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Then There's This: Consumer Report

What apartment tenants should know before they sign a lease

By Amy Smith, Fri., June 8, 2012

If you're a prospective tenant, and you see a notice like this, consider other options.
If you're a prospective tenant, and you see a notice like this, consider other options.

It's not exactly going the way some people envisioned, but a new energy-efficiency disclosure program – perhaps the first of its kind in the nation – could be the best thing to happen to prospective renters. The only problem is no one is telling them about it.

With electric rates set to increase this year, local housing and consumer advocates fear that Austin Energy has already taken too long to get the word out about a city ordinance that requires owners of apartment buildings older than 10 years to have their properties audited for efficiency. The results of the audit must be prominently displayed so current and future tenants will know if repairs and upgrades need to be made and what their electric bills will look like come August.

The Energy Conservation and Audit Disclosure Ordinance, approved by City Council in 2009 and amended in 2011, applies to single-family homes (on the market), commercial buildings, and multifamily properties. Trying to bring the city's vast spread of apartment communities into compliance is not unlike herding cats, so the multifamily component of the ordinance has presented the biggest challenge for the electric utility, which has been charged with overseeing the program.

Local real estate agents representing homebuyers have embraced ECAD as a useful mechanism for negotiating better deals for their clients. On the multifamily side, many apartment owners have made the best of the mandate by using the ordinance as a marketing tool – the better their audit ratings, the more attractive the property is, even at a higher rent. Lower utility bills will offset the cost of paying more for rent, said Sandy Eckhardt, president of the Austin Apart­ment Association.

Energy Hogs

Part of the problem for AE has been trying to track down apartment owners who live out of state or are owned by large insurance or investment companies, said AE's Jill Maness.* She said there are currently about 500 properties that haven't complied with the ordinance and, of that number, some 50 properties are considered high energy users. (It's no surprise that several of the truly egregious energy hogs are in the 78705 ZIP code, which includes West Campus.) The 50 properties by now should have received a warning letter that Austin Energy sent out last month, along with an official notice that they're expected to post in a common area to alert current and prospective renters to the fact that the apartment building isn't up to snuff on energy efficiency. The owners must display the notice until they've reduced their per-square-foot energy usage by 20%. Meanwhile, the utility is trying to bring the remaining noncompliant property owners up to speed on what they need to do to reduce their energy use.

The ECAD ordinance has its roots in the high-profile 2007 Austin Climate Protection Plan, which set into motion a series of goals to reduce Austin's carbon footprint, including offsetting 700 megawatts of peak energy demand by 2020. A task force of industry reps, low-income housing advocates, and other stakeholders was assembled and tasked with drafting the rules for the new ordinance. City Council adopted the rules in 2009, and, after some push-back from opponents, watered them down two years later. Low-income advocates, along with the city's Resource Man­age­ment Commission, have been prodding AE along ever since, says Carol Biedrzycki,* executive director of Texas Ratepayers Organ­iz­ation to Save Energy. "This ordinance was supposed to go in effect on June 1, 2011," she said of the multifamily effort.

'Not Completely Baked'

While there are somewhat similar programs in place in cities on the East and West Coasts, Biedrzycki believes Austin's endeavor – once it's fully off the ground – will be the most progressive and far-reaching of its kind in the nation, and could serve as a model for other cities. She arrived at this opinion after sending out a query on a nationwide listserv to other tenant advocates asking if anyone knew of similar operations. An overwhelming number of people responded wanting more information about Austin's program, she said. "This is such a great, innovative program, I don't understand Austin Energy's reluctance to move forward with it."

Biedrzycki and Kathy Stark, head of the Austin Tenants' Council, had envisioned the utility launching an aggressive public outreach campaign that included information on the program in the newsletter that accompanies monthly utility bills. Such a launch will come in time, said Maness, who concedes the program is still "not completely baked ... it's probably two-thirds to three-quarters baked."

Until then, Biedrzycki has some advice for would-be renters: "If you see a high-energy use facility, you should really take another option, if you have one. The important thing is that people have to know that this information is available."

*The last names of Jill Maness and Carol Biedrzycki have been corrected.

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