Berlin's post soviet refurbishment strategy - lessons learned (Filip Milojkovic, IWO e.v.) www.efficiency-from-germany.info
Berlin's post soviet refurbishment strategy - lessons learned Belgrade, October 21 st 2014 Filip Milojkovic IWO e.v. Berlin www.efficiency-from-germany.info
Content: 1. What are we talking about? 2. Berlin s refurbishment story 3. Success story! Repeat in Eastern Europe?
What are we talking about?
Refurbishment a definition Refurbishment is the holistic implementation of measures with regard to the technical, economic and social aspects of a residential building. The goal is to reinstall the initial technical condition of the building considering standards for new construction of building parts. Refurbishment Increases the useful life time of a building. Leads to sustainable resource and energy savings. Increases the real estate value. Takes place while inhabited. Increases living comfort of residents.
Set of measures Energy Efficiency Refurbishment (EER) Not energy relevant measures Insulation of roof and attic Insulation of the facade Windows exchange Insulation of basement ceiling Renewal of heating and warm water supply system Renewal of ventilation, possibly with heat recovery Roof water and air tightness Balconies security and esthetics Building s entrance Staircase refurbishment Renewal of sanitary installations Tiling of kitchen and bathroom Renewal of entrance doors +/- Renewal of electrical installations
Members to Housing Initiative for Eastern Europe IWO e.v. * 2001 Staff of 10
IWO countries, funding sources and project partners Estonia Latvia Poland Lithuania Belarus Russia BMWi Serbia Romania Bulgaria Ukraine BMUB Kazakhstan Uzbekistan
Berlin s refurbishment story
The outset: initial situation in 1990 Eastern part of Berlin: 632,000 dwellings, of these 360,000 built after 2 WW 273,000 dwellings in prefabricated multi-family buildings. 800,000 East Berliners (i.e. 2/3 of the inhabitants) live in these flats. Main districts: Marzahn, Hellersdorf, Lichtenberg and Hohenschönhausen. Berlin decided quickly: We need to act! Immediate refurbishment and maintenance of housing stock
By 1998: 212.562 apartments were refurbished in programmes 70 % + of estates with more than 2.500 apartments took part in funding programs coordinated by state and regional governments. 2014: around 75 80 % refurbished (numbers for the whole of GDR Eastern Germany). Building refurbishment Housing policy Building surroundings Social policy Youth policy Economic stimulation policy Labor market policy Infrastructure development Source: BMBAU (1999) Eine Zukunft für die Plattenbausiedlung
What were the core factors in this success? 1. Legal assignment of the property and reorganisation of the housing administration/housing economy. 2. Improvement of the residential environment. 3. Renovation and modernisation of the building stock. Main difference to situation in Eastern Europe: No Privatisation! Housing stock administrated by municipal companies! Mostly rental housing stock! Main Principle: First refurbishment and then privatization!
Improvement of the residential environment Improves comfort And just as importantly: payment morale!
The approach Early 90s: Berlin Senate ordered extensive structural studies, to determine the renovation and modernisation need of the different buildings types. Measure/cost-matrix : relating 17 building series with 21 renovation measures, stating an average price for the measure and the overall sum per flat. Prices varied from 7,000 /flat (newer buildings) to 34,000 /flat (QP 59). The matrix was the basis for the Berlin support guidelines. Measures listed included: improvement of thermal insulation and heating system, new sanitation, new windows and balconies, renovation of elevators as well as modernisation of the housing entrances and staircases.
October 1993: pilot phase of support programme started
beginning in 1994 large scale rollout for about a decade
Methods and instruments Cooperation of players for an integrated approach (esp. housing companies, district administration, planners, architects) District concepts enable the individual quarters in the district to develop a special identity. Communal district management focussing especially on the participation of inhabitants and stakeholder inclusion in general.
Basic principles of financing Nearly all refurbishment measures were financed with long-term loans with reduced interest rates. Every credit was secured by mortgages. When necessary: additional state or municipal guarantees were provided. Two administrative levels providing support: Federal Government Municipality of Berlin Creditworthiness of owners, i.e. municipal companies or Genossenschaften, was fairly good! Bankability of projects
Amounts spent in selected programmes a. Prefabricated buildings renovation programme According to the so-called InstModRL Berlin provided long term interest subsidies for buildings, where renovation costs could not be covered by rents and with KfW-loans alone. Senate of Berlin provided around 650 Mio. in long term interest subsidies by the. b. Between 1993 and 2003 around 6.2 Bio. have been invested in the renovation and modernisation of the prefabricated building stock in Eastern Berlin.
Selected number from KfW programme Since 2006 Over 3,5 Bio. apartments refurbished or constructed Every second apartment subsidised by KfW better than minimum Around 1960 public buildings refurbished 2013 Refurbishment or construction of 410.000 residential buildings (2013) Investment of around 35 Bio. Savings of 14.000 GWh per year (compared to 2006) heating energy for 1,4 Mio. housholds 2014 1,5 Bio. on interest subsidies 300 Mio. on grants
Consequences for the residents The costs per apartment for the complex refurbishment around 23.000, of which 8.500 for energy efficiency measures. Measures have been refinanced through the rents. Rents have been increased by 11 percent annually. The average rent in refurbished dwellings included approx. 135 Euro costs for the refurbishment. On average, the rents in renovated buildings amount to around 25% of the average household net income in the group of tenants.
The guiding principles today lessons learned Source: Buildings Performance Institute Europe Implementing nearly zero-energy buildings (nzeb) in Bulgaria
Success story! Repeat in Eastern Europe?
The housing system in much of Eastern Europe Imperfect housing maintenance system Lack of technical knowhow and capacities in relevant institutions High energy consumption Lack of private and public financing no bankability
Serbia Ownership structure in EU-27 How about Serbia? Privatization for symbolic amounts Scattered ownership structure complicates refurbishment
Capacity building The linchpin for successful implementation of EEB policy is the knowhow of involved people, in the construction sector as well as with administrative bodies. A series of four programmes: RRM Residential Refurbishment Manager training on Koprea conception, planning and realisation of EE measures (Lithuania, 2009/2010) Majas draugs creation of expert network for improved quality (Latvia, 2010/2011) PPPUkraine practical application of acquired knowledge (Ukraine 2010/2011) PPP Kazakhstan module-based training of specialists (Kazakhstan 012/2013) To improve quality of construction (the Achilles heel for sustainability) IWO has developed Technical Assistance projects as can be seen in the PERT chart on the next slide.
Comprehensive Technical Assistance PERT chart
and bankability let s start a discussion! It is often said: there is not enough money for refurbishment! But: international financial institutions are happy to lend, if the project is bankable, broadly defined as trust in future debt service. Income is low on average Financial system and individual wealth planning underdeveloped Few precedents in Eastern Europe Latvia: Maintenance Companies take on credit to Prefinance refurbishment Payback by owners via utility/maintenance bill High payment morale after refurbishment! Residents appreciate living comfort