Energy Cost Burdens for Low-Income and Minority Households in Six U.S. Cities: Evidence from Energy Benchmarking and Audit Data

Abstract

Of the three primary components of housing affordability measures - housing cost, transportation costs, and utility costs - utility expenditures are the least understood, yet the one area where the cost burden can be reduced without household relocation. Existing data sources to measure energy costs are limited to surveys with small samples and low spatial and temporal resolution, such as the American Housing Survey and the Residential Energy Consumption Survey. This paper presents a new method to estimate household energy cost burdens that leverages actual building energy use data for 13,000 multi-family properties across six U.S. cities, and links energy costs to savings opportunities based on an analysis of 3,000 energy audit reports. We examine differentials in cost burdens across household demographic and socioeconomic characteristics, and analyze spatial, regional, and building-level variations in energy use and expenditures. We find that the average low-income household has an energy cost burden of 7%, whereas higher-income households have an average burden of 2%. Notably, we find that even within defined income bands, minority households experience higher energy cost burdens than non-Hispanic White households. For lower-income households, low-cost energy improvements could reduce energy costs by as much as $1,500 per year.

Keywords: housing affordability; energy cost burden; environmental justice; big data; energy efficiency; urban policy

JEL Classification: Q4; Q5; R2; R5