Brochure cash recommendations_final21112012

Guide for EU decision makers and Managing Authorities
in the frame of Cohesion Policy 2014-2020
Elaborated on the basis of CASH output documents
CASH Final Conference, November 2012

Lead Partner

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Authors:
Julien Dijol (Policy Analyst, CECODHAS Housing Europe), Sophie Moreau (CASH Coordinator, City of Echirolles), Stéphanie Abrial
(elected ofﬁcial, City of Echirolles), Stéphane Durand (Head, Sustainable Development department, City of Echirolles) and CASH Techni-
cal team

Disclaimer:
The sole responsibility for the content of this report lies with the authors. It does not necessarily reﬂect the opinion of the European Union
and of URBACT Secretariat.

CASH / POLICY RECOMMENDATIONS – NOVEMBER 2012

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TABLE OF CONTENT

EXECUTIVE SUMMARY 5
INTRODUCTION 6

BETTER MONITOR LOCAL NEEDS AND RESOURCES
AND FAVOUR LOCAL GREEN ENERGY MIX 7

Recommendation 1: adapt the energy production systems to the local specificities
and favour green solutions 8

Recommendation 2: make affordable housing the core of local energy production
and distribution grids 9

Recommendation 3: strengthen the local human capital 11

DARE CITIZENS’ EMPOWERMENT AND PARTICIPATION
OF CIVIL SOCIETY! 13

Recommendation 4: strengthen the participatory approach within the cohesion
policy 14

Recommendation 5: use EU funds to enable the participation of tenants in all
stages of sustainability programmes in the field of social housing 15

PROVIDE CLEAR AND STABLE FINANCIAL OPTIONS 17

Recommendation 6: set up long term large-scale energy efficiency funds
accessible at local levels 18

Recommendation 7: create intermediary bodies that will coordinate energy
efficiency programmes and help social housing deal with energy companies 20

STRENGTHEN THE SKILLS OF LOCAL AUTHORITIES 21

Recommendation 8: use EU structural funds to provide technical assistance
to develop long term sustainable social housing programmes 22

Recommendation 9: create local clusters on sustainable social housing 24

CONCLUSION 25

PARTNERS CONTACTS 26


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City Hall of Echirolles where the kick-of f meeting of the CASH network was held in September 2010.


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EXECUTIVE SUMMARY
CASH (Cities’ Actions for Social Housing) is a network of 11 partners led by the city of Echirolles in France (10 cities-
Utrecht-The Netherlands, Tatabanya-Hungary, Sonderborg-Denmark, Les Mureaux-France, Brindisi-Italy,
Bridgend-UK, Frankfurt-Germany, Yambol-Bulgaria, Eorda-Greece, Echirolles-France and one region –Rhône-Alpes
Regional Council).

The ambition of the CASH project is to propose new solutions and promote new policies for the sustainable renovation
of social and affordable housing in the European Union.

The network has organised local and transnational thematic seminars to exchange experiences, analyses barriers
and collect good practices on issues such as the legal framework related to refurbishment of social housing, the
involvement of citizens, the technical and financial aspects of energy efficiency investments. From those technical
seminars, the CASH network has proposed some policy recommendations in support of the EU work done in the
frame of the Cohesion Policiy 2014-2020 to make the best use of the new structural funds to favour the “greening” of
social housing. This brochure intends to make the link between local on-the-ground obstacles and solutions and EU
policies.

The following are the 9 main EU policy recommendations from CASH, which are divided under 4 categories, which
also corresponds to overall objectives.

BETTER MONITOR THE LOCAL NEEDS AND RESOURCES

1. Adapt the energy production systems to the local specificities and favour green
solutions
2. Make affordable green social housing the core of local energy production and
distribution grids.
3. Strengthen the local human capital

DARE CITIZENS’ EMPOWERMENT !

4. Strengthen the participatory approach within the Cohesion Policy
5. Use EU funds to enable the participation of tenants in sustainability programmes in the
field of social housing

PROVIDE CLEAR AND STABLE FINANCING OPTIONS

6. Set-up long-term large-scale energy efficiency funds accessible at local levels
7. Create intermediary bodies that will coordinate energy efficiency programmes and
support social landlords negociating with energy companies

STRENGTHEN THE SKILLS OF LOCAL AUTHORITIES

8. Use EU structural funds to provide technical assistance to develop long-term
sustainable social housing programmes
9. Create local clusters on sustainable social housing

Those recommendations are addressed to the Managing Authorities of EU structural funds but also to EU policy
makers in the fields of energy, housing, urban renewal.


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INTRODUCTION
“We know how to limit greenhouse-gas emissions. We have a good sense of the costs — and they’re manage-
able. All we need now is the political will 1”

The economist Paul Krugman (1) gives in this sentence the sense of feasibility and urgency linked to the necessary
energy revolution that the world has to trigger if we want to avoid the disastrous consequences of climate warming and
the end of the natural resources upon which the current economic system is dependent. What P. Krugman however
did not capture is that although we might know in theory how to limit greenhouse-gas emissions, we still struggle to
turn theory into practice(s), in our case to turn cities into engines of sustainability.

Housing is a good example of this discrepancy. Despite all the knowledge accumulated on how to perform energy
refurbishment of existing housing, things are not moving as fast as they should to bridge the gap between the EU
objectives on energy efficiency and the current path. In the meantime, the percentage of households living in a situa-
tion of energy poverty increases and this require urgent action. Social housing represents 12% of European housing
stock and 20% of CO2 emissions. Social housing is therefore a huge potential contributor to the massive
energy savings we need to make in the next decades.

