The environmental sustainability of Australia's private rental housing stock

Summary

This project contributes to present debates about the sustainability of Australian cities by focusing attention on the opportunities for and barriers to improving the environmental sustainability of Australia’s private rental housing stock. This is relevant in the context of potential rising energy costs under policy measures to address carbon pollution, and concerns over constrained water supplies in our cities. Private rental investors are of particular interest, because they do not face the costs of energy consumed in the household, and so it is thought that they may under-invest in energy saving technology (the so called ‘split incentive’ problem) thus increasing consumption and energy costs of households. Furthermore, many low income people live in private rental accommodation.


Project Number: 40560
Research Theme: Private_rental
Project Leader: Gabriel, Michelle
Funding Year: 2009
Research Centre: Southern

Research and Policy Bulletin

Research & Policy Bulletin

Issue 145: The environmental sustainability of Australia’s private rental housing stock

While private rental investors support environmental sustainability, different segments of the private rental market require different policy initiatives to reduce the financial and other barriers to investment in energy and water savings measures. This Research and Policy Bulletin provides details of the key findings and policy implications from the completed AHURI research project The environmental sustainability of Australia's private rental housing stock.

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388KB PDF Document

Description

This project found that:

  • Low-income private rental households are vulnerable to rising energy costs. Even though they have lower energy use than owner occupiers, they must put aside a similar percentage of their disposable income in order to meet higher energy bills.
  • The evidence for split incentives is mixed. Private rental households do not consume more energy or water than owner-occupiers, even when a range of factors such as income, household size and dwelling type are held constant. However, private rental investors consulted cited a lack of financial incentives to install water and energy saving measures (such as solar panels and hot water systems).
  • There are significant problems with recruitment of low-income private rental households to sustainable retrofit programs. Successful programs negotiate arrangements between tenant, landlord and property manager, provide support in completing government applications for rebates, and assist with installation, but are resource intensive.
  • Investors and stakeholders consulted thought private property managers might take a more active part in facilitating uptake of energy and water saving measures. But it was recognised that there were issues in imposing more work on a group already operating at capacity.
  • Self-managing investors were looking for government support through rebates and tax measures. They were fearful of onerous administrative and bureaucratic requirements as they operate with minimal resources and time.
  • Tenants were open to information campaigns. Mandatory disclosure of energy and water assessments might assist tenants to seek out property managers with a reputation in sustainable property management.

More Information

Download now Positioning Paper: No. 125: The environmental sustainability of Australia's private rental housing stock
258 KB PDF Document

Download now Final Report: No. 159: The environmental sustainability of Australia's private rental housing stock
668 KB PDF Document

Download now Research and Policy Bulletin: Issue 145: The environmental sustainability of Australia’s private rental housing stock
388KB PDF Document

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