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Efficiency standards critical for renters’ health and safety

Christmas day was a scorcher last year, but it was a ‘tale of two Christmases’ depending on the house you live in.

Margaret and her daughter, who live in an under-insulated rental home in Balwyn, had a house full of guests putting up with 33-degree heat by the time Christmas lunch was finished – and that was even without using the oven.

“It’s just exhausting not being able to sleep or eat because of the heat, and living with freezer blocks on your tummy and wet towels draped around your head is not terribly conducive to socialising,” Margaret says of her Christmas day.

Above: Margaret at home in Melbourne's eastern suburbs.

Meanwhile just a few kilometres away, Penny and Kevin’s similar brick veneer house was a comfortable 25 degrees inside on Christmas day – 11 degrees cooler than outside!

The difference?  Penny and Kevin’s house has basic efficiency measures like insulation, window-shading and draught-sealing.

“I feel so annoyed that the landlord offered to install an air-conditioner but refuses to spend money on sensible things like insulation that would make the place more comfortable and avoid the need for costly heating and cooling in the first place,” Margaret says.

“And of course I’m worried about climate change and emissions as well.  I don’t want to be running the heater or air-conditioner all day if I know all that energy is just blowing straight out the roof.”

The Victorian government has recognised in its Fairer Safer Housing review that renters deserve “safe, affordable and secure housing”.  A big part of the reason why many rental homes are not currently providing safe or affordable shelter is their poor energy efficiency performance.

Inefficient homes are little better than glorified tents – dangerously hot in summer and freezing in winter, or waste too much costly energy to keep at a healthy temperature.  With more people renting long-term as home ownership becomes out of reach for many, these health and affordability impacts are increasingly being felt by a broad cross-section of our community, including a growing number of families.  And if rental homes which make up around a quarter of our housing stock are missing out on efficiency upgrades to cut energy waste, then Victoria is missing out on a big opportunity to cut climate pollution.

Right now, the only standard Victorian rental homes need to meet is to have a smoke alarm.  That’s it.  There doesn’t need to be a heater, the windows don’t need to open, and you can forget about insulation or draught-sealing.

The One Million Homes Alliance – a coalition of Victoria’s leading environmental, social sector and consumer organisations – thinks renters deserve better.  At the very least, a rental home should be a liveable home.

While many landlords do the right thing by their tenants in terms of repairs and maintenance, it’s also true that most landlords don’t take advantage of voluntary efficiency programs even when they are free.  There’s not much incentive for landlords to invest in relatively invisible measures like insulation or draught-sealing while it’s the tenants who reap the benefits of lower bills and better living conditions.

The only way to fix this problem is to set minimum standards for efficiency, health and security that all rental properties need to meet before they can be leased.

The idea of regulating in the public interest is nothing new.  We realised a century ago that letting raw sewage run through the streets posed unacceptable risks to public health.  And so Melbourne was one of the first cities in the world to build a sewerage system.  It’s time our building regulations caught up with the fact that in the 21st century, energy waste poses the same risks to public health and safety as sewage waste did in the 19th century.

And while efficiency requirements in new building standards have been steadily increasing, there’s nothing equivalent for existing buildings.  Why the double standard for renters who might be living in a 100 year old house built before energy efficiency was even heard of?

Sensible regulation which drives a progressive improvement in the efficiency performance of our rental stock will deliver a wide range of social, economic, environmental and energy security benefits:

