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Simon uncertain, what’s energy efficiency to you?

By johnboy - 19 September 2013 44

Simon Corbell is wondering how important energy efficiency is to tenants:

The ACT Government wants to find out if tenants would take into account the energy efficiency of homes when choosing rental properties, Minister for the Environment and Sustainable Development, Simon Corbell, said today.

“Higher energy efficiency translates into lower power bills, so knowing the energy efficiency of rental homes

could influence the preferences of potential tenants, and encourage owners to improve the energy performance of their properties,” Mr Corbell said.

“We are investigating whether to introduce new laws that would require landlords to provide potential tenants with energy efficiency information about their properties.”

The ACT Government will be holding workshops with stakeholders, and wants tenants of rental properties to have their say through an online survey.

Whoever did the media released didn’t know the difference between web and email addresses, but at some point the survey should be on time to talk.

For mine I’m wary as hell of anything that makes it harder to rent in this town.

What’s Your opinion?


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44 Responses to
Simon uncertain, what’s energy efficiency to you?
Chop71 3:32 pm 19 Sep 13

Pfff
I hope you can follow me now that you bought up Economics 101

This simple subject covers elasticity of demand, which will state some of these costs are passed on to renters while a portion of the cost will be absorbed by the landlord.

There is also the cost of the red tape that is burdened by the ACT government public service that all ratepayers cover.

So yes there will be additional costs, some paid by the landlord, some paid by the renters and yes all of us will pay a small portion so that Mr Corbell can feel warm and fuzzy telling us how “green” our rental properties are.

Do we need it?

breda 2:37 pm 19 Sep 13

Three wrong assumptions here.

The first is that EER ratings are reliable and relevant. There is plenty of criticism of the methodology used to rate the efficiency of buildings. It is far from an exact science, to put it mildly.

Secondly, the EER rating, even if it were accurate for a dwelling as a whole, does not take into account the usage pattern of the rooms. It really doesn’t matter if the spare room or junk room is freezing in winter and boiling in summer. In my house, those rooms serve that function precisely for that reason.

Thirdly, despite the bleatings of the ACT Government, there is not a skerrick of evidence to support the notion that EER ratings have a significant effect on people’s decisions on whether or not to buy a home. And, as people have pointed out above, there is no evidence that it would override factors like location, price and amenity for renters either.

My house, for reasons known only to the alchemists who decide these things, has an EER of 3. It faces perfectly north. The living areas and my bedroom are warm in winter and cool in summer. The bits I don’t use much are the reverse. So what? I worked all that out before I bought it by looking at the house in situ and checking on a map for the orientation.

It’s just another bit of red tape which adds no value, but costs us all more. Just another crumb off the cupcake nibbled by these insatiable mice in the bureaucracy.

Watson 2:02 pm 19 Sep 13

Absolutely, yes they should provide EER information to prospective tenants. The “more red tape” comment is a bit silly, given you only have to get the inspection done once to get your EER certificate and then again if you make any improvements to the property. And it doesn’t cost all that much either.

It’s been a while since I had to look for a rental (halleluiah) but when I did the last couple of times there is no way that I could’ve been that picky to filter by EER. Even when the market is a bit slow, if you add some unpopular specifics like being single, having a child or pets or working part-time or casual, etc, you’ll still find yourself at the bottom of the list for most properties.

I also don’t think it is fair that tenants “should know from looking at it” what a rental’s energy costs are going to be like. Even the specific brand and model of heater or hws can make a massive difference. And you can’t tell if the walls and roof are adequately insulated either from looking at them from the outside. Which is why you need to pay an expert to assess this to get an EER certificate.

Innovation 1:48 pm 19 Sep 13

This would be an excellent and long overdue initiative. Not being homeowners, many renters really do not understand what is involved, and therefore what to look for, in an energy efficient house. This is especially so when renters come from interstate or overseas and have no idea how cold/hot Canberra can get.

Since an inefficient house versus an efficient house can easily cost tenants thousands extra just over winter alone, any extra information would be very valuable for them. If some landlords feel suitably compelled to improve the efficiency of their houses this cost might reflect in increased rents (if housing rentals are tight) but any increase should be amortised over time not just recovered in the first year’s rental.

If, as a result of the changes, the rental market were to get tighter or too expensive, perhaps the ACT Government could look at reducing land tax. Though I doubt that there is going to be any problem for tenants renting houses in the ACT over the next few years.

However, having typed all of this, the current EER system still seems a little spurious and subjective and needs improvement.

wildturkeycanoe 1:40 pm 19 Sep 13

arescarti42 said :

RedDogInCan said :

Whilst the idea has merit, it won’t make a lick of difference simply because the supply of rental housing is tight. I mean, its not like properties are sitting vacant and tenants get to pick and choose because of an over supply. Even the worst energy efficient house is better than living in a car.

I can’t tell if you’re being sarcastic or not.

