Ryan Mielke, left, and David Ryan do SmartRegs construction work at an apartment complex in Boulder on Thursday.
Ryan Mielke, left, and David Ryan do SmartRegs construction work at an apartment complex in Boulder on Thursday. (Cliff Grassmick / Staff Photographer)

Kim Davis is getting yelled at. Not at, exactly, but someone is yelling in his general direction as a result of bad news he had the misfortune of delivering on a sunny Friday morning in south Boulder.

It's happened before. Davis is a licensed home inspector, and he's just finished evaluating a soon-to-be rental property for energy efficiency. As has happened many times, the house was not up to Boulder's SmartRegs standards. To garner the required 100 points needed to secure or renew a rental license, the homeowner — who requested that her name and address not be revealed — will likely have to purchase new windows for the 48-year-old home at a cost of several thousand dollars.

The anonymous future landlord is one of several in the city facing down a December deadline to get their properties in compliance with SmartRegs, a program the city says is necessary to require property owners to provide a basic standard of efficiency to their tenants. The regulations shift some of the burden of high utility costs onto those who can best afford them, the city argues, and away from renters already struggling under historically high housing costs.

Most of the city's landlords are already compliant. Those that remain are facing thousands in upgrades they say are burdensome, unfair and nonsensical.

"There's a point where it becomes absurd," said Nancy Pavelich, who owns six rental properties in Boulder, "and that's what we're taking about."


Advertisement

'A lot of hoops'

The SmartRegs program was approved in 2010 and tied to the renewal or approval of rental applications. The eight-year rollout was designed to give the city's approximately 23,000 landlords time to make necessary upgrades by Dec. 31.

The program works thusly: An approved SmartRegs inspector visits a property, assigning points to things that produce energy savings: good windows, insulation in attics and crawl spaces, efficient lighting and appliances, low-flow toilets, showerheads and faucets, or solar panels.

Kim Davis checks the crawl space looking for energy efficient improvements at a Boulder home in April. Owners "really jump through a lot of hoops to
Kim Davis checks the crawl space looking for energy efficient improvements at a Boulder home in April. Owners "really jump through a lot of hoops to get compliant," he said. (Cliff Grassmick / Staff Photographer)

Properties must receive 100 points to be considered compliant. The standards are modeled on the International Energy Conservation Code (IECC) of 2000. The set of regulations were selected specifically because it was less onerous than more current versions of the international building code, said Kendra Tupper, Boulder's chief sustainability officer.

"The IECC is now on the 2015 version," Tupper said. "It's been updated five times since then, and our energy code (for new construction in Boulder) is 30 percent more stringent than IECC's current one."

At the onset, the program came under heavy criticism from property owners. Sheila Horton, then executive director of the Boulder Area Rental Housing Association (BARHA), was a vocal opponent.

Horton died in 2016 from cancer. BARHA declined several requests for an interview.

After initial resistance, compliance chugged along and was at 40 percent by the four-year mark, Tupper said. Today, 79 percent, or 18,222, units are in SmartRegs-ready.

Davis, who has inspected 200 to 250 houses in his three-plus years on the job, said about 60 percent of homes are good to go sans upgrades. Of those that are not, half are "easy fixes" such as replacing a small appliance or swapping out light bulbs.

Insulating attics, walls and crawl spaces are the most common upgrades, according to the city's SmartRegs progress report. The average cost to compliance is $2,955.

Less efficient homes tend to be grouped in certain neighborhoods, Davis said. Martin Acres, for example, has an abundance of '50s- and '60s-era construction with "no wall insulation, no attic insulation. I've scored (homes there) down in the 40s."

The Hill is another hot spot for expensive upgrades. Historic homes there often have block or brick walls and are impossible to insulate. Owners "really jump through a lot of hoops to get compliant," Davis said.

"I try to give them as many options as I can (but) it can be frustrating at times for the clients. I don't blame them for venting their frustrations with the city to me."

Frustration boils over

"There’s a point where it becomes absurd," said Nancy Pavelich, pictured with John in University Hill on Wednesday.
"There's a point where it becomes absurd," said Nancy Pavelich, pictured with John in University Hill on Wednesday. (Paul Aiken / Staff Photographer)

Nancy Pavelich is all too familiar with the challenges of owning a nearly century-old home. Three of her six Boulder properties were relatively inexpensive to bring up to SmartRegs standards; fewer than $100 in upgrades for each one.

The other three are still in progress. The majority of their frustration centers on the efforts to rehab a 1,100-square-foot home on 10th Street.

Built in 1925, the home scored an initial 54 points; attic insulation and air tightness tests bumped it to 82 points. In trying to reach the requisite 100 points, the Pavelichs ran into one roadblock after another.

The roof can't support a solar panel "without extensive modification," wrote inspector Bob Case in a January letter to the city. The masonry walls can't be insulated, nor can the crawl space — doing so was deemed "impractical if not impossible."

