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Sustainability and Climate Change

Before 2050, all residential buildings will have to be made sustainable and converted to low (or even net-zero) carbon. This pertains largely to existing buildings, as new development projects will have to be close to energy neutral from 2020 onwards.

In early 2021, local governments will come up with plans for the energy transition and map out the availability of sustainable heating at district level. In the same period of time landlords are expected to have plans in place to make buildings ‘Paris proof’. To create an incentive for the transition to a carbon-free environment, the tax on natural gas will be gradually increased and tax on electricity reduced over the years. This could lead to higher energy bills for tenants in the future if no action is taken. As housing affordability is still an issue in the Netherlands, taking sustainability measures is likely to have an even greater impact on affordability for lower-income households, as investments are higher than the direct savings on energy bills. Landlords and tenants will have to agree on the split incentive (investments versus profit), which will be a challenge.

In addition, global warming and climate change is already happening and buildings need to be resilient in the face of physical climate impact. Monitoring physical climate risks (like extreme weather events) at asset level started in earnest in 2019 and this is expected to become increasingly important in the years ahead.

Well-being and healthy residential buildings is an up and coming theme and is related to material use, design, safety, indoor air quality, thermal comfort, daylighting, freedom from noise and user experience. These themes are already partly incorporated in existing sustainability labels and certifications. However, in some cases the mitigation of building related GHG emissions conflict with health aspects, such as large windows for daylighting.

Numerous institutions are currently developing methods to measure the circularity of buildings and the sector is experimenting with circular building and demolition projects. For the residential sector, this could have an impact on contracts with partners due to different ownership structures for the likes of (electrical) installations and kitchen appliances.

In 2019, construction projects and real estate markets were hampered by changes in rulings related to nitrogen emissions and PFAS levels in the Netherlands. In late 2019, the government introduced new legislation for PFAS levels and temporary legal exemptions for nitrogen emissions to prevent all construction projects grinding to a halt. The political and environmental debate on how to solve the nitrogen problem are still ongoing, as it is clear a more sustainable approach is needed. Additional legislation is expected in 2020, including the ‘Clean Air Agreement’, which will affect future construction projects.

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