In this context we do not only need political will as Krugman suggests; We also need a real expertise in technical and
non-technical aspects – legal, financial, stakeholders’ involvement, systemic project management -, which in the case
of sustainable housing, and in particular of sustainable social housing, means an integrated know-how based on vari-
ous local experiences. This would give decision makers, at various levels, the information about the different options
they have in order to make cities better places to live in ,through actions in favour of sustainable and affordable social
housing.

The CASH project has put together local experiences based on field reality and has tried to build an integrated know-
how about sustainable social housing in an urban context. This know-how should be supported and deepened through
the action of the European Union (EU). Not that a single approach about the challenges of sustainable social housing
in cities can be dictated from Brussels. But the EU is the most suitable platform to collect and disseminate this know-
how. It is also a relevant level of policy, since EU decisions might have a huge impact on local practices.

In this document we have therefore translated the local experiences and knowledge into policy recommenda-
tions for EU decision makers but also into recommendations for the Managing Authorities of the new Struc-
tural Funds. Indeed the EU structural funds (also known as the EU Cohesion Policy) are seen as a major (if not the
main) source of funding to put the EU back on track to reach the energy efficiency objective. But it has of course a
wider role in terms of economic and social development of regions and communities. However the recommendations
will not be limited to the Structural Funds as other pieces of EU legislation have an impact on the way cities build
sustainable social housing.

The recommendations are put under 4 sections which are meant to correspond to the elements of a successful
programme of City Actions for Social Housing (CASH) and which are reflected in the local action plans set up by each
CASH partners : the skills of local authorities, the knowledge about local energy needs and resources, the forward
looking financing options, the innovative involvement of users and residents. There is no order of priority among those
elements, since we believe that they all are necessary ingredients of success. Each section also coincides with
transnational seminars organised within the CASH project during which local practices, barriers and solutions have
been exchanged.

(1)- Paul Krugman, winner of the 2008 Nobel Memorial Prize in Economic Science, in The New York Times Magazine, April 7th 2010


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Better monitor local needs and
resources and favour local green
energy mix

• Recommendation 1: adapt the energy production systems to the local
specificities and favour green solutions

• Recommendation 2: make affordable housing the core of local energy
production and distribution grids

• Recommendation 3: strengthen the local human capital


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BETTER MONITOR LOCAL NEEDS AND RESOURCES
AND FAVOUR LOCAL GREEN ENERGY MIX
The energy needs and the specificities of territories in terms of energy sources can greatly vary. Sometimes
potential local energy sources are not identified. And very often one does not know where the energy comes
from. But what is common to all territories is that all have a potential in terms of local energy production,
which only needs a bit of know-how to be exploited.

Sonderborg-Denmark 5th CASH Transnational Thematic Seminar on Energy production, May 2012Source: CETE, Lyon, France, June 2012

Recommendation 1: adapt the energy production systems to the
local specificities and favour green solutions
The scale of the problem
Developing a strategic energy planning to get to a low or zero carbon local economy is what many cities are aiming
for. Some are already putting the elements in place such as green district heating in urban areas, heat pumps in rural
areas, biogas plants, retrofit of houses, electrical cars… But many cities also believe that this is out of reach, for techni-
cal, financial or cultural reasons. Others are hesitating between different energy options for the future: opting for an
energy which will require relatively low upfront investment (low fixed costs) –after initial industrial development- but
which cost a lot to the final consumer (high variable costs), for instance in the case of fossil fuel based energy, or opting
for an energy which will require high initial costs of investments but whose final price for the consumer will be stable
and much cheaper, in the case of locally produced and renewable energy. The EU through the various pieces of legis-
lation linked to energy will have a great impact on this kind of choice for cities and should favour the elaboration of
green Energy Strategy by municipalities and regions.

Legal or political requirement
The implementation of the Energy efficiency Directive by the Member States (article 3a on the plan for the energy
efficiency roadmap and article 4 about the exemplary role of public social housing) should take into account the effec-
tiveness of some specific technologies such as the Green Combined Heat and Power (CHP) providing ‘decentralized
power’ and favour diversified local green energy sources. Regions and cities must be free to choose the most cost
effective technological options but incentives should be given to use the greenest option, locally available and to
promote the development of green Strategic Energy Plans.

Regions and cities should also make use of the EU Structural Funds to finance those investments in local green
energy production under the investment priority “supporting shift towards a low-carbon economy” (article 5 of the draft
ERDF regulation). However over reliance on a single source of energy should be avoided to ensure security of
supply and stability of price.


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Experiences from CASH Partners
Sonderborg strategic energy planning and Fjernvarme green district heating company

Sonderborg Fjernvarme green district heating company is a consumer owned non-proﬁt utility company, where each
of the 9000 consumers has a vote. It produces energy with a production plant using green energy sources and distrib-
utes the energy, covering a large part of the needs of social housing.

• Its waste and wood chip incineration Heat Power station (CHP)
http://www.sonderborg-fjernvarme.dk

It evolved from fuel oil in 1963 -with district heating producing the energy and pumps distributing the energy -, to
fuel oil and N-gas and waste incineration in 1985, to fuel oil and N-gas and a combined heat and power station
(cogeneration CHP) powered with waste incineration in 1996 and with waste, geothermal and wood chip boilers
in 2012.

• Its geothermal plant
http://www.geothermi.dk

• Its Sun Park Vollerup Solar thermal park producing 1 900 MW/year with its 6000 m2 solar collectors,
4000 m3 storage tank and its 2 boilers, supplying 1000 households.

Recommendation 2: make affordable housing the core of local
energy production and distribution grids
Any credible plan for a sustainable energy future in cities should encompass housing and in particular social housing.
Social housing units are blocks predestined to have cogeneration CHP central systems – concept of “Decen-
tralized power” and district heating can be conceived with green co-generation. Another key element is to allow the
planning of connections between district heating through ‘District heating net map’. Producing energy closed to the
point of consumption, i.e the local level, allows, in particular, to avoid energy losses in transmission and the high costs
of transmission which may represent the bulk of the increase of energy prices and may prevent drops in bills corre-
sponding to consumption.


