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HomeMy WebLinkAboutWork Session- Rental Housing Energy Efficiency Rental Housing in Oshkosh: Improving Energy Efficiency Matthew Gasper Brian Gerl Nathan Kleist 2 INDEX I. Executive Summary……………..3 II. Background/Context………….....4 III. Recommendations…………….....6 IV. Barriers……………………….....11 V. Costs……………………………..13 VI. Stakeholder Identification……..14 VII. Benchmarking…………………..19 VIII. Significance for Sustainability…23 IX. Summary/Conclusion…………..23 X. Works Cited…………………….25 3 I. Executive Summary: This paper is a response to the troubles surrounding the rental housing in Oshkosh. Working under the guidance of the City of Oshkosh, our goal was to try and determine possible programs to make rental housing more energy-efficient. The aim of this project is to help Oshkosh reduce its carbon emissions from rental properties and thus its impact on the larger ecological footprint of the city. Meeting with the Sustainability Advisory Board, we quickly learned about the massive agenda they have already. But with approximately 19% of the greenhouse gas emissions coming from the residential sector, they stressed this as one of the top issues that needed closer attention. Working with the city and landlords, we are proposing a landlord incentive program that would improve efficiency of the rental housing stock. Much of the housing stock within Oshkosh is low-income, rundown dwellings from the 1950s and 60s. We are recommending a program that can create incentives for landowners to renovate and retrofit these rental properties using energy-saving equipment and techniques taken on by similar cities throughout the United States. Some of our focus is dedicated to closing the communication gap and making reliable information easier to access for both tenants and landlords. The project consists of many areas of research within the state of Wisconsin and around the country. We conducted interviews with various stakeholders comprised of landlords, a UW- Oshkosh administrator, and tenants. We also attended a Winnebago Apartment Association meeting where we had the chance to meet with and hear from various landlords, the Oshkosh Chief of Police, and two city council members. One of the keys to unlocking the potential of a landlord incentive program is addressing the various barriers. There are a considerable amount of barriers associated with this project. We will present each of them and the solutions we see as the best fit for the City of Oshkosh based off of already existing projects in other cities around the 4 United States. We will address possible solutions to move a program past these previous snags and believe there are some important factors for success that need to be considered before any proposed project can be truly successful. We will give a brief context of the situation and then present our recommendations. To explain our recommendation we will move to important existing barriers and costs. Following that we will move onto the previously mentioned stakeholder interviews and interactions we had. Their input outlined overlying themes that would prove to be the heart of our project for addressing the major problems. Once we understand the scenario, the problems associated with it, and the attitudes of those involved, we can move forward and look at what is being done elsewhere to address the issue. Our goal was to take the best of these programs and include that in our final recommendation that best suits the City of Oshkosh. After those, we will explain the significance of why this program is important to the sustainability efforts of the city. Our conclusion will sum up our paper and leave you with our final thoughts on where Oshkosh should be directed in its steps for a more sustainable community. II. Background/Context/Problem Identification: This project is the result of the city understanding we have a problem with our rental housing stock. The city states in the International Council for Local Environmental Initiatives report that the overall quality of many of these structures is rapidly deteriorating, contributing to both a decrease in energy efficiency and neighborhood aesthetics. According to Donn Lord, president of the Winnebago Apartment Association, this in turn, leads to stagnant or decreasing property values. However, we could find no proof that overall property values in Oshkosh are stagnant or decreasing. This, nevertheless, was a consistent theme when speaking to landlords in the Fox Valley region. He also points out that the majority of landlords in the state own less than 5 three properties. This shows that many landlords use this as a second income, not a primary one. Much of their expertise and time is devoted to work and projects outside of their rental properties. The Department of Numbers (2016) states the average rental price in Oshkosh is around $751 per month as compared to the state average of $1100. According to the Oshkosh Comprehensive Plan, there are over 10,000 renter-occupied housing units and nearly 14,000 owner-occupied units. This large number of units demonstrates the scale of rental properties we would have to address. The rental market represents a very large portion of the housing stock in Oshkosh. In addition, over 46% of households in Oshkosh earn less than $35,000 per year, and nearly 65% less than $50,000. It is easy to see that a large portion of the households here in Oshkosh are living off a small amount of money. It is important to understand where residential housing fits into the ecological footprint of Oshkosh. According to the Greenhouse Gas Emissions Analysis of Oshkosh, Wisconsin, the residential sector, as a whole, represents nearly a fifth of all greenhouse gas (GHG) emissions for the city at 18.58%. Of that, 65% can be attributed to electricity use and 35% to natural gas. Given the fact that about 45% of all residential housing is rentals, one can assume that about 9% of all GHG emissions from the city come from rental housing (Sustainability Advisory Board, 2013). It is easy to assume, and important to note, that much of this use can be attributed to heating costs. Also, the steep downward trend in emissions following the 2008 economic recession shows us there is a rather significant amount of emissions that can be cut without adversely affecting living conditions. Taking on a project that involves people of many different viewpoints is going to have some issues that arise during the process. To many of the stakeholders involved, it creates tension because one side wants to manage the housing and make sure that it is safe for living 6 while the other wants to be left alone, disconnected from what the city is doing. Landlords feel as though the city has too much power and should stay out of private housing. There is a fear that further inspections will only lead to more and more violations and cost them money. The upgrades that we and the city would like to see require large amounts of upfront capital. This presents a problem in that the payoff for such renovations would take too long to be realized. If we were to get landlords to upgrade their homes, we would have to show them that there is a good return on investment (ROI). There is the debate on whether or not tenants would like to pay more money to have a more efficient home even when they are in the home for less than a year. We spoke with Jason Krueger, Co-founder of Gold Star Investments, LLC, and marketing specialist for Discovery Properties and he said that “if there is a demand for green housing and people are willing to pay for it, we would follow and change”. Landlords may not want to improve unless they know the tenants are willing to pay extra for the added energy efficiency. III. Recommendations: There are a myriad of barriers to address when formulating a solution. This being said, there is likely not just one solve-all solution to this problem, according to Golove and Eto (1996). Our goal is to try to maintain what was successful and discard what was not. We will see that the split-incentive issue is one of the largest roadblocks to success. For starters, any program must first begin with a few things that we believe are critical to the success of any perceived project. We lay those out in the following sections. Improved Landlord/City Communication As we found with our interviews and through our research, a lack of communication between the city and the landlords is a detriment to any possible success. Increasing the discourse between the two will help foster more trust, a feeling desperately lacking from 7 landlords, and an overall better opportunity for mutually-favorable outcomes. This can be done in a variety of ways. The inclusion of landlords in the discussion of future policies is a good example. Currently, the city is working on a landlord registration program. This is a great start to help solve this communication issue. Through this registration, the city will have access to contact information to all landlords owning properties in the city, even if they live in another state. This system can also allow for warnings, notifications, and general information pertaining to the landlords’ livelihoods and properties. Information can be sent out and they can be invited to meetings or discussions that pertain to their interests. Getting the city and landlords in the same room can go a long way to forming a positive working relationship. Centralized Information Source One huge barrier is the lack of access to information and there being confusion between existing programs and eligibility according to Williams (2008). Landlords want a one-stop-shop type of website with access to webinars, website directories, and step-by-step instructions on multiple fronts. This website could be maintained by the city or a third party organization to help educate both landlords and tenants on a myriad of issues. These include energy-efficiency upgrades, recent relevant legal changes, and otherwise general information useful to landlords. This helps alleviate two barriers we face, communication and ease of access to pertinent information. Having information on a site that landlords and tenants can easily understand maximizes the likelihood that they would be willing to make changes. It could start with basic ideas about simple do-it-yourself projects and work all the way up to major overhauls and retrofitting projects. 