Renters Increasingly Prioritize Energy Efficiency and Savings in Housing Choices
As rental demand grows, property managers are facing mounting pressure to adapt quickly to evolving renter expectations, particularly around energy efficiency and utility cost savings.
Energy Efficiency and Cost-Saving Features Take Center Stage
A recent survey from SmartRent Inc., conducted in partnership with Morning Consult, highlights that renters are placing more importance than ever on energy-efficient homes. With electricity costs alone rising 34% since 2020, 92% of respondents indicated that reducing monthly utility bills is “very important” or “somewhat important” when choosing a rental. Additionally, sustainability matters: 75% of renters said minimizing their environmental footprint is a key factor in their housing decisions.
“Renters increasingly expect property management companies to provide tools and technologies that help lower utility bills,” said Frank Martell, CEO of SmartRent. “Meeting these expectations isn’t just about energy savings; it’s essential for attracting tenants, improving retention, and building trust between residents and property managers.”
Growing Awareness and Concerns About Utilities
The survey found that 63% of renters experienced a utility increase over the past year, with 35% seeing hikes above $51 per month. Meanwhile, 76% expressed concern about rising utility costs over the next year. Despite this stress, renters are knowledgeable about technologies that can help reduce energy consumption, from smart thermostats to energy-efficient appliances.
However, the survey also revealed a gap in communication: only 48% of renters felt their property manager effectively communicated about energy usage, and just 44% believed their management team actively helped them reduce utility costs.
What Renters Want in Their Units
When considering a new lease or renewal, renters reported that the following technologies significantly influence their decisions:
| Energy-Saving Feature | % of Renters Who Value It |
|---|---|
| Energy-efficient appliances | 69% |
| Smart thermostats | 58% |
| Online energy trackers | 51% |
Conversely, deal-breakers included:
| Deal-Breaker | % of Renters Who Reported It |
|---|---|
| Inability to control in-unit heating and cooling | 69% |
| High energy costs | 68% |
Interestingly, many renters are willing to pay a premium for energy efficiency. About 32% said they would accept higher rent if total monthly expenses stayed the same, and 33% would pay more for units with consistent energy savings.
Rental Market Dynamics and Absorption Rates
According to Redfin, 48% of new apartments completed in Q1 2025 were rented within three months, a slight increase from prior quarters, reflecting the impact of limited new supply. Only 97,000 new units were completed in Q1, the lowest seasonally adjusted total since Q4 2023. This constrained supply gives landlords leverage in attracting renters quickly.
Concessions Still a Factor, But Less So
Landlords continue to offer incentives such as one free month of rent, which 36% of renters said is the top factor influencing their leasing decision. Apartments.com found that 88% of renters would overlook minor flaws for a good rent concession, while nearly a third value concessions that provide ongoing benefits throughout the lease term. Moreover, 95% said that seeing a concession in a listing would make them more likely to inquire about a unit.
However, as home prices rise and more Americans turn to renting, the need for such concessions may decrease. Landlords may find less pressure to offer short-term incentives as the pool of potential renters grows, though energy-efficient features will continue to be a critical differentiator.
Looking Ahead
For property managers, the message is clear: renters are seeking more than just affordability they want smart, sustainable homes that help manage costs. Those who adapt quickly by incorporating energy-efficient technologies, smart controls, and transparent utility communication are likely to attract tenants faster and retain them longer, even in a competitive rental market.
In short, energy efficiency is no longer a luxury it’s a necessity for modern rental housing, shaping both tenant satisfaction and market competitiveness. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
Responses