Achieving Affordable Housing through Residential Energy Efficiency

February 18, 2015

By Zita Kakalejcikova, Advocacy Assistant, Europe, Middle East and Africa, Habitat for Humanity International


In Central and Eastern Europe, many of the multi-apartment buildings date back to socialist times, the 1960s-1970s, when energy prices were not a concern. Today, residential heating accounts for 30 percent of all energy use. As previous construction and heating methods did not focus on saving energy, highly wasteful usage intensifies the impact of rising energy prices on poor households. This causes these countries to face the dilemma of either subsidizing utilities or allowing homeowners to default on unpaid debts with the market rate prices.  Across the region, governments have chosen the former. However, this model is hard to maintain due to the lack of public funds in the time of an economic downturn.

If the funds are invested elsewhere, jobs and more economic opportunities are created. Large scale investment in energy efficiency of multi-apartment buildings is an effective way to reduce fuel poverty and create savings for low-income families. With energy upgrades, monthly payments for families can decrease significantly. A project on residential energy efficiency, Residential Energy Efficiency for Low Income Households, implemented by Habitat for Humanity with funding from USAID, aims to demonstrate sustainable models for continued investment in energy efficiency in Bosnia-Herzegovina and Armenia. In particular, it looks at activities that improve common spaces, roofs and basements, and insulations.

One of the main goals of Habitat for Humanity is to contribute to sector impact through its solutions and programs on housing. Through the REELIH project, we want to support the market development for affordable housing and at the same time promote policies that advance access to affordable and energy-efficient housing. For these purposes, Habitat for Humanity and the Metropolitan Research Institute in Hungary are putting together a regional comparative analysis of the subsidy mechanisms used in the residential energy efficiency sector. The analysis focuses on the mechanisms used in Poland, Slovakia, Hungary and Romania. Combining the insights gained from this regional research with practical experiences from our work with homeowners in municipalities across the region and buildings in Bosnia and Armenia, we aim to develop a mechanism for carrying out and financing energy efficient renovations.

At the end of the day, these renovations help solve fuel poverty problems for many low-income families and even allow them to increase their income by saving on energy expenses. For more information on Habitat’s work surrounding residential energy-efficiency, see the 2015 Shelter Report “Less Is More: Transforming Low-Income Communities through Energy Efficiency.”

To learn about and contribute to the discussion surrounding efficient residential housing and solutions, join our dedicated online space.   

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