Improving energy efficiency in low-income households could create a ripple effect of health, economic, and environmental benefits for individuals, families, and communities. That was the key takeaway message presented in a new report released by the American Council for an Energy-Efficient Economy (ACEEE) and Energy Efficiency for All (EEFA) highlighting the hefty energy burdens that low-income households are carrying in 48 of the largest U.S. cities.
Ample research and analysis exist to support the fact that low-income households pay a bigger percentage of their income toward household energy costs compared with that paid by the average household. The ACEEE report “Lifting the High Energy Burden in America’s Largest Cities” takes a closer look at the cost burden for individual groups within that low-income segment of the market, as well as minority households. Their research found that each of those groups pays a bigger percentage than the 3.5 percent paid by the average household.
Overall, low-income households experienced the highest median energy burden—more than twice the national average—at 7.2 percent. African American households faced an average burden of 5.4 percent; followed by low-income households living in multifamily buildings at 5 percent; Latino households at 4.1 percent; and renting households at 4 percent. Results vary by region, with the highest cost burdens occurring in the Southeast and the Midwest. Specific to low-income households, including those living in single-family and multifamily homes, the cities with the highest cost burdens are Memphis at 13.2 percent; Birmingham, Alabama, at 10.9 percent; Atlanta at 10.2 percent; New Orleans at 9.8 percent; and Providence, Rhode Island, at 9.5 percent.
Report authors Ariel Drehobl and Lauren Ross make the point that a strong correlation exists between the cost burden and the energy efficiency of the housing stock. For example, households living in multifamily properties pay almost 20 percent more per square foot than homeowners, indicating that they live in less efficient homes, Drehobl says. Improving energy efficiency generates many benefits for communities and for society in general in terms of reducing use of natural resources and carbon emissions. Reducing the cost burden for low-income and minority households also creates positive economic and health benefits for that segment of the population, adds Drehobl.
“What is really unique to this study, in addition to revealing the extremely high burden experienced in communities of color, is the emphasis placed on low-income multifamily housing,” says Khalil Shahyd, a representative with the Energy Efficiency for All coalition and a project manager for the Urban Solutions Program at the Natural Resources Defense Council (NRDC). That is important, because multifamily buildings represent approximately one-fourth of all the housing stock in the United States and account for 20 percent of all the energy consumed in the housing sector, he says. For the past three years, Energy Efficiency for All has been working with partners in 12 states to make multifamily housing healthier and more affordable through energy efficiency.
Energy efficiency programs administered by states and utilities have historically focused on cutting waste in single-family, owner-occupied homes. “This is a problem, because [multifamily] property owners may not always choose to install the most energy-efficient products and appliances, because the tenant and not the owner is paying the energy bills,” says Shahyd. So, improvements such as energy-efficient windows and better insulation are far less likely to be installed in rental units than in other types of housing, he adds.
One of the goals of the ACEEE report is to encourage cities and other stakeholders to use the data and recommendations from the report as they work to address high energy burdens in their communities, Drehobl says. Many utility regulators do require utilities with energy efficiency programs to target low-income customers. “Increasing investment in energy efficiency programming is an underutilized strategy that could complement bill assistance and weatherization programs to help reduce high energy burdens in underserved communities,” she adds. The ACEEE report outlines four strategies for improving energy efficiency in low-income communities that include the following:
- Improve and expand existing low-income utility programs;
- Collect, track, and report demographic data on program participation;
- Strengthen policy levers and leverage existing programs; and
- Use the Clean Power Plan to prioritize investment in low-income energy efficiency.
Specific to low-income households, the report found that bringing the housing stock up to the efficiency level of the median household would eliminate 35 percent of excess energy burden, reducing the energy burden from 7.2 percent to 5.9 percent. For African American, Latino, and renting households, 42 percent, 68 percent, and 97 percent of their excess energy burdens, respectively, could be eliminated by raising household efficiency to the median.
“If we were just able to bring low-income and low-income multifamily housing stock up to the efficiency of the median household in these large cities, we would eliminate at least 35 percent of the excess energy burden. Those are real critical dollars,” says Shahyd.