Just two weeks ago, I was musing on how energy efficiency efforts are designed to benefit people who have savings to lay out for them. The logic flaw was obvious: people who need efficient house heating are the people who can’t afford their heating bills, much less have the money to lay out for high efficiency upgrades.
Landlords do not benefit directly from upgrading their rentals. It is good for the world, but not necessarily good for their bottom line. This leaves a huge portion of Massachusetts’s old housing with insufficient insulation and less-than-optimal heating systems. If Massachusetts was going to meet its energy goals, change was needed.
The energy problem and the solution
“According to a report released late last year, Massachusetts needs to decarbonize 500,000 homes by 2030. Achieving this will requiring retrofitting 20,00-25,000 homes per year until 2025, and then scaling up to 80,000 homes per year by 2030.” [source]
That is a huge task. Enter our new Governor, Maura Healey, with the beginnings of a solution:
“Wherever I go across the Commonwealth, I hear about the high cost of energy and housing,” Gov. Maura Healey said in a statement. “We’re taking these intertwined crises head-on with this new grant program. Massachusetts residents who need help the most will be able to benefit first from healthy, affordable electric heating, cooling, hot water, and energy efficiency.” [source]
Our state legislature also is on board, by allocating money for retrofitting municipal buildings. They established the Zero Carbon Renovation Fund. That program allows $300 million of remaining federal COVID-relief funds to help retrofit public and affordable housing units, schools, and other municipal buildings.
What was wrong with previous energy incentive programs?
In 2022, there were Federal and State rebates and no-interest loans. However, the cost of energy upgrades are still tens of thousands of dollars. These are loans, so the homeowner needs repay them. The $10,000 rebate for heat pumps has to be laid out by the homeowner, then paid back by the government, months later. Moderate- and low-income homeowners often can’t tie up $10,000 like that. Not everyone can take on a new loan, even an interest-free one.
The programs supported wealthy, or at least comfortable homeowners with higher-than-necessary heating bills. That is too limited; it left out moderate income homeowners and was bad for meeting environmental goals. The sudden rate hikes for electricity and heating fuel this year has made the inequity of paying for energy worse. Those with better insulation and upgraded systems paid less than those who could not, or did not, spend tens of thousands of dollars for upgrades.
Why would a landlord lay out for upgrading their tenant’s heating systems? If the systems work, the landlord is doing their duty. The bills are the tenant’s problem, right? Unfortunately, that is the way things have been going.
37.5 percent of housing in Massachusetts is rental property. If landlords don’t step up to make this housing efficient, our Commonwealth does not have a prayer of meeting our energy goals. Therefore landlords need more incentive, especially landlords who provide housing to moderate- and low-income tenants.
The new energy program:
The new program in Massachusetts is meant to increase the number of rental properties that are up-to-date with efficient heating and less dependent on fossil fuels. This program will address those landlords and their tenants. Low-income renters are less capable of shouldering increasing energy costs. Landlords who are collecting lower rents need this increased support to insulate and change the heating systems in these apartments.
As a matter of justice, the new Massachusetts program will focus on low-income areas. Although the devil will be in the details and the implementation, I say, “Brava, Governor Healey!”