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Energy poverty in recent publications

Energy Poverty Advisory Hub Handbooks

The Energy Poverty Advisory Hub (EPAH) Handbooks are a series of practical guidebooks targeting energy poverty, energy transition, and energy efficiency, all with a socially just perspective. The guidebooks are mainly for the local governments and practitioners in the sector. There will be four handbooks in total: (1) Introduction, (2) Assessment of energy poverty at an identified local level (diagnosis), (3) Development of an informed plan (planning), and (4) Execution of an impactful energy poverty project (implementation).

 

First of four EPAH publications is out

The first handbook, the Introduction to the Energy Poverty Advisory Hub (EPAH) Handbooks: A Guide to Understanding and Addressing Energy Poverty, is aiming to "present the concept of energy poverty with the different approaches that can be useful for obtaining a general picture of energy poverty in your local government as well as the initial introduction to the methodology to tackle energy poverty".

Thematic sections

The handbook introduces the reader to two main thematic sections:

Causes of energy poverty

The Handbook states there are three main causes of energy poverty:

Low income level: Low income can result from low salary, job insecurity, unemployment, low social protection or a combination of these. The most affected people here are the most vulnerable ones, such as single parents, people with disabilities, or people of older age.

Low household energy efficiency and energy performance of buildings: Poor quality houses and appliances, old heating systems, lack of insulation and many more are all factors influencing the quality of living and the price of energy. Moreover, many times it is hard for tenants/homeowners to improve these factors as their options are limited either financially or from the side of the landlord.

High energy prices: Prices of energy are easily influenced by external factors such as socio-political-technical systems, natural events, and climate change policies and measures, which can make certain groups of people more vulnerable than others.

Vulnerability factors

The handbook lists vulnerability factors that refer to groups of people who are at higher risk of falling into the energy poverty trap:


Energy Poverty Handbook, 2nd edition

 

In September 2022, the second edition of the Energy Poverty Handbook has been released. In the foreword, Keilani Farha, Former UN Special Rapporteur on the right to housing, stated that this year, the topic of housing has been challenged by the extreme heatwaves, COVID-19 pandemic, extreme increase not only in the cost of living but also construction materials, and lastly, the expected rise of energy costs by 30% as a response to Russia’s invasion of Ukraine. All these factors impact us all, but those suffering the most are low-income households and vulnerable groups of people. The increase in expanses “leaves many to choose between heating one’s home, turning on lights, or paying for rent or food” (p.6). Keilani calls governments and municipalities to action, noting that the energy poverty crisis is a crisis of human rights.

The handbook consists of 22 articles from organisations engaged in climate and social spheres, poverty, housing, clean energy transition, organisations working with municipalities and citizen cooperatives, and energy agencies, to name a few.

The handbook is divided into three thematic parts:


Meanwhile, check the most recent publication of the Residential Energy Efficiency (REE) Observatory in Central and Eastern Europe (CEE), which also covers topics such as energy poverty, energy efficiency, multi-apartment buildings and many more, here.

 

European Commissioner Ursula von der Leyen gave her annual state of the Union speech last week.

As one of the reactions, the European Environmental Bureau (EEB), one of the most influential advocacy NGOs at the EU level, provided its thoughts on how to speed up the enforcement of the EU Green Deal (driving the EU’s climate and energy actions) in a socially just manner.

EEB’s reactions addressing social justice are the followings: 

  • A fundamental commitment to social justice: in facing fuel prices, inflation and the cost of living, and in the energy and ecological transition. Support for heat pumps, home insulation, and affordable public transport are key to avoiding fuel and transport poverty. These can be partly financed by taxes on windfall profits. There will be temptations to subsidize fuel prices to solve the problem. With limited energy supplies, subsidies risk being costly and in very many cases futile. Where subsidies are implemented, they must be temporary to avoid entrenching fossil fuel use. Supporting a well-funded and well-governed Social Climate Fund in the trilogues between the Commission, Council and Parliament will also be essential.  
  • Energy transition – commit to full independence from Russian fossil fuels and accelerate the move to a net zero economy with a 100% renewable future and deep energy efficiency in businesses and homes. Put in place measures to facilitate a shift to nature-positive renewables. Specific focus should be on community-based renewables that support citizens’ agency and empowerment and help regenerate the social fabric of society. Renewables can help ensure sustainable and affordable energy for Europe. 
  • The REPowerEU package is welcome, but we should resist the temptation to roll back needed environmental protections and public consultations. There are plenty of go-to areas to invest in nature-positive renewables without weakening our laws and citizen buy-in is essential. The commitment to hydrogen is welcome, but given conversion losses and leakage of the smallest molecule in the world, its use should be limited to industries in which direct electrification is currently not possible and some areas of transport. The temptation to update the gas grid to a hydrogen grid and replace fossil gas with hydrogen in our homes should be resisted – direct electrification, renewables and energy savings can reach our objectives more economically.”

In case these recommendations are being listened to, energy poverty through enhancing residential energy efficiency could be also mitigated. 

Energy prices and energy poverty in Eastern Europe: Realities and Perspectives

Metropolitan Research Institute, Habitat for Humanity Hungary, FEANTSA and Habitat for Humanity International joined powers to organize a study visit and expert meeting in Budapest
to better understand the state of play of the possible adverse effects of energy efficiency measures and the energy poverty problems in Central and Eastern Europe in 2022,
and how likely it is to be impacted by current European legislation plans and energy prices increase.

