Energy poverty alleviation by social housing providers: A qualitative investigation of targeted interventions in France, England, and the Netherlands
https://www.sciencedirect.com/journal/energy-policy
Posted on 22-10-2024
Decisions made by social housing providers (SHPs) profoundly affect their tenants' energy affordability, a group characterised by above-average energy poverty rates. Concentrated deprivation in this tenure has intensified due to policy-driven ‘residualisation’, compelling SHPs to serve almost exclusively low-income and marginalised households. Despite this, research exploring the potential of SHPs to tackle energy poverty through targeted interventions for their most vulnerable tenants remains sparse. The 2021–2022 energy price crisis offers a unique context to investigate this issue, given its substantial impact on household energy affordability. This study delves into insights of social housing professionals through focus groups conducted in France, England, and the Netherlands. It examines their views on the effectiveness of interventions and assesses their feasibility within the respective institutional contexts. We find that SHPs generally favour retrofit prioritisation and behavioural interventions as effective means of supporting at-risk tenants, whereas alterations in rent setting or housing allocation are considered potentially impactful but often undesirable or impracticable. We identify institutional barriers and lack of data as key obstacles to SHPs' adoption of more targeted interventions. To empower SHPs in tackling energy poverty, housing policy reforms must acknowledge and address the significant impact of energy costs within total housing expenses.
Related vocabulary
Energy Poverty
Financial Wellbeing
Area: Policy and financing
The in-depth study of energy poverty as a social phenomenon commenced in the late 19th century through the works of British social researchers Booth and Rowntree (O’Connor, 2016). This era was characterised by significant social and economic transformation, and these scholars were troubled by the living conditions and welfare of impoverished urban populations, who were residing in congested and unsanitary environments.
Throughout the 20th century, poverty in policy contexts became quite narrowly defined as a lack of income. However, it was another social concern in the UK that led to the development of concepts like ‘fuel poverty’ or ‘energy poverty’ a century after Booth and Rowntree.[i] Following the 1973 oil crisis, the Child Poverty Action Group took the initiative to address how increasing energy costs were affecting low-income households in the UK (Johnson & Rowland, 1976). As essentials like heating, electricity, and fuels became necessary for maintaining a decent standard of living in modern British society, this advocacy group pushed for government financial support. Later, Bradshaw and Hutton (1983) introduced a narrower definition of energy poverty: “the inability to afford adequate heat in the home”. Since then, studies on energy poverty have typically excluded motor fuels, as they fall under transport poverty, a related but separate area of study (Mattioli et al., 2017).
Energy poverty, as defined by Bouzarovski and Petrova (2015, p. 33), refers to "the inability to secure or afford sufficient domestic energy services that allow for participation in society." Although the precise boundaries of relevant domestic energy usage are still debated, this definition expands beyond mere heating as it encompasses energy used for cooling, which is particularly relevant in warmer climates (Thomson et al., 2019). Moreover, it enables a socially and culturally dependent understanding of what it means to participate in society (Middlemiss et al., 2019). On 13 September 2023, the European Union (2023) officially defined energy poverty as “a household’s lack of access to essential energy services, where such services provide basic levels and decent standards of living and health, including adequate heating, hot water, cooling, lighting, and energy to power appliances, in the relevant national context, existing national social policy and other relevant national policies, caused by a combination of factors, including at least non-affordability, insufficient disposable income, high energy expenditure and poor energy efficiency of homes”.
The doctoral thesis and subsequent book by Brenda Boardman, Fuel Poverty: From Cold Homes to Affordable Warmth (1991), marked a significant breakthrough in energy poverty research. She emphasised the detrimental impact of energy-inefficient housing on health and quality of life. In the decades that followed, substantial literature confirmed her qualitative findings (Thomson et al., 2017). Notably, studies have demonstrated the adverse effects of living in energy poverty on physical health (Liddell & Morris, 2010), mental health (Liddell & Guiney, 2015), stress levels (Longhurst & Hargreaves, 2019), social isolation (Harrington et al., 2005), and absenteeism (Howden-Chapman et al., 2007).
