A new ACT Government regulation will require rental homes in Canberra without ceiling insulation or with existing insulation rated less than R2 to be installed or upgraded to R5 from 1 April 2023.
There will be a phase-in period until 30 November 2026 where rental providers will be required to meet the standard within nine months of a new lease being signed for the property.
New properties entering the Canberra market will have three months to comply with the standard, and from 1 December 2026, existing properties will need to have complied or be in the process of complying, regardless of whether a new lease has been signed.
It will become mandatory for rental providers to include information on whether the property is compliant with the minimum standard in all rental advertisements and new tenancy agreements from 1 April 2023.
To assist landlords in meeting the new standard, the ACT Government’s Sustainable Household Scheme will be expanded to include insulation as an eligible product.
Eligible landlords can also claim the insulation expenses as a tax write-off for their investment property.
The government revealed over 60 per cent of rental homes in Canberra are already compliant with the proposed standard but around 18,000 don’t meet that standard – some of which are public housing properties.
ACT Chief Minister and Minister for Climate Action, Andrew Barr, said the government knows these upgrades can be costly to landlords, which is why programs such as the Sustainable Household Scheme have been implemented to assist in reducing costs.
From early 2023 under the Scheme, landlords will be eligible to access a zero-interest free loan of up to $15,000 for insulation when upgrading their properties.
“Getting landlords on board is another big step towards ensuring all Canberrans benefit from a zero emissions future for the ACT,” Mr Barr said.
ACT Minister for Energy and Emissions Reduction, Shane Rattenbury, said up to 35 per cent of heat is lost in an uninsulated Canberra house during the colder months.
“It’s unfair that those with the least capacity to pay often live in properties that are the most expensive to heat and cool,” Mr Rattenbury said.
Insulation is the quickest, most efficient and effective way to improve a rental property’s energy efficiency, he said.
“It is a really tough existence for renters who are living in some of those houses where it is freezing cold in winter, it gets way too hot in summer, they live in an uncomfortable house and yet they have really high energy bills because they’re trying to heat the house but they just can’t, so this is a really important quality of life measure,” Mr Rattenbury said.
“If you’re a tenant, you shouldn’t have to live in a substandard home.”
When asked about Canberra’s worsening housing shortage and whether these regulations will further intensify the issue of renters competing with one another for limited homes, Mr Rattenbury said that is the very reason to follow through with this measure.
“Tenants don’t have a choice. Tenants can’t look at a house and say ‘oh, that’s poorly insulated therefore I won’t take it, I’ll look for something else’ because tenants are under pressure,” he said.
“And so that is a reason for the Government to step in and regulate this space because we know, we have seen, that landlords are not addressing it as a matter of doing it voluntarily…”
To assist in countering rental increases as a result of the regulations, the ACT Government has conducted a regulatory impact statement, which identified the most cost-effective implementation of the measure.
Mr Rattenbury said tenants would still be better off with this regulation in place through their lower energy bills due to ceiling insulation.
He said rents were increasing across the ACT, even without the increased costs of the insulation requirements.
“Right now, we are seeing landlords put the rent up anyway,” Mr Rattenbury said.
“They are getting exactly what they can out of the market and that is the way most people will operate – they will get the highest possible rent the market will allow. I don’t believe this will make a substantial difference.”
In addition, he said the ACT Government will invest in public housing energy efficiency improvements, such as replacing gas appliances with electric alternatives, to support the ACT gas transition by 2045.
As far as Mr Rattenbury is aware, this regulation is an Australian first.
- Read more: Draft ACT rental laws: REIACT ‘concerned’, lobbies say ‘good step’
- Read more: Call for better ACT rental standards
Former landlord to current tenant noticed ‘a huge difference’
Canberra resident Caitlin Aspden is currently renting an older home while her energy-efficient property is being built, and says she notices a difference in the comfort of the rental home, both in regards to heating and cooling.
She said she feels lucky her landlords are “lovely and supportive” but across winter, while actively heating the room with their reverse cycle air conditioner, the house just “doesn’t hold heat”.
“The difference is a renter doesn’t have control over being able to add that insulation if they desire – it’s down to the property owner,” Ms Aspden said.
Previously, she did rent out one of her homes and said since moving into her current rental, she now “knows better” and would have invested in insulation for her tenants.
“If you can’t afford to add it, you can’t afford to be a landlord,” Ms Aspden said.
“It’s one of the most basic things someone can do if they’re supplying someone’s home.
“When you know better, you do better. I wish I had that time again when we did have tenants. It’s only improving the housing stock in the ACT anyway, so everyone benefits.”
Executive director of Better Renting, Joel Dignam, has welcomed the government’s move, saying it’s the first step in ensuring renters in the ACT live in healthy homes.
Mr Dignam said this standard will “literally save lives” and renters have for too long had to suffer in freezing homes that fail to meet World Health Organization guidelines.
He applauded the ACT Government’s investment in monitoring and evaluation to ensure landlords comply with the new requirements, and hopes renters won’t have to “to go the ends of the earth to enforce their rights”.
“As this standard is rolled out, the government should continue to investigate other options to target substandard rental homes,” Mr Dignam said.
“While insulation makes it easier to keep warmth in in winter, efficient heaters are also important to get that warmth in the first place, and Victoria already has a requirement for such heaters. This is an option the ACT Government should keep an eye on.”
The ACT Council of Social Service (ACTCOSS) shared similar sentiments towards the announcement, CEO Dr Emma Campbell called it a “good start”.
Dr Campbell said ACTCOSS have consulted with the ACT Government on rental standards and call on them to commit to include draught proofing, double glazing or curtaining to ensure the benefits of ceiling insulation are fully released.
She also said: “It is also critical that there is an effective system for enforcing this regulation. Tenants should not be solely responsible for ensuring that their landlord does the right thing.”
“The ACT has the highest rate of low-income private rental households experiencing rental stress. As well as paying Australia’s highest rents, these households have also seen their electricity and gas bills increase by over 25 per cent in the past five years.”
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