 

Study Visit

The event started on July 6 with an extensive study visit mostly in the 8th district of Budapest city. The group first visited an EU-funded (Horizon 2020) RenoPont, a one-stop-shop service for residents planning energy renovation, further continued with a tour of a social housing building renovated by the 8th district of Budapest, and with a presentation and discussion at the Family and Child Welfare Service Debt Management and Housing Group of the 8th district of Budapest followed by the meeting with the housing manager from the 8th district. The program ended with another presentation and discussion led by Fanni Tóth and Gergely Schum on social housing and energy projects at the district level.

 

Expert meeting: Exchange of views on energy prices & energy poverty in Eastern Europe

On July 7, the program continued in the format of an expert meeting consisting of two presentation sessions and one panel discussion:

Session 1: European perspectives

In session 1, Ludmila Perunska and Veronika Kiss presented the context of the residential building stock in Central and Eastern Europe and presented the two project, implemented by Habitat for Humanity International - Europe and the Middle East, tackling energy poverty in this region - REELIH and ComAct.

Session 2: The social impact of energy prices increases

Panel discussion: What policies to mitigate the social impact?

The event was concluded by a closing session on key takeaways, with a promising message that

“Through establishing combination of building regulations and pricing mechanisms, and through providing the right type and scale of support, the EU can include low-income households in the energy transition, empowering them to deploy effective and structural solutions that will improve their quality of life and help them move away from dependence on imported fossil fuels while contributing to reducing GHG emissions from their homes”

 

Check out the full report with discussion summaries and event outcomes here.

The current trend of rising energy prices is a worrying one. Not only because it means that people will have to devote more of their salaries to simply pay for energy in their homes, but also because it exacerbates the already negative trend of energy poverty.

Energy poverty as phenomenon is not a universal one. It has many definitions and sources, but one people can agree on is that it is influenced by energy prices in a rather major way, as people paying exorbitant sums for energy, leaving them less and less money for themselves each month is problematic. As a way to ameliorate his, renovations and adherence to modern energy performance standards of buildings should be a priority, at least according to organizations and projects such as ENPOR.

What is ENPOR?

ENPOR is a project that aims to tackle two challenges: energy poverty in the private rental sector (PRS), and testing energy efficiency support schemes, identifying energy poor tenants and homeowners.

Objectives

ENPOR plans to tackle said challenges through three main objectives, them being:

To ensure ENPOR's success, a wide variety of partners and groups have been mobilized, ranging from homeowner associations through utilities companies, to NGOs or policymakers. Among the policymakers, the EU has been a key actor, especially after the inception of the EU Green Deal, the Renovation Wave Strategy and other schemes, among which we can count the Fit for 55 legislative package, new policies and regulations to steer the EU towards a more climate aware future. This was also the key topic at ENPOR's latest Lunch Talk.

Fit for 55

Fit for 55 presents the beginning of a new legislative direction for the EU for the upcoming years. It represents the basics of the EU Green Deal, New European Bauhaus as well as the Renovation Wave Strategy among others, all of which contribute to the larger idea. As per the EU definition:

Fit for 55 refers to the at least 55% emission reduction target which the EU has set for 2030. The proposed package aims to bring the EU’s climate and energy legislation in line with the 2030 goal.

Reducing emissions is the overall goal, and the legislative package is quite complex, as it targets many diverse sectors, such as energy, climate, transport, and housing. Obviously, energy and housing are very closely connected, which ENPOR itself picks out as the main area of interest.

To highlight a few relevant parts of the Fit for 55 package:

And these are just some of the important changes brought by the package.

Conversation at the Lunch Talk

At the Lunch Talk, the panel included representatives of different key stakeholders: Helene Sibileau (BPIE) Emmanuelle Causse and Emil Martini (UIPI), Louise Sunderland (RAP) as well as Gyorgy Sumeghy from Habitat for Humanity EMEA and Ina Karova from the Energy Agency of Plovdiv.

Energy efficient renovation of the existing housing stock is one of the main solutions to reduce energy poverty.

The above written was one of the main talking points of the Lunch Talk that the majority of the guests agreed on. In ENPOR's case, privately rented housing requires renovating those homes that need to overcome several existing conflicts and problems.

Fit for 55 is a very useful legislative package, however, it is also one that can have some seriously damaging consequences if not finetuned properly. According to the Commission, the Social Climate Fund, for example, will help lower the costs for those exposed to fossil fuel price increases during the transition to greener developments, but the issue is that the amount of proposed funding will be insufficient to deliver wide-spread renovations and renewables for energy poor households. As well as this the new emission trading system might also negatively impact energy pricing, making bills even pricier.

Gyorgy Sumeghy from Habitat for Humanity also contributed to the conversation, highlighting work in both REELIH and the ComAct project and saying that owner occupied multi-apartment buildings should be given the same attention as social housing in Western Europe. He proposed that it is the homeowner communities, who need to be convinced first to make the renovation happen, and that requires complex technical assistance and community facilitation. He suggested going for a lower, more sustainable subsidy schemes to incentivize people to also invest into renovation themselves, making it possible for programs to run longer.


For more information on the Lunch Talk and additional resources, please visit this site.

