Study Finds No Discernible Difference in Tenant Energy Usage When HUD Public Housing is Submetered

A 2007 research report funded by HUD, Benchmarking Utility Usage in Public Housing, concludes

there is no discernible difference in energy use between public housing residents that pay for their own energy and those for whom energy is paid by the [Public Housing Authorities].

The report compared energy usage data from buildings with tenant-paid utilities and with utilities paid by the housing authority:

One of the areas explored during development of the benchmarking model was if residents’ usage was affected when the resident paid directly for their utilities. Many PHAs receive and pay all utility bills with no direct involvement of the residents. Other PHA residences are individually metered and the residents pay their own utilities.

It is difficult to acquire utility data for residences that pay for utilities directly. PHAs usually do not keep these records since the residents are billed directly. However, D&R collected data on 648 buildings with full tenant-paid utility information. This information is sufficient to determine what, if any, statistical difference exists between the energy and water consumption habits of tenants who pay their own utility bills, versus tenants who do not receive utility bills because the PHA pays them.
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Considering that the energy-paid-by-PHA correlation is very small—R2 = 0.0168 on a scale of 0 to 1—the impact on energy use would likely be very small, although it is within the range of other variables that do have an effect on predicted energy use. In fact, when taken in combination with other significant variables, the effect of energy-paid-by-PHA on energy use was negligible.

It is also noteworthy that the effect of energy-paid-by-PHA on energy use, as represented by its negative sign in Figure 5 and Table 3, suggests that when the PHA pays the bills, the residents use less energy. This is counterintuitive because it suggests that if residents do not see their bills, they are more likely to minimize their energy use. In this case the negative value is probably more a reflection of its statistical insignificance, in that it is very small—in the “noise level” of the data.

Such results call into question the deference of state agencies to the longstanding efforts of big realty groups to shift master-metered electric bills onto their tenants, and their unwarranted assumptions that tenants will use much less electricity after the bills are shifted to them, in order to justify smaller rent reductions and small utility allowances after conversion to submetering.

The HUD-funded study found that factors having far greater correlation to energy usage include the size of apartments and the age of the building "because older buildings tend to use more energy per square foot. This follows logically also because older buildings generally have less insulation, inferior windows, more leaks, etc."

Attention of New York's troika of submetering agencies - the PSC, NYSERDA, and DHCR - needs to be focused less on promoting landlord agendas and more on new, effective measures that will bring thermal efficiency of older buildings up to Energy Star standards.

McKinsey & Company issued a report in 2009 estimating that 92% of the energy efficiency opportunity in low income housing is in building shell upgrades, and 8% in HVAC systems. Typically tenants lack ownership and control of structures and fixture to do such upgrades, even if they could be financed. Burdening submetered tenants with the cost of energy inefficient structures that they lack the power to change, and allowing landlords to decouple from direct responsibility for energy costs, is not the solution.

For more information, see PULP's web page on submetering.