‘Renovictions’ loom as EU aims to boost building renovation

by Nikolaus J. Kurmayer

Confronted with an energy crisis and the need to rapidly decarbonise the building sector, the EU is now facing another threat: “renovictions,” where tenants are forced out of houses or apartments due to rent increases imposed after renovation.

Buildings account for around 40% of energy use and 36% of CO2 emissions in Europe. Tackling the EU’s inefficient building stock is seen as key to achieving the bloc’s climate targets and reduce fossil fuel consumption, something the EU is trying to achieve via a recast of its Energy Performance of Buildings Directive (EPBD).

But for poor households that are already facing an unprecedented energy price crisis, this may not immediately be good news.

“We’ve heard about renovictions in Germany. That’s the last thing we want – that people are evicted from their homes due to rising rent,” warned Ciaran Cuffe, a green MEP and the European Parliament’s lead negotiator on the recast EPBD.

‘Renoviction’, a term originally coined in Anglo-Saxon countries, either describes the eviction of tenants so extensive renovation can be conducted, or a de-facto eviction through a significant increase in rent following renovation works.

The issue of renovictions threatens to create fractures in society, something already observed in Canada, where protests and lawsuits have cropped up.

For Cuffe, who spoke at a EURACTIV event last week (13 June), the “just transition” of the EU is at stake. “We want Member States to really keep this on their agenda, to ensure that people are protected,” he said.

The European Commission, which tabled a revision of the EPBD in December, is well aware of this. “Our policy will be just or there just will not be a policy,” as EU Green Deal Chief Frans Timmermans recently put it in the European Parliament.

Renovations tend to have large upfront costs which are amortised over many years. This requires a level of financial flexibility usually available only to the rich or professional landlords.

“It’s not a just transition if we simply allow the wealthy to insulate and upgrade their homes,” Cuffe said.

Cuffe, a Green lawmaker from Ireland, proposed including social safeguards in the EU’s recast EPDB proposal, so that national governments are forced to “tackle detrimental effects which the implementation of energy efficiency measures may otherwise have on vulnerable households, including rising rent prices.”

Still, renovictions are another challenge for the EU’s building renovation push.

Challenges upon challenges

Rising energy prices and inflation are already putting tenants into precarious situations, while government support is split between immediate support and financing renovations.

“In the very short term, and here we are talking more about the current energy crisis, income support is what is needed,” explained Adela Tesarova, head of the consumers unit at the European Commission’s energy directorate.

Already before the current energy crisis, 34 million Europeans were energy poor and thus unable to keep their homes adequately warm.

Social climate fund

Vulnerable citizens are in theory the prime beneficiaries of the EU’s proposed social climate fund, which is being debated now among policymakers.

But there are fears the fund won’t go far enough as the money is split between helping consumers pay for energy bills and investing in long-term energy-saving measures like renovation.

“The Social Climate Fund will not go only to the low income groups. It will reflect energy poverty to a great extent,” explained Vlasis Oikonomou, from the Institute for European Energy and Climate Policy (IEECP), who spoke at the event.

According to the researcher, significant shares of the population in some EU countries could be affected by energy poverty in the coming years. As a consequence, the €144 billion proposed by the Commission until 2027 will not go far enough, he warned.

“The only and very effective way to help people out of energy poverty is certainly building renovation,” Tesarova agreed. She highlighted, however, that “there is unprecedented amount of EU financing which is available for energy efficiency” under the EU’s seven-year budget and €800 billion coronavirus recovery fund.

“There are certainly a lot of grants at EU level, and it’s only up to Member States to use these grants,” she reminded, sending the ball back in the court of EU countries.

*first published in: www.euractiv.com