Wednesday, August 10, 2005

Things They Should Invent: reduced rent for non-air-conditioned rental housing

There was some discussion a month or two ago about the possibility of requiring landlords to provide air conditioning in the summer (the same as they're required to provide heating in the winter), but for various reasons that was found to be a non-viable idea.

However, we still have the problem that many people, including the poorest, are living in non-air-conditioned housing in this ridiculous weather, and either aren't able to afford a window air-conditioner, or aren't able to afford the increased electricity bill.

So I propose a solution: if the landlord is unable or unwilling to provide air conditioning, they must provide a rent reduction for each day when the temperature (including humidex) exceeds a certain threshold. The tenant can take this as compensation for their inconvenience, and perhaps use the money to purchase an air conditioner themselves.

A few sample formulae for how this would work out. I'm going to use 26 as the threshold because it makes sense to me. Please note that I have no idea what landlord profit margins are like, so I don't know if the numbers themselves are plausible

The simplest formula is that the percentage rent reduction for the day is equal to the maximum temperature (including humidex) for that day. Let's assume that the monthly rent is $900, which is a bit low, but it's a nice round number to work with. That would work out to $30 rent per day. Now, today the temperature reached a high of 39 with humidex. So you'd get a 39% discount on your rent. That's a discount of $11.70, which means that for today you'd pay $18.30 rent instead of $30.

Another possible fomula would be to take into consideration both the daytime high and the nighttime low. This is because there is a huge difference between a hot day with a cool, fresh night and a hot day when the humidity does not break overnight. So suppose the percentage discount is the average of the daytime high and the nighttime low. The highest temperature today was 39. The lowest the temperature (with humidex) reached last night was 29. That makes an average of 34. So the rent would be reduced by 34%, a reduction of $10.20, for a total day's rent of $19.80. But if the overnight temperature had gone down to a nice balmy 15, there would be a rent reduction of only 27%.

These rent reductions might sound extreme, but they're using extreme temperatures. Using the threshold of 26 and weather records from The Weather Network, there would be no rent reduction whatsoever on a statistically normal day.

If utilities are included in the rent, the landlord shouldn't have to pay as much of the rent reduction, because they'll be absorbing some of the cost of operating an air conditioner, should the tenant be able to purchase one.

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