City Futures Blog

News and research in housing and urban policy, from Australia’s leading urban policy research centre.

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Lifting the energy efficiency standards of low-cost rentals

Posted by on September 19th, 2018 · Climate change, Government, Housing, Housing conditions, Sustainability, Tax, Wellbeing

By Edgar Liu, City Futures Research Centre.

The Australian Senate’s Environment and Communications References Committee recently published the Final Report of its Inquiry on current and future impacts of climate change on housing, buildings and infrastructure. This came about after extensive community consultation on the back of parliamentary flip-flopping regarding if and how Australia will meet our Paris Agreement obligations.

This Inquiry Report details the potential impacts that continued climate change may have on urban and coastal areas, on different socio-demographic groups, on our economy, on our health and wellbeing, and on the adaptability of our current homes and workplaces. Our submission to this Inquiry (#24) highlighted the findings of our CRC LCL-funded project, particularly the negative impacts lower income households will continue to endure if their access to energy efficient products and renewable energy sources remain price-prohibitive, when split incentives persist so that landlords remain reticent about performing sufficient upgrades, and worsening climate change means the poor quality housing that these families live in will get even more unbearable in extreme weather conditions.

Change, however, may be coming. Recently, Independent South Australian Senator, Tim Storer, proposed a new Treasury Law Amendment to the Australian Parliament, under which landlords of low-rent properties would be eligible for tax offset incentives to perform energy efficiency upgrades to their investment properties. A new Senate Inquiry is inviting public submissions to the Committee Secretary until close of business on 28 September 2018.

This proposed Bill and Senate Inquiry is a good first step to setting minimum standards for rental properties, standards that have been in place across the European Union for nearly a decade and strongly supported in Australia by advocacy groups like Environment Victoria. Our submission to the new Inquiry, however, highlights a few shortcomings in the proposal. These concern the proposed regulation’s ability to keep upgraded properties in the lower end of the rental market for vulnerable households—the very households that this Bill was designed to protect—to access; its ability to minimise disruptions to sitting tenants and avoid potential displacements; and how double-dipping by landlords may be avoided.

There is no doubt unaffordable energy and energy poverty is causing great grief to many families, and having a thermally comfortable home that is efficient to run is vital to overcoming that. As our research shows, having the political will to make that change—such as proposed in the latest Treasury Law Amendment—is an important step forward to making that a reality.

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