Author
Angelos Koutsis
Energy Policy Officer at the Belgian environmental and climate NGO Bond Beter Leefmilieu
As a response to the energy crisis, Flanders implemented a rent indexation stop for energy leaky housing with the goal of easing the ordeal for vulnerable tenants that are facing higher living costs, a tripling of their energy bills and rent indexation. The measure led to an increased number of renovations according to the Flemish Rent Platform, as landlords looked to maximize their profits. Nonetheless, the Flemish government decided to discontinue the indexation stop, as supposedly the energy crisis is “over now”.
Two for the price of one
In October 2022, Flanders implemented a one year rent indexation stop for the worst performing dwellings. In practice, it meant that for housing with an Energy Performance Certificate (EPC) D the indexation was capped at half of the allowed rate and that for dwellings with an EPC E or F indexation, it was simply halted.
The measure was designed to do two things: on one hand, safeguard vulnerable tenants from higher energy bills and excessive rent indexation due to inflation, both caused by the energy crisis. On the other hand, to accelerate the renovation rates in the private rental market as these had been low for decades. Therefore, the indexation stop could function as an impetus for landlords owning the energy leakiest dwellings to start renovating them.
The plan worked as most vulnerable tenants were actually spared from rent indexation and came out of the energy crisis relatively unscathed. In addition, the Flemish Rent Platform saw an increased number of enquiries from tenants: “on what a renovation of the rental property would mean for them”, indicating that landlords got to work and actually started renovating.
A plea by many
Due to its positive impact on vulnerable tenants by creating healthier, more comfortable homes, helping to combat energy poverty and its contribution to the renovation wave, a plea was launched asking to continue the rent indexation stop. The plea was signed by all relevant stakeholders (i.e. heating industry, insulation companies, anti-poverty organizations, tenant unions, worker unions, environmental organizations), except for the landlord unions. Furthermore, the Belgian Climate Coalition included the plea’s demands in their housing pact.
Aside from the continuation of the indexation stop, the plea demanded that loopholes in the legislation would be addressed. The achilles heel of the measure was that it didn’t prevent landlords from recovering their “lost” rent revenues retroactively, when starting a new rental contract. To this end, a rent cap for energy leaky housing was proposed. As all rental contracts are registered in Flanders, the government has created a tool to estimate market-conform rent prices for housing, based on the characteristics of the property in question. The plea advocated to subtract a certain percentage from the rent price estimated by the tool in order to determine a just rent cap for energy leaky housing and to close the loophole!
To no avail?
The Flemish government disregarded the plea and decided to discontinue the rent indexation stop as of the 1st of November of this year, stating that the energy crisis was over now. Ignoring the fact that Flemish energy bills were still double as high in comparison to 2020. Nonetheless, the fight isn’t over, and with the regional elections coming up in June 2024, the rent indexation stop for energy leaky housing might very well rise up from its grave to the top of the political agenda.
Angelos Koutsis is a energy policy officer at the Belgian environmental and climate NGO Bond Beter Leefmilieu and was one of the writers of the plea for a rent indexation stop for energy leaky housing.