Leveraging energy efficiency to finance public-private social housing projects

Abstract

The Italian housing model relies on a high rate of privately owned houses. In comparison, few dwellings are built and managed by the public sector. The social housing stock has been built mainly during some post-second world war decades; instead, since the early nineties, it underwent a privatization process.Such a model is inefficient and iniquitous in the long run. Therefore, after being disregarded for several years, social housing has gone back to be among the main agenda items. Nonetheless, due to the lack of public grants, new funding sources are required. The government now fosters an increasing involvement of private finance through Public-Private Partnership schemes.A first outcome can be found in some pioneering experiences. Their comparative analysis allows bringing out worthwhile findings, which are useful to steer housing policies. Moderate to low yields entail the need to involve new kinds of private entities, particularly those adopting a venture philanthropy approach. Meanwhile, building energy performance measures are a crucial driver of feasibility. They allow the tenants to be willing to pay agreed rents somehow higher than both social rents of protected tenancies and fair rents of regulated tenancies.