While rental housing costs are rising in many cities and affordable housing is scarce, renters are still becoming increasingly inclined to favor sustainable design and green features in the homes they choose — to the point that they now take those features for granted. We're sharing some of the highlights from the latest National Multifamily Housing Council report on renter preferences to give cities involved in providing housing a fresh look at what their prospective tenants expect. — Doug Peeples
More U.S. households are renting their homes now than in the past several decades, according to a Pew Research Center analysis. And the majority of them expect their homes to provide features like energy efficiency and good indoor air quality, according to a report from the National Multifamily Housing Council (NMHC).
As NMHC's VP for capital markets Dave Borsos put it in a National Real Estate Investor article, "What used to be exceptional is now everyday." While there are variations from market to market, energy efficiency and air quality are so much in demand they're considered essential in many of them. And as the NMHC report notes, 61% of the roughly 270,000 renters surveyed about how they choose where to live said they were "interested" or "very interested" in those features — enough so that they said they would be willing to pay an additional $27.21 per month to get them.
A number of sources, including the article cited, said most new apartment buildings have at least a few green elements and that owners of older buildings are now more likely to integrate sustainability into their renovations. It's certainly supported by what Fannie Mae (officially the Federal National Mortgage Association) is seeing in its Green Financing Initiative.
The federal program provides financing for multifamily housing, and slightly less than half of the financing it approved last year for apartment buildings met Green Financing program requirements for smart energy and water saving improvements. Meeting those requirements means better loan prices than non-green loans and other incentives. As Fannie Mae explains on its website, "These improvements improve the property's bottom line with lower utility costs, improve the quality and affordability of housing for tenants, and increase the property's environmental sustainability."
As NMHC's Borsos pointed out, there are other incentives for building green: adding green elements in multifamily housing costs less than it once did. "There is no real cost difference anymore — green has become standard practice.
Doug Peeples is a Portland, Oregon-based writer specializing in technology and energy. Follow @smartccouncil on Twitter.