November 15, 2016

Higher Utility Bills Bigger Worry Than Rising Rents

The cost of food, clothing and transportation has been rising slowly in the last year, helping American households make ends meet. But for renters, the pressure on their paychecks keeps increasing as rents remain among their fastest–growing monthly costs. But that's not all — renters are now more concerned about their rising utility bills than they are their rising rents.

Seventy percent of renters surveyed by Freddie Mac say they are moderately to greatly concerned about higher utility bills. By contrast, only 63% shared the same levels of concern about potential rent increases. Seventy–four percent say higher utility bills would have some impact — or a great impact — on their household finances, almost as many as those who said the same (78%) about higher rents. One possible reason — utility bills can vary greatly from month–to–month, i.e. between winter and summer months, making it more difficult to budget, whereas rents typically change only once a year.

Higher Utility Bills Bigger Worry Than Rising Rents

Could Going–Green Help?

A large majority (84%) of renters say green properties are generally better places to live. This isn't a new finding. However, 88% of renters also agreed multifamily properties with green energy– and water–saving features would help reduce their utility bills.

Nearly half (47%) say they are willing to pay more for an environmentally–friendly rental. Renters in the South (52%) and West (49%) were more likely to say they would pay more than those in the Midwest (39%) or Northeast (44%).

These results confirm that investments in energy efficiency may give Multifamily property owners and managers a competitive edge. It also underscores the value of Freddie Mac Multifamily's Green Advantage, which enables borrowers to increase the size of their loan to finance energy– and water–saving features in workforce housing and older properties. Moreover, nearly 90% of apartment buildings Freddie Mac funds are for affordable properties — potentially helping those who could be most affected by higher utility costs.

Conducted in September for Freddie Mac by the Harris Poll, the findings are based on responses from 1,362 renters. For more results, visit the Profile of Today's Renter Multifamily Renter Research.