BPIE’s Climate Conversations series aims to shine light on a diverse range of perspectives on buildings and climate policies, engaging stakeholders from various backgrounds. We seek to identify solutions and blind spots to key challenges related to reducing the climate impact of buildings and to a just transition to a climate-neutral society.

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In this Climate Conversation, BPIE’s Head of Communications, Caroline Milne, connected with Clotilde Clark-Foulquier, Project Manager at FEANTSA, to discuss questions of social justice around the building sector, and whether or not a ‘just transition’ for all is truly possible. In this exchange, FEANTSA explains their concerns about ‘renovictions’, their views on whether or not MEPS are appropriate for all buildings, what the EPBD revision must include to ensure a socially just buildings transition, and their vision of housing as a right.

Caroline: FEANTSA is the European Federation of National Organisations working with the Homeless with a clear social mandate. Can you explain the link between the work you do and building renovation? Why are ongoing legislative revisions, notably the EPBD, of relevance to your work?

Clotilde: FEANTSA’s core work is indeed homelessness, so that’s a fair question, why do we work on renovation & climate policies?! First it’s because homelessness is not exclusively about housing but, it is always also about housing. At FEANTSA we work on housing: housing as a right, concrete grass-roots housing solutions, housing first, housing adequacy, housing exclusion. This has led us to work on energy poverty, even before it was such a hot topic! Now we see the Green Deal, Renovation Wave and more precisely the EPBD as a great opportunity to address the issue of inadequate housing in Europe. At least 50 million Europeans are faced with energy poverty (before the Ukrainian invasion & consequent increase in prices that will push more people into energy poverty). For FEANTSA, the renovation wave is an opportunity to address as priority the worst performing buildings of lowest incomes groups. We believe that prioritizing renovation for households that face energy poverty and poor housing conditions is the cornerstone of a just transition.

Caroline: Speaking of the social aspects of building decarbonization, does renovation necessarily lead to ‘renoviction’, ie, eviction caused by renovation which causes a rent increase, implying that renovation can have potentially negative social impacts. Is this true? Is it linked to renovation itself or are renovations used as false excuse to increase rents, and the main causes of this lying in other parts of the housing ecosystem? And how can it be avoided?

Clotilde: Of course, renovations do not always necessarily lead to renoviction, but we know that it can be a side effect of major renovation programs. Renovation costs have to be paid by someone, and it logically often ends up in the rent, as owners need or want to get back some of the costs involved. The question is how can we avoid a negative social impact of such an ambitious European renovation program? At FEANTSA we are concerned that the issue is likely to become a major one due to new legislation currently discussed to boost renovations in Europe, without serious safeguards as to a potential social impact.

You have to understand our starting point: homelessness, which is in part due to a deep housing crisis as prices in the European Union (EU) for both renting and buying have been going up since 2010. Today, FEANTSA estimates that about 700,000 people are sleeping rough in Europe on any given night. So, what can we do to avoid that the renovation wave exacerbates this housing affordability crisis? The key is funding: we need a major investment plan, whether it is earmarking of European funding or a European “cold home fund”, to enable public funding of the renovation of lowest income worst performing homes.

What can we do to avoid that the renovation wave exacerbates this housing affordability crisis? The key is funding: we need a major investment plan, whether it is earmarking of European funding or a European ”cold home fund”, to enable public funding of the renovation of lowest income, worst performing homes.

There are also some policy tools to control the price impact of renovations. For instance, in Canada, during covid, from 2020 to 2022, the province of Nova Scotia introduced a 2% rent cap and a ban on renovictions. These are not necessarily adapted to every context but what we ask is for a genuine social awareness of the renovation wave, monitoring of rent prices and social impact, support to locally adapted solutions, and dedicated funding to support most vulnerable groups.

For more information on the reality of “renoviction” or examples of population displacements following urban regeneration, you can have a look at our report “Renovations: staying on top of the wave, avoiding social risks and ensuring the benefits[1]”. Professor Katrin Grossman has also conducted some very interesting research exactly on this theme: “energy efficiency for whom?”.