To see the recording of the session, please click here.

Motivated by the vision of the world where energy poverty has no place, the leading EU initiative “Energy Poverty Advisory Hub” (EPAH), seeks to become the center of experience and expertise in Europe. EPAH will support civil society organizations (CSOs) and local authorities by building a collaborative network of all stakeholders interested in combatting energy poverty in Europe.

How did EPAH come to be?

EPAH is the successor of the former Energy Poverty Observatory (EPOV). Starting in 2016, the EPOV lasted for 40 months during which it produced numerous publications on successfully implemented measures, current state of EU and national policies and the first methodology guidebook of energy poverty indicators.

 

On its way of transforming to a new initiative EPAH, it has more than 200 inspirational cases during extensive research period in 2021.

All of these examples, including Habitat for Humanity's projects REELIH and ComAct, are now integrated in this online interactive database, the so called EPAH ATLAS.

 

In addition, the EPAH has launched the report “Tackling energy poverty through local actions – Inspiring cases from across Europe”, in which it showcases 24 successful projects from the EU that handle energy poverty in different ways and on different levels, but all with successful results.

This compilation shows the strength of an already existing network of energy poverty knowledge and experience, and it is a great honor for REELIH to be featured as one of the 24 cases displaying the best practices!

As the Report highlights, REELIH project tackles the effects of climate change and energy poverty. It improves the health and quality of life of low-income homeowners living in multi-apartment buildings in Central and Eastern Europe. It helps to establish and develop an investment market for retrofitting to secure the financial and political support. While doing so, it aims to place increased focus on improving existing buildings by working with the local communities.

EPAH Launch Event 2021

To commence the knowledge transfer and sharing of good practices among the key stakeholders, and to celebrate its very birth, the EPAH organized an online Launch Event 2021, that took place on November 22-23, 2021.  It hosted prominent speakers, who spoke on the present and future of energy poverty action in the EU. Speakers engaged in high-level presentations, interactive debates and workshops.

Representing one of the 24 cases showcased in the report on Tackling energy poverty through local actions, the REELIH team was invited to participate at the Launch Event as well. On behalf of Habitat for Humanity International, Zita Kakalejcikova, Manager of Residential Energy Programs (CEE/CIS) took part in the workshop. She presented about the REELIH project during the workshop on “Inspiring case studies on energy poverty mitigation”.

She was joined by fellows Cecilia Foronda from Ecodes presenting about the “Barrio Solar” project in Spain; Marlene Potthoff from Caritas presenting about the Stromspar-Check Aktiv project in Germany, and Marina Varvesi from AISFOR, presenting about the “ASSIST – Support Network for Household Energy Saving” project in Italy, Spain, Belgium, Finland, UK and Poland.


If you want to find out more about these inspirational projects that usefully mitigate energy poverty in Europe, watch the recording of the event here.

For accessing all of the recordings from the EPAH Launch Event browse through this webpage.

 

What is ComAct?

ComAct - Community Tailored Actions for Energy Poverty Mitigation is an EU funded Horizon2020 project that aims to make comprehensive energy efficient improvements in multi-family apartment buildings in Central and Eastern Europe (CEE) and in the republics of the former Soviet Union (CIS).

The key is to make renovations affordable and manageable for energy poor communities, as well as to provide needed assistance for lifting said communities out of energy poverty.

The idea is to identify energy poor households and to create a new understanding of energy poverty. Next step is intervening across the three key dimensions, being it stakeholders and communities, the financial, and the technical one, and finally testing the approach in five pilot countries - Hungary, Bulgaria, Lithuania, North Macedonia and Ukraine.

Energy poverty is rather a complex concept. Hence a detailed and specific solutions are needed to tackle it, for which there is ComAct with its new report.

The overview report on energy poverty concept

The Overview report on the energy poverty concept is aimed at highlighting the need to tackle energy poverty as swiftly as possible, as it is an issue that acts as a gatekeeper against a higher standard of living. The report was put together by a consortium of organizations that contribute to ComAct - Building Performance Institute Europe, Metropolitan Research Institute, LVOA-ALCO, OHU, ENOVA, IWO, EnEffect, Burgas Municipality as well as Habitat for Humanity International and Habitat for Humanity Macedonia. All of these organizations brought together their best experts in the field of energy poverty and housing to deliver a report on the state of energy poverty within the five ComAct pilot countries, how energy-poor are identified there, and what financial and other supportive programs are in place to support them. Furthermore, the report has identified existing financial schemes from all over Europe, which have been proven to help alleviate energy poverty in multi-family apartment buildings (MFABs).

Some of the key findings related to the concept of energy poverty are:

Energy poverty in the pilot countries

As mentioned above, the report and the ComAct project itself focuses on five pilot countries of the CEE and CIS regions:

Countries in the CEE and CIS regions have the most energy-poor people in Europe, mainly due to high energy prices and poor energy efficiency of the buildings, heating systems and appliances. In these regions, the housing stock is predominantly privately-owned and characterized by a large percentage of MFABs. This is the result of mass privatization in the 1990s, along with the deconstruction of the social safety net: utility and energy costs of the flats massively rose, burdening the family budgets. At the same time, the socialist-era collective maintenance mechanisms were left behind, and the decay of homeowners’ associations has not been addressed effectively with a clear set solution.