8 Standardized Rating System As we can see with Burford, Gangadharan, and Nemes (2012), a rating system, matched with a standardized point sheet like the one used in Boulder, CO, could be very beneficial in helping to promote these upgraded properties. A standardized rating system allows prospective tenants the ability to compare properties from an environmental standpoint. It would be easy to see that one particular rating is better than another for prospective tenants’ comparisons. This puts more power in the hands of the tenants, which in turn could further incentivize landlords to upgrade their properties. This system could use points, say 0-100, and then based on that score it receives a letter grade to make it even more simple. In addition, Phillips (2012) demonstrates that landlords have a willingness to pay for energy rating to help improve the allure of their properties. As the interview with Bruce Karnitz portrays, there is a possibility of landlord participation based on the notion they will be receiving free exposure and advertising from a program backed by the city. It is, however, important to note that we suggest the use of a third party to conduct the assessments of the properties with accreditation from the city. Accreditation by the city for these inspectors and any companies performing work gives the program and the rating of the property even more legitimacy. We suggest a third party or designated energy professionals conduct these inspections because of the mistrust of the city by landlords. They basically want as few city officials on their properties as possible, and we believe they would be more willing to participate this way. This person, or another, could then be the dedicated contact for the landlord for any information or guidance. This also helps alleviate the information barrier. For a landlord, having a particular individual that can help guide you along the way is very beneficial. According to Arena (2012), having a free energy advisory service was vital to the success of Boulder’s SmartRegs program. Here too, we believe a similar resource would be vital 9 to initial and continued success. We believe any project proposed should have the full backing of the city so it can help facilitate its expansion and appeal to both landowners and tenants. Green Leases The next stage of our plan requires both landlord and tenant cooperation but has the potential to greatly reduce the adverse effect of the split-incentive issue. According to Williams, as discussed in the benchmarking section, so called “green leases” may be a great solution. She offers that these leases will align these incentives by making both the tenant and landlord aware of the expenses. While generally used in the past for commercial leases, we believe there is a real possibility for the residential sector as well. Essentially, a green lease has the tenants pay their utility bill for the year upfront to the landlord. Then, the landlord can use this money to help cover the large upfront costs often associated with energy upgrades. Decisions for the how the money is to be used are written into the lease contract. In addition, the lease would include educational information on ways to conserve energy and cut costs. As Eagles (2010) states, tenant education on money-saving and energy-saving features can greatly reduce consumption and save them money. Connected to this green lease idea is another concept. This could include landlords paying at least a portion of the utilities, perhaps half or up to a certain amount per month. This would also help eliminate the split incentive and provide more reason for landlords to retrofit their properties with more energy-efficient equipment as mentioned by Levinson and Niemann (2003) and Ambrose (2015). By capping or paying a percentage, landlords are limiting the potential and likelihood that tenants will over-indulge in their energy use as can be sometimes seen with landlord-paid utilities. Money saved under the cap or a predetermined amount could then be split between landlord and tenant leading to further incentive for both to limit energy consumption in general and not just improve efficiency. As Pelenur and 10 Cruickshank (2012) point out, it is also necessary to consider personal behavior and offer monetary incentives. Financing Options The idea of a green lease requires the landlord to agree on making certain upgrades to their property. This is where the financial aspect comes into play. There are a number of ways for upgrades to be paid for. On-bill financing is great in theory but has clearly fallen short of expectations; landlords simply do not want such long-standing debts on their properties. There is also a legitimate fear that the presence of such a debt would limit tenant interest in signing a lease. Also, they fear that they would need to pay off the loan in the result of default or failure to pay by the tenant according to research by Ambrose (2015) and Eadson (2013). These also require a lot of paperwork and bring along with them multiple added costs and concerns. This is one area that would likely require further research to determine which type of financing is best. There are several options in including on-bill financing, low-interest upgrade loans such as the case with Me2 in Milwaukee, or 0% financing like we will see in Massachusetts. The latter, however, would need to be subsidized somehow. It is clear that landlords prefer grants or heavy subsidies over taking financing options according to our research and Eadson (2013). Grants and rebates from Focus on Energy℠ could work nicely with along with green leases. Both Hope and Booth (2014) and Williams (2008), along with Bruce Karnitz argue that tax incentives could promote energy upgrades to properties. Getting landlord and tenant incentives properly aligned would allow greater options to pay for upgrades as landlords would now have the incentive to pursue them. Possibly offering more than just one financing option would be the best way to move forward from this point. 