{"654661":{"#nid":"654661","#data":{"type":"news","title":"Landlord-pay Rental Units Cost US Economy $836 Million Per Year in Wasted Energy ","body":[{"value":"\u003Cp\u003ERenters with little incentive to save energy burn millions of dollars a year in excess energy and pollution costs, according to\u0026nbsp;\u003Ca href=\u0022https:\/\/www.sciencedirect.com\/science\/article\/pii\/S0094119022000018\u0022 rel=\u0022noreferrer noopener\u0022 target=\u0022_blank\u0022\u003Ea new study\u003C\/a\u003E\u0026nbsp;from Georgia Tech\u0026rsquo;s School of Economics.\u0026nbsp;\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EAssistant professor\u0026nbsp;\u003Ca href=\u0022https:\/\/econ.gatech.edu\/people\/person\/dylan-brewer\u0022 rel=\u0022noreferrer noopener\u0022 target=\u0022_blank\u0022\u003EDylan Brewer\u0026rsquo;s\u003C\/a\u003E\u0026nbsp;analysis, published in the\u0026nbsp;Journal of Urban Economics, found that renters in units where landlords pay heating expenses spend an extra $590 million a year on heating costs and create $246 million in pollution-related expenses.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThis study is the most comprehensive take\u0026nbsp;on\u0026nbsp;addressing energy usage in rental units where landlords pay the bill, Brewer said. It\u0026rsquo;s also the first to use microdata in a structural model to estimate the impact of landlord-paid heating bills on the U.S. economy. The analysis does not\u0026nbsp;include other energy usage such as lights or air-conditioning.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EBrewer used structural modeling and looked at home sizes to get a more accurate number than previous studies. He found that 21% of the extra energy consumption in landlord-pay units is from turning up the heat. About 4% comes from tenants choosing larger apartments than they would have otherwise. Overall, this extra energy usage is called an efficiency gap \u0026mdash; an energy-saving opportunity that is not being taken advantage\u0026nbsp;of,\u0026nbsp;Brewer explained.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EIn this case, Brewer attributes the efficiency gap to an economic concept known as\u0026nbsp;\u0026ldquo;moral hazard.\u0026rdquo;\u0026nbsp;\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u0026ldquo;When the landlord pays for heating, the renter does not face any price incentive for energy conservation \u0026mdash; a clear form of moral hazard,\u0026rdquo;\u0026nbsp;Brewer\u0026nbsp;wrote in the paper. \u0026ldquo;Landlord-pay households thus choose higher thermostat settings than if they paid for heating.\u0026rdquo;\u0026nbsp;\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EOn an individual scale, turning the heat down may only lead to a couple of dollars in savings per month. But added up across all landlord-pay units in the United States, that number reaches over $800 million in wasted money every year, including $246 million \u0026ldquo;due to the external cost of carbon dioxide emissions\u0026rdquo; via their contribution to climate change.\u0026nbsp;Brewer estimated the total could range from $679 million per year on the low end to $1.261 billion per year on the high end.\u0026nbsp;\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u0026ldquo;It was surprising just how big of a problem it is on the macro scale, just because of the number of renters who have landlord-pay heating in the United States,\u0026rdquo; Brewer said. \u0026ldquo;So,\u0026nbsp;it does end up being an $800 million per year problem.\u0026rdquo;\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EThe Census Bureau and U.S. Department of Housing and Urban Development\u0026nbsp;\u003Ca href=\u0022https:\/\/www.hud.gov\/press\/press_releases_media_advisories\/HUD_No_20_071\u0022 rel=\u0022noreferrer noopener\u0022 target=\u0022_blank\u0022\u003Ereported\u003C\/a\u003E\u0026nbsp;there were 48.2 million rental units in the United States in 2018. About 11% of rental units in the Southeast have landlord-pay heating. That number is higher in other parts of the country, such as the Northeast, where landlords pay the heating bill for about 26% of units.