficient buildings. The Department of Energy estimates that 44 percent of US households are defined as low income. These households have an energy burden three times higher than that of non-low-income households. In 2015, about 20 percent of households reported needing to sacrifice essentials such as food and medicine to pay energy bills and 11 percent reported that they kept their home at an unhealthy temperature to avoid high energy bills.

Efficiency standards for rentals ensure that landlords upgrade the efficiency of their residential properties as a prerequisite for renting a property. This avoids running a rental business that uses substandard housing and helps reduce energy burdens on renters. This policy was successfully passed by the City of Boulder as outlined in the 2018 RMI report Better Rentals, Better Cities.

Already, two cities have passed the policy and three other cities have publicly announced their progress on passing the policy. RMI organized a cohort of 27 cities that are also exploring this policy, representing a total of over 1 million rental units. We estimate that this could yield up to $560 million in annual energy cost savings if all 27 cities implement rental efficiency standards.

  1. Residential energy disclosure

While energy costs are one of the largest ongoing costs of home maintenance, most potential homeowners and renters have no way of estimating what these costs will be before moving into a home. Residential energy disclosure policies require sellers or landlords to make home energy performance information available to prospective buyers and/or renters. This type of information enables cities to drive more energy efficiency upgrades, protect consumers and help them make informed decisions, create jobs and invest in local businesses, and reduce energy burdens for low income households. Six cities have already passed policies and two other cities have publicly announced their progress on passing the policy. A cohort of 22 cities serving over 19 million people is currently participating in the effort.

  1. Zero-energy construction policies

Zero-energy homes are efficient homes that produce or procure as much renewable energy as they consume over the course of year. As our previous analysis shows, net-zero-energy ready homes can approach cost parity and are increasingly cost-effective. Cities and states are passing policies including codes that support zero energy and “zero-energy ready” specifications for new construction. Where cities don’t have code authority, they are considering density bonuses and other incentives for zero-energy construction. Two cities and one state have already passed policies, and an additional two cities and two states have publicly announced their progress on passing the policy. Nine cities serving over 2.7 million people participated in a cohort related to these policies.

Environmental, Economic, and Social Benefits for Cities

RMI continues to work with cohorts of cities to help them develop blueprints to pass policies that will benefit their constituents and position their cities as leaders against climate change. These policies help provide renters and owners more information about the energy efficiency of their homes, help create jobs, and ensure that homeowners and tenants don’t spend more than they need to on energy. We look forward to seeing the number of cities passing these policies grow over time, and we will keep this policy map updated. Please contact us if you wish to learn more or get involved.