Can the housing crisis and the climate crisis be solved at the same time?

Rob Preston, associate with Carter Jonas Cambridge, asks if the housing crisis and our climate commitments can be tackled at the same time.

The context

The UK faces two very pressing issues: a drastic shortage of housing coupled with increasing costs for those buying and renting and an urgent need to reach net zero.

The two are not inseparable: the built environment is one of the largest contributors to rising emissions; but construction is also innovating to not only mitigate, but reduce, pollution.

With the UK having entered a legally binding requirement to reach net zero emissions by 2050, there is a clear urgency for the nation to decarbonise. The 2022 UK greenhouse gas emissions, provisional figures published by the Department for Energy Security and Net Zero show that the residential sector emitted 56.4 MtCO2, accounting for 17 per cent of all carbon dioxide emissions in the UK.

The UK Government has set specific targets for sustainable building. The main target is for all new homes to be built to zero-carbon standards by 2025. Furthermore, the government has set a target for all existing buildings to be retrofitted to improve energy efficiency by 2030.

As well as sustainable building targets, the UK has also set ambitious renewable energy targets, including the aim to generate 40 per cent of its electricity from renewable sources by 2030.

What needs to be done?

Former Energy Minister Chris Skidmore’s recent Net Zero Review sets out detailed recommendations of specific measures which should be adopted by the Government and policy makers to help to achieve the Net Zero requirements. Key priorities include all new homes being off the gas grid by 2025, the widespread installation of heat pumps on both existing and new homes and a priority on improving insulation within existing housing stock – ‘the cheapest energy is the energy that we do not use.’

The priority must not just be on improving the standards of new homes; there are opportunities to improve the energy efficiency of existing housing stock (and taking homes off the gas grid). This a priority as, if current trends continue, 92 per cent of emissions in England will come from existing housing compared to a lower 12 per cent from the building and running of new homes, according to research from Ecological Economics, November 2021. Therefore, as major landlords, affordable housing providers will play a key role in decarbonising housing.

The Net Zero Review also makes it clear that building homes to ‘business as usual’ standards will fail to achieve emissions requirements. Forward-thinking developers are already leading the way by building homes off the gas grid and there is a growing commitment by the industry to build homes fit for the future, which go above and beyond standards required by the current Building Regulations.

What are the key challenges to address?

Regulations and policy requirements could be clearer and more prescriptive so that long-term investment decisions can be made with greater clarity. For example, there is still a lack of clarity on certain technical details of the incoming 2025 Future Homes Standard.

These measures should also be enacted through the right regulative regimes – planning is generally too early in the process to fully assess the carbon impact of design; whilst embodied carbon and emissions can be modelled and predicted, actual building performance can only be measured once buildings are operational following handover. Building regulations and minimum Energy Performance Certificate standards will need to play a central role.

The availability of suitable financial subsidies will be key to ensuring the costs of retrofitting and installation of insulation and renewables would be viable, both for the development industry in general and particularly for affordable housing providers. This is important in our current economic context with build cost inflation and supply chain issues. The Social Housing Decarbonisation Fund and Home Upgrade Grants are currently providing finance, and ideally, this would be kept under review and extended where possible in the long term so that sufficient funding is rolled out nationally.

The Government should also address the skills gap in the renewable energy sector to ensure that there is a skilled workforce required for the widespread installation of renewable energy technologies.

The housing and development industries will need to reject business-as-usual thinking regarding building sustainability. A survey published by the Housing Forum (November 2022) indicated that three out of four respondents from their membership base believe the industry does not have the requisite skills and knowledge to meet 2025 targets within the next 10 years. Therefore, there is a need to improve levels of understanding, skills and preparation within the industry.

Can the twin crises be resolved?

The combination of a housing crisis and climate crisis poses a great challenge for the building industry. However, there are plausible solutions. There is a need for greater commitment by the Government to resolve the current barriers to achieving a decarbonisation of the residential sector. There needs to be more regulatory certainty, greater public funding and a focus on addressing the skills gap.

Equally, landlords and developers must develop the knowledge and skills needed by the industry and take steps now to implement strategies to deliver net zero ready future homes.

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