Municipal governments use a number of different strategies to pay for public recycling services. These approaches can differ in who is expected to pay, the amount that is paid, and the means in which the payment system is carried out. Across North Carolina, local governments typically rely on one of two main sources of funding for recycling programs: solid waste fees and general tax revenue. I chose to look into the questions of who pays for recycling and how they pay as one of the topics of my 2018 Leaders in Environment and Finance (LEAF) fellowship program research. In particular, I studied the approach used by several communities to highlight the different strategies of paying for recycling with a particular subset of the population in mind: residents of multifamily housing.
Previous research has suggested that residents of multifamily housing may experience lower levels of access to recycling service than residents of single-family homes. Since multifamily properties are commonly treated as commercial businesses which are often ineligible to receive public recycling services, residents of multifamily housing may have a greater likelihood, depending on how the program is funded in their community, of indirectly paying into a municipal recycling program that they are ineligible to receive service from. This is especially true where recycling services are funded by a tax or fee that is universally distributed amongst residents. Two municipalities in North Carolina, Orange County and the City of Durham, were interviewed about the payment strategies that are used to finance multifamily recycling services.
Orange County funds public recycling service and efforts by charging a Solid Waste Programs Fee (SWPF) to all owners of improved property in Orange County jurisdictions. In previous years, Orange County Solid Waste Management Department implemented a tiered fee that ascribed different fee amounts for different recycling services, but found the system to be difficult to administer. The current fee is administered by the Orange County Tax Office to property owners for every individual unit, or “front door” of their property. In the case of an apartment complex, the cost of the SWPF is usually transferred from a property owner to the tenants by being incorporated into the cost of monthly rent for individual housing units. Ultimately, every residential household unit in Orange County is expected to pay the same amount of money for access to public recycling service.
Nevertheless, access to public recycling service does not look the same for every household. The SWPF funds single-family curbside recycling, multifamily recycling, commercial recycling, drop-off sites (open to the public), electronics recycling, hazardous waste collections, education and outreach, enforcement, and environmental support. As of 2016, every single-family household and multifamily household in Orange County is eligible to receive recycling service contracted through or directly provided by the municipality. While 100% of single-family residents have access to public recycling services, it is estimated that approximately 80% of multifamily residents do. The reason for this difference is that some property managers have chosen to abstain from using the public recycling service that is paid for through the SWPF, instead hiring a private hauler to collect their recyclables. Property managers cite various reasons for opting-out of public service, primarily stating that they are unwilling or unable to accommodate their recycling receptacles for public collection.
The City of Durham
The City of Durham relies on property taxes rather than fees to fund public recycling service. According to the City of Durham’s Solid Waste Department, $0.063 was allocated to the solid waste department’s budget for every $1 of property taxes collected from Durham’s residents last year. Any landlord, business, or homeowner that pays city taxes is thus expected to financially contribute to public recycling efforts in an amount proportional to the value of the property they own. Similar to the single-family residences in Orange County, 100% of the single-family residences in Durham have access to public recycling services. Per the requirements specified in Chapter 58 of the Durham, NC Code of Ordinances, residential complexes with more than four units are required to use privately serviced stationary container facilities. Since the City of Durham currently does not service these properties, residents of multifamily properties with five or more units are ineligible to receive public recycling service.
While Durham residents of multifamily properties with five or more units cannot receive recycling service through the city, their property managers are required by law to provide sufficient recycling services to their residents by hiring a private hauler to do so. While I did not evaluate the cost of private recycling in these situations and how, if at all, that cost was transferred from property owners to residents, it seems likely that residents in these properties ultimately cover a significant amount of this cost.
In Durham and in other cities where taxes are the primary source of recycling funding, landlords and property owners of multifamily housing have raised concerns that they are ineligible to take advantage of a public service for which they are paying. This sentiment is not isolated to the topics of recycling or multifamily property owners—it is important to point out that property owners without children may raise similar complaints that their property taxes fund educational services that they may not directly use.
The bottom line? It’s complicated.
This simple analysis shows how complicated the flows of funds can be in environmental finance systems and how these systems can impact household access and cost to environmental services. Municipalities face many hurdles when designing equitable payment strategies for environmental services: limited budgets, political feasibility, program efficiency, limited budgets, and regulatory constraints. No single approach to financing public services, including recycling, is perfect. Whether a municipality relies on solid waste fees or general tax revenues to fund public recycling services, this case study highlights the importance of considering different subsets of the population in developing such payment strategies.
Lily Schwartz was a fellow in the 2018 Leaders in Environment and Finance (LEAF) program. As part of the LEAF Fellowship, Lily spent the summer of 2018 working as a technical assistance intern for The Recycling Partnership, a nonprofit organization that leverages corporate partner funding to improve recycling in cities and counties across the United States. Lily helped The Recycling Partnership to assess the nation’s current landscape for multifamily recycling and examine policies for moving forward. After returning to the EFC in the fall of 2018, Lily continued her research into the how to pay for it questions of multifamily recycling as an environmental finance issue.