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003EBrewer said he is not advocating for a policy where tenants are required to pay for heating.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u0026ldquo;It\u0026#39;s more of a thought exercise,\u0026rdquo; he said. \u0026ldquo;Because doing that might be costly for a number of different reasons. For example, putting individual meters in apartments is going to be expensive. And there are other kinds of trade-offs that we\u0026nbsp;have to\u0026nbsp;make; for example, the landlord bearing the risk of temperature fluctuations might be preferred to a tenant who\u0026#39;s on a fixed income.\u0026rdquo;\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003ENow Brewer is turning his attention to\u0026nbsp;data from\u0026nbsp;smart thermostats\u0026nbsp;and\u0026nbsp;using it\u0026nbsp;to understand responses to emergency events like polar\u0026nbsp;vortices. \u0026ldquo;It\u0026#39;s related,\u0026nbsp;because it\u0026#39;s looking at the economics of temperature setting, which has become a focus area of my research,\u0026rdquo; he said.\u0026nbsp;\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u003Cem\u003E\u0026ldquo;Equilibrium sorting and moral hazard in residential energy contracts\u0026rdquo; was published online in the Journal of Urban Economics on Jan. 5, 2022. It is available at:\u0026nbsp;\u003Ca href=\u0022https:\/\/doi.org\/10.1016\/j.jue.2022.103424\u0022 rel=\u0022noreferrer noopener\u0022 target=\u0022_blank\u0022\u003Ehttps:\/\/doi.org\/10.1016\/j.jue.2022.103424\u003C\/a\u003E.\u0026nbsp;\u0026nbsp;\u003C\/em\u003E\u003C\/p\u003E\r\n\r\n\u003Cp\u003E\u003Cem\u003ERead more about Brewer\u0026rsquo;s research\u0026nbsp;\u003Ca href=\u0022https:\/\/econ.gatech.edu\/people\/person\/dylan-brewer\u0022 rel=\u0022noreferrer noopener\u0022 target=\u0022_blank\u0022\u003Eon his profile page\u003C\/a\u003E, or explore more\u0026nbsp;\u003Ca href=\u0022https:\/\/econ.gatech.edu\/news\u0022 rel=\u0022noreferrer noopener\u0022 target=\u0022_blank\u0022\u003Enews and research\u003C\/a\u003E\u0026nbsp;from the School of Economics.\u0026nbsp;\u003C\/em\u003E\u003C\/p\u003E\r\n","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":"","field_summary_sentence":[{"value":"Assistant Professor Dylan Brewer\u2019s\u00a0analysis found that renters in units where landlords pay heating expenses spend an extra $590 million a year on heating costs and create $246 million in pollution-related expenses."}],"uid":"35766","created_gmt":"2022-01-21 16:22:13","changed_gmt":"2022-01-21 16:27:02","author":"dminardi3","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2022-01-21T00:00:00-05:00","iso_date":"2022-01-21T00:00:00-05:00","tz":"America\/New_York"},"extras":[],"hg_media":{"654663":{"id":"654663","type":"image","title":"Landlord-pay Rental Units Cost US Economy $836 Million Per Year in Wasted Energy","body":null,"created":"1642782334","gmt_created":"2022-01-21 16:25:34","changed":"1643039849","gmt_changed":"2022-01-24 15:57:29","alt":"Thermostat on a wall ","file":{"fid":"248284","name":"16 x 9 Aspect Ratio (3200 x 1800 px) (4).png","image_path":"\/sites\/default\/files\/images\/16%20x%209%20Aspect%20Ratio%20%283200%20x%201800%20px%29%20%284%29.png","image_full_path":"http:\/\/hg.gatech.edu\/\/sites\/default\/files\/images\/16%20x%209%20Aspect%20Ratio%20%283200%20x%201800%20px%29%20%284%29.png","mime":"image\/png","size":5048485,"path_740":"http:\/\/hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/16%20x%209%20Aspect%20Ratio%20%283200%20x%201800%20px%29%20%284%29.png?itok=xLh43ZoM"}}},"media_ids":["654663"],"groups":[{"id":"1281","name":"Ivan Allen College of Liberal Arts"}],"categories":[],"keywords":[],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003EDi Minardi\u003C\/p\u003E\r\n\r\n\u003Cp\u003Edi.minardi@gatech.edu\u003C\/p\u003E\r\n","format":"limited_html"}],"email":["dminardi3@gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}