Boardman’s work introduced an indicator that has remained influential to this date, although it was not the first attempt to operationalise the concept of fuel poverty (Isherwood & Hancock, 1979). Her ‘2M’ indicator categorises a household as energy poor if it needs to allocate twice the median share of its budget for energy expenses to heat its home adequately. Boardman calculated this threshold to be 10% at that time. Due to its simplicity and ease of comprehension, many governments directly adopted this 10% threshold without considering specific contextual circumstances. Since the early nineties, numerous attempts have been made to develop alternative indicators. Highly influential ones include ‘Low Income High Cost’ (LIHC) by John Hills (2012), ‘Low Income Low Energy Efficiency’ (LILEE) that subsequently became the official British indicator (BEIS, 2022), and a 'hidden' energy poverty indicator by (Meyer et al., 2018). Critiques of these indicators focus, amongst other things, on their simplicity and perceived 'technocratic' approach (Croon et al., 2023; Middlemiss, 2017).
This marked the beginning of significant government commitment, initially in the UK and later in other countries to address energy poverty. Although certain forms of cold weather payments had already been introduced by the UK's Conservative administrations, it was under the successive governments of Blair and Brown, following the publication of Boardman's work, that programmes such as the Winter Fuel Payment and Warm Home Discount were implemented (Koh et al., 2012). The UK examples highlight bipartisan support for addressing energy poverty, with both the Conservatives and Labour backing these efforts. This policy objective has also gained momentum in various legislative contexts, leading the EU to incorporate energy poverty alleviation as a fundamental pillar of the European Green Deal and a specific goal of its landmark Social Climate Fund (European Commission, 2021).
Over the last three decades, public interest in energy poverty as a 'wicked' problem has surged, particularly during the recent energy crisis. This crisis began in 2021 when energy markets tightened due to a post-pandemic economic rebound, and it worsened dramatically after Russia's invasion of Ukraine in February 2022 (IEA, 2023). Extensive research on the impact of this price surge on energy poverty levels has been carried out throughout Europe and globally (Guan et al., 2023; Simshauser, 2023). Consequently, energy poverty has become a significant focal point in discussions related to the 'just transition,' especially within the realm of energy justice, as it serves as a valuable concept for targeting policies towards a specific vulnerable group in this context (Carrosio & De Vidovich, 2023).
[i] ‘Fuel poverty' and 'energy poverty' are used interchangeably, with the former being more common in the UK and the latter in mainland Europe (Bouzarovski & Petrova, 2015). Previously, scholars in the UK used 'energy poverty' to denote a lack of access to energy and 'fuel poverty' when affordability was the concern (Li et al., 2014). However, this distinction is no longer maintained.
Created on 17-10-2023
Read more ->Area: Design, planning and building
Financial wellbeing is an emerging concept with valyrious definitions, many of which focus on the financial capabilities of individuals. A household's financial wellbeing encompasses its capacity to comfortably meet current and ongoing financial responsibilities, fostering a sense of security about future obligations while enjoying the ability to make life choices (Aubrey et al., 2022). Riitsalu et al. (2023) describe it as "feeling good about one's personal financial situation and being able to afford a desirable lifestyle both now and in the future" (p.2). Brüggen et al. (2017:229) frame it as "the perception of being able to sustain current and anticipated desired living standards and financial freedom." This perception highlights the robust link of financial wellbeing influencing human wellbeing, which is a combination of "feeling good and functioning well" (Ruggeri et al., 2020:1). Other terminologies are used interchangeably to describe financial wellbeing, including financial health, financial resilience, and financial freedom (Riitsalu et al., 2023).
In the UK, the public health sector cares to raise awareness of financial wellbeing due to its impact on households' health and populations' productivity. On their official website page on Financial Wellbeing, they used the definition by The Money and Pension Service (Gov.UK, 2022: online) as follows:
"Feeling secure and in control of your finances, both now and in the future. It's knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future."
These explanations and the terminology used, including "afford" and "sustain," underscore the interconnections between financial wellbeing and the vital components of household life. These components encompass mental health, productivity, and pursuing economic sustainability in the present and future. Therefore, a household's financial wellbeing is pressured by various housing-related factors, including the costs of renting or buying and non-housing costs like utility bills and repairs, all of which can affect the household's income.
