The high price of student bills

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By: John Ruf

When renting, students generally have two options: either pay separate monthly utility bills for water, electricity and gas, or pay their landlord a flat rate every month. Many students living off campus opt for the latter — students pay a set price for monthly utilities and the landlord pockets the excess. How well does this system work?

The first disadvantage is that students have no financial motivation to conserve energy. They act like customers at an all-you-can-eat buffet, consuming as much as possible and giving no thought to waste. People like to joke that students are cheap and eat nothing but Kraft Dinner and ramen noodles, but in regard to our energy consumption we don’t tend to skimp. Students leave lights on, take hour-long showers and crank up the heat. Living like this, students might miss the opportunity to learn about energy conservation while living independently; a lesson that is integral to combatting our unsustainable lifestyles.

Because landlords have the potential to make a profit on student’s utility payments one would expect them to strive for energy efficiency by using LED light bulbs and proper insulation. However, this does not seem to be the case. Student houses often have old and inefficient appliances, insufficient insulation, and incandescent light bulbs. Since student rental property is an investment, most landlords want to minimize their initial capital input.

Unfortunately, the alternative to paying your landlord a monthly flat rate for utilities is not much better. Students who pay the bill themselves might be more likely to turn off lights and keep the furnace on low, but positive action might end there. Without profit as motivation, landlords will be even less likely to invest in an energy efficient home, and because students have relatively short tenancies, they won’t purchase expensive energy efficient products that take many years to become worthwhile.

Most economists agree that sustainable behaviour is achievable through strategically implemented incentives. The question becomes which is more likely to lead to positive change: students’ desires to live cheaply? Or landlords’ desires to maximize profits? So far, neither has worked. As behavioural economist Dan Ariely wrote in his book Predictably Irrational, “money, as it turns out, is very often the most expensive way to motivate people.” Perhaps it is time to turn our attention to other motivational tools to improve student housing and to reduce wasteful energy practices.

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