A Preliminary Analysis of the Relationships Between Rising Temperatures and Residential Rental Rates in the USA

Michael A. Garvey () and Tony G. Reames
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Michael A. Garvey: Office of Management, Energy, and Impact, U.S. Department of Energy, Washington, DC 20585, USA
Tony G. Reames: School for Environment & Sustainability, University of Michigan, Ann Arbor, MI 48109, USA

Sustainability, 2025, vol. 17, issue 16, 1-16

Abstract: Climate change poses significant challenges to the economic and social sustainability of urban dwellers, particularly in the real estate market, where rising temperatures are affecting property values. While most research focuses on how climate change impacts buyers and sellers, this study shifts attention to renters, who may be more vulnerable to climate-induced price increases. By analyzing rental price and climate data, this study uses ordinary least squares (OLS) and fixed-effects regressions to assess the impact of temperature fluctuations on rental rates across 50 major U.S. metropolitan areas. The findings reveal a positive and significant relationship between rising temperatures and rental rates, particularly in the Northeastern and Southern U.S. These results suggest that targeted policy interventions may help ease financial pressures on vulnerable renters and support more sustainable urban development over time. The analysis also highlights the potential role of energy efficiency measures in rental housing to lower energy costs and alleviate rent burdens. Additionally, the findings indicate that local policymakers may consider rent stabilization strategies and investments in urban green infrastructure to protect low-income renters, reduce localized heat exposure, and promote long-term urban resilience.

Keywords: climate change; rental housing; urban heat islands; energy efficiency; economic sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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