To address the complex roots of energy poverty, there is a need to develop a new approach to make interventions affordable, substantially influence energy costs and consequently reduce the high energy poverty level in the CEE and CIS region.

Following is a short description of the state of energy poverty of each ComAct implementing country.

Hungary

Surprisingly, the country has a rather low level of energy poverty compared to other states within the ComAct project. Just around 5 to 10% of households are energy poor in Hungary. It is mostly the rural areas, specifically the family houses that are more affected. Nevertheless, MFABs have a myriad of other specific problems, such as a large number of apartment owners that make renovation more challenging from an organizational point of view. Hungary also uses the term 'vulnerable consumer' for law-making, which is a descriptor of social status. Problem is that there are no socially targeted renovation subsidies available, which might make it harder for Hungary to implement the coming EU Renovation Wave Strategy in the most effective way.

Bulgaria

Among the ComAct countries, Bulgaria has the highest share of energy-poor households, with a whopping 10 to 35% of households being energy poor, and with only 3.6% receiving a heating allowance. The current renovation program also lacks income components to help facilitate an alleviation of energy poverty in the country.

Lithuania

Following Bulgaria, Lithuania is the second energy poorest state, with an energy poverty level of 10-26%. MFABs in cities and towns are more affected than family houses in rural areas. There also is no official definition of energy poverty, but there are some measures like heating allowances and socially targeted renovation schemes, which aim at alleviating the energy poverty stricken owners.

North Macedonia

North Macedonia is very forward thinking, as it already addresses issue of energy poverty in several strategic documents, as well as through policies targeting vulnerable energy consumers. The number of energy-poor households is comparable to that of Lithuania and Bulgaria, which highlights how being within the EU does not automatically mean a higher standard of living, as it takes time and appropriate policy work. Although the condition of buildings in rural areas is worse, the problem of energy poverty is much more severe in urban areas due to the affordability of energy.

Ukraine

Ukraine has a large energy poverty problem since the cancellation of its high energy subsidies during the last five to six years. Not all subsidy schemes were abolished and some are still in place, but as there is a large energy-poor population and the building stock has a very low energy performance, it is difficult to target these schemes at the most vulnerable consumers.

The EU perspective on energy efficiency of buildings

Energy poverty has a long tradition inside the EU, hence according to the known regulations such as the National Energy and Climate Plans (NECPs), and also as a part of the Renovation Wave Strategy or the EU Green Deal, the EU has dedicated mechanisms to support building renovation, for which money is earmarked within the Recovery and Resilience Facility, as well as other instruments. Problem is though that the EU member state implementation is rather insufficient, and hence energy poverty is still a large issue.

All EU member states should ensure the necessary supply of energy for vulnerable customers and in doing so integrate an approach, which looks at various policy areas that could be used to measure and tackle energy efficiency improvements of housing. Effectively, these directives should acknowledge the existence of energy poverty and say that the protection of vulnerable consumers is a minimum requirement to eliminate it, keeping in mind that energy poverty is a broader concept than that of vulnerable customers.

Existing energy policies

The Clean Energy for Europeans package takes it a step further, as it consists of eight legislative proposals targeting various sectors: energy efficiency, energy performance of buildings, renewable energy, energy security and more. The Governance of the Energy Union and Climate Action Regulation also stipulates that EU member states should assess the number of energy-poor households, but measures and solutions are still not exactly clear. Similarly, the Energy Efficiency Directive tackles energy poverty in a way, in which it calls for measures to address vulnerable households as a priority. Lastly, under the revised Energy Performance of Buildings Directive, EU member states are required to outline relevant national measures to help alleviate energy poverty as part of their Long-term Renovation Strategies, to support the renovation of both residential and non-residential building stock.

Said legislations are also important for the Energy Community members, such as North Macedonia and Ukraine, although they have still not implemented the Clean Energy package, as their legislation is lagging behind that of EU member states.

All in all, the EU is primed to address energy poverty within and even outside the EU. However, if it means to do that properly, heavy cooperation with both the EU member states and the civil society experts will be necessary, as they are the ones with the real field expertise. And just as the overview report of ComAct illustrates, solutions must be direct and comprehensive, targeted at the most vulnerable energy consumers.


Find more information about ComAct on the official website of the project here.

For more information on the overview report and its findings, please visit this site.

Recently, the United Nations Economic Commission for Europe (UNECE) published three in-depth national studies focusing on the state of residential building stock in Armenia, Kyrgyzstan, and the Republic of Moldova.

The UNECE was set up in 1947 and it is one of five regional commissions of the United Nations. UNECE's major aim is to promote pan-European economic integration. UNECE includes 56 member states in Europe, North America and Asia and over 70 international professional organizations and other non-governmental organizations take part in and help UNECE achieve its objectives.

As a multilateral platform, UNECE helps in achieving greater economic integration and cooperation among its member states, as well as it promotes sustainable development and economic prosperity.

Out of all sectors of economic activity, the buildings sector has the largest potential for cost-effective improvement in energy efficiency and emissions reductions.

To help capitalize on this potential, UNECE has developed the three studies under the project “Enhancing National Capacities to Develop and Implement Energy Efficiency Standards for Buildings in the UNECE Region”.

