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Rental Toolkit

RE+ City Cohort Action Guide

Efficiency Standards for Rentals

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Rental units have had a huge impact in the affordability and sustainability of US cities. It has traditionally been difficult for policymakers to target energy efficiency and equity in rental units. Cities across the United States now have a way to make rentals more efficient, saving energy and improving quality of life for residents.

What are efficiency standards for rentals?

Efficiency standards for rentals ensure that landlords upgrade the efficiency of their residential properties as a prerequisite for renting a property. This policy has successfully been implemented in Burlington, Vermont, and Boulder, Colorado, and is being considered by several other cities.

Map of Cities that have implemented

There are several cities that have already passed or are in the process of passing efficiency standards for rentals

View the map

Why should cities implement efficiency standards for rentals?

  1. High climate impact – In most major cities, over half of the housing is rentals, but these have been the hardest homes to get efficiency upgrades in. This segment represents approximately 10% of a city’s carbon emissions. If the country’s 43.7 million rental properties were able to reduce emissions from rental property by 10%, this would be equivalent to what could be achieved by building all new residential properties to a net zero energy standard for the next six years.
  2. Reduce the energy burden for vulnerable households – Improving energy efficiency would reduce energy bills in the households most likely to struggle paying them: 43 percent of renters report energy insecurity compared to 24 percent of homeowners. In 2015, about 20% of households reported needing to sacrifice essentials such as food and medicine to pay energy bills and 11% reported that they kept their home at an unhealthy temperature to avoid high energy bills.   These households have an energy burden three times higher than that of non-low income households.
  3. Address split incentives – Rental properties are typically some of the most inefficient residences because landlords have no financial incentive to make improvements that benefit a tenant’s utility bills. An efficiency standard ensures that landlords upgrade efficiency of their properties to improve the thermal comfort, air quality, and energy bills for their tenants.
  4. Easy integration into existing licensing programs – Cities can build upon existing policy and administrative frameworks to implement a rental efficiency standard.
  5. Local job creation – This policy creates jobs for energy efficiency inspectors, stimulating local businesses and growing the sustainable energy economy.