Still muddling through: Local sustainability leaders and energy efficiency in rental units

Rental housing comprises a significant portion of residential buildings globally and contributes substantially to greenhouse gas emissions. The “split incentive” problem hinders energy efficiency improvements in rental units due to misaligned financial interests between landlords and tenants. The problem has been investigated both theoretically and empirically, usually within the context of energy usage or from the viewpoint of landlords or tenants. This study is one of the first to explore the challenge from the perspective of local government sustainability leaders across the U.S. – the people charged with implementing local greenhouse gas reduction policies. Based on our analysis of 59 interviews done in 2023, we categorize local policies into five approaches: assistance to landlords, assistance to renters, regulations, enhancements in public housing, and the promotion of external energy efficiency programs. Drawing from interviewee reports, we find most efforts were likely to improve the energy efficiency of only a modest portion of rental units. A variety of factors described by local leaders, such as program design issues, tenant hesitancy, and the poor condition of rental housing stock, contributed to the limited reach of these initiatives. We conclude by highlighting some promising strategies, including incorporating energy efficiency into rental licensing programs, using incentive zoning, and partnering with nonprofits to reach vulnerable populations.