The purpose of the study for Armenia

The "National study and detailed gap analysis between the performance objectives of the Framework Guidelines for Energy Efficiency Standards in Buildings and implementation of current building energy efficiency standards in Armenia," is a report analyzing the energy performance of buildings, implementation of current building energy efficiency standards and providing country-specific recommendations to bridge gaps and enhance national capacity to develop and implement energy efficiency standards for buildings.

The main purpose is to highlight the state of multi-family apartment buildings (MFABs) in Armenia, especially concerning their energy performance. The report also includes some other important elements, such as the status of legislature and audits regarding energy performance in Armenia, as well as many other relevant policy and project highlights that succeeded in uplifting the situation in Armenia.

Important findings

The national study in Armenia revealed that buildings are one of the major sources of greenhouse gas emissions (GHG). 18 per cent of the total GHG emissions is from fuel consumption in the residential buildings. The share of the residential buildings in total final energy consumption is 38 per cent. At the same time, the building sector presents significant energy saving potential, which can be realized through the effective use of modern energy efficient technologies and practices, reinforcement of robust certification systems for energy efficient buildings, and energy efficiency lending by international and local financial institutions. The Government of Armenia has put efforts into effective enforcement of recently adopted legislation in the building sector. Some relevant technical regulations and standards have also been adopted to improve the effectiveness of the whole regulatory system in the building sector.

The report itself outlined the major deficiencies of MFABs, as well as some recommendations that should be taken into consideration, not only when it comes to the renovation of energy inefficient buildings built in the second half of the 20th century, but also when it comes to relevant legislation, maintenance, and cooperation between the major parties interested in improving Armenia's situation. In a major move, the report also drew attention to the fact that Armenia should be inspired by the way other post-socialist states dealt with these buildings, such as Czechia or Poland with their establishment of associations of housing unit owners, which centralized all the relevant decision-making, thus making renovation and upgrades easier.

As an example, energy audits of multiple residential buildings proposed a standard set of measures which can bring to as much as 65 per cent energy consumption reduction:

A success for Habitat for Humanity Armenia

We are very glad to see Habitat for Humanity Armenia's long lasting efforts mentioned in the document, where UNECE recognizes their hard-work in partnership with universal credit organizations, with whom Habitat Armenia implemented housing microfinance projects that helped low- and middle-income families receive loans from financial institutions to improve their living conditions. These families used the loans to renovate and repair their homes, improve energy efficiency, and to create access to renewable energy. Through its housing microfinance projects, Habitat Armenia also provides technical assistance to families and partner financial institutions through training programs, construction technical advice and informational brochures. Other programs involve renovation of common areas of residential buildings, residential energy efficiency for low-income households and access to renewable and efficient energy in the municipalities of Vayk and Spitak.

Apart from these activities, Habitat Armenia has long been working on reforming the legislation on the management of multi-apartment buildings. The Armenian government reformed a law according to Habitat Armenia's recommendations in late 2020, which had been advocated for since 2015. According to this law, each building shall have a separate bank account for the management of its funds, which will increase the overall transparency of the fund management for each building. For more information, you can check this blog.

Conclusion

Armenia has a considerable untapped potential to improve the energy efficiency of its buildings, but several barriers and challenges must be addressed if notable progress is to be achieved in the coming decades.

In some cases, deep renovation is not possible in only one step, mostly because of the high initial investment. International collaboration is likely to remain the key for ensuring both the short-term success and the long-term viability of Armenia’s efforts. Best EU practices, already applied is some countries, show that renovation can be a long process that allows measures to be done step-by-step to maximize the final effect and reduce the energy consumption as much as possible.

As the report summarizes, Armenia still has a long way to go when it comes to energy efficient renovation. Despite this, the work that has already been done in rejuvenating the building stock makes a case for any future projects, as there definitely is a need and will to do more. The only thing that remains is to get the work done.

Habitat for Humanity Armenia (HFH Armenia) has recorded the first success in its advocacy efforts in reforming the legislation on residential buildings management in Armenia. In December 2020, the Government of Armenia approved “Decision on Bank Account Opening and Servicing Procedure” for the implementation of mandatory and other payments set by the “Law on Residential Buildings Management”. What does it mean in practice? Each building shall have a separate bank account for the management of its funds, which will increase the overall transparency of the fund management for each building. In addition to this, by the decision of the homeowners assembly, they can set up a separate reserve fund account for each building to be used to cover the expenses related to the unforeseen accidental renovation works in the building, as well as other expenses related to the operation and betterment of the buildings.

Until the end of the last year, Armenian homeowners had been suffering from the lack of proper and systemic regulation on maintenance of residential buildings and its commonly owned shared spaces. The recommendation proposed by HFH Armenia had been advocated since 2015, accompanied by many side events and activities. Let’s see together what stands behind this housing problem by looking at the history of its residential buildings maintenance system, its weaknesses and negative impacts and the benefits resulting from a successful policy change that has come into power just at the end of 2020.

Buildings in Yerevan, Armenia

Buildings in Yerevan, Armenia

 

History of the residential multi-unit buildings maintenance in Armenia

Before 1990, Armenia was part of the USSR, the communist block of countries. The collective housing dwellings under the communist era were both state-owned and state-managed. In practice, this meant that the state was not only the owner of the residential multi-unit buildings but it was also responsible for the maintenance of these buildings. State building maintenance companies were in charge of these maintenance services and works.

