Need to know
- In most states, standards requiring a dwelling to be fit for tenancy fail to include heating or heating costs
- Owner-occupied homes are much more likely to have insulation than rental properties
- In some cases, insulation can reduce heating costs by up to 50%
When Alex Bayley moved into their Californian bungalow in the Victorian town of Ballarat in 2013, they had no idea how cold it was going to get. In winter, the temperature inside drops to about 2°C overnight, but without enough money to run the heater, there's no option but to suffer through the cold.
"I wear multiple layers of jumpers, hats and scarves and mittens indoors," says Alex. "I've done what I can for insulation, I've put bubble wrap on the windows, but it's still so cold."
I wear multiple layers of jumpers, hats and scarves and mittens indoors… but it's still so coldAlex Bayley, renter in Ballarat, Victoria
In 2016, after years of freezing, Alex made what they thought was a reasonable request to the landlord, offering to pay half the roughly $1000 cost of insulating the roof in return for extending the lease by two years.
Alex was paying more than $100 a month in gas bills through winter to run the heater, and estimated they'd make the investment in the rental property back over a short period of time.
"I didn't want them to move me on two months later after putting money into the property," says Alex. "I wanted to make sure I would get some benefit from it."
The landlord refused.
State laws offer little protection
Tenants' rights advocacy groups in Victoria, NSW and Queensland told CHOICE that the laws in their states do little to protect renters from poorly insulated homes – and the power bills that come with them.
"You have a right to repair the house to that standard that it's in a 'liveable' state, but that doesn't mean that it's energy-efficient," says Jemima Mowbray, policy and advocacy coordinator for the Tenants Union of NSW.
When the NSW government brought in a suite of new minimum standards for rental homes in March 2020, energy efficiency wasn't included.
Likewise, the Victorian government introduced new minimum standards for rental properties in March 2021, but also failed to include energy efficiency. However, by 2023 almost all Victorian rental homes will be required to have a minimum two-star energy-rated heater.
Eirene Tsolidis Noyce, secretary of the Renters and Housing Union, says the reforms in Victoria are a start, but don't go far enough.
"We are talking about the bare minimum that renters should be able to have in the homes they are paying increasingly exorbitant rents for," she says.
Tenants Queensland CEO Penny Carr says minimum standards legislation is on the agenda for Queensland later this year, but there's no indication how sweeping the reforms will be.
"As long as it's fit to live in, it is legal," she says. "That doesn't mean that it's energy-efficient."
Proper insulation can slash heating costs for tenants, but many landlords are unwilling to fund it.
Less than half of rental properties insulated
In 2018–19, the average Australian energy cost per household was more than $5200 a year.
Sustainability Victoria estimates that home insulation in the walls, floors and ceilings of a house can reduce the energy consumption of a property by 40–50% every year.
Yet there remains a huge discrepancy in the number of rental homes insulated compared with owner-occupied homes.
In 2012, more than 80% of owner-occupied houses had insulation compared with less than 40% of rental properties owned by private landlords.
There remains a huge discrepancy in the number of rental homes insulated compared with owner-occupied homes
Robert Crawford, associate professor in construction and environmental assessment at Melbourne University, says the discrepancy results from owners who don't live in their properties (i.e. landlords) having no financial incentive to make them energy-efficient.
"It's something that's hidden from tenants until they get in there and start using the heating and the cooling," he says.
"It's hard to get onto the roof and check [for insulation], you can't get into the walls and check."
Freezing cold and damp
When Eugenia moved into her two-bedroom unit in the Melbourne suburb of Footscray in 2011, she was new to the city and thought living in the cold just came with the territory.
She and her husband got so cold in winter that they slept with four or five duvets on the bed.
"[There was] a giant gas heater and we basically had that on all the time because it was so freezing cold and damp," says Eugenia.
They later found there were holes in the roof that the landlord had covered over with paint.
"After we complained and they did nothing, I was like... we're moving, we're not going to do this anymore," says Eugenia.
