Simulating retrofit incentives and distributional effects of four tenancy law policies

Leo Reutter () and Bernadetta Winiewska ()
Additional contact information
Leo Reutter: University of Kassel
Bernadetta Winiewska: ITG Dresden (Institut für Technische Gebäudeausrüstung Dresden Forschung und Anwendung GmbH)

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Due to rent control, the primary landlord-tenant dilemma prevents landlords from recovering costs of energy-efficiency retrofits, which mainly benefit tenants. This necessitates tenancy law to allocate retrofit and energy costs adequately. We analyze the impact of Germany's current system and three reform options on both parties' finances using simulations across various building sizes and retrofit ambitions. We find that, in general, investment costs exceed energy savings. Only two of the reform options consistently incentivize landlord investment, albeit at tenants’ expense, while the status quo system and the third reform option almost always incentivize landlords to forego retrofits. A sensitivity analysis shows these systems’ effectiveness is barely affected by the details of German general tenancy law and local rent markets’ characteristics (rent levels and their inflation, valuation of energy efficiency). Designing landlords’ retrofit premia to depend on the technically estimated energy demand cost savings is especially promising, contingent on reliable energy performance data.

Keywords: Landlord-tenant dilemma; Tenancy law; Allocation of retrofit and energy costs; Simulation model (search for similar items in EconPapers)
Pages: 26 pages
Date: 2025
New Economics Papers: this item is included in nep-ene and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.uni-marburg.de/en/fb02/research-groups ... 5-papers/08-2025.pdf First version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:202508

Access Statistics for this paper

More papers in MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) Contact information at EDIRC.
Bibliographic data for series maintained by Bernd Hayo ().