In Armenia, with the fall of the communist regime, a huge wave of privatization took place and transformed not only the economic system but also the housing ownership structures. Due to this process,  the ownership of the housing stock went from the hands of the state to the hands of the homeowners who formed homeowner associations or other management bodies for the management and maintenance of the buildings. However, due to the lack of proper management of the buildings, low collection rates and certain gaps in the respective legislation, the technical condition of multi-apartment buildings has been continuously deteriorating.

In numerous countries of the former Soviet Union, the former state building maintenance companies turned into private entities and continued with the maintenance services for these buildings, reporting to the newly established homeowner associations consisting of private owners of housing units. Each building established its own bank account and was in charge of its own financing, accompanied by the assistance and services provided by the private maintenance companies.

However, in Armenia, the legislation did not set requirements for opening and maintaining a bank account for each building separately, which often created uncertainty in the minds of homeowners regarding the use of their funds set by mandatory norms.

Hence, lacking regulation and rules on the responsibilities and competencies of buildings’ management bodies, and lack of loyalty of homeowners towards the management body of their building resulted in a rather unsystematic collection of money. This became the main issue to the actual maintenance of the Armenian residential multi-unit building stock.

 

Escaping the ineffective system

HFH Armenia identified this issue and started to develop recommendations that would solve the problem of misfunctioning financing and capacities within the home-owner associations, their position and their role in the system. They referred to the need of specifying minimum mandatory norms for management, maintenance and exploitation of the multi-unit housing stock and the establishment of the control system improvement mechanisms. In this way, the implementation of mandatory norms and renovation works, maintenance and servicing would become more accessible for the homeowners.

HFH Armenia saw it essential to create a law that would make it mandatory to open a separate bank account for each building by the residential building management body. Thanks to this step, it would allow even for opening a savings account for each building managed. Therefore, a portion generated from maintenance fee collection for the maintenance fund could be transferred to this saving account and contribute to the overall financial stability of buildings’ owners.

The most significant result of such an action is making the residential building management bodies a reliable player, possessing its own finances and with the ability to manifest its spending and savings upon the need, or for example, when applying for a loan for reconstruction works.

Building in Yerevan, Armenia

Building in Yerevan, Armenia

Advocating for a change

In order to actually realize the proposed policy change, HFH Armenia has been working hard to advocate for these changes since 2015. The work has started with the support of the Visegrad Fund thanks to which the resources were allocated to the preparation of the primary research paper about the housing situation of residential multi-unit buildings in Armenia. Then, HFH Armenia developed and submitted a set of recommendations to the State Development Urban Committee, organized two roundtable discussions with the government representatives in Yerevan. The Armenian case was presented also during one of the roundtable discussions organized under the UN-Energy Summit in Yerevan in 2015. Moreover, they contributed to the REELIH regional conference organized by Habitat for Humanity International and USAID in Brussels in 2017 where several government representatives were present as well. Additionally, they participated in the three Working Group meetings set to develop the reform of the residential building management law in Armenia.

UN - Energy For Sustainable Development Forum 2015

UN-Energy For Sustainable Development Forum 2015

 

Benefitting citizens and local communities

With the change of the residential building management law, numerous benefits for the homeowners and their homeowner associations are coming. Thanks to the fact that each building, from now by law, has to have its own finances managed on a separate bank account, the process of maintenance works and renovation of the buildings becomes easier and more accessible. Among the main benefits are:

Before and After of muti-apartment building renovation

Before and After of muti-apartment building renovation

In Habitat for Humanity, we believe that for homeowner associations, mixed financing schemes are the best and most effective solutions for maintenance and renovation works of the commonly owned spaces of the buildings. The mixed financing consists of three elements:

The three mentioned ways of financing are only possible when the homeowner associations have direct power over their own resources. Thus, thanks to this policy change, the Armenian homeowner associations are becoming more stable, self-sufficient and in the end, fully-fledged market players.

 

Empowering communities and its common interests

Along with the work done in advocating for the change of the law on the national level, HFH Armenia has been working on a local level, too. As the current system resulted in huge mistrust in the maintenance companies, it was inevitable to start developing a sense of ownership between the flat-owners towards the shared space of their properties. This activity was done in order to develop trust among the owners and their deepened willingness to contribute to the funds and being supportive of the investment into their buildings once the law changes.

In this respect, HFH Armenia advocated for the creation of mechanisms for awareness-raising on housing stock energy efficiency. The prefabricated buildings that were built during the communist era are highly energy inefficient and have a further negative impact on people who spend a high amount of money on energy bills. Through the introduction of training courses related to housing stock energy efficiency in primary, and education programs in secondary, the citizens would become aware of their possibilities and motivated to invest in their buildings.

In 2019, as part of its awareness-raising activities, HFH Armenia has conducted training for homeowners on energy efficiency measures in the buildings. The post-training behavior change monitoring survey showed that 72% of respondents started saving energy in their apartments after participating in the training through:

This activity demonstrates the efficiency of trainings on the behavior change of the tenants towards a smarter use of energy at home and implementation of other energy-saving measures.

