The split incentive problem arises because landlords pay for retrofits while tenants reap the utility savings. To fix this, policymakers must align these mismatched financial interests. One way is through on-bill financing. Here, the cost of upgrades is added to the utility bill and repaid through the savings. Since the debt stays with the meter, the landlord isn't stuck with a bill if the tenant leaves.
Property tax abatements also work well. If a landlord installs high-performance heat pumps or triple-pane windows, the city can freeze or reduce their property tax assessment for several years. This offers a direct return on investment. Another option involves green leasing. This allows landlords to recoup upgrade costs through a small, transparent
