Page 1387 - Week 04 - Wednesday, 6 April 2011
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residential energy use indicates that a large proportion of consumption is from heating and cooling, hot water, lighting and cooking, components that tenants would, aside from usage patterns, be unable to easily influence.
As Canberra’s residential housing stock accounts for around 40 per cent of the ACT’s greenhouse emissions and the rental market accounts for around 30 per cent of those residencies, rental housing offers a significant opportunity to make greenhouse savings.
This bill will have the effect of implementing by May 2011 the government’s COAG commitment of phasing in mandatory disclosure of residential building energy efficiency ratings for rental properties at the time of lease. It is interesting to note that many groups such as VCOSS, the Brotherhood of St Laurence and the Tenants Union of Victoria have warned against introducing mandatory disclosure without introducing minimum rental standards, as houses that have improved energy efficiency will be able to demand higher rents, leaving low income tenants priced out of the market and pushing them into the lowest quality, least energy efficient housing.
While the ACT rates well on some scales of housing affordability, the rent market is tight and rent prices are too high for many on lower incomes. Families already experiencing cost-of-living pressures will only find it harder if they are renting properties that are energy hungry. It is not uncommon to see an energy efficiency rating of between zero and 1½ stars for older houses in the ACT, and they are expensive to run.
Interestingly, while many have had cosmetic upgrades that presumably make them easier to rent out, they still have very low EERs. Yet information supplied by the home energy audit team in 2005 indicates that lifting an EER from zero to three can halve a home’s energy bill. Given that the cost of energy has risen markedly over the past six years, this fact becomes even more important.
Some may argue that placing extra costs on landlords in terms of capital expenditures will just put up the price of renting in a town where renting is already difficult and expensive. But experts tell us that the key determinant of rental price is in fact the market vacancy rates and availability rather than landlords’ costs. Our tight rental market means that landlords consider what they might be able to charge in light of what the market can bear. In the last few months, I have had many conversations with tenants who have had their rent increased by $30 to $50 per week, without any improvement to the house.
Given that reality, the introduction of minimum standards is likely to have very little impact on rents. Even if some rents do rise slightly as a result of expenses that are absorbed by landlords, then it is very likely that the tenants will save over the longer term on the running costs of the property. And landlords will have access to some financial assistance to improve their properties. Already the government offers a $500 rebate if more than $2,000 is spent on energy efficiency improvements, and there are also rebates available for dual-flush toilets under the ACT government’s ToiletSmart program. Landlords will also be able to claim some tax concessions.
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