My experience managing a rental property illustrates the barriers to electric vehicle charging and ways to overcome them.
Go for a walk in a dense urban area, like where I live in Oakland, and you come across extension cords that wrap around the sidewalk to vehicles. This shows the need for better access to efficient vehicle charging. Renters are particularly left behind, which could hurt the adoption of electric vehicles.
Lucas Davis found In California, owners are three times more likely to own an electric vehicle than renters. Even when comparing owners and renters with similar incomes, renters are much less likely to own electric vehicles. My own recent experience as a homeowner trying to provide electric charging shows how difficult it will be to bridge this gap, but also suggests potential policy responses.
An opportunity to add vehicle charging
My partner and I own a duplex built in 1940 that we have been renting out since our family outgrew two bedroom units. Each apartment has an assigned parking space in a garage, which is not available to many apartment dwellers in urban areas. Our tenants do not have electric vehicles, but if they did, they would have to make do with a common wall outlet that provides two to four charge miles per hour. This type of plug is more suitable for an electric bicycle than for an electric car.
We recently decided to update the electrical system of our duplex. This got us wondering if now is the time to add EV charging as well. Would it be a wise investment?
None of our tenants drive an electric vehicle today. When asked, one said he might get one in the future, but that’s not certain. Even if these tenants do not have an electric vehicle, perhaps offering electric vehicle charging would be interesting for future tenants and allow us to charge higher rents. More and more apartment listings in our area list electric vehicle charging as an amenity, suggesting that other building owners see an opportunity.
We also looked at the direction the policy is taking. California Governor Newsom wants to eliminate the sale of internal combustion engine vehicles by 2035, and the federal government plans to tighten vehicle fuel economy standards. We could prepare our building for the influx of cars that will need to be recharged.
However, after our initial conversations with electricians and the local power utility, plans began to go off the rails.
How a simple project becomes complex
The first thing we learned was that the size of each apartment’s electrical panel and the service to the property as a whole was too small to accommodate EV charging.
However, upgrading electrical panels would trigger the latest electrical codes and utility rules. In our case, this would mean that electrical panels and meters would have to be moved to the opposite side of the building to be more accessible to workers, especially in an emergency. The house wires should be rerouted to the new location, and the utility should move its connection point closer to the new meter location. Costs are rising.
Next, the utility should investigate whether the distribution circuit on our street has the capacity to accommodate our increase. If not, the utility will need to design and implement a project to increase network capacity. There is a complicated set of rules where we may have to pay for upgrades to the neighborhood’s electrical system. Much more cost, greater the potential for delay.
In other words, we are faced with a large, complex project that may not be profitable for us as owners.
Maybe our property is exceptionally difficult, but there are plenty of older homes in the United States. Almost half housing in the United States was built before 1980, most in cities with older infrastructure.
Encourage owners to invest
Our experience points to several possible approaches by government and utilities to better motivate owners, and owners more generally, to invest in electric vehicle charging.
Of course, I might suggest throwing money at the problem by offering grants to homeowners. However, the benefits may primarily benefit owners of higher-income properties with higher-income tenants, as a result of the scheme of incentives for electric vehicles, which raises equity issues. The overall cost of a large-scale incentive policy could also be very high. As an analog, Erich Muehlegger and David Rapson find that incentives to purchase electric vehicles increase adoption, but that the overall cost of fleet transformation with incentives is surprisingly high. Before rushing down the incentive route, I would like to see randomized controlled trials to determine if this is likely to be a sustainable approach.
But there could be other levers.
Bringing older properties into line with the full set of modern codes and standards increases project costs. Governments could allow building code holidays for EV-driven upgrades. Utilities and their regulators could do the same for the rules they administer. Older properties of all kinds, owner-occupied or renter-occupied, would benefit.
Perhaps the coordination between utilities, electricians and landlords could be improved so as to reduce costs, risks and delays. Today, utilities perform ad hoc studies whenever a building owner is considering an upgrade. Instead, they could proactively analyze excess capacity on circuits and announce available capacity to owners on the circuit. When new capacity is added, they can advertise it to households. It would be similar to how internet providers in my area have marketed the availability of faster internet speeds when they make local improvements. Landlords may be motivated to take advantage of the accelerated approval process and greater certainty. Electricians could also target their marketing. A utility might even be interested in increased capacity by inviting building owners to register in advance, similar to the open season process gas pipeline companies use before building a new pipeline. . This better coordination would benefit both landlords and tenants.
Ultimately, I expect tenant demand to be the biggest motivator for landlords. Electric vehicles are still only two percent of the fleet in California, where EVs are happy, so it’s no surprise that owners are taking their time. As electric vehicles become more common, more and more owners will invest in vehicle charging.