Because the Climate Legacy Initiative passed by the Minneapolis City Council and Mayor unanimously in 2023, the City is finally funding local climate action at a scale needed to build momentum toward meeting the ambitious goals the city has on paper. This means it is time for a revived nudge to city leaders to make sure renters can be included in its benefits. Community Power has long been bringing attention to making energy efficiency programs more accessible to renters since we held listening sessions back in 2015 with the Corcoran Neighborhood organization from which the following policy ideas were developed. 

Following the Policy Ideas for the City to adopt there are a few points to ground them in:

1) Energy efficiency is a big livability and affordability issue for renters.

2) InquilinXs UnidXs recently has had an incredible win with properties involved in AG Ellison's lawsuit

3) Inclusive Financing for Energy Efficiency could remove the upfront cost and credit barriers if it is given a chance

In addition to TOPA (Tenant Opportunity to Purchase) a top policy recommendation is Prohibiting Rationed Utility Billing Systems (RUBS) at single-metered rental properties:

The city of Minneapolis should consider Prohibiting Rationed Utility Billing Systems (RUBS) at single-metered rental properties by amending Minneapolis ordinance 244.270 liability for utility service payments so that the landlord may only pass on the utility costs at single-metered buildings by including it into the rent or installing sub-meters so that the energy bills for each tenant reflects their usage.

What are Rationed Utility Billing Systems (RUBS)?

•       It allows a landlord to divide or ration the costs of a single-meter utility bill, commonly for gas, water and sewage via other methods than the measured usage.
•       It was introduced to Minnesota in 1998 with the passage of the Minnesota Statute 504b.215.Subd2a Conditions of separate billing to tenant and single meter buildings.
•       It's a bad policy for working families who rent because:

o   It disguises true housing costs from advertised rent, adding 13% increase or $83.93 a month for one bedroom.

o   It creates a disincentive for landlords to invest in efficiency since costs are passed on to tenants.

o   The bills are unfair as they are not linked to tenant behavior or energy use. They are fixed ratios per unit, regardless of how a tenant uses energy in their home.

o   It circumvents the customer protections provided by the Public Utilities commission, including the cold weather rule and defined late payment dates/ fees and dispute resolution. In other words, you can get evicted for not paying a RIBS bill to your landlord.

Additional policy steps the City of Minneapolis should take on Renter’s Access & Inclusion in Energy Improvements:

• Strengthen awareness and accountability to meet the energy conservation standards that are already in the Rental Housing Code. This can be done by ensuring that city inspection teams are investigating and ensuring compliance with existing conservation standards, which include insulation and building shell (244.500), retrofitting of supplied facilities, (244.4358 and 244.580), weather, tight windows and doors (244.530) and for other areas.
• Create additional energy conservation standards as part of the Housing Maintenance Code.
• Requiring a full insulation and weatherization of homes to be part of rental licensing standards, similar to how current rental licenses regulate lead and asbestos that clearly cause harm. A similar method can be used to require full electrification so that renters can have clean appliances that don’t cause asthma and indoor air quality concerns and to meet the city’s Climate Equity Plan goals by 2040.
• Establish a right for tenants of a building to collectively compel landlord participation in currently available Xcel and CenterPoint multifamily building programs, available audits, and available benchmarking programs if it can be shown that existing standards are not being met.
• Build upon existing efforts to create outreach/education materials to promote awareness of energy conservation standards and available programs to both tenants and landlords.
• Requiring energy audits in multifamily buildings by amending Minneapolis Ordinance 244.435 heating facilities performance inspection and energy audit required to be applied when violations to energy conservation standards are ordered by inspections and no audit has been done within the last 10 years. This is followed by ensuring that the audit results are posted or communicated to renters.
• The city of Minneapolis has made progress in recent years on developing benchmarking for medium to large multifamily buildings. So, it is worthwhile to ensure benchmarking, participation and data access for tenants of qualifying buildings.
• Ensure resource equity for “naturally occurring, affordable” multifamily housing. When government, nonprofit or utility funded programs are used to improve energy efficiency in subsidized affordable housing, or naturally occurring affordable housing, lets include protections to ensure that energy cost savings are passed along to the renters through a targeted form of rent controls. Specifically, landlords should only be allowed to raise rents for making housing more energy efficient if they personally make the investment.
• Providing tax incentives for building owners that both participate in full building retrofits while also tying rent increases to the cost of inflation. Note that the existing 4D program provides tax incentives for multifamily building owners to keep rents within the affordable housing range which is defined as households making less than 60% of AMI (Area Median Income).