  • Lower energy bills.  Energy unaffordability is a serious and growing problem in Victoria, with utility disconnection rates for non-payment doubling since 2010¹.  Improving efficiency can cut household energy consumption by 40 percent, translating into savings of more than $1,000 a year for an average household².  But unlike homeowners, renters have little control over improvements that make the biggest difference to costs, such as insulation or fixed appliances.
  • Jobs and investment.  The Victorian Energy Efficiency Target scheme is estimated to support at least 2,000 jobs³, many of which are in small to medium sized trades and services businesses.  Creating incentives for landlords to invest in efficiency would boost that figure further.  Money that households save on their energy bills and spend elsewhere in the economy also contributes to broader economic activity and job creation.
  • Fairness and equity.  Victoria’s housing stock is inefficient by world standards⁴ but rental homes are generally even worse⁵.  This particularly impacts low-income households who spend a greater proportion of their income on energy than the rest of the population, and are more likely to rent.  With more households including families renting long-term, poor quality rental homes can no longer be dismissed as a minor or temporary problem.
  • Low cost emissions reductions.  Nearly 70 percent of Victoria’s emissions come from the energy we use in our homes and businesses⁶.  If rental homes, which represent a quarter of our housing stock, are wasting energy then Victoria is missing a big opportunity to cut emissions.  Managing energy demand also helps us get to 100 percent renewable energy faster and more cheaply, because it avoids or delays investment in costly additional supply and network infrastructure.
  • Health and safety.  Inefficient housing magnifies people’s vulnerability to weather-related health impacts, which in turn increases pressure on health and emergency services.  More people lost their lives in the heatwave preceding Black Saturday than in the bushfires⁷, while more than 2,600 deaths each year are associated with cold weather⁸.  New Zealand introduced insulation standards in 2016 after its home insulation program delivered $1.2 billion in health system savings⁹.
  • Efficiency programs are not reaching renters.  Low participation rates by landlords in government efficiency programs¹⁰ is evidence that property owners have little incentive to voluntarily invest in efficiency – because the benefits of bill savings and improved comfort accrue to tenants.  However, most tenants are reluctant to request upgrades because of fear of eviction or rent increases.

These benefits for individual households and the wider Victorian economy and environment vastly outweigh the potential for adverse consequences (on rent or housing supply), which can be managed through a well-designed, staged implementation process.

Standards should be introduced at an achievable level to initially target the worst performing properties.  Responsible landlords who already recognise the benefits of keeping their properties in good condition are likely to find minimum standards easy to meet, while the rest would be given ample time to comply.  Standards would then be progressively raised so that all tenants benefited over time.  Flagging compliance dates well in advance would allow landlords to spread investment over several years, thus minimising pressure on rent increases.

Complementary measures such as affordable finance and advice services would help to minimise compliance costs and avoid pass-through of costs to tenants.  Strengthened provisions in the Residential Tenancies Act relating to rent increases, for example inclusion of an additional measure mandating a maximum annual rent increase, are also needed to protect tenants.

It’s time the Victorian government bit the bullet on this important reform which has been in the ‘too hard basket’ for too long.  There will always be people who oppose all forms of regulation, and not all tenants have always behaved well either.  But we should not let the poor behaviour of a minority of tenants and landlords stand in the way of sensible reform which will make a significant difference to the majority – not only by improving quality of life for people who rent, but also by helping Victoria meet its emission reduction targets.

 

This editorial was provided by Environment Victoria.  Any views or opinions represented belong solely to the authoring party(ies) and may not represent those of the other people, institutions, organisations associated with the Make Renting Fair campaign.

Be sure to sign the petition and email your local MP in support of the Make Renting Fair campaign.

 

References:

  1. ESC 2016, Energy Retailers Comparative Performance Report – Customer Service, Essential Services Commission, Table 4.1
  2. SV 2014, Victorian Households Energy Report, Sustainability Victoria
  3. Energy Efficiency Certificate Creators Association, http://greenenergytrading.com.au/news-events/detail/eecca-welcomes-vic-labors-commitment-to-veet-scheme-calls-for-scheme-to-be
  4. SV 2014, Victorian Households Energy Report, Sustainability Victoria
  5. ABS 2013, Household Energy Consumption Survey, Australia: Summary of results, cat. 4670.0, Australian Bureau of Statistics
  6. Department of Sustainability and Environment 2012, Greenhouse Gas Inventory
  7. Hennessy, K. 2014, ‘Explainer – what are heatwaves?’, CSIRO Blog
  8. Barnett, A. 2015, ‘Cold weather is a bigger killer than heat – here’s why’, The Conversation
  9. Evaluation of the Warm Up New Zealand: Heat Smart programme, http://sustainablecities.org.nz/2012/05/
  10. Lovering, M. 2013, ‘Can low-income tenants rent an energy efficient home?’, AHURI Evidence Review 040, Australian Housing and Urban Research Institute; Environment Victoria 2016, Future Power