The issue of rising housing costs directly undermines financial wellbeing. This trend can be attributed to several factors, including increased construction costs, labour shortages, and rising material prices (Brysch & Czischke, 2021). Furthermore, there is a notable shortage in affordable and social housing supply (Emekci, 2021; Gov.UK, 2022). This scarcity is partly due to decreased public investment in new dwellings (Housing Europe, 2021; OECD, 2020). This issue further burdens low-income households who face high private rental costs and a gradual reduction in housing benefits (Tinson & Clair, 2020).
This issue also leads many households to cut back on essential needs. For instance, interviews with social housing residents in Scotland with low to modest incomes revealed a tendency to prioritize rent payments over other necessities, such as food and heating (Garnham et al., 2022). Similarly, Adabre and Chan (2019), , citing Salvi del Pero et al. (2016), warned that:
"Households who are overburdened by housing cost may cut back on other important needs such as health care and diet. Besides, in the medium term, households may trade-off costs for lower quality housing such as smaller size of rooms and housing in poorer locations which lack better access to education and other social amenities. The latter has often been cited as the cause of residential segregation."
Another financial burden is non-housing costs involving energy costs for heating (AHC, 2019; Stone et al., 2011). According to Lee et al. (2022), this issue persists, contributing to financial strain and even excess winter deaths in the UK. Poor housing quality raises energy bills (AHC, 2019; Lameira et al., 2022). It presents the risk of considering dwellings as affordable due to local authority support focusing on housing costs alone (Granath Hansson & Lundgren, 2019), regardless of its quality impacting energy bills (OECD, 2020). Social housing residents, particularly the ageing population and those living in poverty are at increased risk of fuel poverty (Tu et al., 2022). Fuel poverty occurs when more than 10% of a household's income goes towards energy consumption for heating (Howden-Chapman et al., 2012).
Looking forward, two factors could continue burdening households’ financial wellbeing. One factor is the fluctuating energy prices that are often increasing, such as the case in the UK (Bolton, 2024). Another factor is the impact of climate change, leading to colder winters and the potential for overheating, increasing energy demand during extreme weather conditions, as warned by the Committee of Climate Change in the UK (Holmes et al., 2019).
Non-housing costs associated with extensive housing repairs can also impact household financial wellbeing, which may arise from several factors. For instance, selecting low-quality construction materials, workforce or equipment to reduce construction costs might lead to increased repair costs over time (Emekci, 2021). Hopkin et al. (2017) highlighted a related issue in England, where new housing defects were believed to be partly attributed to the building industry's prioritization of profitability over customer satisfaction. Another factor could be improper periodic maintenance, potentially accelerating the physical deterioration of the dwelling (Kwon et al., 2020). Additionally, dwellings may fall into disrepair due to unresponsive maintenance services from housing providers, and residents may lack the financial means to cover repair costs themselves (Garnham et al., 2022).
Financial wellbeing is closely tied to household income. Low-income households are particularly vulnerable to being burdened by rising housing costs (Housing Europe, 2021; OECD, 2020), leading to financial insecurity (Hick et al., 2022). In addition, they might suffer housing deprivation due to the increasing housing and non-housing expenses coupled with their declining incomes (Emekci, 2021; Wilson & Barton, 2018). The financial pressure due to low income is further exacerbated if a household member has a disability or severe illness, potentially consuming up to 35% of their income (AHC, 2019). Recently, the COVID-19 pandemic period highlighted households' financial wellbeing vulnerability to housing-related financial challenges (Brandily et al., 2020; Hick et al., 2022; National Housing Federation, 2020). During this period, job losses led to difficulties covering housing and non-housing costs, with a third of low-income social housing residents burdened by housing costs (OECD, 2020).
The issues discussed above on dwellings being of poor quality or unaffordable harm financial wellbeing, leading to residential segregation (Adabre & Chan, 2019; Salvi del Pero et al., 2016) as well as intensifying gaps of social injustice, health injustice, poverty, and fuel poverty (Barker, 2020; Garnham et al., 2022). Without addressing those housing-related issues, many households' financial wellbeing would remain vulnerable to economic insecurity even if they live in housing considered to be "affordable" in terms of rent-to-income ratio.
Created on 14-10-2024
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