How Condominium Owners' Associations Carry Out Energy Efficiency Building Renovations

A third of Baden-Württemberg's housing stock is in the hands of condominium owners' associations (COAs). A major proportion of COA buildings are in dire need of renovation and offer a large potential for energy savings to be made. In a current study, the Mannheim Centre for European Economic Research (ZEW) examined activities, motives and impediments of COA-led energy efficiency renovation projects in Baden-Württemberg. A particular focus was placed on the key aspects of project financing.

In addition to statistically evaluating the 2011 census on buildings and housing, the study entailed a survey among property managers who have accompanied COA-led energy efficiency renovations. The results of the survey suggest that in 2014, Baden-Württemberg's property management firms supervised comprehensive or partial renovation projects for 2.7 per cent of their housing stocks. Partial renovations, amounting to a value of EUR 2,500 per apartment, were six times more frequent than comprehensive refurbishments, amounting to an average of EUR 30,000 per unit.

By far the most important factor motivating COA members’ decision to carry out energy efficiency renovations is a desire to sustain and increase property value. Many of them, however, lack the financial means for comprehensive renovation. To overcome this obstacle, COA members can apply for association loans from the L-Bank as part of a funding programme launched by the state of Baden-Württemberg in 2012. A third of the surveyed property managers have already made use of this programme to fund energy efficiency renovation projects. Between 2012 and 2014, the renovation of around 6,000 condominiums was funded by loans worth a total of EUR 43 million. For the property management firms, the most essential component of the programme consists in securing the loan through a state guarantee.