4 Ways Climate Change Affects Renters

We read through the 2018 climate report and summarized the effects of climate on renters.

The Fourth National Climate Assessment report was released on November 23rd. It paints a grim picture of the future, covering a very broad range of topics, ranging from economic changes to infrastructure resiliency. Here are our key takeaways for renters.

1. More Crowded Cities = Higher Rent

Politicians and media often understate the extent to which the US is an urban nation. “85% of the total U.S. population” lived in urban areas as of 2015, and that number appears to be increasing. “From 2010 to 2017, a historic number of rural counties in the United States experienced population declines due to persistent outmigration of young adults.”

One effect of climate change may be an acceleration of that trend. The report emphasizes how difficult it will be for rural economies to survive climate change. Agriculture is likely to be heavily affected by temperature changes, significantly decreasing productivity. For example, the higher temperature and air quality problems from fires may cause increased health problems in livestock. Meanwhile, the rural energy sectors (coal mining, drilling, etc.) will likely be affected by the response to climate change – an increased demand for going green will decrease our need for these sources of energy. These agricultural and rural communities have fewer resources to prepare for the effects of the increased number of natural disasters we expect to have. When your home or farmland is destroyed, it likely affects your entire region. Where else is there to go, except towards a city to find a job?

On the other hand, some cities may literally lose ground. Coastal cities are expected to see some building and homes underwater over the next few decades – especially areas like Miami. While coastal housing is often owned by the rich, they will have to move slightly inland, competing for the same valuable city real-estate that was previously held by renters. It would appear that our cities will become denser, which tends to mean that rent gets higher all around.

2. Worse Housing Conditions for Renters

Problems like air quality issues from fires, extremely high or low temperatures, and flooding may affect renters worse than owners. For example, “people without access to housing with sufficient insulation and air conditioning (for example, renters and the homeless) have greater exposure to heat stress.” Renters will have to ask for repairs more frequently and the effects of roof leaks, electrical problems, poor plumbing, poor insulation, and infestations will be worse due to more extreme weather.

Renters and homeowners will experience problems with evacuations and natural disasters. However, homeowners have a few advantages over renters. First, they tend to have higher incomes and vehicles, allowing them greater freedom to preserve their safety and property in the event of a natural disaster. For example, homeowners can easily board up windows in preparation for a storm and then drive to a safe region, whereas a renter may be prohibited from modifying their apartment in such a way. Renters are less likely to own a car, they are less likely to know someone who does, and it’s expensive and difficult to rent a car during an evacuation period. Therefore, the most severe aspects of climate change may affect the safety of renters the most.

A small benefit to renters is that if a renter’s place experiences damage, it’s not their own property that loses value. They can simply move to a new unit, whereas a homeowner loses a major investment and are responsible for the costs of repairs. However, because landlords will be placed in a similar situation to that of homeowners, we may see increased rent to reflect these increased costs.

We at RenterPeace often release blog posts on what renters can expect after a major natural disaster. Check https://renterpeace.com for more details.

3. More Urban Living Problems

Cities are expected to face a number of disturbances to utilities. “Higher temperatures can increase energy loads, which in turn can lead to structural failures in energy infrastructure, raise energy bills, and increase the occurrence of power outages.” Power outages can cause the Internet to go out, creating cascading problems in medical treatment and delivery of resources. In other words, be prepared for city living to be more expensive and less reliable.

Transportation is key to reducing climate change. In response, bigger cities will continue to create programs that encourage public transportation over car ownership. We may see such initiatives encourage increased crowding on subways, buses, and metros. Many forms of public transportation already suffer from bad infrastructure or poor management – flooding and power outages from climate change can cause disruptions and accelerate the decay of their infrastructure.

There are many compounding effects of climate change in ways we still have yet to fully understand. For example, moderately increased rainfall after a major fire can cause increased electricity usage, air quality issues, flooding, and other effects. Cities will be battling multiple weather problems at once. One thing climate scientists are still struggling to understand is how cities and cultures will become resilient. For example, if heat rises, we might see more renters purchase AC window units or we may see more housing built with central AC units.

