The financing of renovation in the social housing sector

If one wants to have a short look back at how the European policymakers have dealt with the topic of renovation of housing over the last few years, 2010 would probably be a turning point. That year, on the one hand, the Global Financial Crisis and the various attempts to launch economic recovery plans at the EU and national level effectively put the housing sector and in particular the renovation of the existing stock at the centre of political concern because of its growth-enhancing role.

The present study aims at addressing the lack of precise understanding and will focus on and compare the financing schemes supporting the renovation of social housing in 6 countries. The social housing segment is indeed particularly relevant for policy makers: although social housing, cooperative and public housing make on average only 11% of the housing stock of the EU countries, as this study will show, their energy performance is on average better than the private rental or the homeowners sectors, the expertise of social housing providers in renovation activities is growing in strong and it is the segment who cater for low-income families, people with special housing needs and more generally speaking people who can’t find a decent and affordable accommodation on the private rental market or through access homeownership. This is, therefore, a key segment of the housing market and a key area of intervention of national and regional housing policies.  

The renovation of social housing is the most obvious example of how environment and social justice considerations can be combined.  Making renovation affordable for low-income social housing residents is the key question for social housing providers. 

In this context, the cost of renovation and the various schemes and mechanisms to finance it are determining factors. Bringing down the cost of renovation and, at the same time, the cost of finance are the challenges housing providers are confronted with. The regulatory and financial frameworks in the different countries can either help or on hamper the search for such cost-efficient investments.