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CHP motor 5 electrical kW SENERTEC CHP motor 50 electrical kW CHP motor 611 electrical kW, 800
‘Dachs’ machine, Frankfurt, Germany. managed by Social home owners thermal kW power gas engine for
association Rödelheim, Frank- district heating network, Sossen-
furt, Germany. heim, Frankfurt, Germany.

Source: Utrecht-The Netherlands 1st CASH Transnational Thematic Seminar on Technological development, January 2011

European directives and funding should take into account, that social housing building blocks and areas which
need to be modernized may be the nucleus of local energy distribution grids, thus giving better practical and
economic conditions for the implementation of green cogeneration units and transforming the supply from fossil fuels
to renewables.
The EU directives about energy performance of buildings (EPBD) and energy efﬁciency (EED should take into account,
that the modernization of social housing may be a main structural factor of implementing savings of energy
and cogeneration and ‘greening’ the energy sources.

Experiences from CASH Partners:
Green co-generation for social housing blocks and its networking with green district heating, Frankfurt am
Main.
In the case of Frankfurt am Main, 2 billion are spent eachyear for energy, mostly imported from other countries (e.g.
Russia). More than 50% comes from natural gas, 23% from coal and 7% from oil. The question raised is how to keep
this money in the city and create green jobs. Key components are to: use as much green energy of the region
- biomass from bio-wastes, solar energy, wind power -, shift towards green co-generation and reduce the demand
- knowing that around 50% of the actual demand for heat, electricity and transportation is linked to behaviour. To
achieve this, Frankfurt is working on its Energy Plan 2050. The following key steps are being analysed:

• Understanding from where the energy comes from
• How to transform this and possibilities – bottom-up estimation.

Barriers foreseen are the mentality and views to change, as well as, inappropriate legal framework with lot of laws to
change (see 2nd CASH transnational Thematic Seminar on Legal Framework, Brindisi-Italy, April 2011).

Decision making tool: renovation in a portfolio strategy-Utrecht,Netherlands
The Dutch housing corporation Mitros uses a decision model for its housing stock, based on return on investment from
EE renovation. The principal goal is to try to raise the value of the housing stock. Next to the market value of the
houses, it is also the value for renting them out and the value for the quality of living (‘social return’). Return on invest-
ment gained through increased life span and value of the house, is a management criterion too. The returns from
renovation can be summarised as follow:

Making such future oriented calculations urges house owners, tenants and land-
lords, to search for the most efﬁcient and adapted techniques and technologies
for energy renovation. With such model, a rational decision can be made
between “Continuation of Utilization”, “Disposition”, “Renovation” or “Demolition
/ rebuilding”.

Source: Frankfurt am Main energiereferat


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Recommendation 3: strengthen the local human capital
Scale of the problem
The lack of specific technical knowledge and training among the different groups of energy retrofit actors (workers,
tenants, social housing professionals…) is one of the most important obstacles to the success of actions towards
sustainable social housing.
The EU can help to bridge the gap in terms of human capital by investing into an integrated approach that will
combine the infrastructure aspect and the human capital aspect.
The situation in the past has been very often characterised by a fragmented approach of the question of sustainable
energy: too often Operational Programmes of the Structural Funds only target the infrastructures aspect without
caring about the human skills needed to make those energy infrastructures function. This may lead to what has been
called a “rebound effect”, where efficiency improvements are offset by behaviour changes, such as increasing demands
for cheaper energy. EU projects have clearly shown the potential of behavioural changes 2.

Political or legal requirement
Managing authorities should use a significant part of the European Social Fund to support projects whose main
or ancillary activities consist in training workforces on sustainable energy related professions (installers, certi-
fiers, engineers, workmen able to carry out deep retrofitting of building etc.).

Example from CASH partners
Echirolles, France

Developing synergies between stake-
holders is a major issue tackled by the
City of Echirolles, France, in its public
and private EE renovation projects.
The following diagram synthesises
the synergies favoured among key
stakeholders to optimize the time-
frame, the cost, the efficiency and the
sustainability of such projects.

EUC Syd, Sonderborg, Denmark
The regional technical college EUC Syd, with 23 000 students annually, from secondary school to pre-university levels
has a sustainable perspective. It has developed core competencies in energy efficiency (EE) and energy consump-
tion, as well as in strategic energy planning. It has an active role in contributing to the carbon neutral 2029 regional
development and presents itself as a Zero academy.

EUC Syd is training staff from the municipal institutions in how to be more sustainable, more EE and more critical
with energy consumption. 140 municipal staff, in particular staff responsible of building management and mainte-
nance, were trained. In cooperation with the Danish Institute of Technology, it has trained 150 energy counsellors
– screening buildings for energy renovation on a sustainable basis. It has also trained people in contact with
tenants to incentivize tenants.

Shared enery skill center in les Mureaux
The city of Les Mureaux plans to set up a special energy training facility for craftsmen.
The city has identified a shared interest with several training / research organizations in the sector, for a common
technical platform. The project partners will realise a new building with the newest energy efficient technologies so that
the technical solutions of the building or equipment can be used for educational purposes and training.

(2) http://www.energy.eu/publications/a03.pdf


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Source: Project Zero - for creating Zero Carbon Sonderborg, Denmark, http://www.projectzero.dk/


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Dare citizens’ empowerment !

