Dáil Éireann Debate, Friday - 16 September 2016
1707. Deputy Róisín Shortall asked the Minister for Communications, Climate Action and Environment if he will publish the analysis of the consultation on minimum thermal efficiency standards in rental properties; and if he will make a statement on the matter. [26338/16]
View answerIndependent research conducted by the Economic and Social Research Institute has shown that people who rent their homes are more than twice as likely to live in a home that is an E, F or G on the Building Energy Rating (BER) scale than a homeowner. This research has also found that households living in relatively energy inefficient properties spend €160-€419 per annum more on energy than households in a home rated with a BER of B.
This is due to split incentives. This is a common situation whereby a landlord is responsible for meeting the cost of energy efficiency improvement work, but only receives a benefit when the work increases the rental or re-sale value of the property. The tenant, who is typically responsible for paying the energy bills and would thus benefit from lower energy costs, is unlikely to invest in the work without certainty that they will remain in the property long enough that the savings will out-weigh the investment. These diverging incentives mean that energy efficiency investment is much lower in the rented sector than among homeowners.
In the absence of intervention to correct this, an increasing proportion of renters will be likely to live in homes with poor energy efficiency. This has implications for the achievement of our climate goals and indeed, for energy poverty levels if incomes fall and/or energy costs rise. Therefore, the Government Strategy to Combat Energy Poverty concluded that the implementation of minimum energy efficiency standards for rented properties should be examined.
Research work on this topic, commissioned by my Department along with the Department of Housing, Planning, Community and Local Government, supported by SEAI, has been completed. Both Departments are now engaged in analysing the research work with a view to publishing a consultation paper, along with the research work, by the end of 2016.
It is recognised that there is a need to balance improving the energy efficiency of rented properties against the supply and price of properties for rent. Any such minimum standards will need to be thoroughly consulted on, tested and developed, with implementation sufficiently phased to allow landlords the opportunity to make provision for compliance.
The publication of this research work will be the start of a process that will bring together stakeholder groups in a structured engagement process with the aim of leading to agreement and providing regulatory certainty for the rented sector.
