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Green Buildings Saved Renters $72M, Fannie Mae Says

Green features such as energy-efficient light bulbs and low-flow toilets significantly cut utility bills for apartment renters, according to a Fannie Mae report.

(Bloomberg)—Using energy-efficient light bulbs, low-flow toilets and environmentally friendly heating and cooling systems cut the utility bills of some 550,000 renters over the last six years, adding as much as $72 million in annual savings, according to a new report from Fannie Mae.

The government-controlled mortgage giant recently published the first results from an eight-year-old program that encourages landlords to make energy improvements, for the sake of both the planet and renters’ finances. On average, renters saved about $145 per year. Across 200,000 buildings, landlords saved $33 million on utility costs.

“Ultimately this is better quality housing -- homes that are warm when they should be warm and cool when they should be cool ,” said Chrissa Pagitsas, vice president at Fannie Mae.

In the voluntary program, landlords could agree to a free energy audit and to make significant energy improvements to their properties. In return, they were offered a slight reduction in their mortgage rates and an increase in their loans to cover the cost of the improvements.

Fannie Mae rolled the new mortgages into more than $51 billion of green bonds, which has made it the largest green bond issuer worldwide.

Buildings are one of the top sources of carbon emissions in the U.S., and improvements like these feature in the policies of Representative Alexandria Ocasio-Cortez’s “Green New Deal.” The properties in the program reduced greenhouse gas emissions by 287,000 metric tons of carbon dioxide, or the equivalent of taking 61,000 cars off the road for a year. They also save some 6 billion gallons of water a year.

Landlords usually recovered their full investments in the green projects in six years, Fannie Mae said.

To contact the reporter on this story: Emily Chasan in New York at [email protected] To contact the editor responsible for this story: Janet Paskin at [email protected]

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© 2019 Bloomberg L.P

TAGS: Multifamily
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