Overview
- A Green Rental Housing Ordinance in Ann Arbor was unanimously passed by Ann Arbor City Council on Monday, June 16th. It was developed in partnership with a task force composed of environmental advocates, housing professionals, and community members. The ordinance is part of Ann Arbor’s A2Zero initiative to achieve carbon neutrality by 2030.
- The ordinance will require all rental properties—about 23,000 units across the city—to meet minimum energy efficiency standards before landlords can renew their rental licenses, but there is flexibility in achieving compliance. Property owners would have to either complete a city-provided checklist of energy-saving measures or obtain a qualifying third-party energy assessment such as a HERS, or Home Energy Score.
- The ordinance is framed as both a climate and equity measure. Buildings contribute roughly 40% of Ann Arbor’s greenhouse gas emissions, and more than half of city residents are renters. Supporters argue the ordinance will reduce emissions and lower tenant utility bills by 20-30% over time, especially in older, poorly insulated buildings. The city also claims that improving rental housing quality will yield public health and comfort benefits.
- However, the proposal has met pushback from some landlords and housing advocates because of the anticipated costs of upgrades. Some landlords warn these costs could raise monthly rents by $400 to $800 or cause some units to be withdrawn from the market entirely. Tenant groups, while supporting the environmental goals, caution that affordability protections are needed to prevent displacement, especially in a city where median rent for a one-bedroom unit now exceeds $1,800.
- Ann Arbor’s ordinance may serve as a test case for how far cities can go in aligning housing regulation with aggressive climate goals.
Transcription
David Fair: The City of Ann Arbor continues to push forward with its ambitious carbon neutrality goals. I'm David Fair, and welcome to this week's edition of Issues of the Environment. The city has set a deadline of reaching carbon neutrally by 2030 with its A2Zero initiative. The latest move is called the Green Rental Housing Ordinance, and it targets more energy efficiencies among the 23,000 or so rental properties in Ann Arbor. Landlords and concerned community members fear it could drive up the cost of rents in a city that already lacks enough affordable housing. Our guest this morning says that simply isn't so. Missy Stults is director of Ann Arbor's Office of Sustainability and Innovations. And welcome back to WEMU, Missy!
Missy Stults: Hey, thanks for having me! It's a pleasure!
David Fair: While the ordinance was passed by City Council on Monday, June 16th. The city has framed it as both a climate and an equity measure. How so?
Missy Stults: Yeah. Well, also, I will throw in a consumer protection measure. Fundamentally, this is an ordinance that helps make sure that people have information as they go to rent a unit about the efficiency of that unit, the practices in that unit. Fundamentally, this is about ensuring everyone has access to housing that's healthy, comfortable, safe, and affordable. And so, the ordinance has--and we'll probably get into this--different pathways. There's a lot of flexibility built into it. But it's about making sure that people know about the units that are about to rent and can make an informed decision about if this is the best place for them, their family, et cetera, to occupy.
David Fair: What this requires of landlords is to meet minimum energy efficiency requirements before the city will grant renewals of rental licenses. How are those minimum requirements defined?
Missy Stults: Well, that's interesting. So, I just want to push slightly on that framing that it doesn't actually require minimum energy standards. There's flexibility. So, that's one pathway. There is another pathway that really is more about education and engagement with tenants on other sustainability practices. So, the two pathways available: you can get what's known as a home energy rating score. This is like a golf course, so lower is better. And it comes in, and it's evaluating the efficiency--like, you sort of led with--of the unit. In this case, you need to get 110 of a score or lower. Again, lower is better in order to pass. And when you pass, that score is called a HERS score. It's good for life, right? So, this is kind of a one-and-done. Maybe you don't want to take that path for some reason. There's also a checklist, and that checklist you have to get, when this is fully implemented, 110 points there. So, 110 and 110 on both sides out of 300 possible points. And you can get points for things like making sure you can open your window, providing emergency alert information to residents, so they're aware if something happens and what to do about it, supplying first aid kits or making sure folks have washers and dryers in units. There's a lot of flexibility in there. So, you can do things in the checklist that help improve efficiency, but you don't have to do those things. So, I know I've said this before. We really tried to design an ordinance that is customizable to very different situations in the City of Ann Arbor.
David Fair: There are what? More than 23,000 rental units in Ann Arbor?
Missy Stults: Yeah, that's right. Yeah. So, we have about, we say it's somewhere around 54% of all the housing in Ann Arbor is rental.
David Fair: I would assume a decent number of those units may already be in compliance. Do you have a feel of how many are going to have to make upgrades?
Missy Stults: Yeah, that's a great question! So, we looked at HERS scores that have been done historically in the City of Ann Arbor, and we never found one that wasn't in compliance. We did do some assessments with folks who are really nervous, and we were able to find a few. But here's the good news. I don't think it's many. And in doing the assessment, we also analyzed what would you have to do if you did a HERS score to come into compliance. And the answer was very simple: insulation. A single motive or action here in putting insulation in the walls. And I want to clear. These were houses that had zero insulation. We're not talking a little bit inflation. We had nothing. There was nothing between those walls and the outside. If they put insulation in, they would have been in compliance. Their scores would have dropped well below the threshold. It means they would have in compliance for life. The other side of that is we have rebates and funding to help support things like insulation. So, we're now just saying you must do this thing to help improve health and safety. We're saying we would even help you do this thing and help fund this thing because it's good for everybody.
David Fair: How on Earth is the relatively small staff and city government going to ensure compliance?