• Recommendation 4: strengthen the participatory approach within the
cohesion policy

• Recommendation 5: use EU funds to enable the participation of tenants
in all stages of sustainability programmes in the field of social housing


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DARE CITIZENS’ EMPOWERMENT !
Involving citizens and civil society is challenging for any kind of policies. We indeed often hear several
arguments against such an involvement: ‘The man on the street has not the sufficient expertise to take
reasoned decision’. They are also selfish and will not take decisions that won’t bring them an immediate gain.
They also might be aware of the necessity to take action for the wider good of society but not in their
backyard. But behind those arguments, the question of timing and money arise as involving citizens adds to
the timing of project and requires financial resources. No investor is usually keen on “wasting” time and
money for this. However, they really should change their mind looking at the results of successful methods of
involving citizens that have been used by the CASH partners. Involving citizens not only increases the
acceptance of renovation programmes, but it increases the efficiency of those programmes, by changing the
daily behaviours towards energy consumption and thus achieving up to an extra 30 % of energy savings!

Bridgend-UK 4th CASH Transnational Thematic Seminar on Citizens’ involvement, January 2012

Recommendation 4: strengthen the participatory approach within
the Cohesion Policy
The scale of the problem:
Insufﬁcient cooperation and communication problems between different departments of the government when prepar-
ing the national strategies, lack of involvement of energy stakeholders at the regional level when preparing the opera-
tional programmes…, those situations are common in many member states and regions.

Legal or political requirement:
Member States and members of the European Parliament should agree on article 5 of the draft Common Provisions
Regulation about the partnership principle which requires Member States to involve relevant partners at all levels
of programming. The European Commission should support the development of a database for good practices and
guidance to help Member States and Managing Authorities in that ﬁeld.

Experiences from CASH partners:
In Wales the “ARBED – Strategic Energy Performance Investment Programme” was established in 2009 (using
European Regional Development Funds) with an objective of improving EE of a minimum of 4800 homes in Wales by
2015. The Welsh government will try to continue this model by including relevant actors in the preparation of the 2014-
2020 Structural Funds programming period. A European Programmes Partnership Forum 2014-2020 (EPPF) has
been indeed established to discuss the development of any future European funding programmes in Wales.

The EPPF will provide advice and guidance to Welsh Government Ministers, on options and proposals for future Euro-
pean programmes in Wales. Members of the EPPF are expected to consult and communicate with their constituencies
to broaden discussion and share information. The Forum is expected to meet quarterly.


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Recommendation 5: use EU funds to enable the participation of
tenants in all stages of sustainability programmes in the field of
social housing
Scale of the problem:
They are usual obstacles to the involvement of tenants in the co-conception of social housing energy efficient
renovation:

• existence of reluctance among the different stakeholders to involve citizens in the planning and design phases.
Social landlords and architects often consider that tenants are not construction experts and that it will represent
more work to involve them;
• citizens’ involvement is not a top priority for social landlords and financing bodies ;
• no dedicated time and budget for the involvement of citizens in the EE renovation project cycle;
• long time frame of renovation process as opposed to tenants’ time frame. When tenants are informed too early they
get frustrated because of the long period left before the renovation (sometimes up to 5 years).

However, as stressed many times by the experience of CASH partners, citizens’ involvement is important because:

• they are directly concerned since it affects their house in which they spend a great part of their life;
• by involving owners and tenants, a sense of ownership and belonging is developed;
• a greater understanding of what happens helps the renovation process and the development of appropriate
behaviours.

It has been clearly demonstrated that the adherence of inhabitants requires a participation process of the residents
before-during-after the EE renovation, which means during the different programme phases: planning, design, reno-
vation, occupation.

This is in particular a guarantee that the potential energy savings will not be jeopardised by the inappropriate behaviour
of the tenants owing, in a huge part, to their lack of participation, as highlighted, as well, by the SHELTER project 3.

EU regulation and Managing Authorities’ criteria should favour citizens’ involvement in the co-conception of the
social housing energy efficient renovation (SHEER) to ensure a design coherent with the cultural behaviour
and the optimal use of the EE equipment and systems by tenants, thus favouring the optimum functioning
of renovated buildings and the reduction of energy consumption.

Managing authorities of the Structural Funds should build upon the experience of URBACT II cities that have devel-
oped local action plans (LAP) which use the involvement of residents as a way to enhance the quality of policies.

Synergies with other EU networks such as the Covenant of Mayors should be supported.

Under article 7 of draft ERDF regulation, member states can propose a list of cities that will directly manage the funds
for sustainable and integrated urban projects. Having participated to an URBACT II project with emphasis on citizens’
involvement (such as CASH) could be one criterion when establishing the list of cities that can directly manage the
Funds. Eventually, the Structural Funds should support practices that reinforce the participation of residents to the
energy savings measures such as the Energy Ambassadors 4.

Communities First (a Welsh Government funded programme to reduce poverty), has assisted in the develop-
ment of a training programme with Valleys to Coast V2C social landlord to involve citizens in devising community
access plans. Voluntary community champions were identified and given the skills in design, planning and communi-
cation. Even though the experience was not in the co-design of the EE renovation process, it allowed emphasizing
key principles of Community engagement, such as:

- establishing driving motivations
- exploring wider options
- clarifying and reconciling options and motivations
(3) http://www.shelterproject-iee.eu/ (4) www.energyambassadors.co.uk


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- acknowledging geographical / spatial / socio-economic differences
- tackling the issue of information asymmetry (unknown knowns, unknown unknowns…blind, secret and missing
knowledge) and building trust
- testing perception against.

Echirolles, France
In Echirolles, citizens are involved since the beginning of the process, as illustrated hereafter, but mainly through
consultation and information, except if tenants contribute to the financing of the renovation through rent increase:

• Planning phase:
- for the emergence of the renovation idea through meetings and ‘diagnosis while walking’.