We complained about it for a long, long time… nothing ever got doneMark Henry, tenant in Marrickville, Sydney
Mark Henry and his housemates in the Sydney suburb of Marrickville got so frustrated with gaps under the skirting boards that let the cold air in – and which the landlord refused to fix – that they bought insulation to plug them themselves.
"We kind of complained about it for a long, long time, multiple years, nothing ever got done," he says.
Victoria: A right to reasonable requests
Recent changes to tenancy laws in Victoria mean that landlords can't refuse a reasonable request by the tenant to make a minor modification to the property, which covers things such as insulation and draught-proofing.
"This includes modifications to increase thermal comfort or reduce energy and water usage," says Ben Cording, lead community education lawyer from Tenants Victoria. "There is a whole theme throughout the tenancy legislation now that energy efficiency is a priority. That's really good news."
Many landlords won't pay for insulation
But it only covers the issue of consent, not cost. Tenants still have to negotiate with the landlord over who picks up the tab.
Jemima Mowbray of the Tenants Union of NSW says that without the security of long-term tenure, renters were unlikely to invest money improving the energy efficiency of a property because there was no guarantee they would see a return.
The ACT is the only state or territory in Australia where a home's energy efficiency star rating must be disclosed to the renter before they move in.
However, Joel Dignam, executive director of Better Renting, a community renter advocacy group, says the regulation doesn't force properties without an energy efficiency star rating to get one, and that the regulations aren't enforced.
"There is a lot of non-compliance with that requirement," he says. "While it is part of the legislation, it's not enforced at all. Our research found about one in three rental properties advertise an energy-efficiency statement."
Mandatory disclosures for renters?
Cording says he would like to see Victoria and other states follow the ACT's lead in terms of mandatory disclosures of energy efficiency for renters.
"It would be great if, when you rented a house, you got an energy scorecard like a washing machine or a dishwasher, so you know what you're getting, but we haven't quite got there yet," he says.
But Carr says that disclosure alone wouldn't be the answer.
"Disclosures are a good step, but it is not the solution," he says. "You are always going to have poorer renters who will accept a home with low energy efficiency, even if warned about it, because they don't have a choice."
Reform on the horizon
While states and territories don't currently have minimum standards when it comes to energy efficiency, reform is on the way.
At a meeting of the Council of Australian Governments (COAG) Energy Council in late 2019, all jurisdictions signed up to an addendum committing them to establishing a framework for energy-efficiency standards for renters by the end of 2022, to be implemented in law by 2025.
End of 'no reason' evictions
Recent law reforms in Victoria have also removed the 'no reason' notice to vacate, meaning tenants can't be booted from their homes without a reason being given, along with evidence.
Cording says that should give renters more security and confidence to take up issues with their rental providers.
"Renters were really scared of challenging their landlords in most cases," he says. "Now that 'no reason' notice to vacate is gone we hope people will have a go at holding landlords to account."
Many renters still fearful
A CHOICE report in 2018 found that 68% of renters were concerned that raising a request for a repair could see their rent increase, while 44% feared it could get them evicted.
Patrick Veyret, CHOICE senior policy and campaigns adviser, says any minimum energy-efficiency standards would need to be rigorously enforced by state regulators.
"Many people feel scared or unable to report poor insulation for fear of being evicted by their landlord," he says. "We've heard from countless people who put up with terrible conditions rather than risk losing their home."
Many people feel scared or unable to report poor insulation for fear of being evicted by their landlordPatrick Veyret, CHOICE senior policy and campaigns advisor
For renters like Eugenia in Melbourne, the fear of being 'blacklisted' by a real estate agent for raising complaints meant she didn't take her issues further when they weren't addressed.
"Rentals in this city are so hard, it is so competitive," she says. "It always felt like we were in a very, very precarious situation."
Mark in Sydney agrees that there is a lot of uncertainty for renters: "We basically have no rights and it certainly feels like that," he says.