Legislating minimum energy standards for rental housing would cut bills, save lives, create jobs and help reach climate targets, according to a new report from Environment Victoria.
Victoria currently has 600,000 rental homes, and the number is growing rapidly due to an ongoing housing affordability crisis, with renting now a long-term or life-long proposition for many.
The problem is that homes only have to meet the building standards in place when they were constructed, which could have been up to 100 years ago. An outcome of this is that more Victorians currently die due to chronic cold than in Sweden, largely because of poor-quality housing.
Environment Victoria efficiency campaigner Anne Martinelli said the latest Census showed that almost one-third of Victorians were renting, making inefficient housing stock a “mainstream issue”.
“As a community, we are comfortable with the idea that cars are required to pass a roadworthy test. It’s about time houses met a basic ‘homeworthy’ test before they can be leased,” Ms Martinelli said.
“With a major review of rental laws currently underway, the Andrews government has the perfect opportunity to help Victorian renters cut their energy bills, while creating good local jobs and reducing climate pollution at the same time.”
Under the Environment Victoria plan, detailed in the Bringing rental homes up to scratch report, standards would be introduced at a low level targeting the worst 10 per cent of the rental stock, before progressively being tightened. Key areas targeted include ceiling insulation, efficient lighting, draught-sealing and heating system upgrades.
The report said landlords would typically have to put in about five per cent of the median rental income (~$1100 a year) for five years to bring properties up to standard, which would lead to ongoing tenant energy savings of $850 a year.
“Our plan would see standards phased in gradually, giving landlords plenty of notice and the opportunity to spread investment over several years,” Ms Martinelli said. “This will keep costs affordable and minimise the risk of unintended consequences such as rent increases and evictions.”
The costs quoted are likely “the upper end of compliance costs”, as landlords may have already installed some of these measures.
The program, if adopted, is expected to create 4000 jobs over the five years, with 1600 ongoing jobs.
Ms Martinelli said standards were necessary to overcome a split incentive problem.
“At the moment, the problem is that there’s little incentive for landlords to improve the energy and water efficiency of their properties because the bill savings largely go to tenants,” she said.
The brunt of housing inefficiency is being borne by those least able to pay, with the report calling minimum standards the “missing piece of the jigsaw in the government’s social justice and environmental agenda”.
Environment Victoria has collated a series of rental horror stories detailing just how bad renting can get.
Arnold from Brunswick West said his household had to put up “survival blankets” and shade-cloth over windows to stop the summer heat.
“It means living in the dark, but it’s better than cooking in a glasshouse,” he said. “It usually works well for a day or two, but after a couple of hot days the house becomes unliveable.”
Richard from Pascoe Vale said his landlord refused to do draught-proofing and instead installed a property-value-raising ducted heating system the tenant couldn’t afford to even use, “particularly with the house being uninsulated”.
“In this day and age, we should be able to ensure property owners run their business in a way that avoids endangering other people’s safety and wellbeing, in the same way that restaurant owners, transport providers and a host of other businesses face obligations relating to public safety,” Ms Martinelli said.