Finance

Housing association is crucial in the fight against energy poverty

550,000 households in the Netherlands are struggling with energy poverty. This is the conclusion of the TNO research institute based on figures from 2019. The label ‘low energy’ arises when a household spends 13 to 20 percent of its disposable income on the gas and electricity bill. By way of comparison: in an average home, 5 percent is spent on gas and electricity.

A hard core of 250,000 turns out to be extra vulnerable: they have a low income and high energy costs and a house that is not well insulated. Understandably, this mostly concerns people who live on social assistance benefits, another social benefit or the AOW.

In addition, single-person households and single-parent families are overrepresented in energy poverty. This is logical: the general costs of gas and light cannot be divided over several incomes and weigh relatively heavily on the disposable budget.

Vulnerability is increasing due to the sharp rise in gas prices. TNO warns after new calculations that 170,000 extra households run the risk of becoming energy poor if current price levels persist for several years.

It is striking that the problem mainly occurs outside the Randstad: in the north, east and southeast of the country and partly in Zeeland. Where income poverty is primarily an urban problem, this is not the case here.

Energy poverty is relatively common in ‘little and non-urban areas’. The share of households with a low income and a house with higher energy costs due to the poorer construction quality is higher there.

It is a distressing consequence of the structurally lagging attention of national politicians to the region.

Another important fact is that 75 percent of these energy-poor households live in a housing association. Of the remaining 25 percent, half have owner-occupied homes of modest value and the other half have rented homes in the private sector. This immediately answers the legitimate question of the extent to which energy-poor households can take matters into their own hands. By making their house more energy efficient through better insulation or other sustainability measures, their bill can be reduced, right?

This is very disappointing. 48 percent (!) of Dutch households in low or moderately performing homes with regard to energy efficiency can do little about this. Simply because 26.7 percent – ​​2.1 million homes – rent and depend on the landlord.

The other 21.3 percent – 1.7 million homes – are homeowners with too little capital to renovate the home. Their action perspective is limited. Sure, tips from an energy coach help, but is that enough?

It will be a major social challenge. In order to speed up the energy transition, government policy is to gradually increase the tax on gas consumption. In addition, investments in, among other things, insulation are required.

Research agency Ecorys reported that energy-related housing costs will increase due to climate policy and without intervention, energy poverty could double. At the macro level, a higher gas price stimulates behavioral change, but at the micro level tenants have very limited scope to change their behaviour. They’re stuck.

Are policy options available to make major strides in tackling energy poverty? Three solutions are obvious. The first is to increase Social Security benefits so that disposable incomes rise.

The second is more financial resources for housing associations, so that they can make their housing stock more energy-efficient. Now they warn that they have an insufficient budget for sustainability and that they have to balance (too) many different social objectives.

The third policy option is that housing associations may charge less rent for homes with a low energy label and more for homes with a high energy label. Then renovation becomes more profitable.

If 75 percent of households with energy poverty live in social housing, one conclusion is inescapable in any case: housing associations are crucial for combating energy poverty. Inactivity on the part of the government and the housing associations will increase resistance to the energy transition in the Netherlands.

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