Cities Find Creative Ways to Green 46M Rental Homes

Forty-six million American renters are stuck in a frustrating catch-22. Their landlords control which appliances and insulation go into their homes, but renters are the ones paying the monthly utility bills.

It's called a "split incentive," and it's been quietly undermining climate progress in one of the largest housing sectors. When a furnace breaks or insulation crumbles, property owners have little reason to choose efficient options since they won't see the savings on their own bills.

"The issue of split incentives comes up every single meeting," says Dovev Levine, who works with 40 municipalities through the New England Municipal Sustainability Network. A new study from Binghamton University found only half of local officials interviewed even offered programs targeting rental properties.

But that's starting to change, and cities are finding surprisingly effective approaches. Alachua County in Florida offers up to $15,000 for efficiency improvements based on either renter or owner income. Minneapolis goes even bigger with $50,000 per building.

The timing matters too. Some cities now engage landlords right when they're already making repairs, helping offset the cost of choosing a heat pump over a standard furnace replacement.

Boston launched an "Energy Saver" program last fall that provides personal consultations to help people navigate available resources. The city plans to deliver $300 million in benefits by 2027.

Finding the right incentive isn't always enough. Burlington, Vermont tried rebates first without much success, then passed an ordinance in 2021 requiring rentals to gradually become more efficient.

"Despite rebates, we weren't seeing a lot of change," explains Jennifer Green from Burlington Electric Department. "This is one of the tools in the government's toolbox."

Not every city can take the regulatory route. Florida state law actually prohibits local governments from requiring landlords to make efficiency upgrades, pushing officials to focus on creative incentives instead.

The Ripple Effect

This shift matters beyond lower utility bills. Renters tend to have lower incomes than homeowners, making them more vulnerable to energy costs. When cities crack the code on split incentives, they're not just cutting emissions but also putting money back in the pockets of people who need it most.

The research shows 13 jurisdictions have turned to regulations, though most apply only to new construction or major renovations. Meanwhile, the success stories from cities using incentives are spreading, inspiring other municipalities to try similar approaches.

Stefen Samarripas from the American Council for an Energy-Efficient Economy has watched this momentum build over the past decade. He's optimistic that more cities will follow as they see what works elsewhere.

The creative solutions keep coming as officials stretch their thinking about how to serve all residents, not just homeowners.