• Design phase:
- at the reception of the funding agreement through an information meeting by the SHO;
- during the elaboration of the pre-program of work by SHO through an individual survey focused on comfort
aspects;
- at the restitution of survey results and of pre-programme of works through an information meeting during
which works related to comfort are debated;
- in the case of requesting tenants to contribute to the financing of the renovation, renovation scenarios
prepared by SHO and designers are presented and the negotiation is focused on the costs; the renovation
methodology is presented by SHO and validated during a meeting with tenants.

• Renovation phase:
- the undertaking of the renovation works is presented by SHO and a follow-up of works is achieved through
regular meetings at the foot of the building, to analyse malfunctions and disturbances and works’ evolution.

• Occupation phase:
- the energy consumption monitoring for a good control of operating costs is performed by the SHO and
results are shared through a tenants’ committee or through quarterly meetings. Individual information is
sent by mail by SHO to disseminate good practices;
- the control of operating costs and charges is done during an annual meeting between SHO, tenants’ union
and tenants association / representatives
- first monitoring results are presented at a public meeting coordinated by the SHO and the city.

On the basis of this analysis, the OPAC38 and SDH social landlords have agreed to integrate into their specifications
a genuine involvement of tenants in decision-making in the different phases described.


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Provide clear and stable
ﬁnancing options

• Recommendation 6: set up long term large-scale energy efficiency
funds accessible at local levels

• Recommendation 7: create intermediary bodies that will coordinate
energy efficiency programmes and help social housing deal with
energy companies


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PROVIDE CLEAR AND STABLE FINANCING OPTIONS
Financing sustainable social housing, at a time of scarce public resources and low interest from the private
sector due to the rather low rate of return on investment, is a real challenge. However the experience
accumulated around Europe gives clear indications about what needs to be put in place to take up this
challenge.

Frankfurt am Main 3rd CASH Transnational Thematic Seminar on Financial Instruments, September 2011

Recommendation 6: set up long term large-scale energy
efficiency funds accessible at local levels
The scale of the problem:
It has been estimated that the comprehensive energy renovation cost for a dwelling, is in average 23,000 Euro (in
France). In order to reach the European CO2 reduction goals for housing, approximately 70 to 180 million housing
units in the European Union (EU) need to be renovated according to low energy consumption standards. This would
require from 1,500 to upwards of 4,000 billion Euros of energy refurbishment investments in the residential sector
before 2050, which represents roughly 27% of the energy consumption in the EU.

How can this be achieved knowing that energy costs should be reduced by a factor of 3 to 4 and that 2/3 to 3/4 of the
renovation costs are often dedicated to general maintenance measures?

The trend is to cover these costs in the long term by the added value of the building and in the short term through
higher rents. However, it is often not possible in the case of social housing, to raise the rent and certainly not
more than the expected reduction in heating costs. Thus, additional financial instruments are required.

Limited financial capacity for co-funding planned investments makes necessary to look for leveraging public funds.

This was the reason why the European Commission introduced in 2007 a new mechanism: Joint European Support
for Sustainable Investment in City Areas (JESSICA)5. Its main financial innovation and benefit becomes obvious at the
level of projects to be funded: instead of paying out capital as a grant, capital is revolving and can therefore be rein-
vested in new projects (enabling the “recycling of funds”). JESSICA was therefore launched with a view to providing
new opportunities to Managing Authorities responsible for the implementation of Structural Funds in line with Opera-
tional Programmes agreed for the current programming period.

However, supporting the emergence of innovative local / regional financial instruments, scaling down the EU level of
intervention, is also a terrain need.

A question remains, however, about the suitability of such financial engineering instruments in the case of large scale
and long term energy investments such as the renovation of large real estate and in particular social housing renova-
tion where the profitability is limited.
(5) http://www.eib.org/attachments/documents/jessica_horizontal_evaluation_study _udf_en.pdf


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Member states and members of the European Parliament should support the mainstreaming of financial engi-
neering instruments as proposed by the European Commission (art. 56 of the Draft Common Provisions Regula-
tion), as well as the development of innovative local / regional financial instruments. Consequently part of the
ERDF technical assistance funds should be dedicated to setting up those instruments, in particular, the revolving
funds similar to JESSICA urban development funds.

Experiences from CASH Partners:
The Danish Building Fund:
Started in 1966, this national fund is fed by rents once the loans made by the “Local Social Housing Department”
(social landlord) for the construction of the building have been paid back. The state supervises this self-financing
national fund, through a board with 9 elected members.

Rents cover the following costs: improvement costs: 21%, common costs (elevators, green areas…): 17%, Local
Social Housing Department: 28%, Loans or National Building Fund (depending if building loans are paid back or not):
20%, Reserve (to repair the apartments): 14%.
This means that 20 % of the rents go to the National Building Fund, once the building has been paid. In 2010, the value
of the Fund was of 9 000 000 €.
To cover renovation investments: 50% of the investment comes from the National Building Fund (upon its agreement)
and 50% from a loan.
However: Local Social Housing Department has no access to green loans and is obliged to take normal loans ; the
procedure is not simple and it takes time to obtain the money.

National rent scheme and scoring system, Netherlands
In the Netherlands, the maximum rent of social housing is set by a national scoring system. The higher the quality of
the house, the higher the rent can be. A recent adaptation of the system has included the energy label of the house in
the scoring methodology, to motivate social landlords to invest in energy improvements.

If landlords improve the EE of the house, a higher rent may be charged. On the other hand, if no energy improvement
is made until 2014, the scoring will be lower and rents reduced. The scoring for the energy label varies from 0 to 44
points and can be a considerable part of the total score of an apartment or house.

