Building-Bound Financing for Owner Occupiers within Condominium Associations in the Netherlands An ex-ante policy analysis

With the adoption of the Kyoto protocol the first step to slow down global warming was taken (UNFCCC, 1998). The little impact of the protocol resulted in the origin of the Paris agreement, wherein drastic cuts in fossil fuel use are prompted (UNFCCC, 2016). In the Netherlands, the large majority of the approximately 7 million dwellings is making use of natural gas (Sociaal-Economische Raad, 2018b, p. 30). By 2050 the use of natural gas has to be reduced to nearly zero (Ministerie van Economische Zaken, 2016). The Dutch housing stock is in need of an increased performance to be able to eliminate natural gas. However, the majority of households is not affluent enough to invest in the modifications needed for increased performance (Prins & De Boeck, 2018). Funding is required to reach the 2050 goal within the Dutch housing stock. One seventh of the Dutch housing stock consists of condominiums: buildings with multiple dwellings owners and a joint responsibility for the shell and common areas (CBS, 2016). The owners are by law member of a condominium association (CA) (art. 125 sec. 2 BW Boek 5), which has an annually meeting for decision making with respect to the common areas. The joint responsibility affects the process to increase the performance of the building (Van der Waals, 2015). Moreover, funding is often the bottleneck in that process (Boendermaker et al., 2018; Paradies et al., 2017; Van der Waals, 2015). Although there are existing funding tools to fund energy efficiency retrofits (ACE Retroffiting, 2018), these are not intended for or used by condominium associations (Van der Waals, 2015). There are several types of barriers at the basis of the few energy efficiency retrofits of condominiums The Dutch government has set the goal for the Dutch housing stock to be independent of gas by 2050. The funding for the needed energy efficiency retrofits is a bottleneck in the process. Owner occupiers within condominium associations come across many barriers in the application process for funding. One of which is the lack of a well suited funding mechanism. If implemented right, building-bound financing can be the solution to the funding problems. Seeing as it is a non-existing type of funding. The following research question was used: What is needed for building-bound financing to be an operable funding for owner occupiers in Dutch condominium associations to support energy performance retrofits? With use of the Governance Assessment Tool and a stakeholder analysis, the current situation of condominium associations with respect to sustainability policy and funding are analysed. From there backcasting is used to depict what changes are needed for successful implementation of building-bound financing for owner occupiers in condominiums. A institutional structure along with a list of coordination problems is provided, to depict what is has to be arranged for building-bound financing. It was found that the problem entails more than a new funding mechanisms is able to solve. Furthermore, it was found that an opt-out option for funding is also an option for the problem. Further research is needed into the operation of the structure and the societal support for it.