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EUC votes to oppose multifamily weatherization rent freeze

Tuesday, January 29, 2013 by Michael Kanin

Members of the City of Austin’s Electric Utility Commission expressed concern over a Council-fueled effort that could implement a rent cap for landlords who take advantage of Austin’s weatherization reimbursement program. Their action came in the form of a resolution that echoed similar concerns from the city’s Resource Management Commission.


The Electric Utility commissioners’ document contained language pulled from a similar action approved by their Resource Management colleagues. In so doing, electric commissioners voiced concerns that a post-weatherization cap on rents would have a detrimental effect on the program. Commissioners urged Council members to not establish a rent cap.


“It’s taken a long time to get the multi-family housing market to embrace the concept of energy-efficiency upgrades,” said Electric Utility Commission Chair Bernie Bernfeld. “Personally, I see this as nothing but a way to just kill – just as it was starting to grow – the energy efficiency movement within multifamily housing.”


Council Member Kathie Tovo and Mayor Pro Tem Sheryl Cole brought forward a resolution on Dec. 13 that instructed City Manager Marc Ott and city staff to come up with a policy that would make the receipt of an energy efficiency rebate contingent on a landlord commitment to not raise rents over a “reasonable period.” The resolution passed on a 4-3 vote, with Council Members Bill Spelman and Chris Riley joining Mayor Lee Leffingwell in dissent.


Amended resolution language instructed staff to bring any policy before both the Electric Utility and Resource Management commissions for input.


Before Austin Energy staff got a chance to present their ideas for a policy, RMC Chair Leo Dielmann told electric commissioners that his group was against a rent cap. “(The RMC) does not believe that freezing rents meets the goals of the city’s energy efficiency or affordable housing programs,” Dielmann said.


Dielmann also noted that the resolution expressing concern passed by unanimous vote of commissioners present at the meeting.


Various citizens also told electric commissioners that they were against a rent cap.


However, Lanetta Cooper of Texas Rose and the Texas Legal Service Center offered her support for the idea. “What we’ve got right now…is a contradiction between providing energy efficiency, but at the same time raising rents because of the energy efficiency,” she said.


Though staff agreed that there were still issues that needed to be resolved, they argued that a policy could be established. They noted that the rent freeze would only affect commercial multifamily properties that had not received federal reimbursement for weatherization. The feds, staff said, already require a rent freeze from landlords that receive U.S. reimbursement, many of whom serve low-income tenants.


Staff’s policy would also try to separate the costs of weatherization from other major upgrades. It would trigger at $500, and allow landlords to recoup any expenses incurred while installing major improvements that were not part of the weatherization reimbursement.


Commissioner Phillip Schmandt served on an EUC subcommittee that addressed the city’s current Energy Conservation Audit and Disclosure ordinance. Schmandt reminded commissioners that, as part of the negotiations that brought about eventual passage of that program, “the multifamily folks agreed to mandatory upgrades for the worst-performing multifamily units.”


Those mandatory upgrades, Schmandt noted, were the only mandatory upgrades included in the resolution.


“I respected them very much for coming forward and saying we will agree to this compromise…even though they got the shortest end of the stick of anybody,” Schmandt continued. “To now come back to them and say, ‘Oh, guess what? We’re going to renegotiate that deal with you and make it even a shorter end of the stick’ is to me politically irresponsible: Why would they ever come back to the table again and negotiate if they know that the deal that they negotiate is going to be recut?”


The call for Council members to not approve a mandatory rent cap for weatherization reimbursements passed the EUC by a 6-0 vote. Commissioner Karen Hadden abstained.

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