Key Takeaways:
- Rental affordability in Australia remains a significant issue, with many renters struggling to heat and cool their homes due to high energy costs.
- The difference in energy costs between renters and owner-occupiers is substantial, with renters paying more on energy bills despite having less control over their energy usage.
- There is a lack of minimum energy efficiency standards for rental properties, with only Victoria and the ACT having implemented new standards.
- Governments could incentivize investors to improve energy efficiency standards in rental properties through tax concessions or other measures.
- The gap between owner-occupied housing and rental accommodation is widening, with renters facing significant challenges in maintaining a comfortable living environment.
Introduction to the Issue
The onset of warm weather brings a new set of challenges for Alessia Palumbo, a resident of Adelaide, who resorts to using bubble wrap as a makeshift flyscreen for her windows. Her three-bedroom unit, equipped with ducted air conditioning, is not part of her lease terms, leaving her to find alternative ways to keep her home cool. This is not an isolated incident, as a new report from Energy Consumers Australia reveals that many renters in Australia are struggling to heat and cool their homes due to high energy costs. The report surveyed over 4,000 households and found that about 70% of renters are avoiding heating and cooling their homes to save money, while 40% of renters said they could not keep their homes at a comfortable temperature without using a lot of energy.
Differences between Renters and Owner-Occupiers
There are significant differences between the changes a renter and an owner-occupier can make in their homes. Australian National University researchers found that only 4% of renters had rooftop solar compared to 25% of home-owners. Energy Consumer Australia’s survey also found that 11% of renters had solar, and 36% had at least one form of insulation. The lack of control over energy usage and the inability to make changes to the property are significant challenges faced by renters. In contrast, owner-occupiers have an incentive to invest in energy-efficient upgrades, such as insulation, solar, and hot water systems, as they can reap the benefits of cost savings in their energy bills.
Minimum Standards for Rentals
The federal government announced plans to build 1.2 million homes by 2029, including the development of a nationally consistent policy on no-grounds evictions and minimum quality standards for rental properties. However, two years on, only Victoria and the ACT have implemented new minimum energy efficiency standards. The new measures introduced in Victoria include energy efficiency standards for ceiling insulation, draught proofing, and cooling, while the ACT has energy efficiency measures for ceiling insulation. The lack of commitment from other jurisdictions on implementing energy efficiency standards is a concern, with Leo Patterson Ross from the National Association of Renters’ Organisations stating that the Commonwealth needs to monitor the progress of states and territories on energy efficiency standards in rentals.
Incentivizing Changes to Rentals
Governments could do more to incentivize investors to improve energy efficiency standards in rental properties through tax concessions or other measures. Dr. Michael Fotheringham, managing director of the Australian Housing and Urban Research Institute, suggests that governments could introduce triggers, such as requiring properties to meet a certain energy efficiency standard when a new lease is signed. This could help bridge the gap between owner-occupied housing and rental accommodation, which is widening due to the lack of investment in energy-efficient upgrades in rental properties. Alessia Palumbo’s experience is a testament to the challenges faced by renters, who are often forced to find alternative ways to maintain a comfortable living environment due to the lack of energy efficiency standards in their properties.
Conclusion
The issue of rental affordability and energy efficiency in Australia is complex and multifaceted. The lack of minimum energy efficiency standards for rental properties, combined with the high energy costs faced by renters, is a significant challenge. Governments, investors, and renters must work together to find solutions to this issue. By incentivizing investors to improve energy efficiency standards and implementing nationally consistent policies, we can begin to bridge the gap between owner-occupied housing and rental accommodation. Ultimately, it is essential to prioritize the comfort and well-being of renters, like Alessia Palumbo, who deserve a safe and comfortable living environment, regardless of their tenure status.