Household Energy Bills and Subsidized Housing

Samuel Dastrup, Simon McDonnell, Vincent Reina , Furman Center for Real Estate and Urban Policy
New York University School of Law and Wagner School of Public Service

As with the articles in this issue, this introduction reflects the views of the authors and does not necessarily reflect the views of the U.S. Department of Housing and Urban Development.

Household energy consumption is crucial to national energy policy. This article analyzes how the rules covering utility costs in the four major federal housing assistance programs alter landlord and tenant incentives for energy efficiency investment and conservation. We conclude that, relative to market-rate housing, assistance programs provide less incentive to landlords and tenants for energy efficiency investment and conservation, and utilities are more likely to be included in the rent. Using data from the American Housing Survey, we examine the differences in utility billing arrangements between assisted and unassisted low-income renters and find that—even when controlling for observable building and tenant differences—the rent that assisted tenants pay is more likely to include utilities. Among all tenants who pay utility bills separately from rent, observable differences in energy expenses for assisted and unassisted tenants are driven by unit, building, and household characteristics rather than the receipt of government assistance.