Fewer apartments for even higher rents? The EU is working on it right now

By Dagmar Henn

It reads well, that decision of the European Parliament on the “Energy Performance of Buildings”. There is talk of improved quality of life, social cushioning, of a return to the ideas of the Bauhaus, which once wanted to make good housing possible for the masses. But such resolutions always read well; this was already the case with the various variants of the Energy Saving Ordinance (EnEV). Only the reality was different then.

A small example of the EU prose: “In order to ensure adequate housing for all, a definition of vulnerable areas and neighborhoods related to energy poverty needs to be introduced, which can be used to more accurately identify less developed (rural and urban) micro-areas within more developed areas This would help to identify and locate the most vulnerable social sectors and those affected by energy poverty, those people and households who have high energy bills and do not have the means to renovate the buildings they occupy, and thus to combat social inequalities caused by the application of various climate protection measures could arise.”

And then there are the figures, with which the EU Parliament itself states how many buildings in the EU will ultimately be affected by this decision: “Almost 75% of this building stock is inefficient according to current building standards and 85-95% of today’s buildings will be in 2050 are still standing. However, the weighted annual rate of energy-efficient renovations remains persistently low at around 1%.”

The aim of the resolution is therefore to increase the rate of energy-related refurbishments. The means for this is the EU-typical: bans. The specified goal is to achieve “carbon neutrality” by 2050, i.e. no longer using fossil fuels to heat buildings. This carbon neutrality refers back to the climate belief, according to which the average temperature should not rise more than two degrees above the “pre-industrial” value, which is known to be in the middle of a small ice age, if you take the beginning of the 19th century as a benchmark.

The use of residential buildings that do not achieve at least energy efficiency class E will be prohibited from January 1, 2030 concern According to the German figures (which are only available as an evaluation of broker data because there has not yet been any statistical overall recording of the stock), around 45 percent of the German stock will either have to be energetically renovated by then or will fall out of use. Only social housing is explicitly excluded from the EU decision. There are only 1.1 million of them in Germany, which is 2.5 percent of the total stock; this leaves at least 42.5 percent or 18 million apartments in any case.

By the way, the Federal Environment Agency has a study published, which expresses quite sharp criticism of the criteria for classification into these energy efficiency classes; the real consumption, especially in poorly insulated buildings, is up to 40 percent below the assumed level. This 40 percent is easily enough to raise a building from class F to class E. Basically, hundreds of lawyers could already be preparing for the relevant procedures today. And yes, even when the classification was introduced, it was said that the big end was yet to come and that it was by no means just about informing tenants better about their rented property; a suspicion that has now been proven.

This decision had to be made in the European Parliament. If such a proposal came up in a national parliament, there would be a wide public debate in which social reality would at least partly claim its space. The members of the Bundestag, who have to take over this task by the end of next year, can shrug their shoulders and declare that they have to transpose the EU decision into national law and that they have absolutely nothing to do with the decision itself.

Whereby it is astonishing that apparently nobody has even evaluated the results of the EnEVs, which also represented an attempt to force energy-saving renovations. The lever with the EnEV was: As soon as a part of a building, be it the facade, be it the heating or the roof, is renovated, this must be done in accordance with the applicable energy standard.

The result? The renovations according to EnEV were so expensive that large, such as municipal, rental housing companies as well as cooperatives came to the conclusion to refrain from renovations and simply demolish the existing houses in order to then replace them with new buildings. The rent increases, which were four or five euros per square meter, would simply not have been feasible. They still aren’t, except for the top segment.

The only use that the EnEV had was as a eviction tool. If a homeowner wanted to rent out their homes to wealthier people at a higher price, all they had to do was renovate and relocate. At the moment, only eight percent can be allocated, up to an amount of 3 euros per square meter. That would only be a fraction of the renovation costs; but for tenants who receive citizen income or basic security in old age, that should still be enough.

Since then (this information still referred to the EnEV 2009), not only have the specifications become more stringent, but energy prices have also risen massively. Under the conditions at that time, the costs of these renovations were by no means offset by corresponding savings in energy costs. With current energy prices, that might be possible; However, even that is of no use if large parts of the household are unable to raise these amounts, regardless of whether the surcharge on top of the already often horrendous rent is in the form of higher heating costs or in the form of apportioned renovation work. Anyone who previously had to put half of their income on the roof over their heads, as is not uncommon in German cities, no longer knows afterwards what they are supposed to live on in both cases.

However, the cost of the renovation has also increased. This is evident from the material used alone. The popular (because cheap) insulation made of styrofoam, for example, is also affected by the higher energy prices, as are plastic windows, but also various other building materials. It is not for nothing that new building activity has almost come to a standstill at the moment. There are additional requirements such as the provision of charging facilities for electric vehicles, which in turn trigger completely new fire protection problems.

Even if the EU decision even addresses the issue of existing craftsmen, the 160,000 additional jobs said to be created through this program will not solve the problem. 160,000 for the entire EU when 18 million apartments are at stake in Germany alone, and that in less than seven years?

Despite all the talk that “households in need of protection” should be protected from too high costs – how credible is that when billions are being pumped into the armaments companies because the EU wants to play war alongside the USA, and when the inflation triggered by this is also a factor the income is not compensated? The development of rents over the past few decades already had a very clear effect on the economy as a whole: it shifted income from wage earners to capital owners. Each subsequent increase further exacerbates this problem. Unless, of course, the governments resort to the means of rent caps actually mentioned in the EU decision.

But there are strong doubts about that if you look at the politics of the past few years. Serious efforts to increase the number of affordable housing are nowhere to be seen. Even if the strategy adopted years ago of dwindling into replacement buildings is implemented, nothing will change.

However, this decision affects not only tenants, but also owners. Because according to these specifications, even self-used living space is not excluded. For many, however, there should be no possibility of financing such a renovation, which is particularly important if your own apartment is used for old-age security. German banks in particular are reluctant to give loans to pensioners, and the financial leeway of large parts of the population simply does not allow for such complex measures. State funding? Even with the EnEV, it was calculated in such a way that it never covered the costs. Full financing is not provided.

The end result of this decision will be that smaller landlords will try to divest their apartments before the deadline, while large corporations such as Vonovia may refurbish part of the portfolio that has the option of being able to rent it out at a higher price and the rest simply up run on the deadline and then leave it unused. Finally, there is no obligation to replace housing that is taken off the market by these regulations. Ultimately, what happens is what the EU always likes to create: a redistribution from the bottom up.

However, an EU regulation only applies as long as there is an EU. Just imagine the impact of these requirements in countries like Bulgaria or Slovakia, where large parts of the population survive mainly because they own the apartment in which they live. If it is almost impossible to meet these requirements in Germany, what is the situation there? And who, please, should evacuate half of Bucharest because the apartments haven’t been renovated in terms of energy efficiency?

It may be the unspoken goal of putting half the European housing stock at the feet of a few big investors. But the years until 2030, given the speed at which the world is changing at the moment, are an eternity. The bold, deeply misanthropic plans that the European Parliament has made with this decision will not survive the collision with reality.

more on the subject – Energy crisis: According to the tenants’ association, a third of Germans will not be able to pay energy costs