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Sunday September 22nd 2019

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Smart Regs: Another Landlord’s Perspective


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The Smart Regs proposal, which would require energy upgrades in over 19,000 Boulder rental properties, is likely the single most important opportunity to reduce carbon emissions in Boulder to date.

The implications of climate change are extremely serious and the science is very compelling as predicted changes are actually occurring around the planet.  This is just the beginning of the substantive actions communities need to take to start doing something about it.

As an organization whose mission supports sustainability and environmental protection, Plan Boulder should come out strongly for the Smart Regs ordinance and its individual members should make their voices known to City Council.

Will these energy efficiency upgrades make a big difference for Boulder’s GHG reduction goals?  I believe they will when one considers about 52% of our housing stock are rentals.  They also promote the city’s goal of housing affordability and for me, it is a question of social fairness.  I think it unjust that people who in many cases can’t afford to buy in Boulder, or who are students really stretched thin with higher tuition costs, are made to bear the cost of their landlords’ choosing not to invest in their property. The upgrades should  be part of the cost of doing business.  Spread out over a few years, they are reasonable and manageable with proper budgeting. Many landlords have owned their properties for years and can tap into considerable equity as such.  Landlords also receive tax write offs when they list the improvements as depreciable assets In this case, the investments required by property owners end up being value added for the property, much as any other upgrades, and are a big economic advantage for the tenant.  There are going be trade offs, but in this case, the benefit overwhelms the costs.

We in Boulder like to tout ourselves as environmental leaders when in fact other communities have had regulations in place for quite a while. Berkeley and San Francisco have had rental property energy standards since 1981, Anne Arbor and Minneapolis since the 1980s, and  Burlington since 1997.  Memphis, Tennessee passed a rental housing ordinance in February, 2009 that requires rental units to insulate their attics, seal ducts, close off leaks and properly seal and glaze windows.  Inspections occur when tenants call in with documented high energy usage and utility bills.  The whole state of Wisconsin requires energy standards at point of sale for all residences with a special section for rental properties.

Much of the housing stock in Boulder does not even meet the minimum building energy standards of the 1970’s as the bulk of it was constructed pre-1965 where at best the insulation was a few inches of rock wool in the attic and nothing in the crawlspace and walls. Many homes have not been retrofitted. Payback periods for putting in attic insulation can be as little as a year, and a tremendous amount of heat is squandered without attic insulation.  If inefficient air conditioners are added to the equation, the energy expended as coal, a very potent CO2 contributor, is very high.  Insulation keeps structures more comfortable in all the seasons.

The good news is that in most cases it is not costly to blow insulation into existing attics and walls. Please see the insulation calculator site: When I plugged in the cost of taking 1000 sq feet of attic space from R5 (typical Table Mesa home with no modifications) to R30,  the cost savings was about $300 for natural gas in the first year alone. This is almost the cost of the insulation itself. The CO2 reductions are about 3000 pounds for natural gas and 11,000 pounds for electric. With electric heat the savings will be more than double.

Tenants will realize substantial savings for heating and cooling.  The assertion that upgrades will raise rental rates is simply not grounded in fact and is a scare actic perpetrated by the landlord association to dampen enthusiasm for this ordinance. The rent is determined by these factors:  rental market demand at the time of advertising, the number of bedrooms and location. It also depends on whether the landlord is going for “top dollar,” which may result in a higher vacancy rate and more frequent turnover, a big trade off.

As a landlord who has upgraded two homes that had no insulation and leaky single pane windows, I’d like to describe the details of having upgraded these properties.  Our houses do not generate lots of income; we have to be satisfied with the long-term view of retirement savings.

Our house in Table Mesa and the bungalow in Longmont now have R-40 and R-30 fiberglass batts respectively.  My husband laid the batts, wearing a dust mask, taking about 3 to 4 hours for each home. The insulation cost about $300.

My son installed the batts along the Table Mesa crawlspace, again the total cost was about $300, including his pay and the insulation. It took half a day.  He is not a professional. He helped us with insulating the walls in Table Mesa, the cost was less than $200. We hired someone to blow cellulose in the Longmont bungalow; the costs were so minor, I have since forgotten them, but think it was less than $300.  The Longmont house was done in 1999, and the Table Mesa house between 2001 and 2004, as we could budget in the improvements.

Window replacements were more costly, but definitely worth every penny.  The total cost for replacing 8 windows has been about $2000 for our Table Mesa house and about $1500 for a little bungalow we own in Longmont. All included new trim and insulating foam sealant. Our tenants were extremely appreciative when we swapped out the old leaky aluminum framed single pane windows.  The appearance of the house has been really enhanced and I am confident they have increased the property’s values by far more than the installation costs.  We hired part of the labor for the large difficult ones and did the easier ones ourselves.

All these costs, insulation and windows, have been listed as depreciable assets in our taxes each year, so they count as a tax write off.  These investments have been less consequential and much more satisfying in terms of adding value than other repair and maintenance expenses we’ve encountered over the years.

Obviously we cut costs by doing labor ourselves, and by purchasing about 5, high quality, used windows from Resource, but it shows that this is an option for the landlord on a shoestring budget. The Two Techs and a Truck program should facilitate the process and reduce retrofit costs.

As for increasing rents, actually the opposite happened. We charge less for the Longmont house for the past 8 years than we did at first, because the market is soft, and we have a long term tenant who can’t afford much.  The same thing happened in Table Mesa; for years after the upgrades we reduced the rents by about $120 a month, as a result of a weak market.  I think the upgrades have, however, helped us attract responsible, longer term tenants. We have had 0% vacancy.

I think it essential that the City develop a system for tracking down people who have never licensed their properties. This may require sorting by names through the County database to see which property owners pay taxes on more than one property or who live out of town.  These people should be encouraged to get licensed with incentives at first, and penalties if that doesn’t work. If we don’t track these non-licensed landlords down, it won’t be fair to those who do comply. My concern is that the tracking methods suggested won’t get to landlords who have never been in the data base.

Secondly, the properties should be required to do a substantial portion of the upgrades within the first 4 years or the owner may simply “flip” the property in the meantime, getting out of the requirement.  We have already taken years getting to this point of finally having the ordinance before you, let’s not wait for years before we see the energy savings.

Much of our housing in Boulder has had substandard energy performance for years. We need to seize this opportunity to raise the bar. If we can’t do this, who will, and how can we claim to be leaders in addressing climate change?  Folks, we need to not just talk, but act.

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