Caroline: As you know, Minimum Energy Performance Standards (MEPS) have been introduced in the Commission’s EPBD revision proposal as an instrument to achieve fast emission reductions. BPIE has welcomed the introduction of MEPS overall, as they can send a strong market signal to renovate and when designed as progressive standards to achieve long-term targets to decarbonise the European building stock, MEPS may also ensure deep renovation. What is your take on the introduction of MEPS?

Clotilde: In theory, we are 100% supportive of MEPS, as an important tool to upgrade the housing stock, in particular worst-performing buildings often occupied by lowest income groups. However, we are concerned again by the implementation as it appears that the social impact has not been carefully planned. How will lowest-income groups be impacted? Will the rent increase, to pay the costs of renovations or because the property has increased value? How will poor property owners abide by these standards?

The current EPBD reform presents a positive recognition of the issue of energy poverty but leaves the responsibility to Member States to deliver a socially just renovation wave, without the appropriate funding and only with existing EU funding sources that are already in competition for many uses. We ask for dedicated funding – the proposed Social Climate fund is completely inadequate – that could be sourced from ETS1 revenues, through the reform of the international corporate taxation to be implemented from 2023, or an earmarking of the next MFF.

Caroline: The housing crisis is connected to a much broader spectrum of causes beyond energy performance standards. How can we ensure that these do not contribute to fueling the housing crisis, dividing the market further between those who can afford affordable quality housing and the rest? What parts of the housing ‘ecosystem’ do we need to look at? How can we turn the energy transition into an opportunity for adequate and affordable housing? How does the narrative need to change?

Clotilde: A growing number of low- and middle-income people have difficulty affording housing, are overburdened by housing and maintenance costs. 80 million people in the EU are overburdened by housing costs, live in unhealthy, low quality, energy-inefficient, or overcrowded housing, or are homeless or at risk of eviction. For the last 10 years, homelessness has increased in almost all EU Member States. So, yes indeed, the housing crisis is a much broader issue and the challenge is how can we ensure that retrofitting the stock will not exacerbate the crisis and increase the divide.

At FEANTSA we believe that one fundamental problem is that housing is increasingly seen as a financial good rather than a social good, it’s the ‘financialization’ of housing where housing has become an asset for investors.  A concrete and recent illustration of this phenomenon is the model for short-term rental platforms. The basic idea, putting tourists in contact with private local property owners, who would occasionally rent out their spare room, has moved a long way toward a ‘professionalisation’ of hosts. Several university studies and investigative reports have shown that a large proportion of listings are not being made by individual property owners but by companies with many properties on their books, driving housing prices up in cities, making it increasingly difficult for people who live and work there to afford housing.

…one fundamental problem is that housing is increasingly seen as a financial good rather than a social good.

To that “financial asset” vision we oppose a vision of housing as a right. Concretely what does it mean? There is no silver bullet, but many small solutions. On the short-term rental platform part of the solution will be to impose information sharing obligations on digital platforms so that cities can implement their local rules. On energy performance, we believe part of the solution is monitoring of rent increase,  tailoring building renovations to the needs of the existing populations, building in community participation in renovation planning as a standard quality issue, not a ‘nice to have’ extra, providing support to grassroots non for-profit organizations and local authorities so that they can enable renovation work and access to the various support mechanisms for the most excluded households, financing for deep retrofit of private housing to be based on tried and tested systems that collect back money at a very slow rate.  

Ultimately, if the social impact is to be mitigated, the key is public financing. We must accept that the scale of energy renovation and the capital costs of this cannot be filed by private market interests. Public authorities must develop long term investment plans to finance low carbon, quality controlled housing with social purpose.

[1] http://publications.europa.eu/resource/cellar/5187e545-78ab-11e6-b076-01aa75ed71a1.0001.04/DOC_1

[2] https://www.feantsa.org/public/user/Resources/reports/Renovation_Wave_final_report.pdf