Addressing the Energy Performance Diagnosis Dilemma for Small Housing Units

An Overview of the Energy Performance Diagnosis Issue

In France, there has been an increasing concern regarding the energy performance diagnosis (EPD) and its potential impact on small housing units under 30 or 50 square meters. As part of the Climate Law of 2021, the French government aims to prohibit rentals labeled as G – the worst rating in terms of energy performance – by January 1, 2025. This provision risks reducing rental availability, particularly for students and disadvantaged households amidst a housing crisis.

Established in 2006, EPDs classify properties from A to G based on their energy consumption and, since 2021, their impact on climate change. The Association of French Mayors argues that it is crucial to maintain this schedule to achieve Paris Climate Plan goals and fight against energy poverty. Over 10,000 people die each year in France due to poor insulation in their homes, and the World Health Organization estimates around 130,000 deaths annually in Europe are associated with inadequate living conditions.

Proposed Changes and Adjustments to the EPD System

The government’s directive involves simplifying the EPD system for smaller housing units. However, there is disagreement among industry professionals about whether these adjustments would significantly change the impact of EPDs on the real estate market. While some argue that a lighter version of the EPD is necessary for smaller spaces, others believe that doing so could disadvantage property owners who have already started renovation processes and delay those yet to begin.

  • Schedule Flexibility: Some elected officials argue that the January 1, 2025 deadline is too short for co-owners engaged in renovation processes to complete their work. They recommend more flexibility in terms of deadlines.
  • Calculation Rule Changes: Others oppose modifying the EPD calculation rules, fearing that manipulating the diagnoses could make property owners feel cheated.

Stakeholders’ Perspectives on Changing the EPD System

Differing opinions exist among various stakeholders regarding proposed changes to the EPD system and its impact on small housing units:

  • The National Federation of Real Estate: The organization’s president, Loïc Cantin, assures that adjustments would not profoundly change the impact of EPDs on the real estate market but points out that the January 1, 2025 deadline constitutes a total legal uncertainty.
  • The French Building Federation: President Olivier Salleron believes that the Climate Law was passed without consultation and now requires loosening restrictions by creating a lighter version of the energy performance diagnosis for smaller spaces.
  • The Interprofessional Federation for Real Estate Diagnostics: This group acknowledges the need for adjustments for small spaces.
  • Sidiane, the Interprofessional Union for Real Estate Diagnostics: In contrast, President Jean-Christophe Protais opposes manipulation of energy performance diagnoses, which could lead to an unfair advantage or delay in renovation processes for property owners.

Finding the Balance for Energy Performance Diagnosis Reform

As the January 1, 2025 deadline approaches, the French government faces the challenge of addressing concerns surrounding the EPD system for small housing units. Striking a balance between simplifying the process for such spaces and protecting both tenants and property owners is crucial in maintaining rental availability and achieving Paris Climate Plan goals. Proper consultation, consideration of various stakeholders’ perspectives, and adequate measures are necessary to find a balanced reform that can sustainably address the challenges posed by energy inefficiency in France’s real estate market.