11 IV. Barriers: There are several significant barriers involved with this type of a project, as there with any substantial project. It is important to realize that a good number of them can be dealt with in a few simple steps which we laid out in our proposal. For now, we will focus on these barriers and how they represent issues for us to break through. The first barrier is communication. There is a lack of good communication between the city and landlords. The city does not have a way to contact the landlords. Fortunately, the city is currently working on a program to require the mandatory registration of landlords to address part of the issue. Landlords complained that the city fails to inform them about relevant meetings where key informatio is being discussed. This problem also exists between landlords and tenants. Tenants are often too timid to make energy-related requests to landlords. In addition, landlords are unlikely to react unless enough prospective tenants demand such upgrades. Information is another critical barrier that needs to be handled and coincides with the communication. Ambrose (2015) suggests that there is a lack of knowledge and an issue with misinformation available to landlords. We found this to be true when conducting interviews and during research. The pattern is consistent regardless of who we talked to. Consolidation of information, correct information, and an easy one-stop-shop were important concepts we came across. Access to this information for both landlords and tenants is vital to help educate them on energy efficiency, general household maintenance, and energy-saving tips that can be done on their own. Part of this education is trying to change the current trends of overconsumption and get people to willingly change their habits. Reliable, clear, and trusted information are vital to the proper education needed for landlords to fully commit to any efficiency program (Rental Housing, 2011). 12 Perhaps the most written about issue is the split-incentive, or principal-agent dilemma. It is well documented by Ambrose (2015) and many others. This concept refers to the idea that the person responsible for the upkeep of a property or renovation efforts (landlord) is not the same person that pays the utility bill (tenant). This, possibly, has proven to be the most critical, and the hardest to overcome, barrier in the rental property energy arena. Just as the issue implies, the incentives to act are simply not aligned between the two parties. If a landlord improves the energy efficiency of their property, the tenant reaps the rewards rather than the landlord that paid for it. This is a massive obstacle that has perplexed those trying to solve it for decades. A part of this issue is the power imbalance between landlords and tenants as indicated by Williams (2008). Landlords hold the power, but tenants are the ones that must live with their decisions. Then, there are of course, the financial or economic roadblocks that Reddy and Painuly (2004) point out that we must address. Retrofits can be expensive. They often require a lot of capital upfront, capital that many small landlords do not have. There are several financing options, each with their benefits and shortcomings. We will address different options in the benchmarking section. Short-term leases present another issue, according to our interview with Bruce Karnitz, which will be covered in more detail in the stakeholder section. The problem with short leases, generally one year, is that new tenants are continuously coming and going. That means every year landlords are trying to fill their properties and face a chance that they will go vacant for a given time. That possibility in a break in income may hinder landlords from making any significant improvements when there is no money coming in. Also, each tenant may possess different values and preferences. There is yet another barrier that is rather unique to the rental property dilemma. As Williams (2008) illustrates to us, there is a very severe market fragmentation issue at hand in the 13 rental market. There are both small landlords with single unit homes all the way up large landlords with hundreds of units and everything in between. Tenants include all ranges of people from different economic levels. It is easy to see how this can be a significant barrier and as Ambrose (2015) states, it is important to consider programs targeted at both small and large landlords. As we will see later in the stakeholder section, the majority of landlords here are small-scale. However, there are some large-capacity units and owners with many properties, especially targeting students near the college campus. Each type of landowner is going to require modifications to any plan. V. Costs: Each property will vary on how much the retrofit will cost. Costs will be determined by the amount that the landlord wants to put into the residence. Out of pocket costs, if done correctly, could be relatively