Maggie interviewing a homeowner about their tenants.

Our Finger Lakes Climate Fund awardees have nearly all been homeowners who qualify for our grants based on their income: 80% or less of the county’s median. Over the past 10 years, we’ve helped dozens of families in Ithaca and surrounding counties to become climate heroes by providing gap financing for insulation, air sealing, and high efficiency equipment. But in a city where nearly 75% of the population rents their living space, it requires a bit more effort and outreach to replace outdated, dangerous, and inefficient HVAC equipment in rental properties. This summer, our team at Sustainable Tompkins is conducting a door-to-door survey focused on lower-income neighborhoods to capture the reality of residents’ energy cost burdens and related health, indoor air quality, and home comfort issues.

Our summer survey data will help give us a sense of the energy challenges tenants are facing as well as identify homes that may qualify for local and state grants. Some respondents may be connected directly with grant funding to install insulation, air sealing, or clean energy heat pumps and water heaters. We’re also aiming to connect with those willing to be neighborhood block leaders who can help educate their neighbors to take next steps.

The Split Incentive: Who invests vs. Who benefits? 

So why are we focusing on renters? Month-to-month, many tenants grapple with poorly insulated older homes and outdated equipment. Replacements often happen only when a system completely fails. Because their tenants either directly or indirectly cover the utility bills, landlords can be slow to make improvements and often lack an incentive to buy higher quality equipment that reduces energy bills. The cost of installing a new high-efficiency heat pump system represents an additional barrier for landlords to update their rental properties, and they’re often unaware of the financial assistance available to them if their tenants are income-qualified. As a result, cheaper fossil-fuel powered furnaces continue to be replaced by more of the same, delaying the home’s transition to clean energy by the additional 15-year lifespan of the replacement.

To complicate matters further, in the City of Ithaca, almost all homes rely on natural gas, typically the cheapest fossil fuel for heating. Thus, landlords must be convinced based on future return-on-investment through added value to their property, the likelihood of future local and statewide bans on natural gas appliances, and the moral imperative to “do what’s right.” Most of our local green landlords have been slowly making the changeover and discovering ways to cost-effectively reduce their building carbon footprints. For example, when converting to heat pumps, the landlord can take on the energy bills themselves and include the (now lower) utility costs in the rent. If they have multiple units in a building, they could service the building with one meter instead of a sub-meter for each unit and save on the $20 monthly charge of each meter. A local green landlord, Ian Shapiro, has successfully done this when converting his properties to electric heat pumps, and has saved hundreds while increasing the value and resilience of his investments. 

At the core of New York’s Climate Leadership and Community Protection Act, is a focus on making sure that lower-income residents are at the heart of our climate solutions – to ensure that they are not left behind in the transition off of fossil fuels. Over the past two years, NYS has invested millions to install heat pumps with significant subsidies for low-income homeowners. But now it is time to find ways to solve the ‘split incentive’ so that low-income tenants can also be part of the clean energy economy.

The City of Ithaca is working to provide low-cost financing to cover the upfront capital costs of switching our buildings to efficient heat pumps, so that owners can use energy savings to help pay for their investment. This can be supplemented with current and expected subsidies from state and federal climate programs to reduce those upfront costs. Although this might make sense for homeowners who directly benefit from lower utility bills and improved comfort, landlords are still likely to need more persuasion to voluntarily take on debt payments when our tight housing market makes it easy to find tenants who will pay the utilities on existing systems. Our hope is that our survey will help us identify other health, safety, and comfort issues in rental properties that would be solved by not only installing heat pumps for clean heating and cooling but also tightening up our buildings. As more landlords tap into the grants and incentives available on behalf of their low-income tenants, we can share their stories and inspire others to follow their lead.

The City of Ithaca can act as a case study and role model for other municipalities and cities, while local renters can directly receive relief from the negative health impacts, unpredictable, costly energy bills, and uncomfortable drafts caused by poorly insulated, fossil-fuel powered homes. We hope our survey will provide insight into the kinds of issues tenants are facing. For some respondents, it may even lead to that individual’s home receiving funding for home energy improvements.

As our mission to serve the community and direct resources toward historically marginalized groups evolves, focusing on the low-income tenant population in the City of Ithaca has become a key aspect of transitioning the whole city to clean energy and reaching our 2030 city-wide carbon neutrality and equity goals (also see the City of Ithaca’s Green New Deal resolution). So if you see us out on the streets, don’t be shy! We’re out here trying to help Ithaca take the next steps toward a healthier, cozier future.

Take our survey if you live in the City of Ithaca! 

Think it’s time for a heat pump? Fill out this form from HeatSmart Tompkins to start the process.