“properties are sitting vacant and tenants get to pick and choose because of an over supply” is exactly what is happening at the moment.

Asking rents are falling across the board because of excess supply.

Chop71 said :

FFS – more red tape for the nanny state.

As much as this could be a “good idea” I’m sure when landlords pass on the cost to renters, you will be the same people who complain about the cost of renting and housing in Canberra

That’s not how it works, landlords can’t just “pass on the cost.”

Rents are determined by the market, not by the costs faced by landlords. Setting rents higher than the market price is a good way to end up with a vacant property

This is economics 101 stuff.

Economics 101 is lost when you, as a landlord, can get another $50-100/week for your home if there is solar power on the roof, or the insulation has given it a 5 star energy rating. Why would any landlord spend thousands on their property with no way to make the money back, especially when the property already makes a mint without doing anything to it? When the government starts to subsidize these initiatives though, it’ll be another story altogether.

anoif 1:32 pm 19 Sep 13

Great idea, benchmarking is a great way to create competition and is valuable in informing the customer….absolutely create the tenancy EER rating system for rental properties.

We all know electricity prices will continue to increase; forcing the hand of the owner now means standards have to improve and the benefits will filter to the customer.

EER values are an important factor when purchasing a home and should be the same for rental properties.

The anticipated outcome of this scheme can be compared to the discolsure of EER values in commercial buildings. Energy efficient commercial buildings are now the norm with efficiency targets on the increase. Those buildings which choose not to make improvements are the ones that have the ‘For Lease’ sign out the front….you just have to drive down Northbourne Ave to witness this.

…..lets stop debating it and get on with it i say.

beejay76 1:10 pm 19 Sep 13

Given that since 1999 all new houses and houses on the market need to have EER info, surely many property owners would have this information already.

thebrownstreak69 12:48 pm 19 Sep 13

An idea like this will achieve nothing. The older places are colder, the newer places less so. A few new places will be cold too.

When you inspect you can easily tell whether a property/room will get sun or not, and what the heating is.

Arescarti is correct in saying that rents are determined by the market. It’s worth being aware, though, that when landlords get an opportunity to increase rent, pushing extra costs on them just makes them that much more determined to squeeze every drop out. I tend to go easy on rental increases because I want to retain good tenants, but having an extra cost increases the likelihood of passing on a full rise to make up for it.

funbutalsoserious 12:44 pm 19 Sep 13

Good idea in principle, however due to the cost if implemented it would surely decrease the quantity of rental properties in Canberra and increase the rental price.

blindcommissioner 12:22 pm 19 Sep 13

I think this is an excellent idea. When moving into any new residence regardless of it’s age the hidden costs are always well hidden. To give all consumers a fair and level playing field, the full cost of living should be a disclosed to the consumer where ever possible. How could one possibly budget their financial future without those costs.

arescarti42 11:16 am 19 Sep 13

RedDogInCan said :

Whilst the idea has merit, it won’t make a lick of difference simply because the supply of rental housing is tight. I mean, its not like properties are sitting vacant and tenants get to pick and choose because of an over supply. Even the worst energy efficient house is better than living in a car.

I can’t tell if you’re being sarcastic or not.

“properties are sitting vacant and tenants get to pick and choose because of an over supply” is exactly what is happening at the moment.

Asking rents are falling across the board because of excess supply.

Chop71 said :

FFS – more red tape for the nanny state.

As much as this could be a “good idea” I’m sure when landlords pass on the cost to renters, you will be the same people who complain about the cost of renting and housing in Canberra

That’s not how it works, landlords can’t just “pass on the cost.”

Rents are determined by the market, not by the costs faced by landlords. Setting rents higher than the market price is a good way to end up with a vacant property

This is economics 101 stuff.

p1 11:16 am 19 Sep 13

Perhaps the government could have someone go around the city and do an energy efficiency audit (or whatever you call it) on every single dwelling and publish it on a website somewhere. Then if you upgrade something you could pay to get it improved (if you care at all).

Chop71 10:36 am 19 Sep 13

FFS – more red tape for the nanny state.

As much as this could be a “good idea” I’m sure when landlords pass on the cost to renters, you will be the same people who complain about the cost of renting and housing in Canberra

RedDogInCan 10:34 am 19 Sep 13

Whilst the idea has merit, it won’t make a lick of difference simply because the supply of rental housing is tight. I mean, its not like properties are sitting vacant and tenants get to pick and choose because of an over supply. Even the worst energy efficient house is better than living in a car.

arescarti42 9:57 am 19 Sep 13

This is a really excellent idea.

I’ve always wondered why you’re required to provide efficiency ratings when selling a house, but not when leasing it.

The difference in operating costs between an efficient, and inefficient house is massive, particularly in a climate like Canberra’s.

Probably the key to making it a successful initiative will be ensuring that providing that information doesn’t impose unreasonable costs on landlords.

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