 

The fight is not at the end

It will take some time for the new law to fully bring its benefits as there appeared new challenges in the implementation process. Change in the payment system from cash to online brings about one of the biggest issues. It now requires homeowners to make non-cash payments directly to the bank account and most tenants simply do not pay, because there is no one going and knocking on their doors for collecting the fee, as they were used to in past. Moreover, especially pensioners are not used to going to banks to make payments, as well as they are not even aware of the possibilities of online payment methods. Hence, in the short run, the collection rate of maintenance fees has dropped but is expected to grow after the change is well communicated with the homeowners. HFH Armenia has already started discussions with the Yerevan Municipality to run awareness-raising campaigns to make the transition to the new payment method faster and smooth.

Yerevan Municipality Roundtable

Yerevan Municipality Roundtable

To add, it is necessary to create new, effective enforcement mechanisms for payments of mandatory fees, as the current one proves not to be that efficient. Therefore, as a next step, HFH Armenia has started advocating for having a better enforcement mechanism for mandatory payments via submitting its recommendation to the State Urban Development Committee.

The last remaining, and probably the biggest challenge, is the creation of the saving accounts for the buildings. Under the current law, the homeowners of the buildings have to create their basic bank accounts and store their funds there which allows them to have control of their spending in the first place. The additional saving accounts would give even more reliability to the homeowner associations, but unfortunately, this recommendation was accepted only as a voluntary and recommended action. HFH Armenia plans to further advocate to make the creation of the saving fund mandatory to ensure even more financial stability for the multi-unit buildings, as well as advocate for setting more efficient enforcement mechanisms towards the betterment of the collection of mandatory fees.

The Armenian advocacy success is proof that hard and systematic work and dedication can really make a change. Fingers crossed for HFH Armenia in their future work.


Find more information about HFH Armenia here.

Since the environmental challenges are these days on top of the agenda of the European Union (EU), new strategies to incorporate green topics into various spheres, including the building sector, started to emerge more and more often. The EU's Renovation Wave Strategy, which is consolidated into the EU Green Deal, aims to support the improvement of buildings in order to make them more sustainable and energy-efficient.

To maximize the potential of the Renovation Wave Strategy for people who are likely to face energy poverty, a collaboration between Habitat for Humanity Hungary (HFHH) and the Center for the Study of Democracy, Romania (CSD) arose

to raise their concerns toward the EU to consider the need for more region-specific recommendations how to tackle energy poverty.

As stated in the report, more than 50 million people in the EU are unable to secure an adequate level of energy for their living. The most affected regions are located in Central and Eastern (CEE) and Southeastern Europe (SEE). Both of these areas are marked by the era of socialism and a high level of marginalized communities.

While there is no official and general definition of energy poverty, we talk about it when:

Not only is the current state of many dwellings in the CEE/SEE region energy inefficient, but it is also one of the biggest air pollutants in most of the region. Usage of outdated heating systems and solid fuels, such as wood and coal, as the main heating products, caused Hungary to ascribe over 80% of PM2.5 emissions to these combustibles.

Therefore, HFHH and CSD call for EU policies and funding schemes to support the renovation of buildings while taking specific needs and circumstances of the CEE/SEE region into account. As a result, they came up with 13 detailed recommendations within three major topic areas:

      • stronger focus on energy poverty - an obligation of EU member states to target energy-poor households while making sure the funds are designated to address energy poverty of those living in the rural areas, urban areas and the marginalized and segregated communities
      • appropriate funding instruments - mainly through tailor-made financial solutions, implementation of a buy-back program, low-rate loans, financial behaviour consultations and education in energy efficiency, and support of upgrade of the most inefficient and polluting devices
      • the need for EU policies to address energy poverty - complement the EU legislation by suitable funds and measures which would target the housing issue, improvement of data collection, make sure that national governments go beyond their National Energy and Climate Plans (NECP), and direct support of the implementation of renewable energy sources.

 


Read the whole report with 13 recommendations here.

Habitat for Humanity Europe, Middle East and Africa has launched a new report on energy poverty aspects of the REELIH project in the three implementing countries – Armenia, Bosnia and Herzegovina, and North Macedonia. The aim of the study was to find out how these countries were able to contribute to the fight against energy poverty by encouraging energy efficient renovation of multi-family residential buildings. The study was conducted by the team of experts from Metropolitan Research Institute (MRI) and Buildings Performance Institute Europe (BPIE) and thanks to the financial support of USAID. Find out more about the interrelation between the energy efficient retrofits and energy poverty alleviation and read through the main findings of the study and our recommendations below.

How to define, measure and tackle energy poverty?

Energy poverty refers to a condition in which individuals or households are unable to meet materially and socially necessary energy services at an affordable cost in their homes. There have been many attempts to come up with a general definition of this term, however, the environment around the energy poverty stimulators is different in each country and therefore, proffered is to work with the concept of energy poverty on a specific national level.

The study highlights two standard ways of measuring this state of condition:

While each is required to capture both quality and affordability aspects of energy services that are important especially from a policy perspective, they differ in how they pin down energy poverty. As the study explains, the expenditure-based approach relies on monetary calculations derived from the ratios between the cost of energy and household income. The consensual approach relies on rather a subjective self-assessment of the households' comfort and on affordability of their housing costs. No matter what approach one uptakes,

the energy efficient retrofits have proven to be effective instruments in fighting against energy poverty faced by, especially, low-income households. What is more, they are considered the most sustainable and effective way to tackle energy poverty.

