Municipal goat paths to get the green subsidy to the right address

Read also: The road to a sustainable home is full of obstacles

Özmen and his colleagues will inspect 500 homes like Lydia’s this spring. He has been engaged by the municipality of Arnhem, which wants to encourage homeowners to become more sustainable with a targeted subsidy. Only owners of a relatively small house with a low WOZ value can claim this: a maximum of 100 square meters and no more than 355,000 euros. A subsidy of 2,000 euros is available per home, the total municipal budget is 1 million euros.

Making rental homes more sustainable is the task of housing associations. In 2030, social rental homes must all have at least energy label D. It has been agreed with the cabinet that they will not pass on the costs to their tenants. And homeowners with higher incomes are often wealthy enough to make their homes more sustainable, with or without government subsidies.

But for low-income homeowners, making your own home more energy efficient is a problem, says Cathelijne Bouwkamp (GroenLinks) alderman for Sustainability in Arnhem. They often have problems paying the increased energy bill. The subsidy scheme of 2,000 euros per home is intended to alleviate energy poverty among these homeowners. They don’t have enough money to better insulate their own home, even if it pays for itself later with a lower energy bill. They also often do not know their way around existing subsidy schemes.

“We have seen people who were already struggling to make ends meet since the energy crisis sink completely,” says Bouwkamp. Twenty percent of the Arnhemmers live on it maximum 120 percent of the social minimum – about 1,500 euros for a single adult – compared to less than 13 percent of the total Dutch population. And a third of Arnhem houses have energy label D or lower.

Bouwkamp admits: filtering on living space and house value is a cumbersome method of tackling energy poverty among precisely this group. Because who says that the owner of a house of 95 square meters and a WOZ value of 340,000 euros earns little or is insolvent? For comparison: the WOZ value of a average Arnhem home was earlier this year at 320,000 euros. The average surface area was 104 square meters, although that figure includes both rental and owner-occupied homes.

The municipality would have preferred to pay a subsidy based on income, says the alderman. But municipalities are not allowed to pursue their own income policy. Policy on income distribution, often to reduce inequality, is a task of the national government. Municipalities are not allowed to make local taxes, such as property tax or waste collection tax, dependent on income.

No local income policy

According to Corine Hoeben, local tax researcher at the University of Groningen, the national government prefers to keep income taxes in its own hands. “The government is afraid that wealthy residents will move to municipalities where income tax is lower,” she says. “There is a fear that income policy by municipalities would thwart all kinds of macroeconomic ideas and plans of the government.”

According to Hoeben, where the law is clear about taxes, paying out subsidies based on income is a “grey area”. The law is not explicit about this. “But as soon as you make something dependent on income, you still have the chance that a citizen will challenge it and that the court will look into it,” says Hoeben. “That may mean that it was ultimately not legally valid. That causes a lot of hassle for municipalities afterwards, so they prefer to be on the safe side.”

Making taxes and subsidies dependent on the WOZ value is a tried and tested method of levying taxes on income – the property tax from the 1970s is also based on this.

Arjen Schep, professor of local government levies at Erasmus University, sees more municipalities struggling with the ban on income policy when it comes to making homes more sustainable. The subsidy measure makes sense in itself, says Schep, but he argues for more flexibility.

Municipalities often know exactly in which neighborhoods problems arise, says Schep, but have few options for a targeted approach. And ultimately it is municipalities that have to do the most sustainability work. Through the ‘local approach’ – cooperation with municipalities – the cabinet wants to achieve this until 2030 insulate at least 750,000 owner-occupied homes. “Municipalities now have a duty of care, but there is a lack of both carrot and stick to really entice residents to take the first steps in the field of sustainability.”

Cleverness and goat paths

Schep thinks an approach like that of the municipality of Arnhem is well thought out, but “second best”. “Of course there is some connection between the WOZ value of the home and the income,” he says. “But there are probably people who consciously continue to live in a cheap house, while they can afford sustainability.”

Alderman Bouwkamp himself says he is “frustrated” about the lack of policy options and also fears that his own subsidy will not always end up in the right place.

According to her own words, she has discussed the matter several times with fellow aldermen and the government. Like Professor Schep, Bouwkamp sees other municipalities struggling with how best to reach low-income homeowners, which leads to all kinds of different regulations locally. So has Zutphen a similar scheme, and ventures a municipality like Deventer by filtering on income and assets.