With the options, the fight has centered around a functioning, 50-year-old boiler. To replace it with a new, high-efficiency model would bring 915 10th St. nearly into compliance. But the cost is steep: $17,000, according to Case's estimates.

The Pavelichs are resistant; the boiler is still working, and could continue to do so for another 12 to 20 years, Case estimates. What green sense does it make to throw out a functioning piece of equipment, they ask?

By environmental standards, the boiler is "past its useful life," Tupper said.

"It might still be working, but it's not working that well. The efficiency has degraded over time. How much CO2 is that 40-year-old furnace burning into the atmosphere as it's chugging along?"

The Pavelichs have applied for a technical exemption, which has not yet been granted. Instead, the city has suggested the purchase of something called a mini-split system. Two contractors have made bids of $17,000 and $23,000 for the project.

Few exemptions given

The city has granted just three exemptions during the SmartRegs rollout, of six applications. A system for seeking a pass — intended to avoid upgrades that required costly or impractical works, or that would displace tenants — wasn't developed until 2017, in response to property owner complaints.

Tupper said it wasn't necessary until recently. "No one was even asking for them. Everyone that complied early on didn't have to do much; one or two upgrades. The people that pushed it off, it was because they had more inefficient homes. We got far enough along that we started hitting the harder cases."

Kel Darnell might have liked another option. Her 1950s fourplex on Alpine had vaulted ceilings, making attic insulation a major project that would force the tenants to move out. The windows needed replacing and the walls insulated.

Ultimately, since her renters would have to be displaced anyway, Darnell decided to do a down-to-the-studs remodel at a cost of nearly $500,000. When the units are back on the market, it will be for double the cost, she said.

Before, Darnell kept the rents below market rates, from $700 for an efficiency to $1,500 for a two-bedroom. But she needs to recoup money to repay the $350,000 loan that funded the work.

While admitting the SmartRegs didn't necessitate the expensive undertaking, she still believes that the cost of the regulations will be passed on to all Boulder renters, not just hers.

"Who does the city think pays? It took me a long time to understand when they talk about affordability, they're not talking to landlords. We're doing things that are affordable," she said.

Impact on affordability

Discussion among sustainability staff about what SmartRegs might do to affordability have been robust, Tupper said. Technical exemptions do take into account cost for property owners who provide cheaper housing.

The process is intended to help people such as Kathleen Hagan. She lives in one-half of a 1920 duplex; the other half is rented for $900 to a tenant who has been there nine years. She has already replaced the windows at a cost of $10,000, insulated her attic and replaced lighting and thermostats with eco-friendly options.

She is still not compliant. The crawl space will need to be insulated, the city has suggested. Contractors have estimated the cost at $5,000 to $7,000, Hagan said, because workers may have to remove and replace the siding in order to access the space.

In her 80s, Hagan draws a pension and uses her tenant's rent to help with the $1,500-a-month mortgage. The only financing option available, she said, would be a reverse mortgage, an option she is loath to take.

As of press time, she was considering applying for a technical exemption but had not yet done so. The process has been an emotionally taxing one, she said, filling her with resentment toward what she sees as a hypocritical city government.

"The city (is) letting developers come in, they give them all these water taps, they bring in more cars that add to smog, and then turn around and say, 'You have to insulate your attic or you can't rent this anymore,'" she said.

"It just seems unfair."

Hagan's best course, she believes, is to sell — displacing her longtime, newly unemployed tenant.

Sustainability as social equity

Boulder's sustainability workers push back against the idea that they pursue green measures without regard to cost. SmartRegs are a form of social equity, Tupper argues.

"Renters don't have control over energy costs or the quality of space they inhabit," she said. "(We're) trying to strike a balance between what's affordable for the landlord and what's affordable for the tenant that has to pay the energy costs."

SmartRegs was an attempt to "establish a base level of efficiency that should be provided to renters," added Tupper, noting that the level playing field the city is going for is nearly two decades out of date. "We're trying to bring our rental housing stock up to the code equivalent of 18 years ago, just to keep it in perspective."

Plus, she said, real estate in Boulder is a "tremendous asset" that generates lots of money for landlords. Requiring them to re-invest in that asset, "I don't actually think that's a terrible requirement to place on somebody."

The Pavelichs are "still making money," Nancy said, though "less and less every year." She is not opposed to expensive upgrades: two of her six units received new furnaces recently. Energy costs at a house on 10th Street don't exceed $130 at their highest — not unduly burdensome when split among four tenants, she believes.

What the landlords say bothers them is the city's perceived refusal to work hand in hand with property owners. All three expressed concern that criticizing SmartRegs openly might hamper attempts to process rental licenses or building permits in the future.

"It's not like we're trying to get out of SmartRegs," Pavelich said. "We always follow the rules; we're trying to do what's right."

The green people don't see that, she said. "They see greedy landlords."

Shay Castle: 303-473-1626, castles@dailycamera.com or twitter.com/shayshinecastle