Minimum standards for residential rental properties - Regulation Impact Statement

For those able to pass on the costs of the upgrade as increased rent, the minimum standard options are unlikely to have sizable impacts on the rental returns of an average rental provider: likely in the order of a fraction of a percentage point over the life of the asset. [...] The RIS is structured as follows: — the nature and extent of the problem is described in Chapter 2 — the policy rationale and the case for government action are outlined in Chapter 3 — the range of policy options identified to address the problem, and those which are investigated in detail, are given in Chapter 4 — the impacts of the policy options are considered using a cost-benefit analysis in C. [...] It explores: — the Canberra housing stock, and the rental stock in particular — the evidence for the importance and prevalence of thermal comfort features in the rental stock — the costs of poor thermal comfort in the rental stock, including the energy costs, environmental costs, amenity costs and health costs. [...] 3.3 Interaction of split incentives and information asymmetry Rental providers are often unable to recover the costs of the improvements in the form of higher rents because of a second market failure — the information asymmetry between rental providers and tenants concerning energy efficiency and thermal control features. [...] However, each of these solutions is not necessarily appropriate for rental households in terms of the efficiency and effectiveness of those solutions — especially in the context of the market segment under consideration and the split incentive problem.