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Spilt Council wants rent moratorium in exchange for energy rebates

Friday, December 14, 2012 by Michael Kanin

City of Austin management will explore whether to impose a moratorium on rental increases if landlords take advantage of Austin Energy’s weatherization rebates.


The action comes after a resolution brought Thursday by Council Members Kathie Tovo, Mike Martinez and Mayor Pro Tem Sheryl Cole passed by a 4-3 vote. Council Member Laura Morrison also voted for the resolution.


Council Members Bill Spelman, Chris Riley and Mayor Lee Leffingwell voted against the measure. Spelman called the resolution “a bad idea.”


Austin Energy offers a slate of rebates as incentives for apartment owners to make their properties more energy efficient. Eligible items include work on heating, ventilation and air-conditioning units, and other items that would contribute to the overall betterment of a building’s capacity to withstand extreme temperatures.


Such upgrades can offer property owners a way to cut back on electricity use for heating and cooling – a proverbial win-win for landowners who get lower utility bills and the utility, which is always looking to conserve its need for energy.


But Spelman argued that the exchange of a rent moratorium for weatherization rebates could mean few landlords would make energy-efficiency improvements.


“If we were dealing with low-income tenants and low-income apartments, I could see a justification … (where) the primary reason for (action) was not energy efficiency but to put more money into the hands of low income-folks,” Spelman said.


“The program we have for energy efficiency is offered at all parts of the income spectrum – rich folks, poor folks, everybody in between – for the purpose of energy efficiency,” he continued. “I’m persuaded that if the landlords are prohibited from taking … any of those (weatherization) costs back, they’re just not going to participate in the program, and we’re not going to get energy efficiency out of the program.”


According to the resolution, Austin Energy rebates for work on multi-family buildings can extend to $200,000.


Austin Energy General Manager Larry Weis told Council members that it wasn’t clear what effect a moratorium on rent increases might have on the weatherization program. “It’s very subjective depending on the attitude of the owners,” Weis said. “For example, are they interested in making some capital investments …for depreciation purposes? A lot of things factor in to it.”


Martinez pointed out that the measure was simply a starting point. “This just starts the process,” he said.


He then turned to the concern of his colleagues. “I think it’s worthy of asking these questions – I think these are great questions – but that’s what the process is for: So that we can get all of the stakeholders together and see if there is something we can come up with that 1) keeps the owners of these older buildings wanting to participate in the program but 2) don’t pass (the costs) on to the low-income renters that most of them house as tenants,” Martinez continued.


Tovo added that there would be a process for landlords to raise rent, if they could prove that the increase was not related to weatherization costs.


City staff will be back before Council with a proposal about how to move forward with a potential link between a moratorium on rental increases and the weatherization program.

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