Thursday, December 15, 2016

Energy efficiency and economic value in affordable housing

• Dutch affordable housing suppliers recoup sustainability investment by selling dwellings.
• Energy-efficient affordable dwellings sell at a premium.
• A-labeled dwellings are 6.3% – 9,300 euros – more valuable than C-labeled ones.
• The combined value effect of refurbishing an affordable housing dwelling, including improving the energy efficiency, of 20% would more than pay for the retrofit.

Strong rental protection in the affordable housing market often prohibits landlords from charging rental premiums for energy-efficient dwellings. This may impede (re)development of energy efficient affordable housing. In the Netherlands, affordable housing institutions regularly sell dwellings from their housing stock to individual households. If they can sell energy efficient dwellings at a premium, this may stimulate investments in the environmental performance of homes.

We analyze the value effects of energy efficiency in the affordable housing market, by using a sample of 17,835 homes sold by Dutch affordable housing institutions in the period between 2008 and 2013. We use Energy Performance Certificates to determine the value of energy efficiency in these transactions. We document that dwellings with high energy efficiency sell for 2.0–6.3% more compared to otherwise similar dwellings with low energy efficiency. This implies a premium of some EUR 3,000 to EUR 9,700 for highly energy efficient affordable housing.
by Andrea Chegut 1, Piet Eichholtz 2 and Rogier Holtermans 2 
1. MIT, Cambridge, MA, United States
2. Maastricht University, Department of Finance, PO Box 616, 6200 MD Maastricht, The NetherlandsThe Netherlands
Volume 97, October 2016, Pages 39–49
Keywords: Affordable housing; Energy efficiency; Energy performance certificates
A free version of the paper is currently available free of charge via the MIT Centre for Real Estate at

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