Energy efficiency is a big livability and affordability issue for renters.

Just over 50% of Minneapolis households rent, including 3 out of 4 immigrant and BIPOC residents. 

• Many tenants of older, lower-quality multifamily buildings have shared first-hand experience in listening sessions which Community Power participated in about management being unresponsive to maintenance concerns, such as drafty/ nonfunctional windows, lack of proper heating, poor insulation, and inconsistent hot water.
•  Sometimes the wall a/c units are not working making the temperature extremely uncomfortable in the warmer months. Very often, tenants are not provided a cover for a wall a/c unit to protect against cold air entering the unit throughout the cold months.
• In buildings that are set up where tenants cannot control when the heat gets turned on, it has led to concerning stories of tenants using their ovens or space heaters to warm the unit.

Buildings with deferred maintenance issues are often leaky and inefficient. That wastes energy that could be saved by available, cost-effective improvements and also makes utility bills unnecessarily high. However, when it is the renters themselves who pay the energy utility bills, many landlords lack a financial incentive* to invest in energy efficiency improvements, while tenants do not have the authorization to make these changes to the units themselves.

While renters can request a Home Energy Squad visit, asking renters who are just scraping by financially and are transient / may not live there for very long to invest their money into a property owned by someone else is not a useful or logical strategy, particularly in cases where the owner may seem to have limited care for it

As a result, there are two general types of measures need to be put into in place to resolve this dilemma: 

1)    We need to increase landlord "yes's" and galvanize building owners to participate in clean energy retrofits either by carrot or stick and create real incentives by removing upfront cost and credit barriers. 

2)    We need to protect renters from price spikes in fossil fuels and associated rent increases. 

* Not all landlords can be painted with the same brush according to the Minneapolis Renter’s Coalition’s Community Engagement for Energy Efficiency Pilot Project back in 2016-2017. It included a survey which has shown that market-rate property owners range from being interested in energy efficiency and cost savings (and may have already completed some upgrades) to being disinterested in investing in the property and only planning to keep the spaces operational. The latter results in piecemeal upgrades such as only replacing appliances when a repair cannot be made. 

InquilinXs UnidXs recently has had an incredible win with properties involved in AG Ellison's lawsuit 

Attorney General's Office settles with landlord accused of neglecting north Minneapolis homes HavenBrook Homes agrees to pay $2.2 million in restitution, forgive up to $1.9 million of tenants' debt and attempt to sell its rental homes. 

By Susan Du Star Tribune March 15, 2024

This is story connected to Community Power’s work in addressing local energy democracy goals:

• It is a community ownership takeover from bad actors, 
• It is solidarity wins for renter's rights (low-wealth communities)
• When renters win more control over their home, then it means a narrowing of the "split incentive" that arises with energy upgrades where the landlord has little incentive to provide them, and the renter then lives in drafty, expensive, and sometimes thereby unhealthy homes.
• IX has been a partner with Community Power in the Minneapolis Renters Coalition and in the Energy Efficiency Cohort. 

Inclusive Financing for Energy Efficiency could remove the upfront cost and credit barriers if it is given a chance

Many of the less wealthy landlords genuinely want to do the right thing but run up against the barriers to energy improvements that many middle-income homeowners do. The most common barrier is lacking the front money required to enroll in a program or to wait for rebates. That is sometimes compounded by an additional barrier of not having a minimum credit score required to take out a loan for it. A third common barrier is when the energy saving programs are too complex to navigate.

Landlords who mean well, just like anyone else, will show greater interest in financing options to fund efficiency projects as long as it is simple to set up/sign up. That is particularly the case for landlords who pay for heating in the building and when the energy savings outweigh the cost of improvement. 

Having inclusive financing for energy efficiency as an available option would allow us to pay for home energy improvements on our monthly utility bills, in a way that would eliminate the up-front cost, minimum credit score, and program complexity barriers. Having a program that would allow us to save money on Day 1 for projects in which the long-term energy savings outweigh the initial costs would galvanize landlords to say yes.