low for the landlords with the help of grants and other financial breaks. However, our group understands grants are not a sustainable method for paying for the upgrades. Starting out, they prove to be very important and may continue to be so to help incentivize landowners. Another method to help reduce the upfront costs for the landlords is on- bill financing. This strategy actually has the tenants (or whoever pays utilities) paying off the loan. However, we will later demonstrate that this process proves unappealing to many landlords. Costs to the city are hard to pinpoint. In almost every program we have seen, there are government subsidies to back rebates, loans, or grants. Much of this money comes from higher government levels such as the state or federal level. Programs do much better when they can offer access to money from these programs. However, there would certainly be capital and personnel needed for a program with building assessments, support, and creating a standardized 14 scoring sheet. Also, the possibility of tax incentives would decrease city revenues as a cost for incentivizing landlords to act. VI. Stakeholder Identification: As we mentioned, there are several different stakeholders involved in the rental market. We put our focus on landlords but also talked with tenants throughout the majority of the surrounding communities of UW-Oshkosh Campus and extending through the Fox Valley region. The city plays a major role and is the reason we are working on this project. The Oshkosh Sustainability Advisory Board, community members, and city planners want to improve the energy efficiency of the rental sector and is currently investigating ideas for possible programs. Here we present a number of stakeholders and their views on the current situation. One of the most important interviews we conducted was with Donn Lord. As mentioned earlier, he is a pretty significant player in the rental properties market. Donn pointed out that most renovations would need to happen through small landlords in regards to a proposed incentive program. Many of these small-scale landlords (1-3 properties) do this as a second income. Time and money are not on their side when dealing with these proposals. It is not in their best interest to upgrade anything if there is not a substantial payout in the end. Many larger landowners that own a good portion of the college houses throughout the city will only take action if they have a big project organized with grants and incentives. The big landowners get the incentives and have a lot of money and government backing for such a project to occur. The bigger projects are more appealing to the city, according to Donn, and grants from the government would only be implemented if it were ideal in their eyes. Many landlords set out initially in this market because of rent, tax incentives, and properties increasing in value. However, in today’s market, property values have remained 15 stagnant or declined, according to him. Donn had recollected on the homes he owns. Most of the landowners affiliated in the Landowner Association were still getting the same or less in rent amounts as when they first started renting. That presents another problem with large-scale retrofits. It is not seen as a good investment on a property that is not increasing in value or earning more money as a rental. The primary focus he presented on the issue of proposing a landowner incentive program was actually educating all the landowners on issues or just landowner basics in general. According to Donn, the biggest problem was communication with landowners and the city. The city does not have everyone’s contact information and landowners themselves do not have sufficient communication with their tenants or other landowners. Donn says he will get updates immediately if his residences had a problem or there was a robbery on his street. By adding this line of communication among all landowners, Donn believes that the city can start to convince landowners to help change their opinions and mentalities. With other housing problems and staying up with code, the smaller landowners have a hard time committing money where it would seem most appropriate. From there, the issues such as property value may start to turn for the better and projects, as we originally intended to propose, will start to take form on their own. We had easy access to multiple members of the UW- Oshkosh football team. The overriding concern was with the smaller issues such as drafty windows and better appliances rather than concerns about overall energy efficiency. Since renting while in college is only a few years, most of the concern is with working appliances and having a livable space. Another important interview was conducted with Bruce Karnitz of Titan Property Management, LLC, who owns 51 properties and manages another 75 in the Fox Valley area. He offered a number of important comments that we found to be very similar to other landlords that 16 we talked to. For starters, just as it was with Donn Lord, Karnitz also had major concerns about upfront costs and simply finding possible solutions to energy inefficiency. While he understands there are plenty of resources out there, he said it is hard to find the time necessary to truly get a good understanding of the all the possibilities. There are some pretty significant time