Housing’s Energy Hogs

If renters use more energy per square foot than homeowners, are apartments still energy efficient?

Renters use nearly a third more energy per square foot than homeowners, according to data from the Energy Information Administration’s (EIA’s) most recent Residential Energy Consumption Survey (RECS).

However, the topline takeaway from the survey, which is considered the gold standard for energy consumption data among researchers, is leading some industry consultants and academics to the somewhat illogical conclusion that apartments are intrinsically less energy efficient than their single-family counterparts.

But newly released survey micro data is challenging that conclusion, showing that homes in larger multifamily buildings (5+ units) in fact use less energy than single-family houses, as well as homes in small multifamily buildings (2-4 units).

How energy intensity drives square foot results

Experts and academics point to a number of reasons why apartments appear to use more energy per square foot than a single-family house, ranging from the observation that apartments tend to have fewer energy-efficient appliances to the thought that renters may be less judicious about using energy because it’s often rolled up in the rent.

However, these explanations leave out a critical dimension: apartments are more energy intensive than single-family houses, supporting a similar number of standard household appliances and electronic devices (refrigerators, microwaves, TVs, computers, hair dryers, etc.) in a much more compact space.

Beyond that, focusing on energy consumed per square foot has a glaring weakness: It fails to account for the larger size of single-family houses. After all, a single-family house that uses half as much energy per square foot as an apartment, but is four times as large, still uses twice as much energy as the apartment.

Why household energy use offers a better measure

For this reason, a more relevant energy measurement is energy consumed per household. Under this lens, the survey results are quite different. Single-family homes use more energy per household than both small multifamily buildings (2-4 units) and large multifamily buildings (5+ units). (See chart above.)

These trends hold up for overall heating and cooling as well as for energy usage for most appliances. But other housing characteristics are important as well and must be accounted for.

For example, climate also plays an important role. Cold climates have the highest total energy use, while both hot-humid, dry, and marine climates use much less. Other characteristics that affect energy include the size of the home; the age of the home; and the income of the household.

In-depth analysis shows better energy performance

With so many factors influencing energy consumption, it was necessary to disentangle these varied effects through the more high-powered analytical tool of econometrics. This amounts to grinding through more than 11,500 observations in the sample, matching energy use with relevant characteristics of the housing units to estimate the energy impact of each characteristic.

This analysis, which essentially accounts for the different characteristics of households and housing units, confirmed expectations in key areas: both hotter and colder climates cause higher energy use; larger homes use more energy; older homes have higher energy usage then newer homes; and higher income households use more energy than lower income households.

But beyond that, two additional conclusions of importance emerge. First, while renters who don’t pay for utilities directly use more energy than owners, there is no significant difference in energy use between owners and renters who do pay directly for at least some of their utilities.
Second, single-family homes use more energy than 2-4 unit multifamily homes, and 2-4 unit multifamily homes use more energy than 5+ unit residences.

So, while apartments by nature are more energy intensive than single-family houses on a square foot basis, their performance on the more important measure of energy use per household, even after controlling for a number of variables, refutes the notion that apartments are less energy efficient.

Certainly opportunity exists to continue to find ways to improve multifamily energy performance, ultimately lowering total energy consumption. However, given the wide variety of factors that can influence energy performance, it’s critical that, going forward, energy analysis and policy recognize this inherent existing energy efficiency and also pursue individualized technical analysis that reflects the unique nature of multifamily communities.

Mark Obrinsky, Ph.D., is vice president of research and chief economist for the National Multi Housing Council in Washington, D.C.