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As lead expert of the URBACT CASH Network Jan Dictus has a very clear and realistic view on how raise energy efficiency standards in social housing.

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Social housing or affordable housing should be read as housing for social weaker members of the society. This is organized in different ways in different countries.Cities have the responsibility for quality of life for their citizens and take therefore also the responsibility for affordable housing, even when it legally or regarding ownership not their task.Starting Assumption: Energy efficient renovation leads to lower energy costs, and thus an improved financial and social situation of the residents.Barriers for energy efficient renovation

  • In general houses involved are the poorest quality houses available. Energy improvements require large investments, and are not compensated by reduced energy costs.
  • The owner is responsible for the investment. Ownership of the houses is varied. Housing blocks have individual owner/users, private or public owner with tenants, and all mixed forms in between.
  • Even with institutional owners, the majority of the residents have to agree on the renovation works.

Options to remove hesitation to renovate.Energy efficient renovation has a bad reputation, as a consequence of bad implementation and usage of techniques. As an answer one should for renovation of houses (people’s homes) use proven techniques and skilled craftsmen. Introduce quality management in the whole chain.To promote and safeguard quality, the instrument of energy labelling has potential and should be reconsidered again.Energy efficiency investments are not covered by reduced energy costs and consequently raised rents.

Barrier Possible Reaction
Investments are made by owner. Savings are made by users. Raise rent with the level of savings in energy costs
Investments are before, savings are afterward Use loan for investment.
Investment is certain, savings are uncertain Use a safety margin.Introduce quality management for the Energy Efficient renovation to raise the certainty of the estimated savings.
Energy use is depending on behaviour and (change) of life style. The uncertainty will cause hesitation among tenants to decide for an Energy Efficient renovation. A partly solution can be to guarantee the tenants a reduced energy costs. The guarantee should be supported with a guarantee Fund.
Investments are outflow, savings are not “inflow” but avoided outflow. Keep rent and energy costs together as a flat rate for “housing costs”
Investments are higher than sum of savings Additional Funding needed

These “solutions” are even less effective in social housing. Housing quality is bad, rents are subsidised, in case of energy poverty, renovations reduce the deficit and not create a surplus, etc.Big investments and additional funding are needed, which demands a long term strategy, starting with stock taking and asset management of the whole housing stock of the city, regardless ownership. (Examples are available from individual institutional owners, or the national guidelines for cities “Sanierungsplan” in Germany)Additional funding should have following features:

  • Structural; to renovate the complete old housing stock of a city there is a need for big scale investments.
  • Basic techniques; Big scale renovations are most efficient using proven techniques. Funding should be targeted to that.
  • Covering deficits; Investments can only for a small part be covered by added value and saved costs. Funding is needed to cover the deficits.
  • Diversity of (small) actors; Funding should be available for a big variety of actors, owners, building industry, residents, cities, etc. The activity should be funded, not the actor.
  • Revolving; financial advantages of the investments should flow back into the fund.
  • Solidarity; individual owners or tenants cannot cover all costs. The investments are needed from a social and environmental point of view and bring advantage for whole society.
  • Labeled; If society contributes to the funding, then a transparent flow must be guaranteed, to keep relation between investments and results clear.

(Actual examples which have partly these elements: Danish Building Fund, Three Third financing model, Green Deal, European agriculture funding)

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