restraints on many of these landlords. His reaction to our proposal of a consolidated resource for landlords brought a smile to his face, but he did not stop there. He also mentioned that this could go far beyond just energy upgrades. A series of webinars and website lists of viable energy saving options and upgrades, he argued, could go a long way in educating landlords in topics covering recent legislation and energy saving techniques or programs. A “one-stop shop” is a common theme we heard during our interviews; that one place where someone could go to find out the maximum amount of information in the smallest amount of time possible. Included in this concept, he added, there should be some step-by-step directions to the energy-efficiency upgrades the city is pushing. He said the paperwork and complication for many of these programs is a large deterrent for any landlord to undertake. In addition to that idea, he also supported the idea of collaboration between the city and landlords to promote some type of “Green Renters” initiative. This would help curb the costs to any landlord wanting to upgrade his properties by giving them some free advertising with a city- backed program to support greener landlords. This would also help to partially alleviate the split- incentive issue because landlords would be getting some reward for updating properties they do not personally pay utilities on. Some type of rating system would need to be established with inspections completed by a third party, however. Again, as we saw repeatedly, landlords are not too keen on the city conducting any assessments of properties that are not already necessary. 17 He offered up a few more important ideas. He would like to see more money easily available, especially upfront, to smaller landlords and not just large developers. How this would come is unclear, perhaps in the form of grants. There is a growing push for college campus housing to include more utilities which, for our purposes, helps to reduce the split-incentive issue. Lastly, based off of the current market, he finds it unlikely that he would be able to raise rent prices very much, if at all, with any green program. This is important to consider so we do not shoot too high when initiating a program. We cannot assume, necessarily, that tenants would be too willing to pay much more, even though their utilities would presumably be cheaper. Jason Krueger, Co-founder of Gold Star Investments, LLC, and marketing specialist for Discovery Properties, also gave us a bit of his time to discuss the issue at hand. Discovery Properties has about 400 units while Gold Star Investments operates about 34. As has been the standard, he supported a third-party inspection process for any energy-efficiency assessments. Like many other landlords, he wants to help balance the power that the city plays in the rental market arena. The significant barriers he mentioned included upfront cost and how long it would take for the upgrades to pay themselves off. Again, he, like the others, would appreciate easier access to information about numerous topics that could help rental properties become more efficient and generally make better landlord-tenant relationships. This should be online and updated regularly to help aid landlords and companies do the best they can. We contacted Sharon Kipetz from the Dean of Students Office at the University of Wisconsin-Oshkosh. We were hoping the university could and would back a “green renters” program to help promote them on campus. Unfortunately, for the purposes of legality and accountability, she said the university would not be willing to take on this role. She did, 18 however, mention the city is already in the process of creating a landlord registration program. This is a great start and should really benefit any future programs that may be considered. During interviews with students Chris Schierl and Richelle Kasten, we found that they would be willing to pay a little more for more sustainable houses in better condition. They said the condition of the homes that they currently live in are not fit for people due to various violations including rodent infestation. These interviews could be biased though as these students are members of the Environmental Program at UW-Oshkosh and have knowledge of environmental impacts. Although it is somewhat unorthodox, we found an interesting article posing hypothetical scenarios to actual stakeholders. Certain criteria were used by Burford, Gangadharan, and Nemes (2012) to essentially capture tendencies of these stakeholders and therefore conclude what was important to them based on their reactions. We thought this provides some important insight that can be included in this section. Their research shows tenants may be more likely to trust mandatory certification programs over voluntary. In a mandatory program scenario, the landlords were required to display their energy-efficiency in their advertisements. However, voluntary programs require much less oversight and cost less to the city. Tenants were much more likely to rent from landlords that included certain certification levels, even at elevated costs in many scenarios. Whether regulatory or voluntary, the idea of a tiered rating system shows great promise. However, there are some important things worth noting. Excessive regulation can force landlords out of the market, thus shrinking the available choices for tenants and possibly create an equity dilemma. 