Will New Green Rental Housing Ordinance Push Rents Even Higher? Landlords Say, “Yes”

by Jaime A. Hope

Ann Arbor’s City Council recently passed a green-energy housing ordinance. The Exec. Dir. of the Washtenaw Area Apartment Association says the new ordinance will increase red tape and expenses for rental housing owners at a time when the City Council is also concerned about a lack of affordable housing in the city.

The Green Rental Housing Ordinance aims to enforce new energy standards on rental housing. The ordinance imposes additional red tape and financial burdens that experts say will reduce Tree Town’s rental stock, particularly for low-income residents, and push high rents even higher.

Landlords will have to meet a qualifying “Asset Rating” through either a prescriptive checklist or a third-party energy rating system before each routine rental inspection. A landlord who fails to comply could be prohibited from obtaining or renewing a rental license.

Violations can result in civil fines of $500 for a first offense and $1,000 for subsequent offenses, plus the cost of prosecution, according to the draft language.

“While we understand the intent behind this ordinance, the Washtenaw Area Apartment Association firmly believes it will have far-reaching and devastating consequences for students, tenants, and property professionals in Ann Arbor,” James Nichols, the organization’s executive director, said in an email.

Costly upgrades required by the ordinance will lead to higher rents, Nichols said. “This will not only hurt tenants, but price many students and tenants out of their homes.”

Members of the City Council say they are grappling with a housing crisis, according to an April 2024 report by Michigan Daily.

Some observers say the ordinance makes it harder to make housing more affordable.

“Ann Arbor’s City Council is working against itself,” Jason Hayes, a director of energy and environmental policy in Lansing. “They’re pushing for more affordable housing while imposing green ordinances that raise costs for landlords and limit rental options.”

Hayes cited mandates for all-electric systems that add tens of thousands in upfront costs for homeowners and landlords, pricing out low-income residents.

Ann Arbor Mayor Christopher Taylor defended the proposal.

“The Green Rental Housing ordinance sets reasonable and attainable standards that will improve tenant expense and comfort, without overburdening landlords,” Taylor wrote in an email.

City Council Member Jen Eyer echoed Taylor’s view, stating in an email that the ordinance is crafted to improve conditions for renters without sacrificing affordability.

“Ann Arbor’s housing affordability challenges are serious — and so is the climate crisis,” Eyer wrote. The city can’t tackle one issue while ignoring the other, she added.

Improving energy efficiency in rental housing will reduce financial burdens on tenants, Eyer said.