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A renter's market?

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billlascher | Aug 27, 2010 10:54 AM

For the first time in decades it's cool to be a renter. So why is it so hard to rent a home and still be “green"?

This week, as news outlets across the board reported a steep decline in home sales and prices in July, especially in the West, some reported increased preferences for renting, especially with the added uncertainty wrought by high unemployment levels. Particia Orsini of AOL's Housing Watch reported Aug. 26 that Americans, particularly homeowners, are now more likely to think that renting a home is more prudent than buying one. Other news outlets, such as Forbes and the Real Estate Channel and Time's Curious Capitalist" blog, also recently dissected the growing preference for renting.

Orsini cited statistics from Harvard's Joint Center for Housing Studies. I took a glance at that report – titled State of the Nation's Housing 2010 – and found it shows that rental vacancies grew from 2006 to 2009, even though the renter pool was growing at the same time. In fact, U.S. Census Bureau housing vacancy survey data cited by the report shows that fewer people own homes in the West compared to any other region in the nation. The same numbers also show that nearly three-quarters of white Americans own homes while fewer than half of minority populations do.

So, what does this all have to do with the environment?

Everything. When we discuss incentives for energy efficiency we often focus on homeowners. Doing so leaves out millions of Americans, who by necessity or choice, rent their homes instead of buy. These renters may not be paying property taxes, but they still often pay for utilities such as electricity, gas and garbage disposal. As fewer Americans own homes, more will rent. Since they're more likely to be renters, minorities are less likely to have access to financial incentives for making their homes more environmentally friendly. (The same could be said of residents of any ethnicity living in the West, where home ownership rates are low.)

In an Aug. 18 Palo Alto Online article, Ryan Deto points out that the thousands of dollars in upfront costs for homeowners to install solar systems or edible gardens are out of reach for low-income renters. Those costs would be even greater for a multi-unit property owner who, in many cases, isn't the one who would see the savings of efficiency measures on utility bills.

That's why it was encouraging to read Willey Staley's Aug. 24 “Urban Nation” column in Next American City. In the piece, Staley described how an 81-unit senior housing complex in Boulder, Colo., was one of 100 affordable multi-family housing complexes to receive a share of $112 million in stimulus grants and loans from the Department of Housing and Urban Development for green retrofits such as solar panels and new, more efficient appliances.

In lauding the grants, Staley captures some of the early drama and, dare I say it, hope for a possible “Green New Deal” that surrounded early coverage of the economic stimulus.

“In a sense, this is a perfect example of what the American Reinvestment and Recovery Act was supposed to accomplish,” Staley writes. “It saves money both for property owners and tenants (emphasis mine), the federal government, creates domestic green jobs, and will contribute to reducing carbon emissions down the road. It’s hard to imagine a program that better encapsulates the Obama Administration’s policy goals: public spending that attracts private investment in more sustainable technologies, and helps ensure long- and short-term prosperity.”

Staley's optimism is great, but there's a problem. The West – which is being hit harder than anywhere else in the country by the shifting housing market – received far less than other regions from HUD's recent series of green retrofits. Of the 100 green retrofit awards announced by the department (the department's press release about the retrofits includes a link to a PDF copy of the list), only 17 were directed at projects in the region. In fact, money was doled out for projects in but five states in the region – California, Oregon, Washington, Nevada and Colorado. Of the nearly $112 million in awards, only a little more than $15 million, or about 14 percent, went to these states.

Even so, the grants only serve low-income renters who live in federally assisted housing. Millions of low-income renters don't, as detailed in the Harvard housing study.

“Despite federal support for rental assistance of about $45 billion per year, only about one-quarter of eligible renter households report receiving housing assistance,” the report's executive summary said.

If we want lasting economic and environmental prosperity shouldn't we as a nation be investing in everyone who is participating in our economic system and interacting with our environment?

Bill Lascher is a Portland, Oregon-based freelancer. He focuses on the environment's intersection with science, business, culture and policy. 

He got the name for his Web site, Lascher at Large, from the legal column his father penned for 20 years before his death. Lascher is currently working on a project with his grandmother to tell the story of her cousin, Melville Jacoby, a foreign correspondent who died in the early days of World War II.

A renter's market?
steve sanchez
steve sanchez
Sep 07, 2010 03:56 AM
This article just goes to show that the real estate market is not going to pick up anytime soon, as more and more people are looking to rent instead of buy. And with that assumption, we can also expect the level of inventory of the new and existing homes to become higher as more people are abandoning the idea of home ownership. And as we know home ownership is the one major driving force behind the recession of 2008. Since we expect less movement with the real estate market, we can implicitly deduce that a double dip recession is inevitable. If we can avoid the recession, we should be able to curb the number of personal bankruptcy being filed on a monthly basis. If you want more information on personal bankruptcy, please read http://tofilebankruptcyornot.com/[…]/
Quality control
mbc
mbc
Sep 07, 2010 06:28 PM
HCN, I want better journalism than this. I'm not sure what the author's asserting here, but he's not demonstrating that he knows what he's talking about. HUD, as the name would imply, tends to spend its budget in densely populated areas (i.e. the East). A very little research shows its not the only agency forking out recovery dollars for residential energy efficiency. DOE has spent just over a third of its recovery budget in western states & 29% of that is for programs that can include residential energy efficiency. A quarter of its total funding for those types of programs has gone to western states. EPA is handing out dollars for that kind of work too, and both those agencies spending patterns tend to be more evenly spread across natural resource centers and population centers.

But that's still missing the point. Energy efficiency programs are developed and run at the state and/or utility level. And most utilities and states offer a number of programs that target low-income and multi-family properties, like free or heavily subsidized aerated showerheads and weatherization kits. Most CFL programs, which is where residential energy efficiency gets the biggest bang for the buck, operate at the point of purchase, where the rental vs. owner question becomes nearly irrelevant. And all those programs are likely to be more effective than anything that happens with federal recovery money, because the added layers of bureaucracy reduce the return on investment.

In addition, you can make a pretty solid argument that environmental damage goes up with income. Rich people own bigger houses that have larger utility bills (even if they are more 'efficient'), drive more, fly more, consume more, and encroach natural areas in their quest for pristine frontiers. When you stack it all up, worrying about whether renters have enough insulation in the walls seems a little misguided from a practical environmental policy point of view. Maybe we ought to spend our recovery dollars changing attitudes out here in the west (and south and mid-west) that families of four should own 2500+ sq ft homes and a summer cabin in wildfire country. But that would be reinventing America not recovering it.

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