Joel Dignam, Better Renting

Almost half residential rental properties in the ACT disclosing energy efficiency ratings are getting zero stars on the NatHERS scale, according to data gathered by tenant advocacy organisation Better Renting.

According to the organisation’s director, Joel Dignam, this is resulting in ACT tenants experiencing energy poverty, diminished comfort and impacts on health and wellbeing.

Under new ACT rules, any energy efficiency rating (EER) held by a residential property must be disclosed at the point of sale or lease. In the case of older homes and apartments, obtaining a rating is optional, however.

Mr Dignam’s organisation analysed all properties advertised for rent in the ACT at the AllHomes website throughout January and February this year.

Of 3549 rental properties listed, only 931 possessed a rating – and 43 per cent of these properties had a NatHERS rating of zero stars.

By comparison, of 2575 properties advertised for sale, 2195 of them disclosed an EER and only four per cent of those had a

Rotting frames in a Canberra rental home prevent windows from being airtight when closed, allowing cold air to enter and heat to escape. Image: Better Renting.

NatHERS rating of zero.

“Canberra renters are being left to suffer in the worst properties on the market,” Mr Dignam said.

“This report shows that almost half of renters are living in glorified tents that do virtually nothing to keep inhabitants safe and comfortable through summer and winter. This means higher power bills, worse health and avoidable climate pollution.”

Mr Dignam toldThe Fifth Estatethe fact ratings on rental properties were optional, rather than mandatory, meant there was a disincentive for landlords to even obtain one.

His organisation aims to address this, and also the broader issue of rental home energy and comfort standards, by lobbying for mandatory minimum energy efficiency standards for rental properties in the ACT.

Its Comfy Homes campaign and other agendas, including reducing barriers for pet owners and tightening the rules around evictions in line with the new proposed Victorian tenancy legislation, have attracted about 500 supporters since the organisation launched in February 2018.

“Disclosure is a good first step, but it is not the whole answer,” Mr Dignam said.

“It provides tenants with information, but it is not driving structural change.”

He has been hearing some rental property horror stories from ACT tenants, including one family that decided to move because the damp conditions in the house were causing mould to grow under their baby’s cot mattress.

Cost of living concerns

The issue of bill stress is also a factor.

As a renter for many years himself, Mr Dignam said he has been seeing the impact of poor standards. While his initial focus was the climate change element of energy use, the cost of living impacts are increasingly at the forefront.

He wants standards improved so tenants “don’t have to choose between heating the house and feeding their children”.

With power bills going up, that challenge is becoming starker for many, he said.

He said the new analysis highlights the importance of government action on energy and thermal comfort.

“It’s clear that landlords are not acting themselves to make rental properties energy efficient.

“Queensland has updated its Residential Tenancies Act to allow minimum energy efficiency standards, and New Zealand requires landlords to install ceiling insulation, but in the ACT renters are being left out in the cold.”

He said that while there are some landlords wanting to do the right thing in terms of the energy efficiency and overall condition of their rental properties, “the market is not encouraging that”.

The poor standard of homes in the ACT also has an impact on carbon footprint. Mr Dignam said that after 2020, when the majority of the ACT’s electricity will be from renewable sources, the gas used to heat rental properties will be a “significant contributor” to the ACT’s overall carbon emissions.

Better standards will also mean tenants will not have to spend as much to stay warm in Canberra’s freezing winters.

There are also payoffs for landlords when properties perform better. Mr Dignam pointed out that tenants were more likely to stay longer in a comfortable home, resulting in fewer vacancy periods and less outlay in terms of advertising.

Tenants are also likely to be more invested in looking after a property when it is in good condition, he said.

Data on the value of properties also shows that properties with higher energy efficiency ratings can attract a higher price premium in terms of rent, and have a higher value when sold.

Issues such as damp and mould, by comparison, can affect the integrity of a property and lower its value.

Mr Dignam said his organisation was also working with Environment Victoria and the One Million Homes campaign, as well as Tenants Queensland, to see the issue of minimum energy efficiency standards put on the national radar.

“We want to see all jurisdictions head in this direction.”

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  1. In a recent study by University of Melbourne academics, it was found that the non-disclosure that occurs within the ACT rental market exacerbates this problem, with effectively lower socio-economic groups being unfairly exposed to poorly performing housing.