Many of the people living in privately owned multi-unit buildings in Eastern Europe and Central Asia are affected by energy poverty meaning they pay more than 10% of their income on their heating bills. Heating bills are high because usually these buildings were built between the 1950s and 1980s with poor insulation standards and since then they even deteriorated further as no significant improvement took place in the last 25 years. However, heating bills are also high because many of these households use outdated heating technologies, and take no preemptive measures to decrease their energy consumption – e.g. leave entrance door open in the building.
Heating bills could be decreased by investing into proper energy efficiency renovation of the building. One important reason behind the lack of large scale energy efficiency renovations of these kinds of buildings is that owners have difficulty reaching investment decisions together – a process that is sometimes further hampered by legislative impediments.
If you attend an EU conference on energy efficiency of buildings, most of the discussion will be about technology and innovative financing models. In Eastern Europe and Central Asia (basically former communist bloc countries) the real challenge is how the homeowners make decisions about building maintenance and improvement of common spaces. Historically most of these buildings in Eastern Europe and Central Asia had been owned by the state or local governments but after the transition in the early 90s a huge wave of privatization swept through this region resulting in sitting tenants became homeowners overnight. But there was no structure and culture how these newly created groups of homeowners should look after their buildings.
In several countries new legislation required that the owners of flats should establish so-called homeowner associations as legally registered entities with their own rules of operation. This new legislation did not happen in all the countries and even where it happened it could not solve all the challenges of home maintenance and improvement. In some cases for some time the new legislation became the real bottleneck of decision making by requiring for example 80-100 % of unanimous vote of all the homeowners. Even improved legislation could not solve issues like the lack of culture of democracy and cooperation or the huge income difference among homeowners in one building. And in several countries there hasn’t been new legislation at all to respond to this new situation.
Because of the general income level and the mixed income levels of the homeowners usually there is a need to have access to complex financing schemes. In several countries neither national nor local governments were prepared to develop subsidy schemes to help homeowners invest into the energy efficiency of their building. In most of the countries financing institution were totally unprepared to develop new credit lines to homeowner associations.
Habitat for Humanity and USAID identified energy poverty as one of the key factor of poverty housing in this region. It is also clear that the energy poverty of people living in multi-unit residential buildings in Eastern Europe and Central Asia is the poverty housing issue which affects most people in this region. Therefore in order to reduce poverty housing in this region, it is essential to address the energy poverty issue. Engaging with communities and helping them to develop their own solutions to poverty housing problems is part of Habitat for Humanity approach regardless of geography or the type of housing problem.
Our experience shows that these homeowners can make the right decisions to invest into the energy efficiency of their building if there is a mediating agent or organization that can facilitate these discussions among homeowners. There is also a need that homeowners receive independent and reliable information on the benefits of energy efficiency renovations. Both this awareness raising and the facilitation of common decision making can be done by an organization like Habitat for Humanity or any other actor with the same expertise.
Residential Energy Efficiency for Low-income Households project is one of the many assistance projects supported by the American people through the United States Agency for International Development (USAID). Since 1992, the American people through USAID have provided a broad range of development programs in Armenia and Bosnia and Herzegovina, shifting from an initial humanitarian emphasis to assistance for economic, political and social transition.