Policy Brief I
Advancing Affordable Housing through Energy-Efficient Renovation
Suzan Naz Uzel
The Renovation Wave aims to enhance energy efficiency, stimulate economic growth, and improve living standards for Europeans. With a target to renovate 35 million buildings by 2030, the initiative aims to at least double the EU’s annual rate of energy renovations. By cutting energy consumption and greenhouse gas emissions, while also generating green jobs in the construction industry, the Renovation Wave’s goal is to contribute to better living conditions across Europe.
The Affordable Housing Initiative (AHI) has been introduced to ensure that social housing can access the necessary technical resources to achieve these goals. The RE-SKIN project is a critical enabler of this vision, providing a holistic renovation package that integrates renewable energy, circular materials, and information and communication technologies (ICT) for smart, sustainable building upgrades.
The issue: Energy Poverty and Inefficient Housing
Energy poverty arises when households are forced to limit their energy usage to a level that harms the health and well-being of the occupants. This issue is primarily driven by three key factors: A significant share of household income being spent on energy, low household income levels, and poor energy efficiency in buildings and appliances.
Findings
- Energy-inefficient buildings: Many affordable housing units are outdated, with poor insulation, inefficient heating systems, and high energy consumption.
- Low renovation rates: Despite the EU’s goals, current renovation efforts are fragmented, underfunded, and slow, especially in the affordable housing sector.
Who is affected?
Vulnerable groups, including low-income families, seniors, and those in social housing—are disproportionately affected. Inadequate housing exacerbates health issues, perpetuates social inequality, and limits economic opportunities.
Implications
Without targeted action, inefficient housing will continue to drive energy poverty, hinder the EU’s climate neutrality goals, and perpetuate socioeconomic disparities. However, a strategic approach can unlock opportunities for climate resilience, job creation, and improved quality of life.
Recommendations for Action
To address these challenges, policymakers must leverage innovative solutions like the RE-SKIN project and maximize the impact of the Affordable Housing Initiative. The following recommendations outline actionable strategies:
1. Accelerate Renovation Rates in Affordable Housing
Energy-inefficient buildings and low renovation rates are major contributors to energy poverty. By dedicating EU funding streams (e.g., Recovery and Resilience Facility, REPowerEU) to energy-efficient renovation in affordable housing, these issues can be addressed directly. Prioritizing public housing and providing support for small-scale landlords and cooperatives ensures inclusive benefits.
Impact: Doubling renovation rates will reduce energy consumption and emissions while improving housing quality for vulnerable groups.
2. Empower Local Communities and Stakeholders
Low renovation rates stem partly from fragmented efforts and limited engagement. Residents can be empowered through training on how to optimize the use of appliances and reduce energy consumption to avoid unnecessary waste. Involving housing associations, SMEs, and social economy entities in the renovation process addresses this fragmentation while promoting local ownership.
Impact: Strengthened community ownership, improved awareness of energy-saving practices, and long-term behavioral change.
3. Introduce Inclusive Financial Mechanisms
Vulnerable groups often lack the financial means to afford renovations, perpetuating energy poverty. Tailored financial tools—such as subsidies, tax incentives, and low-interest loans—bridge this gap, enabling affordable housing providers to undertake retrofits.
Impact: Greater financial accessibility and ensuring cost neutrality will guarantee wide-scale retrofitting and will avoid renovictions of tenants without burdening housing providers.
4. Scale-Up Innovative and Sustainable Renovation Solutions
Outdated renovation practices limit progress. Emphasizing innovative, sustainable, and scalable technologies—such as modular retrofitting systems, prefabricated materials, and digital energy monitoring tools can fast-track renovations and improve their effectiveness.
Impact: Enhancing the energy efficiency of affordable housing stock, directly reducing energy poverty and aligning with the EU’s climate goals by cutting emissions in the building sector.
Conclusion
By directly addressing the drivers of energy poverty—inefficient buildings, fragmented renovation efforts, and rising energy prices—these recommendations offer a roadmap for transformative change. Scaling up renovations in affordable housing will not only improve living conditions for millions but also contribute to the EU’s climate neutrality objectives and foster socioeconomic equality.
A strategic approach combining funding, community empowerment, financial accessibility, and innovation can unlock immense potential: reducing energy poverty, creating green jobs, and building climate resilience for Europe’s most vulnerable populations.
