In the past few years, efforts to decarbonize the U.S. building stock have accelerated due to growing concerns about climate change. It’s a crucial transition, but to help renters stay in their homes and reap the benefits of upgrades, we need well-designed policies.
Residential and commercial buildings are the largest source of greenhouse gas emissions in the country. Fortunately, this is changing. More than 40 U.S. mayors and governors have pledged to adopt building decarbonization strategies, and 13 have already adopted building energy performance standards, which set strong mandates to reduce emissions. Many state and local leaders have also created rebate and incentive programs for home electrification with the support of $8.8 billion in funding for home energy upgrades from the 2022 Inflation Reduction Act (IRA).
The transition to a decarbonized future will undoubtedly require significant funding and effort, but the IRA-funded rebate programs represent only a fraction of what’s needed. And under the new federal administration, a robust follow-up to the IRA appears unlikely. [Editor’s note: In fact, climate policies in the Inflation Reduction Act have come under fire under the current administration. It is uncertain how federal funds to environmental initiatives will flow in the future.]
This reality, and our urgent need to meet climate goals to address the crisis, mean that incentives alone are insufficient. Decarbonization mandates will be necessary, but they must prioritize rental housing stability alongside climate action.
The nation’s renters stand to reap enormous benefits from building decarbonization. Improving the building envelope, replacing gas appliances with electric ones, and adding heat pumps can lower energy bills, lessen indoor air pollution, and ensure more comfortable indoor temperatures—all while contributing to the fight against climate change.
But renters lack the power to make these modifications to their homes themselves.
Many renters, particularly low-income, long-term tenants, struggle with high rents and precarious housing situations. Nationwide, half are considered rent-burdened, leaving little room for other expenses—let alone investments in decarbonization.
At Strategic Actions for a Just Economy (SAJE), the member-based economic justice organization where I work in Los Angeles, we regularly encounter low-income tenants living in older, energy-inefficient housing with outdated systems and appliances. Their efforts to make their homes more habitable are often met with resistance from landlords unwilling to invest in upgrades. During an August conversation with our members about extreme heat, Gloria Rubio, a tenant who has lived in her apartment for decades, shared that her landlord has refused to let her install an air conditioning window unit, despite LA’s increasingly hotter summers and longer, more frequent heat waves. Rubio lamented, “I have been suffering for 26 years in the heat.”
Two years ago, in December, I suspected the gas heater in my apartment, where I have lived for 10 years, was malfunctioning. The utility company confirmed it was producing carbon monoxide and red-tagged it. Alarmed, I proposed the idea of installing an electric HVAC system to my landlord, even offering to pay part of the cost. His answer was a firm no. Even if I had wanted to pay for it all myself, I would still need his permission—my lease prohibits alterations to the unit without written approval, and installing a heat pump requires a building permit, which only the property owner can apply for.
At the core of this issue is the adversarial relationship between landlords and tenants in tight housing markets like that of Los Angeles. Many landlords prioritize maximizing profits, often viewing long-term tenants as obstacles to higher rents. The combination of weak tenant protections, entrenched private property rights, and skyrocketing property values—resulting in ever-increasing rents—creates a precarious housing landscape. This dynamic is a significant barrier to decarbonization. Landlords may resist making costly green upgrades, while tenants may also not be willing to pay for them when they have more immediate financial needs and lack affordable, stable housing.
The average cost to decarbonize one unit in a high rise apartment building through upgrades like electric panel replacements, energy-efficient appliances, and improved insulation is $50,730. Many landlords would like to see these costs passed on to tenants. As Jeff Faller, president of the Apartment Owners Association of California, bluntly stated at an October meeting of the South Coast AQMD (Air Quality Management District), “Rents are going to be going up because of it, because the cost of running everything is going to go up.” Faller was talking about two proposed regional rules to reduce emissions from residential furnaces and water heaters. But the problem extends further than Southern California. Who will pay for decarbonization? Without strong tenant safeguards, renters—who are often the least able to absorb these costs—are likely to bear the financial burden.
The nationwide affordable housing shortage further complicates the question. With a shortage of 7.3 million affordable rental homes, no state has enough housing to meet the needs of its low-income renters. The federal programs meant to address the shortfall have been underfunded for decades. Meanwhile, as the LIHTC program ages, the affordability covenants of hundreds of thousands of units are expiring.
“Renovictions” are already a widespread issue, and the end of COVID-19 eviction moratoriums saw a surge in such cases across California. Under the guise of renovation work, landlords have evicted tenants for more minor repairs, like electrical panel upgrades and the installation of new appliances. There is growing concern that decarbonization could be misused as a pretext to evict. Without policies to prevent this, the push to decarbonize risks pushing people out of their homes.
Compounding these challenges is the lack of any significant tenant protections in most cities across the country. Renters typically lack long-term tenure security. It’s difficult to justify why they should bear the costs of decarbonization when they may not even be in the same units in the long run to benefit from improvements. In cities without rent stabilization policies or just cause eviction protections—unlike in Los Angeles or New York City—tenants are especially vulnerable to the unintended consequences of decarbonization. But even in California—home to some of the nation’s strongest tenant protections—cost-recovery programs allow landlords to pass the costs of upgrades on to tenants through rent increases that can reach hundreds of dollars each month. Cities including Denver and St. Louis have adopted building performance standards requiring costly investments but have not put any safeguards for vulnerable tenants in place, leaving tenants at risk of unreasonable rent raises and even eviction as compliance deadlines approach. Advocates in these cities are understandably worried about the displacement and worsening housing affordability that could result.
RELATED ARTICLE: The Shift to Using More Electricity Will Change How Affordable Housing is Built]
Even when building decarbonization policies include well-designed tenant protections, implementing and enforcing the protections remains a significant hurdle. Structuring subsidy programs in a way that restricts evictions and rent increases is a potential solution, but such restrictions can be challenging to design. SAJE worked with the California Energy Commission to develop tenant protections for its Equitable Building Decarbonization Program, the gold standard for tenant-centered decarbonization. The program includes critical safeguards, including just cause eviction protection and a limit on rent increases to no more than 3 percent per year. This restriction lasts for 5 years in small buildings and 10 years in larger ones. Increases must be attributable to documented cost increases, such as higher property taxes or operational costs.
Yet achieving these wins required extensive collaboration with the California Energy Commission to educate an agency steeped in energy policy—not housing policy—on tenant issues. Moreover, there are no clear guidelines for enforcement. The agencies tasked with overseeing these types of programs often lack the capacity or expertise to ensure that landlords comply. This limitation underscores the need for systemic change: tenant protections must be codified into law (not just included in program guidelines) to provide comprehensive, enforceable safeguards.
At SAJE, we’ve built a coalition to advance tenant-centered decarbonization. In 2021 we brought together environmental justice organizations, affordable housing providers, housing justice advocates, climate groups, and labor organizations under the umbrella LA for Resilient and Healthy Homes and successfully secured a citywide ban on substantial remodel evictions in Los Angeles as part of a broader effort to tie tenant protections to climate policy. Our work is meant to shield countless renters from displacement as the city moves forward in ushering in a “renovation revolution.”
But our fight is just beginning. We demand decarbonization without displacement. Advocates of decarbonization must recognize the intersectionality of housing and climate justice and prioritize tenants in their work. In doing so, the climate movement can help build a future that both protects the planet and keeps people housed.
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