Turns out that nearly a third of renters are willing to pay more for green units, though rent premiums are likely less than 5 percent. So says the results of a 2009 multifamily energy management research study conducted by Parks Associates exclusively for Multifamily Executive magazine.
“Those who don’t think that green and energy-efficient initiatives are fruitful should reconsider their stance,” said Bill Ablondi, director of home systems research for Parks. “A growing percentage of prospective renters are willing to pay a rent premium.”
Nearly 80 percent of multifamily firms today rank energy efficiency as a high priority for their company. However, getting higher rents was not as important a factor in their strategy as the possibility of lowering operating costs. Today, those firms are targeting an average 7 percent reduction in annual expenses by going green; the five-year target is to double those savings.
That doesn’t mean that units won’t lease or sell faster with green features. “Interestingly, one of the things we found was that installing energy-efficient appliances was as likely to positively influence leasing decisions as amenities such as high-end fixtures, in-unit broadband, and fitness centers,” Ablondi said.
Ablondi’s No. 1 recommendation to multifamily firms considering growing their green initiatives was to seek partners in terms of service or software providers and product manufacturers who can help both offset the cost of investment required to go green as well as help build awareness about energy-efficiency initiatives.
The full research results and data analysis are available by emailing Bill Ablondi at [email protected].
