Can energy cost increases transform the multifamily business model? via Galley Eco Capital

@LEEDEBOM tweeted a link to the DB Americas Foundation study on the benefits of retrofitting multifamily properties, which is now on my (fluid) list of 2012 green multifamily milestones. One of the first reasons to read it is to take in the eyebrow-raising update on how hard middle and low-income renters’ wallets have been hit by energy cost increases in recent years:

According to the U.S. Department of Housing and Urban Development (HUD), 88% of households in multifamily buildings are renters and have a nationwide median household income that is approximately half that of homeowners. Energy costs in low-efficiency multifamily housing puts a large financial strain on these households. HUD found that while average rents in multifamily housing increased by 7.5% from 2001 to 2009, energy costs for these renters increased by nearly 23%.

Ouch! If you carry HUD’s growth rate through 2012, renters are paying a 30.5% increase in energy costs over 2001 levels. And they have paid those increases over years when unemployment increased dramatically.

How will multifamily owners address tenants’ energy cost increases?

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