Survey: Green Apartment Rents Rising Faster Than Salaries
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In a recent survey, RENTCafé found that 69% of those surveyed are interested to live in an energy-efficient or green building
However, renters' actual willingness or ability to pay the cost of renting a green-certified apartment is well below the real price of green apartments.
Here's what the survey found:
The majority (52%) of those that expressed interest in renting green are willing to pay no more than $100/month extra rent for a green apartment, much less than the rent premium of $560 that green apartments demand. This tells us that prices still have a long way to go (down) until they align with what most renters are willing to pay.
Green-certified apartments cost a staggering $560/month more than regular new apartments
Yardi Matrix rent data shows that green-certified apartments cost on average an extra $560 per month or 33% more than new non-green apartments. They are also smaller, offering 73 fewer square feet of space than regular new apartments. More precisely, new non-green apartment units (built in 2009 or later) average 955 sq. ft. in size and cost $1,700 in rent, nationally. Green units built during the same period of time average 882 sq. ft. in size and $2,260 in rent. The rent differences maintain across all asset classes (high-end, mid-range or affordably-priced apartments).
Here’s a breakdown by how much extra renters would pay for a green-certified apartment:
- $0: 23.5% of respondents
- $1-$100: 52% of respondents
- $101-$300: 10% of respondents
- $301–$500: 4.5% of respondents
- More than $500: 10% of respondents
The interest for green living is evenly distributed across all generations: 34% are Millennials, 34% are Gen-Xers and 32% are Baby-Boomers. The largest share of those willing to spend more than $500 in additional rent for a green-certified apartment is made of Baby-Boomers.
Our survey also revealed that the most popular green apartment features are “energy-saving appliances and thermostats,” followed by “water-saving plumbing” and “eco-friendly transportation options.”
Although there aren’t many reports on specific long term energy savings, renting green brings along some savings in terms of energy and maintenance costs, as well as health benefits such as better air quality and temperature comfort, not to mention that priceless “do-good feeling.” But these added benefits come at premium prices, preventing many from leading the sustainable life they desire.