Our Family lives in San Jose, CA. which is one of the more expensive housing markets in the country. We cannot afford to buy our own home, hence we rent.

Everything in the state of California is expensive including Fuel, Electricity and Gas. While we continue to live here, we are mindful of our energy usage and save where we can.

The local Electricity and Gas PG&E monopoly in their infinite wisdom sends guilt emails every month pointing out how inefficient the house we rent is.

The house is rated only “Fair” and consumes almost twice the energy of new construction homes in the area. To make it even more infuriating, the emails note how I can save energy with LED light bulbs (done long time ago to avoid heating up the house in summer) and not using dishwasher with half-load (obvious) or by taking shorter showers. NONE OF WHICH will bring this old house energy usage down anywhere near a modern construction.

Why?

• the windows are old and leak
• the walls are old and not well insulated
• the air-conditioning unit is old and inefficient
• the appliances are what they are (older)
• we work from home so naturally use a bit more electricity

There is absolutely no way this house can move from “Fair” to “Good” rating without a renovation. But since this is a rental property, there is no incentive for owner to renovate, as housing is in high demand, and it will easily rent as-is. Also, as it is the tenants who pay high utility bills, it is not landlords’ problem.

With 1-year leases, there is no mechanism for me to spend my own money on this place and be guaranteed I’ll come ahead financially, therefore I optimize for my overall cost.

So here we are, in California, claiming to be so green, where there are 0 incentives for landlords to make homes more efficient. Where tenants can’t afford to move into their own homes which they WOULD be incentivized to make more efficient.

The Cause

Q. How did California get here?

A. 1978 California Proposition 13 which limits property tax reassessments.

Between inflation, not enough housing supply and Prop 13, investing in real-estate in California became extremely profitable. The real estate market is stagnant and favors owning multiple properties for rent. This reduces supply, driving prices up and pricing a lot of people out of home ownership. Without owners paying utility bills, the ever increasing energy prices are not an effective mechanism to force green improvements.