Ann Arbor pilot offers $1 million in incentives for energy efficiency upgrades in rental properties

The Ann Arbor Office of Sustainability and Innovations and DTE Energy are piloting a new program that offers up to $1 million in incentives for multifamily rental property owners looking to invest in energy efficiency upgrades. 

The program, called Insulate Ann Arbor, focuses specifically on insulation and air sealing upgrades. Insulate Ann Arbor provides up to $75,000 or 50% of total project costs (whichever is lower) per multifamily rental property. Income-qualified property owners may expect rebates up to $250,000 or 90% of total project costs (whichever is lower) per rental property.

“This came out of the new Sustainable Heating Franchise that was signed between the city of Ann Arbor and DTE Energy,” says Joe Lange, a senior energy analyst with the city’s Office of Sustainability and Innovations. “There were a couple of different programs and initiatives that came through, and one of them was a commitment to establish some sort of energy efficiency funding for rental properties.”

He explains that the city’s green rental housing efforts, intended to create healthy, comfortable, and efficient housing in Ann Arbor, also prompted the project. The Green Rental Housing Ordinance was passed last year by city council, and fully went into effect this year. 

“What it does is really sets the minimum baseline for health, comfort, and efficiency in rental housing here in Ann Arbor,” Lange says. “So we wanted to make sure that we had opportunities for all properties of all different sizes, types, and ownership structures to have some sort of incentive to be able to make those improvements.” 

He shares that while home energy rebates have been available through the city of Ann Arbor for the past few years, those who have taken advantage of the assistance have primarily been landlords of smaller buildings, such as single-family homes, or smaller multifamily properties.

“We needed something to kind of fill the gap for some of the larger multifamily buildings,” Lange says. “That’s how we came to kind of synergize between the city of Ann Arbor and DTE Energy to offer more funding than might be available by either of us on our own.”

The new rebate program dovetails with Ann Arbor’s overall broader climate and housing goals as buildings – especially rentals – have been an area of great concern. 

“Emissions directly from our buildings here in Ann Arbor are about two-thirds of our overall emissions,” Lange says. “Rental housing is in a kind of weird spot where sometimes it’s a commercial entity, sometimes it’s a residential entity, but about 55% of our housing stock is rental. This is a pretty significant source of our emissions.”

He’s encouraging owners of eligible properties who are interested in the new rebates to learn more online. The goal, he says, is to run out of money. That’s possible, as some income-qualified properties could receive up to $250,000 per property. 

“This money is just sitting there and we want to get it out,” Lange says. “And we want to get more people living in healthy, comfortable, and efficient homes.”