Green Deal, UK
In the Energy Act of 2011, the UK Government has announced a “Green Deal”, which intends to reduce carbon emis-
sions from buildings, starting in October 2012 with the following characteristics:

Every British home and business will be able to install packages of energy saving technologies, such as insulation, at
no upfront cost. Repayments will be made over time out of the energy savings. A revolving fund will be installed. Strict
standards will be put in place to protect consumers.

A new requirement on energy companies is to provide support, with an estimated value of £1.3 billion a year, to ensure
equal access to the Green Deal – regardless of income or of the type of house. Additional help will be available to
ensure the fuel poor get better boilers and fix draughty homes while subsidy will also be provided to help tackle homes
that are hard to insulate, including solid wall homes.
The Green Deal is expected to kick start around £14 billion of private sector investment over the next decade. It could
support at least 65,000 insulation and construction jobs by 2015.

KfW programs, Germany
In Germany the KfW-development bank has been operating funding programs for energy and modernization of
residential buildings for more than 15 years. Their funding tools are soft loans and direct subsidies (Zuschuss). There
is a wide range of programs for reducing heat demand, for promoting renewable energies and for the modernization
of energy sources and dwellings. KfW’s main rule is that the higher the savings, the lower the interest rate or the higher
the subsidy. Additionally, the services of a consulting body to determine savings potentials and to follow-up the works
to ensure good results, is also funded. Over the last year, KfW has integrated funding for co-properties (Wohnei-
gentümergemeinschaften). On the one hand, KfW’s pro grams are sometimes criticized because they tend to change
rather rapidly. On the other hand, they provide several guidelines for achieving good results and savings, thus contrib-
uting to the good use of State money. From April 2012, heritage-protected buildings can also be financed. KfW’s
programs have been evaluated several times for their effectiveness in reducing CO2 emissions and improving living
conditions.
www.kfw.de


20

Recommendation 7: create intermediary bodies that will
coordinate energy efficiency programmes and help social
housing deal with energy companies
Scale of the problem:
Third party financing is a financial mechanism involving the financing by an outside energy service investment company
(ESCO) or by an energy provider. These investments are then paid off using the cost savings achieved. The investor
installs efficient technology and maintains the system to make sure energy is saved. This might, for example, involve
provision of the heating equipment, fuel and maintenance, as well as energy saving measures or investments in reno-
vation operations paid back on energy savings. In some countries, as in UK, there are legal obligations which compel
energy companies to contribute to the EE renovation costs.

In Energy Savings Performance Contracts, the contractor (public or private, or a holding) proposes the owner meas-
ures that will produce measurable guaranteed savings, committing itself to reach the level of savings defined in the
contract. Projects are partly funded through energy savings and may result in future revenue for the owner.

The use of third party financing whereby the upfront investment for the refurbishment of a house is made by an energy
companies which is paid back through the savings made on the energy bill, is a promising financing option for sustain-
able social housing. However, in reality, it turns out to be complex to implement not only because of the difficulty to
guarantee the expected energy savings and because social landlords have not the same control over the EE renova-
tion process and need to build-up monitoring competencies, but also because energy companies would need (as any
private investor) large scale operations to recover transaction costs. In the housing sector, in particular social housing,
this is hardly the case.

As for the Structural Funds, third party financing should be considered as authorized co-financing although it
is not an expense paid by the beneficiaries (article 59 of the draft Common provisions regulation of the Structural
Funds).

As recommended by the CASH network, within the framework of the implementation of the Energy efficiency directive,
independent third party managing entities should be created to manage technical, financial and organisational aspects
and the monitoring of measures. They would act as facilitator between sociallandlords/coproperties’ owners and
tenants. The role can be taken by local/regional funds/foundations or energy service/supply companies or even
tenants organisations.

Tatabanya – Hungary: the reinvestment of Municipal power plant profit to finance heating modernization, as well
as the selling of Kyoto CO2 quotas. The district heating company, co-owned by Tatabanya municipality,is developing
several measures to support homeowners and co-properties’ owners in reducing their energy consumptionand reduc-
ing CO2 emissions:

• Development of a heating modernisation fund to connect households to the district heating network - from 1700 to
2400 Euros with a rate of contribution of 25-33% -. In the first twoyears, 10% of the targeted apartments have been
connected,counting for 31% energy savings;
• Measurement appliances setting on radiators
• Information and personal advice.
http://www.trf-kft.hu

Local financial instrument, Brindisi, Italy
In Brindisi, Italy, the public social landlord IACP (Istituto Autonomo Case Popolari) regulates its relations with tenants
through a mixed committee “Commissione di Gestione della Carta dei Servizi”, according to the charter “Carta dei
Servizi. Through municipal deliberation, it has been modified to allow the tenants’ Union to receive 30% of the rents
(of 30€ min.) for self-management, which could be used for improvements in agreement with the IACP. Discussions
are underway to include energy efficient renovation in the improvements.
http://www.unioneinquilini.it


21

Strengthen the skills of local
authorities

• Recommendation 8: use EU structural funds to provide technical
assistance to develop long term sustainable social housing programmes

• Recommendation 9: create local clusters on sustainable social housing


22

STRENGTHEN THE SKILLS OF LOCAL AUTHORITIES
Although the economic, social and environmental necessity of triggering the energy transition, if not revolution,
has gained a kind of consensus among the wider public opinion, there are strong inequalities in the capacity and
competence of the local level (in particular cities) to deal with that challenge. Gaining expertise and a strategic
vision for a sustainable future takes time and requires ideas and experience from elsewhere but also the support
from the EU in particular the EU structural funds.