19 VII. Benchmarking: We found a number of programs throughout the United States and abroad that offer some insight for possible fits for Oshkosh. Essentially, there are two ways of producing energy- efficiency upgrades; mandatory and voluntary. Each style has its benefits and shortcomings. It is not really possible to say which is better than the other. Mandatory means changes are brought about through regulation or laws. While this ensures participation and positive results, it is also accompanied by higher operating costs and cause further alienation of landlords which have an already rocky relationship with the city. Voluntary programs are generally less successful but prevent alienation of landlords and are more often much less expensive for the city to operate. We will first look at some significant voluntary programs that we found. Nearby, in Milwaukee there is a program called Me2, standing for Milwaukee Energy Efficiency. This is a voluntary program primarily directed towards homeowners. This program combines low-interest loans, usually around 5%, existing Focus on Energy℠ rebates, and subsidized home assessments. Results show a 30% decrease in energy use for participating homes. The length of the loan can be as long as 15 years and all applicants must go through the appropriate lenders and contractors for any work. This program has been quite successful as over 1200 homes have utilized it according to choosemilwaukee.com. The main issue, however, is that it is directed towards homeowners and not rental properties. While it may be used by the owner of the property it is not geared in that direction. Focus on Energy℠ itself, is a benchmarking example. Again however, the primary focus of this program is directed towards homeowners and business. It has great popularity but ultimately could be even more productive if they placed some more attention on rental properties and the specific issues that accompany them. Another local example like Focus on Energy℠ is 20 the UW-Extension Rent Smart Program. This program essentially combines several classes for tenants so they can learn beneficial information to help make them more knowledgeable renters (Rent Smart). This could prove to be a great resource when designed a local educational program to help educate both renters and landlords alike. Or, perhaps, this could simply be used as the platform to reach landlords as well. Another voluntary program is being tested by the Cambridge Energy Alliance in Connecticut. According to Williams (2008), this is a local group trying to start a new generation of local energy initiatives. They are really pushes the “green lease” concept and believe this can greatly reduce the effect of the split-incentive problem. We will go into greater detail in the proposal section of the paper with regards to the green lease. We explained earlier how the green lease functions and believe it has many benefits to offer us. Across the Atlantic Ocean are two more examples of voluntary programs. The highly touted Green Deal in England was supposed to be the answer to energy-inefficiency. However, according to Ambrose (2015), there was very little success from the project. During interviews she found that many landlords did not understand the program and in many cases had not even heard of it. Even after explanation, many landlords did not see it as a likely option. In general, landlords do not sit well with the idea that there will be a long-standing debt associated with the property. Even with the tenants making the payments on utility bills (On-bill financing), many landlords feared that in the absence of tenants or in the case of a default, they would be responsible for paying it. As Ambrose (2015) also pointed out, there was a fear amongst them that it would be difficult to find new tenants when they knew there was a loan attached to the building. However, others such as Bird and Hernández (2012) feel as though on-bill financing is the best solution to the split-incentive issue. Perhaps, with better advertising and additional 21 incentives it could be much better. In our opinion, on-bill financing seems a much better option for owner-occupied dwellings. They do, however, in England, have what is called SAP, or Standard Assessment Procedure. According to Hope and Booth (2014), this allows properties to easily be compared to each other on an initial scale from 1-100 which is then transferred to a letter-based grade of A-G. This is the process to achieve an Energy Performance Certificate, or EPC. We really like this idea and believe some form of a standardized grading system would be quite beneficial. In contrast to the Green Deal, the CO₂ Building Rehabilitation Programme (CBRP) in Germany has achieved much more success since 2001. According to Hope and Booth (2014), this is due to the German Federal Bank providing subsidies and grants for retrofit measures through a development bank instead of regular commercial banks like the Green Deal. Boulder, Colorado offers another interesting example. Their EnergySmart program has been quite successful, servicing over 13,000 homes. Although this program is also tailored to homeowners it is worth a look. They offer home energy assessments for $185 which includes an advisor