Michigan project could help boost efficiency for rental properties
A first-of-its-kind project in west Michigan could serve as a new model to overcome financial obstacles to energy upgrades in rental housing.
One of six planned projects owned by PK Housing & Management Company, the 32-unit Cambridge Court apartment complex in Greenville, Michigan will be the first in the country to have PACE financing approved under the USDA Rural Development loan program for affordable housing.
Multifamily housing faces unique challenges when it comes to improving energy efficiency. A split incentive gives property owners little incentive to do improvements since they don’t pay tenants’ energy bills. On the flip side, tenants have little incentive to invest in improvements in property they don’t own.
The USDA’s approval of a PACE lien has the potential to impact a substantial segment of the multifamily housing market, according to James Turner, Michigan’s state director for the USDA’s Rural Development program.