The great housing affordability debate currently going on in Australia runs much deeper than the divide between those who own their homes and those who don’t. It is directly linked to a cost-of-living issue as those locked out of the market simply can’t save the money they need for their initial home deposit. It seems rather unfair then, that those with less money are expected to pay more for their electricity bills now and into the future than those who are more fortunate to own their homes and have access to renewable energy. Fixing solar for renters is a moral imperative for a rich nation like Australia. The fix can be as simple as mandating every landlord must take necessary steps where possible to install rooftop solar. The question is who will show the leadership required to initiate this change.
Two groups are the obvious choices in my view – the government and the real-estate industry. Let’s cover the government’s role first. Whilst we often like to shift blame or delegate big problems onto our governments, a measured approach will serve us well in this matter. Our federal government’s long running rebate on rooftop solar is not widely talked about these days but it has played a major role in making Australia a world leader in rooftop solar installations. The federal rooftop solar rebate is slated to end in 2030. On top of the instant rebate at the point of sale, landlords can also claim depreciation on plant and materials over the lifespan of the equipment. So, there are some dangling carrots from the government to landlords. But most are not biting as they see installing solar as an act that saves the tenants money on their electricity bill and of little benefit to landlords.
Enter the friendly neighbourhood real-estate agents who are often the only communication bridge between renters and landlords. If the landlords commission rooftop solar without prior consultation with the tenants, they are simply footing the bill without any immediate prospect of returns on their investment till the next time the rent for their property is up for renewal or the current tenants vacate. With only 6 years left of the government rooftop solar rebate – this status quo needs to change fast. What if the real-estate agent approached the landlord and brokered a deal so that the tenants voluntarily add an increase to their rent which they will save from their electricity bill? Going forward this new figure becomes the market rent payable for the property as it can demand a higher rent to comparable properties that don’t have solar. The landlord now has an asset that not only adds value to the property but is immediately income generating.
Of course, the government can do all this with a policy change that mandates more energy efficient homes for renters. But they are unlikely to move until there is critical mass and this becomes an election issue. In the meantime, our real-estate agents can lead and be the change makers. With our 2030 emissions reductions targets fast approaching, there might be some quick wins in the rental housing domain that addresses the big ticket “cost-of-living” item as we approach the next federal election.