Possible impact on the rental market of energy upgrades on buildings

Subject: Possible impact on the rental market of energy upgrades on buildings

One of the measures to support the climate transition put forward in Portugal’s recovery and resilience plan is a programme to improve the energy efficiency of buildings (component 13). This measure has the potential to boost social inclusion by fighting energy poverty in the housing sector and improving living conditions.

However, under the current law on urban leases, introduced by a coalition government of Christian and Social Democrats that willingly ceded to pressure from the EU and the Troika to get it approved, this measure could prove damaging. The problem is that this law provides woefully inadequate protection for tenants; indeed, it has already led to a spate of evictions and undermined the right to housing. Now, calls to invest in energy upgrades in residential buildings could prompt landlords to cite the need to carry out ‘extensive work’ as a pretext for unaffordable rent hikes and subsequent evictions. This state of affairs is all the more dramatic in the context of the current health crisis.

What can the Commission do to ensure that EU funds do not spark a wave of evictions as landlords take up incentives to perform energy upgrades on buildings?

Answer given by Ms Simson on behalf of the European Commission

(22 September 2021)

The Recovery and Resilience plans help to establish the pillars of green and digital transition in a fair and just manner. The Portuguese Recovery and Resilience Plan (1) (RRP) includes the development of a National Strategy for Combating Energy Poverty under component 13 (2), and the deployment of a comprehensive set of measures to promote affordable housing under component 2 on Housing.

The RRP includes specific criteria to support renovation of housing and is fully aligned with the National Long Term Renovation Strategy (3).

Most renovation and energy saving measures for buildings do not require the occupants to vacate their homes. The measures foreseen in the RRP will help alleviate the economic pressure on households while at the same time ensuring the necessary comfort conditions within the building. All these elements combined should support renovations while improving living conditions.

The Commission will monitor the implementation of the RRP to ensure that the investments promote an inclusive recovery for a fair green and digital transition. The Commission will authorise disbursements based on the fulfilment of milestones and targets.

⋅1∙ Portuguese Recovery and Resilience Plan (europa.eu) — https://ec.europa.eu/commission/presscorner/detail/en/QANDA_21_2986

⋅2∙ on Energy efficiency in buildings — COM(2021) 321 final.

⋅3∙ Portuguese Long Term Renovation Strategy — Submitted under Article 2a of the Energy Performance of Buildings Directive (2010/31/EU as amended by (EU)

2018/844) — https://ec.europa.eu/energy/sites/default/files/documents/pt_2020_ltrs.pdf