Yambol-Bulgaria 6th CASH Transnational Thematic Seminar on SHEER Project management, September 2012

Recommendation 8: use EU Structural Funds to provide technical
assistance to develop long term sustainable social housing
programmes
Often referred to as a magical recipe to make successful policies although without being clearly defined, technical assist-
ance means, in our case, the use of EU funds (in particular Structural Funds) in order to:
• foster the administrative capacity of the beneficiary regions;
• provide the training of staff involved in Structural Funds implementation;
• put in place well-functioning monitoring and evaluation systems;
• foster information, communication and promotional activities related to the national strategies.

Technical assistance has therefore been mainly used by Managing authorities of the Structural Funds in the past to
increase their own competence in managing the funds (compliance with EU rules). But what is now needed is to use tech-
nical assistance to:

• ensure project promoters are aware and can access funds to help them set up a project;
• ensure Managing authorities can develop the necessary tools to write relevant calls for proposals in the field of
sustainable social housing (through needs analysis, consultation with energy practitioners) understanding the
systemic approach required for Social Housing Energy Efficient Renovation (SHEER) projects.

At the EU level, there are at the moment opportunities of project development assistance, in particular ELENA (European
Local ENergy Assistance)6 financed through the Intelligent Energy-Europe (IEE) programme. ELENA support covers a
share of the cost for technical support that is necessary to prepare, implement and finance the investment programme,
such as feasibility and market studies, structuring of programmes, business plans, energy audits, preparation for tendering
procedures - in short, everything necessary to make cities’ and regions’ sustainable energy projects ready for EIB funding.
Funds are currently available to support projects under this facility. Another project development assistance opportunity
has been recently developed through the yearly IEE calls for proposals on Mobilising Local Energy Investments (MLEI-
PDA)7. An important feature of MLEI is that it has an investment threshold of only 6M€ compared with 50M€ for ELENA -
EIB. The supported technical assistance for project development services is similar.
(6) http://www.eib.org/products/technical_assistance/elena/index.htm


23

However, the funding available under these facilities will not be sufficient to cover the needs and act at large scale. Techni-
cal assistance under the new Structural Funds – including the Integrated Territorial Investment ITI - should therefore
provide the same kind of services then project development assistance facilities, to facilitate their accessibility
by social landlords, co-properties and / or municipalities and to clearly explain the scale of operations for which
they are intended.

Project development requires in particular legal skills for the design and implementation of tendering processes. Many
possibilities do exist to use procurement rules to promote sustainability and an integrated approach: Green public procure-
ment (includes the cost of the life cycle of a product/service/equipment), framework contracts, build-design tender. Local
authorities are not always equipped to take the most efficient approach from a societal point of view.

Member states and members of the European Parliament should support the proposal of the European Commission
about the widening of activities for which technical assistance possibilities are foreseen in the draft common provi-
sions regulation (article 51).
Local authorities should be incentivized to use green public procurement procedures in particular when using the Struc-
tural Funds for sustainable energy programmes
An EU funded research priority may be the development of tools and instruments for a long term refurbishment strategy
on city level. Support is needed to develop capacity for these tasks.

Experiences from CASH Partners
Technical support can cover: Technical assistance for the certification process, accessing financial support and
helping draw up funding requests, as in France; energy measurements by universities, as in Denmark; development of
district heating by municipalities, as in Denmark and the Netherlands; use of smart metering to raise awareness, as in
Germany.

Capacity building and training vary widely, going from schoolchildren to scholars: in Denmark, National educa-
tional programme exist for primary schools, as well as regional educational programs for municipal staff, energy ambas-
sadors and teenagers; in Germany, teaching programmes exist in technical schools around the PassivHaus building,
including programmes for architects and builders.

(7) http://ec.europa.eu/energy/intelligent/faq/faq-energy-investments/index_en.htm#2.7


24

Renovation approach: Rhone-Alpes Regional Council energy renovation plan for social hous-
ing, France
Starting with the challenge of national EE targets set in the new French Environment bill ‘Grenelle 2’, of 80 000 renovations,
with an energy consumption performance level <150kWh/m²/year, CASH partner Rhône-Alpes Regional Council (RARC)
has adopted an ambitious regional energy renovation plan in favour of social housing, both public and private, for the 2011-
2013 period. This plan, built around the regional partnership between RARC, the French Agency for Energy and Environ-
ment Management (ADEME) and the regional association of social housing organisations (ARRA-HLM), will provide
technical assistance and financial support to public social landlords and co-properties.

Objectives of this plan are to generalise the target of high energy performance and to develop a project management
integrating a multi-criteria approach (architecture, ventilation, comfort, eco-materials, etc.). Energy requirements have
been set up so that flexibility and capacity of adaptation are guaranteed to operators.
www.logementsocialdurable.fr

Energy renovation of Bulgarian homes Programme of the Ministry of Regional Development
and Public Works, Bulgaria
In Bulgaria where the public stock has been transferred to private ownership characterized mainly by low income owners,
a special attention has been given to providing technical assistance to co-properties‘ owners. Indeed, in its Energy reno-
vation Program, the Bulgarian Ministry of Regional Development is offering the service of a project manager who:
• helps co-properties’ owners and associations preparing the indicative budget for the building renovation and
allocates the expenses amongst the owners;
• prepares information about the method of financing of each owner;
• assists in finding the technical documentation of the building;
• helps in founding the association of owners;
• assists in finding solutions for the insolvent owners;
• cooperates in the issuing of property sketch;
• makes clarifications; attends General meetings; fills forms;
• keeps in contact with municipality.

