Abstract
The German government aims to achieve virtually climate-neutral building stock by 2050 to tackle climate change. To realise this goal, comprehensive policy packages based on neoclassical economic theory are in place to foster energy efficiency investment. However, in the building sector, there is increasingly a gap between this aspiration and the reality. It is claimed that one of the main reasons for this is that the existing policy framework fails to address the specific characteristics and needs of different groups of building owners. This is a particular challenge in Germany, where 80% of all dwellings are owned privately and 37% are rented out by small private landlords (SPL). Despite the significant numbers of SPL, they often follow black box decision-making processes when considering energy renovations. In this study, the author uses an explanatory model to understand the decision-making processes of SPL, combining theoretical aspects from different research disciplines. This model was applied to a low-demand housing market in a neighbourhood in the Ruhr area. Eighteen semi-structured interviews (each lasting between 37 and 115 min) were conducted, demonstrating that in addition to economic factors, the values, beliefs, norms and routines of SPL—as well as their personal capabilities and contextual factors—play an important role in their decision-making. Based on the findings, recommendations are made for enhancing the effectiveness of existing energy efficiency policies and other supporting instruments (e.g. tenancy law and social legislation), tailored to the specific needs of SPL.
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Notes
The German Advisory Council on Global Change (WBGU) is an independent, scientific advisory body set up in 1992 by the German federal government. The council analyses global environment and development problems, reports on these and provides recommendations for actions and further research.
In Germany, there is no official definition of the term small private landlords (SPL). In this paper, we follow the definition of Cischinsky et al. (2015, p. 29), who define SPL as natural persons (in a legal sense) who, individually, as a couple, or as part of a community of heirs possess apartments or houses and rent them out. SPL need to be distinguished from other professional owner types in the private rented sector, such as housing associations or companies.
With respect to the aim of this paper, the author focuses on policies to promote energy saving. For a broader perspective, see Germany’s Energy Efficiency Strategy (BMWi 2015).
A ‘KfW Energy Efficiency House 55’ only consumes 55% of the primary energy a new building can consume according to the EnEV. Thus, the primary energy consumption is 45% lower than the minimum energy performance standard.
For homeowners, labour costs only of up to €1200 are tax deductible according to the Income Tax Act (EStG)
This paper focuses on SPL who individually own complete buildings. Communities of owners (Wohneigentumsgemeinschaften, WEG) are not part of the empirical work, although the number of communities of owners is growing.
Diefenbach et al. (2010) compare single-family and multi-family houses yet do not distinguish between owners. Michelsen (2016) analyses probably the largest data set for German multi-family homes based on data from an energy billing service provider. However, the dataset only contains material from one provider and does not include gas floor heating facilities. Moreover, only energy consumption, not demand, is measured.
The theory combines the three other theories: Universal Theory of Human Values (Schwartz and Bilsky 1987), Normative Influence Model (Schwartz 1977) and New Environmental Paradigm (Dunlap et al. 2000). It assumes a hierarchical model where individual value orientation directly influences beliefs in specific environmental issues, and thereby influences attitudes and behaviour. The theory starts with relative stable value orientation presenting an individual’s personality, which affects more specific beliefs about human-environment relationships (NEP) and an individual’s beliefs about the consequences of their own actions and the individual’s responsibility and ability to avoid negative consequences. Subsequently, this may result in the activation of personal norms for action.
According to the latest LEG-Housing Market Report, the average vacancy rate in North-Rhine Westphalia was 3.1% and the German average was 3.0% (LEG 2016).
A structural equation model (SEM) is planned at a later date as part of the project to confirm or reject theoretical assumption of the VBN theory.
This is, of course, a very subjective assessment and results might by influenced by the unfamiliar nature of the interview, but almost all interviewees displayed a strong relationship with their rented house. They once lived there themselves, or close by in the neighbourhood. Relatives lived or still live there and many know their tenants personally. Many of the interviewees have additional incomes and consider the rent as extra money that is welcome but not crucial for their own standard of living.
In this study, tenants’ willingness to pay higher rents increases increase by 0.02% for every kWh/m2 final energy saved. However, the willingness increased by 6.8% if the rent included a kitchen. This means that a mathematical increase in energy efficiency by 340 kWh/m2 has the same effect as a kitchen.
More radical policy innovations, such as renovation obligations (Friege 2016) or a CO2 tax, are discussed in the scientific community and to some extent also at political levels, but do not seem likely to be implemented in the near future.
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März, S. Beyond economics—understanding the decision-making of German small private landlords in terms of energy efficiency investment. Energy Efficiency 11, 1721–1743 (2018). https://doi.org/10.1007/s12053-017-9567-7
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DOI: https://doi.org/10.1007/s12053-017-9567-7