Missy Stults: It feels like both a soft fall and a tricky one. Well, we already do rental inspections. It's part of what happens here in the city. So, our building department goes out, and they're doing inspections on a traditional cycle that's already set up. This is part of the inspection process. So, it is not an add-on. It's not a new inspection someone has to have. If you rent in the city, you already get inspected on a two-and-a-half to three-year cycle. So, this will be something you will have to just submit and say, "Yep! I'm in compliance. Here's my HERS score," or "Here's my checklist." And that will be part of the existing system. So, we have a team member here who is helping automate as much of that as we can. Of course, we've got our rebates. So, we've had a different team that's helping get those dollars into people's hands to make improvements. And then, we're working with our contractors in the community, both existing and growing more contractors and more jobs to help actually do improvements where people want to make improvement in their units.
David Fair: Issues of the Environment and our conversation with Missy Stults continues on 89.1 WEMU. Missy is director of Ann Arbor's Office of Sustainability and Innovations. I'm quite certain that, over the past several months, you've gotten an earful from landlords. Those that have addressed City Council and those that have reached out to us here at WEMU believe there's no way to avoid higher prices for rental units because of the cost of any upgrades that may be required. Now, you have disagreed on several fronts as has Mayor Christopher Taylor. How can higher rents be avoided?
Missy Stults: Yeah, this is a great question! And I think it gets to a lack of understanding of the flexibility in the ordinance. And I also want to point out I do not paint folks in a broad brushstroke. We worked with a lot of landlords, tenants, housing, affordability advocates and others, building scientists, et cetera, to create this ordinance. And we've worked on it for over four years. In fact, we were ready with this ordinance about three years ago, and we held for a different reason in terms of moving it forward. So, a lot of people have helped us really think purposely and intentionally about it. And I think that's why you see a better ordinance that's really flexible. So, I'll give you a few reasons why. I think it is not likely that we're going to see massive rent increases. Number one, most units are already in compliance--they don't have to do anything. Number two, for those units that may not be in compliance and have to make improvements, we actually have funding to support them with making those improvements. We are being very intentional and purposeful. We're working on targeted outreach right now to landlords and property managers to make sure they know about those funds. We're working with the contractors who do the work that we have funding available for to make that they are educated and know how to access those funds. So, we're actually gonna take the edge off of any improvements that need to be made. And then, third, you have flexibility in the checklist. So, I heard some hyperbolic language when I heard, in particular in public comments, people saying, "I'm going to have to install fill in the blank! I'm gonna have to do a new heat pump!" Absolutely not! There is nothing in the ordinance that mandates what you have to do. You could choose to work with our office and do a swap day. And you'll get points for that. That's not a cost option. We're providing all of the services. You could also choose when your fill in-the-blank appliance, let's go for stove, when your stove breaks, to install one that's more efficient. You get points for that. You don't have to take anything out that currently exists in order to come into compliance here. So, there's a lot of built-in flexibility to help make sure this does not increase rent in the market, but also, fundamentally, make sure every person, regardless of income, age, gender, ethnicity, has access to healthy, comfortable, and affordable housing in Ann Arbor.
David Fair: Some have questioned whether or not this ordinance is even legal. As you've mentioned, you've been putting this together over a period of years. So, do you anticipate there will be court challenges, or are you quite secure in its legality?
Missy Stults: It's pretty secure in its legality. We worked with lots of different lawyers to think about how to frame this. And, again, it goes back to the keyword you're probably picking up, which is flexibility. No one is required to do any specific thing here. There are so many pathways to get to compliance that it's not going to require you to do things on the building code. It's not going to require you to do engagement with tenants. And, again, because many units are already probably in compliance with it as well, I'm going to say "not probably." I'm confident the majority of units in Ann Arbor are in compliance with the ordinance.
David Fair: With that in mind, most in compliance, what kind of dent do you expect this ordinance to make in Ann Arbor's carbon output and reaching its goal of carbon neutrality by 2030?
Missy Stults: I'm so glad you asked this question, because we've heard from, I would say, our climate activists on the other side that the ordinance isn't strong enough. And there are times that I fully agree with that. But what I would say is fundamental to the work that we do is having information and data. And this ordinance is going to help us understand how our units are performing and where there are opportunities for continued growth and advancement in decarbonization. So, being able to use that information, understanding our housing stock looks like this, we have 40% of the stock that needs Y, means we can create a program to support a transition to Y. We can provide funding for Y. We can do education around Y. Without that information, you're sort of guessing, right? You don't have data to build a robust program around. So, the ordinance will help us get our lowest performing units into compliance, and it will give us the data that we need to move forward with the next step in our decarbonization work.
David Fair: Thank you so much for the information and the conversation today, Missy! I appreciate it!
Missy Stults: My pleasure, Dave! And please, I just want folks to check out the website. There's FAQs. You can actually read the ordinance yourself. I know there was a lot of misinformation in circulation, and we just want to make people aware to get the facts. Kind of read for yourself and form your opinion now.
David Fair: That is Missy Stults. She is director of Ann Arbor's Office of Sustainability and Innovations and has been our guest on Issues of the Environment. For more information on the Green Rental Housing Ordinance, pay a visit to our website at WEMU.org. We'll get you to all of those links that she referenced. Issues of the Environment is produced in partnership with the Office of the Washtenaw County Water Resources Commissioner, and you hear it every Wednesday. I'm David Fair, and this is your community NPR station, 89.1 WEMU-FM Ypsilanti.
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