FM Commentary

FM Commentary

Energy Efficiency and its Relationship to Household Income in Multifamily Rental Housing

Jeff Hayward imageDemand for quality rental housing has increased in the United States, particularly among low- and middle-income families. Despite mortgage rates dropping to historic lows and home prices significantly below their peak in 2006, many Americans still choose renting as an affordable living option.

Recently, Fannie Mae engaged Hoyt Advisory Services (HAS) to conduct a study examining the energy efficiency of multifamily housing and its relationship to household income. Dr. Gary Pivo, Professor of Urban Planning and Professor of Natural Resources and the Environment at the University of Arizona, undertook this effort. His findings were published online in a paper titled: Energy Efficiency and its Relationship to Household Income in Multifamily Rental Housing. Dr. Pivo is solely responsible for the content of this report, which does not necessarily reflect the opinions of Fannie Mae or HAS.

The paper examines the energy efficiency of multifamily rentals in comparison to other housing types and its relationship to household income. It analyzes 2005 and recently released 2009 data from the U.S. Residential Energy Consumption Survey and finds that multifamily rentals were less energy efficient than other types of housing, both nationwide and in every region of the country. Nationwide, in 2009, multifamily rentals averaged 34 percent fewer energy efficiency features than the number found in other types of housing (7.4 vs. 11.2). Multifamily rentals added efficiency features between 2005 and 2009, but the efficiency gap between them and other housing types shrank only slightly. In addition, the paper shows that lower income multifamily renters lived in less efficient units than higher income multifamily renters in 2005 and they fell further behind from 2005 to 2009.

You can read the full paper here.

Jeff Hayward
Senior Vice President
Multifamily Mortgage Business

October 31, 2012

The views expressed in these articles reflect the personal views of the authors, and do not necessarily reflect the views or policies of any other person, including Fannie Mae or its Conservator. Any figures or estimates included in an article are solely the responsibility of the author.

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