Recommendation 9: create local clusters on sustainable social
housing

Against the lack of local skills (i.e lack of expertise and training from local small and medium enterprises, but also from the
housing providers, the municipalities, etc.), one often suggests that a possible response is more competition among small
and medium enterprises (SMEs). However this might not be the most effective one. Indeed the clustering approach,
favouring the development of special linkages and synergies between local stakeholders involved in a specific field - as
research, industry, municipality, social and private landlords (in the case of EE renovation -, is an efficient tool to help
developing these skills. Through different types of linkages, fromknowledge spill-overs to the use of a common labour
market, clusters could through synergies decrease the cost of research and development and decrease all transaction
costs (i.e. all costs incurred in participation in the energy refurbishement market).

Local clusters may also be developed for the whole supply chain of energy efficient renovation from supplier, planners,
architects via installer, to users. In such a cluster, Quality management can be developed, using energy labeling.

The future EU strategy on low energy buildings, which will be launched in the autumn 2012, should support the creation
of clusters, using the Intelligent Energy Europe programme for pilot clusters based on transnational experience and
Structural Funds to scale them up.

Experiences from CASH partners
The Apulia “Cluster for Sustainable Building” (Brindisi, Italy) is promoting cooperation and educational
activities for sustainable development to increase awareness of sustainability in the building process at any level. It brings
together industries, companies and universities in the region, informs and gives training on sustainable development and
energy-related issues, as well as, initiates research and innovation. Stakeholders involved share their experiences, allow-
ing regions to give feedbacks to the higher legislative level and to influence new legislation, through the cluster’s R&D
activities.


25

CONCLUSION

GET READY FOR THE COHESION POLICY
2014-2020
The European Union wants to be back on track to reach the objective of 20% reduction
of energy consumption by 2020. It is not only a question of political credibility. It is also for
cities an opportunity to mitigate and adapt to climate change and thus create new sources
of growth. Cities should see the EU as an ally in this quest, not as a costly constraint. The
EU indeed provides many new opportunities to support green social housing and thus
increasing both the environmental performance and social inclusion in cities.

To seize these opportunities requires a bit of preparation especially for the implementa-
tion of the Structural Funds programming period 2014-2020. Member States and Regions
will indeed prepare their Partnership agreements and Operational Programmes from
early 2013 onwards. They should rely on the expertise of cities involved in other EU initia-
tives such as URBACT II or the Covenant of Mayors, and cities all over Europe should
beneﬁt from CASH partners’ know-how on green social housing and articulate
programmes and projects around the different dimensions of a successful project such
as technological issues, legal framework, ﬁnancial engineering, citizens’ involvement,
energy production aspects and systemic project management.


26

PARTNERS CONTACTS

Lead Partner Tatabanya
Thierry Monel, Ville Echirolles, France Tamas Galgovics
t.monel@ville-echirolles.fr - Tel: 33 (0)4 76 20 63 00 galgovics.tamas@tatabanya.hu
Lead Coordinator Utrecht
Sophie Moreau, Ville Echirolles, France Inge Van der Klundert
s.moreau@ville-echirolles.fr - Tel: 33 (0)4 76 20 56 00 i.van.de.klundert@utrecht.nl
Bridgend (UK) Yambol
Elaine Williams Mariya Paspaldzhieva
elaine.williams@bridgend.gov.uk paspaldjieva@abv.bg
Brindisi (Italy) Conseil Régional Rhône-Alpes
Valerio Costantino Claire Prédal
arch.costantino@gmail.com cpredal@rhonealpes.fr
Frankfurt (Germany)
Werner Neumann
werner.neumann@stadt-frankfurt.de
Echirolles Elected member in charge of CASH
Les Mureaux (France) Stéphanie Abrial
Brigitte Bonafoux Stephanie.abrial@iepg.fr
bbonafoux@mairie-lesmureaux.fr
and Laeticia Bideau-Maruejouls Echirolles Elected member in charge of Housing
lmaruejouls@mairie-lesmureaux.fr Carole Simard
c.simard@ville-echirolles.fr
Eordea (Greece)
Kostas Nikou Lead Partner Technical support team
knikou@gmail.com Stephane Durand,Sustainable Development Service
s.durand@ville-echirolles.fr
Sonderborg
Inge Olsen Sylvain Bove, Financial Ofﬁcer
iols@sonderborg.dk s.bove@ville-echirolles.fr


URBACT is an European exchange and learning
programme promoting sustainable
urban developpement.
CASH (Cities’ Action for Sustainable Housing)
is an URBACT network of 11 partners
(10 cities: Utrecht-The Netherlands , Tatabanya-Hungary, Sonderborg-Denmark,
Les Mureaux-France, Brindisi-Italy, Bridgend-UK, Frankfurt-Germany,
Yambol-Bulgaria, Eordea-Greece, Echirolles-France
and one region Rhône-Alpes Regional Council-France)
led by the city of Echirolles in France.
The ambition of the CASH project is to propose new solutions and promote new policies for
the sustainable renovation of social and affordable housing units in the European Union.

Cities have become major policy players in the area of climate change policy and sustainable
energy policy, for at least 2 simple and interlinkedreasons: first, cities use a significant
proportionof the world’s energy and secondly,
cities have significant energy and CO2 savings potential .

URBACT CASH PROGRAM

PARTNERS

URBACT is a European exchange and learning programme promoting sustainable
AN URBACT II PROJECT

urban development. It enables cities to work together to develop solutions to

major urban challenges, reafﬁrming the key role they play in facing increasingly

complex societal challenges. It helps them to develop pragmatic solutions that

are new and sustainable, and that integrate economic, social and environmental

dimensions. It enables cities to share good practices and lessons learned with all

professionals involved in urban policy throughout Europe. URBACT is 300 cities,

29 countries, and 5,000 active participants. URBACT is co-ﬁnanced by the ERDF

Funds and the Member States.

http://urbact.eu/cash
http://www.ville-echirolles.fr/developpement-durable

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