4. Renters Have to Become Active To Protect Their Safety

“Urban areas, where the majority of the U.S. population lives and most consumption occurs, are the source of approximately 80% of North American human-caused greenhouse gas (GHG) emissions, despite only occupying 1%–5% of the land.” Cities are a major source of climate change, which means they can help reduce its effects – and they are working on it. “Cities in all regions of the country are undertaking adaptation and mitigation actions.”

Unfortunately, city policies on where and how to build climate-related protections may tend to benefit homeowners and the rich. “Decisions about where to prioritize physical protections, install green infrastructure, locate cooling centers, or route public transportation have differential impacts on urban residents. If urban responses do not address social inequities and listen to the voices of vulnerable populations, they can inadvertently harm low-income and minority residents.” Those “vulnerable populations” tend to include a large number of renters. This is in part because more attention is given to affluent communities and because local political engagement is much higher with homeowners than renters. Homeowners tend to be more involved because they are more rooted in their community, while renters tend to be more transient.

For this reason, it’s important for renters to band together to demand protections. RenterPeace helps renters connect and bond with their community extremely quickly, including learning about local news and policies.

All quotes are from the climate report, found here: https://nca2018.globalchange.gov.

Why Luxury Apartment Buildings Have Empty Units and High Turnover

Luxury apartments are the ones with glass walls, rooftop pools, and high rent. You might have noticed that there are a lot of them but they are always advertising vacancies. Why don’t they just lower the rent? They also tend to have very low deposit requirements, which is strange. Why is that?

Rent Control and High Turnover

Many big cities have rent control measures. Generally, rent control prevents landlords from significantly raising the rent on current tenants. For example, in DC, landlords typically can’t raise the rent more than $50-$100 once a year for every $1000 of rent. But, when the apartment is empty, landlords are free to raise the price. That means that it makes sense for landlords who are making renovations or have purchased a building in an up and coming neighborhood to have high turnover, so they can frequently raise the rent. That’s why in some buildings, you’ll see them post $2500 for rent but then require only a $400 deposit. The less you’re committed to a place, the faster you’ll move out. It’s also why such buildings can appear fancy on the outside, but the service provided by the landlord and property manager is far from “luxury.” When they want you to move out, they won’t be attentive to your problems.

With traditional housing, it’s the opposite – high turnover is BAD for landlords. Finding new, quality tenants is expensive. The more tenants a landlord has over time, the higher chance that one of them will be a monstrous, trouble renter. It’s more stress from an investment that a landlord would ideally like to not worry about. So in many ways, the incentives of landlords in affordable housing favor tenants. But rent control, especially in gentrifying neighborhoods, has the unintended side effect of flipping those incentives on their head. Some variations of rent control laws attempt to fix this problem.

The Value of a “Luxury” Feel

Another factor is that the landlord wants to maintain a luxurious feel for these well-off tenants. Renters who pay premium prices expect to be surrounded by people in a similar economic class. The more low-income tenants that they allow to pass through the lobby, the less that snobby renters will want to rent there. At least, in theory. Mixed-income housing is controversial, and the effects are still being studied. It’s unclear whether the impact of snobby tenants is significant enough to outweigh the costs of empty units.

One thing is clear – purchasers and developers care about the whether the building has premium rent prices. When pricing an apartment building, the potential for the building is calculated, taking into account the average rent of the building. If fewer renters are paying an above-market price, then it reflects well on the building. On the other hand, when a building has fewer vacancies, but everyone is paying less than the luxury building across the street (the one with empty rooms), it may be perceived as a less luxurious building. In gentrifying neighborhoods, where the average income is expected to rise, it makes sense for developers to purchase buildings that can meet the demand for the most luxurious buildings. There’s also a sense of pride from owning the shiniest, fanciest building. So the valuation of a luxury building may not be strictly in how much money it produces, but instead, how fancy the place is.