Under the REELIH project we have carried out energy efficient retrofits of multi-apartment buildings in the three of the implementation countries. The overall findings reveal that every REELIH renovation program increased the level of comfort among the multi-apartment buildings' inhabitants and symptoms of energy poverty were somewhat reduced as well. Furthermore, complex interventions managed to decrease the energy needs of apartments and thus either decreased the energy costs in a longer term or permitted to heat up at an adequate level the apartment without financial sacrifice. Read out more about the country level implementation of REELIH project in the next section.

REELIH Implementation Countries

1. Armenia: Crucial impact on the institutional level

In the common areas of 13 multi-family buildings in the cities of Yerevan and Vanadzor, the basic energy efficiency interventions that were carried out included the replacement of the doors and windows with more efficient ones, improvement of the lightning system and insulation of roof and basement. Due to the limited space for interventions, they resulted only in 2-6% of energy savings, therefore the impact on financial situation at the individual level was not that significant. However, at the institutional level, the impact was much more significant. The project initiated crucial changes in the framework conditions of energy efficiency renovations in three main ways:

 

2. Bosnia and Herzegovina: New Schemes supporting building retrofits

The pilot buildings in 4 cities were renovated. The owners joined the program to fix crucial structural problems of the buildings such as falling facades or leaking roofs. After the renovations, their comfort level increased and the energy costs are expected to decrease in the longer term. Very importantly, by upgrading from wood-burning stoves to electrical heaters, the projects have met the goals of the local decisionmakers to reduce the air pollution as well.

The shift of the project's focus from actual renovations of buildings to investment of the efforts into advancement of the legal and financial framework of energy efficiency retrofits has resulted in a growing number of municipalities and cantons starting to introduce new grants schemes to support energy efficient renovations of multi-apartment buildings.

Our implementing partner ENOVA in Bosnia and Herzegovina is conducting extensive audits of the residential building stock in multiple municipalities and based on the results of its analysis, prepare residential energy efficiency action plans for selected municipalities for implementation of recommendations.

The main obstacles that REELIH project faced in Bosnia and Herzegovina were related to the regulation of multi-apartment buildings. Namely, it is the paralyzing legal obligation that the owners who vote for the renovation have to finance it, where a simple majority decision already counts and enforcement of payment of minority is unacceptable; and non-transparent accounting mechanism of management companies. Moreover, some renovation is blocked also because of the uncertainty of the ownership of the buildings.

3. North Macedonia: enabling environment for energy efficiency retrofit works

North Macedonia is, from among the three implementing countries, a leading example in terms of tackling the energy poverty. The main reason for this is that its renovation processes are inclusive as the HFH loan is provided to low-income households as well. In North Macedonia, HFH Macedonia (HFHM) provided complementary financial assistance to the already existing renovation schemes of the local municipalities through a “Residential Energy Efficiency Revolving Fund”. A building management company funded by HFHM is now managing over 100 buildings in a professional and transparent way, and also carries out renovation works. Even in the cases where savings were not that significant, the comfort level of the apartment definitely increased. Outstanding success of Macedonian case is likewise connected with the fact that HFHM has several other energy efficiency projects accompanying the REELIH project which serves primarily as a creator of the enabling environment for energy efficiency retrofit works.

Learnings from the REELIH project and EU Best Practices

The study discussed the key considerations stemming from the evaluation of the implementation projects. It finds out that the financial and institutional environments are crucial for there are structural factors that hinder the implementation of energy efficient retrofits of multi-apartment buildings (e.g., low level of trust towards home-owner associations, lack of financial products). Improving building quality is crucial both for achieving energy efficiency and generally necessary maintenance of buildings. Another important learning from the REELIH project is that it is important to ameliorate not only the buildings themselves but the heating system as well.

Evaluation of effective renovation programs reaching vulnerable households in the selected countries has shown, however, that a number of challenges likely accompany their implementation. Therefore, the study collects the practices of different retrofits programs across the European Union and reflects on the lessons learned there as well. For instance, the analysis of the “Multi-Apartment Buildings Modernization” program in Lithuania has revealed that the uptake of loans increased, when local municipalities got involved in the program. Or that tackling the problems of the poorest can be an efficient tool to accelerate the renovation market in general. The first large-scale renovation program in Greece, so called “Saving money at home”, has managed to increase the share of dwellings with C or better energy certificate from 0% to 33%. Our analysis has, however, pointed out that sophisticated income-based criteria incorporated in the program are likely to work well only in the case of individual contracts, such as in the case of the detached houses' renovation.

However, in the setting of multi-apartment buildings where an entire building as a single entity applies for a grant might cause significant difficulties.

Overall, the lessons learned from the non-REELIH case studies suggest that the seemingly competing environmental and social goals might be united though well-designed financial schemes that combine socially targeted subsidies with loans. Social targeting of financial schemes for energy efficiency retrofits will accelerate the renovation rate if:

Recommendations for policy makers

Last part of this research is devoted to proposing several recommendations following the deep analysis of REELIH project and other best practices in tackling energy poverty across Europe, and even beyond. The recommendations are made for both EU and national level representatives. The following are the areas and the topics that should not be omitted when looking for solutions that attempt to tackle energy poverty, especially in co-owner multi-apartment buildings.


Find the full study here and the short summary here.

Find more information about Buildings Performance Institute Europe here.

Find more information about Metropolitan Research Institute here.

 

 

 

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