Poor Energy Efficiency Pushes Homeowners into Poverty

Habitat for Humanity released recommendations for policy makers to fight energy poverty in South Eastern Europe (SEE) and the CIS states, calling for targeted measures for homeowners after analyzing the findings of its projects in Armenia and Bosnia-Herzegovina.

With large-scale, pre-fabricated building blocks as the remnants of common socialist heritage, states in the SEE and CIS region face similar challenges as countries in Central and Eastern Europe. Built with little or no consideration for energy efficiency, rising utility costs account for up to 50% of the income of their residents, pushing them into energy poverty. As space and water heating of residential buildings are responsible for up to 40% of total energy consumption, energy poverty and CO2 emissions are two sides of the same coin.

Given their potential to reduce energy consumption by 40 to 50%, the business case for retrofits is compelling. The countries’ building stock and tenant structures transitioned into the mass privatization of homes in the 1990s. Without a clear framework to govern in its place, the responsibility for the building blocks’ maintenance became fragmented. Energy efficiency policies should therefore build their approach around the homeowners who, after the privatization waves, became the heart of the SEE and CIS region’s housing markets.

To make sure that they do take the leap to retrofitting, Habitat for Humanity urges for mandatory provisions for coordinating bodies to assist homeowners’ associations in the renovation process and for a clear system of responsibilities for housing management that integrates energy efficiency into its operational practices. To reduce payback periods, this needs to go hand in hand with affordable financial mechanisms that are available to collective legal bodies such as homeowners’ associations, and with government intervention through targeted subsidies or loan guarantees.

Recommendations are presented at a conference in Brussels. Habitat wants policy makers to take the link between energy efficiency and social inequality to heart, and break the vicious cycle of energy inefficiency and poverty.