who can help guide you through the process of finding contractors, explaining the assessment results, apply for rebates or incentives, give free energy saving devices, and provide overall guidance through the process. In addition to this resource is something they call SmartRegs. The SmartRegs Ordinance requires that all rental housing in Boulder meets standard minimum criteria by January, 2019 according to EnergySmart. The process works in a similar way as and in conjunction with EnergySmart. There is a checksheet where certain features in the home are worth a number of points. Each home must reach 100 points to be considered certified. Rebates, then, for both programs can be accessed through Boulder’s Climate Action Plan and Xcel Energy. This is a combination of both mandatory for rentals and optional for homeowner 22 but does have some interesting promise. We especially like the idea of a standardized scoring system that can be used to rate properties on a grade scale. Overall, retrofitting programs throughout the country include upgrades in HVAC systems, insulation throughout the residencies (particularly in the attic, basement or around windows/doorways), heating and cooling systems, and lighting. Each retrofitting program allows for improvements in marketability of the home and its value, but most importantly energy efficiency. This in turn allows for a more sustainable residency that in the long run will save the landowners money and pay for the retrofit just off the savings, along with reducing energy bills and the impact on the environment. An area of study in Walnut Creek, California, found the use of electric upgrades throughout The Madison Homeowners Association, a 60 unit, 4 story building. With upgrades to LED lighting and the use of solar panels throughout the complex, this is a great example for landowners of apartment complexes. Although this example uses high cost upgrades of solar panels, just changing the lighting throughout the complex improved savings approximately $17,000 a year. Originally this complex spent around $1,833/month just on their energy bill, where after the retrofit they benefited substantially in savings and reduced their electric bill to $417/month. If they were to pay off this upgrade with just the savings alone, it would take approximately 5-7 years (Fields, 2013). This is a long term investment with initial upfront capital, no grants, and the idea to improve their complex. Understanding the benefits allowed this landowner to save big. They used energy contractor, Rayco Energy and Construction Manager to upgrade solar roofing, garage lighting, and hallway lighting fixtures. These were all local businesses and nothing landowners in Oshkosh would have a hard time finding. 23 VIII. Significance for Sustainability: This issue is significant because the housing stock in Oshkosh is very outdated in terms of efficiency. By improving the housing stock in Oshkosh, it is going to greatly reduce the impact housing has on the city's carbon footprint. The residential sector is responsible for approximately 19% of the greenhouse gas emissions based off of the report from the Sustainability Advisory Board (2007). If the city of Oshkosh could reduce the impact of the residential sector for greenhouse gases, it would greatly limit the impact the city has on the environment. The report, although it is good, does not have a whole lot of detail on the residential sector and what impact it is having on the environment. It says how much each area is contributing, but it does not go into detail of how to reduce. Part of the issue with the residential sector is that there is not a lot of data on homes because of the disconnect that we have talked about throughout the paper between landlords and the city. Better communication between the two could lead to more information and provide us a better opportunity to implement changes. Oshkosh is working towards a goal of becoming a city that can be used as a sustainable model for other cities. Achieving this would be a big win not only for the environment, but for the city in achieving its sustainability goals and to provide a safer and better community. IX. Summary/Conclusion: Although greening the city of Oshkosh is going to be a large task, we feel that it is important in to set the foundation for greater change and possibly create something other cities can adopt. By closing the communication gap between the landlords and the city, we could see substantial differences in the rental communities and make headway with proposed projects. Providing landlords with the information that is needed to be more efficient is needed if there is going to be any impact. Often times, landlords are unaware of laws or city ordinances due to how 24 frequently they are changing. Speaking with landlords throughout the Fox Valley allowed us to get an insight into some of the common themes in addressing something of this project's magnitude. Retrofitting projects and incentive programs throughout the country have shown their impacts to the communities and what benefits they bring to the table in a long term investment. Getting the upfront capital is one of the largest barriers in our project, along with getting the landlords to buy into something that takes on this “sustainability” structure. 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