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AMH Sets Path to Zero Energy Homes Through HERS® Ratings

Jul 3, 2023 General


AMH, which owns about 60,000 single-family rental homes across the country, has been tweaking designs of houses it builds to make them more durable and energy-efficient. The company has targeted to have all of its portfolio of new homes eventually to be net-zero energy.

Recently Bloomberg featured AMH’s commitment to sustainability in “Wall Street Landlords Want to Rent You a Greener Suburban House”.

The feature states that in 2017 the corporation began constructing its own properties with the goal of energy efficiency.

Bloomberg reported that in 2021 the company “evaluated almost all of the 2,000 homes it built with the Home Energy Rating System, or HERS, which grades houses on a scale from 150 (inefficient) to 0 (net-zero). American Homes notched an average score of 63.”

David Singelyn, chief executive officer of AMH was quoted “What we have done today is take the first baby steps in a process. The things that we are going to learn in the next five years are going to be significant. It’s going to be so much better five years from now than it is today.”

Bryan Smith, the company’s chief operating officer stated that motivation for building HERS-rated energy-efficient homes is, “I absolutely think that if we have more efficient homes, that’s a better value proposition for our residents.”

Bloomberg reported that “American Homes 4 Rent has other reasons to pursue efficiency. It appeals to some stock market investors and helps the company access marginally better financing terms. Maybe more important, the company and its peers would like to change how they’re perceived.”

AMH isn’t the only rental house company embracing ESG. Landlords have started programs to help tenants eventually buy the homes they live in and are seeking to build more sustainable dwellings. Some have already lapped AMH on efficiency and clean energy: UK investing giant Man Group Plc is building 1,000 net-zero rental homes across the US with backing from investors in Germany and the Netherlands. A US developer owned by Singapore’s Alset International has begun outfitting Texas rental homes with Tesla Powerwalls, according to a recent filing with the Securities and Exchange Commission. And Toronto-based Tricon Residential Inc. is developing roughly 1,200 rental houses in California that will be equipped with solar panels.

Bloomberg concludes that this movement, “given its sheer size, it could, in theory, move the needle on home energy efficiency and carbon emissions”.

AMH is a real estate investment trust that invests in single-family rental homes. The company owns homes in 22 states. Its largest concentrations are in Atlanta, Georgia, and Charlotte, North Carolina.