Ann Arbor 2030 District Tenant Engagement Toolkit

Abstract

2030 Districts Network is a non-profit organization with local Districts in cities across North America striving to adapt to and mitigate climate change (2030 Districts Network, 2022a). Ann Arbor 2030 District (AA2030) has been a client for University of Michigan School for Environment & Sustainability (SEAS) master’s projects in the past. AA2030 work focuses on reducing existing building energy consumption, water use, and transportation emissions by 50% for existing buildings and infrastructure before 2030 using estimated baselines (2030 Districts Network, 2022b). Multifamily buildings have the largest floor area of any building type in Ann Arbor, Michigan, and have the largest carbon footprint in Ann Arbor, followed by office and retail (Smith, 2022). There is a need to determine how building owners and property managers can best engage occupants of commercial and multifamily buildings to start making reductions to meet carbon neutrality goals. Often landlords with tenants who pay the utility bills do not want to invest in improving their properties to be more energy and water efficient because the improvements do not save them money. Similarly, tenants do not want to invest in upgrades because they typically do not have extra financial resources and they do not want to invest in a place they only plan to be in temporarily. This is especially true in college towns like Ann Arbor where turnover is extremely high. This problem is called the “split incentive dilemma” and is a significant challenge to improving the sustainability of housing. There are ways to overcome the split incentive dilemma that share the benefits of the upgrades between building owners and tenants including green leases and various financing strategies (HVAC HESS, 2013). A study on split incentive conducted in Germany found that to make investing in energy efficiency more attractive for both landlords and tenants, strong policy action, aligned with social and urban development policy objectives is necessary (März, Stelk, & Stelzer, 2022). A 2015 study found that social norms and large financial rewards were effective in reducing consumption by 6% and 8% respectively, but the larger effect of financial incentives disappeared when information on social norms was given (Dolan & Metcalfe, 2015). Another study found that personalized and real-time advice and feedback on ways to save electricity are more effective than feedback on electricity costs (bills) and general electricity savings tips (Buckley, 2020). Previous estimates of electricity savings that can be achieved through monetary, informational and behavioral incentives hovered at 6.4–7.4%, but a 2020 study found a more realistic estimate to be 1.9–3.9% reduction in consumption (Buckley, 2020). A similar study of college student dormitory residents that implemented a competition in addition to providing feedback, education, and incentives found that electricity use decreased by 32%, but water use only decreased by 3% (Petersen et al., 2007). I found the results of this study to be consistent with my findings that students are reluctant to change their water use habits. These previous studies were used to shape questions around what incentives tenants in this study are interested in and might respond to. While building owners generally have control over building systems and operations, tenants play a critical role in achieving lasting reductions in the amount of energy used (US DOE, 2016). Collaboration between both tenant and landlord is essential to meeting Ann Arbor 2030 District goals. The responsibility of utilities and waste management are typically split between landlords and tenants. Landlords are typically responsible for energy and water uses such as hallway lighting and lawn watering, while tenants are responsible for things like plug loads, food waste,

and residential water consumption. This report focuses on non-policy strategies to engage tenants with the goal of reducing environmental impact at their residence. For example, people are more likely to commit to sustainable behaviors if there is public signaling of that commitment (BacaMotes et al., 2013). Using this background coupled with tenant responses, I recommend ways to engage tenants in improving the sustainability of their residences based on communication, current efforts and barriers, and interest and behavior change. In conjunction with the Ann Arbor 2030 District and the University of Michigan (UM), this project aims to create a suite of engagement tools to assist 2030 Districts Network members in meeting their reduction goals for transportation emissions, energy and water use, and waste. The goal of this research is to gather information about tenants’ sustainability habits, interests, efforts, and barriers and identify ways AA2030 District can support landlords in engaging with tenants to reduce water consumption, energy consumption, waste production, and transportation emissions. Applicability in other 2030 Districts will also be a priority during engagement toolkit development. The general approach is as follows: • Work with a local property management company and city affordable housing to design and implement semi-structured interviews with AA2030 District member multitenant buildings • Pilot the interview scripts, incorporate necessary changes, document process and results • Conduct a qualitative analysis of interview results • Develop an engagement toolkit including a broadly applicable set of tools for new District members to effectively engage building tenants in achieving reductions • Produce a final report and toolkit that can be used by other districts and organizations I am not the first person to do a project of this kind, and there are precedents to build on. Multiple organizations are doing similar work and research. Better Building Partnership has created a similar toolkit, which emphasizes a partnership between owners and occupiers of commercial buildings (Better Buildings Partnership, 2013). Energy Star has a toolkit with resources that focus on strategies to engage commercial tenants on energy efficiency (EPA, n.d.). National Renewable Energy Lab (NREL)’s recommendations for commercial buildings emphasize the voices of both parties being heard; the building needs to communicate energy use information and recommendations, and the occupant must respond by providing comfort feedback and requesting adjustments (Schott et al., 2012). The American Council for an EnergyEfficient Economy (ACEEE)’s toolkit focuses on the multifamily sector through engaging utility regulators, facilitating access to whole-building energy usage data, and reducing funding uncertainties (ACEEE, 2017). These sources were used to shape the interview scripts for this research. I identified the types of tools in existing resources (e.g., competitions, data transparency, providing educational information, incentives) and formed questions to see if those resources would be a good fit for use in multitenant spaces. Most tenant engagement research is centered on the commercial space, and there is a need for more research in residential multitenant building engagement. AA2030 has established baselines for water use (Johnson-Lane, 2021), energy use (Dukus, 2020), and transportation emissions (Fields, Pritchard, & Sivah, 2021) in previous University of

Michigan graduate student projects A partner of AA2030, Ann Arbor’s A2 Zero program, recently passed a benchmarking ordinance for city buildings and initiated a Rental Efficiency Standard and the city is drafting a Green Rental Housing Ordinance to be adopted before the end of 2022. The program is also applying for government funding to get 30 homes to net zero (Smith, 2022). The goal of this project is to leverage the work and resources that already exist to create an engagement toolkit specifically for Ann Arbor, yet applicable to and available for other 2030 Districts to use. In this report, I build on previous tenant engagement research with the input of participating tenants from Oxford Companies (primarily off-campus student housing) and Ann Arbor Housing Commission (low-income family, single adult, and senior housing) to shape a playbook of strategies that work to implement individual and collective action in reaching Ann Arbor 2030 District emission and consumption goals. Using data collected from these semistructured interviews, I gather tenant feedback regarding communication, interest and behavior change, and current efforts and barriers to construct an engagement toolkit to be used by building owners in the Ann Arbor 2030 District as well as the wider 2030 District network. I supplemented these data with three interviews with Ann Arbor Housing Commission (AAHC) partner organization service providers. Future research into other types of tenant spaces, such as commercial spaces and single-family homes in wealthier areas, is needed. Inequities exist in household energy efficiency and carbon emissions in the U.S., and Ann Arbor is no exception. Residential energy use accounts for almost 20% of greenhouse gas emissions in the United States (Goldstein, Reames, & Newell, 2022). Wealthy American homes have carbon footprints 25% higher than low-income residences primarily due to home size (Goldstein, Gounaridis, & Newell, 2020). Addressing energy and water use of multiple building types is essential to the bigger picture of this research.