The environmental sustainability of Australia's private rental housing stock

Summary

The introduction of the Carbon Emissions Trading (CET) scheme poses particular challenges for private rental tenants. Not having the right to adapt their homes without landlord acquiescence, and with landlords not reaping the immediate benefits of investment in alternative energy efficient equipment, the financial incentives motivating such investment is weaker than those of homeowners. In response, this project will examine the potential opportunities for, and barriers to, improving the environmental sustainability of Australia’s private rental stock.


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

Description

The project team will:

  • review how the current policy and legislative framework in Australia operates to facilitate or discourage investment in environmentally sustainable private rental housing,
  • employ a micro-simulation modelling exercise to estimate the impact of CET on private renters’ energy bills, particularly low-income tenants,
  • use hedonic modelling techniques to test the principal-agent hypothesis, which predicts that private rental households are more vulnerable to higher energy prices than homeowners,
  • assess the potential impact of policy measures designed to improve the environmental performance of private rental housing stock on low-income tenants, and
  • conduct a series of focus groups and interviews with private rental investors in order to gain insight into their attitudes towards improving the environmental sustainability of their investment.
The project’s focus on private rental housing reflects the growing significance of this tenure in the Australian housing system, the vulnerability of private rental tenants to higher energy prices and the relative lack of environmentally sustainable policy initiatives directed towards private rental housing stock to date. The project will address living standard issues for renters, in particular low-income renters, and evaluate the adequacy of existing compensation mechanisms by providing policy makers with estimates of the effectiveness of state energy rebates in cushioning the impacts of CET on private renters, and the state government budgetary implications of higher energy rebates due to CET. In addition, the project will provide policy makers with insight into strategies that can encourage providers and consumers of rental housing to adopt more energy efficient practices, whilst ensuring that such policies do not exacerbate existing socio-spatial inequalities in Australian cities.

More Information

Download now Positioning Paper: No. 125: The environmental sustainability of Australia’s private rental housing stock
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