Case Study: BHA pilot Zaharna Fabrika Housing Estate, block 4, 10 and 25

Short Description

High energy consumption and the deteriorated state of condominium housing are urgent problems of the housing estates in all Eastern European big cities. In Bulgaria, the situation is even more complicated by the extremely high share of homeownership and the lack of any traditional practice and legislation relating to the maintenance and management of condominium buildings.

About 97% of the dwellings are privately owned and almost all of them owner occupied. As a result of the extremely distorted tenure structure, more than 50% of the owner occupiers do not have sufficient income to cover the current costs of the services. There is an acute disparity between the status of an apartment owner and the income level of the residents.

Since 2004 the Bulgarian Housing Association has implemented a pilot renovation project in the Sofia – Zaharna Fabrika Estate, in order to investigate possible solutions for a sustainable and efficient renovation and a subsequent management of the renovated condominium buildings. The project's efforts were directed at tackling three main issues:

- Lack of know-how about energy efficiency in housing;
- Lack of adequate organisation of homeowners for building management;
- Lack of affordable financial tools for renovation of existing buildings.

The project was supported by two Dutch housing associations – De Nieue Unie and Woondrecht and involved limited income homeowners of existing condominium buildings.

Key Elements

Certification

The first renovated pilot building, block No 10, was audited by a certified company Eneffect Consult and has been awarded an Certificate Class A for the energy efficiency of a residential building. After renovation heat consumption was measured and found to have decreased by more than 50%. The other participating building, block No 25, was renovated with support from the state budget and was audited before the start of renovation work  in order to define the necessary energy efficiency measures to be taken.

Project Management

The pilot project is the first and still the only existing attempt in Bulgaria for a comprehensive integrated approach in tackling the energy efficient renovation of existing condominium housing. In this project an attempt was made to cover all related stages in solving the issue of the sustainable housing renovation – establishment of a homeowners’ association for renovation and further management at building level, energy efficient housing renovation based on a long-term soft loan arrangement, energy audit and pilot building certification.

Work with Residents

The key element of the pilot project was involving the residents in decision taking process. This was necessary because of the fact that they are owners of the apartments in the renovated buildings.

During the renovation preparatory stage the residents were advised on the different options that existed for refurbishment of their buildings.

Funding

The three pilot buildings were renovated under different financial schemes:

• Block No 4 was renovated 2008. In this case the Bulgarian Housing Association advised the residents on taking subsidized renovation loans from EBRD credit facility in combination with own funds.
• Block No 10 was renovated in 2004. The project was carried out by means of a very carefully engineered financial scheme covering the expenses for the investment from the savings for heating energy afterwards. Apart from the soft loan facility offered by the Dutch International Guarantees for Housing, there was no any subsidy which makes this scheme even more prospective and sustainable in possible combination with a state budget subsidy under the National Renovation Program available after 2007.
• Block No 25 was renovated in 2009. This building was renovated with a subsidy from the state budget under the National Renovation Program. The Bulgarian Housing Association facilitated completion of the financial scheme and relations with the contractor.

Thermal Insulation

Due to the budget limits, only basic energy efficiency measures were applied for the three renovated buildings: insulation of building envelope with extruded pen polystyrene and mineral plaster over the existing brick external walls and insulation of the roof with mineral wool.

Windows and Shading

The existing wooden framed windows in renovated buildings were replaced with PVC ones.

Main Results

The pilot project achieved the following key results, which are of decisive importance for the intended larger scale of energy efficient condominium buildings refurbishment that is planned under the National Housing Renovation Program:

• The first legally established homeowners association was created (block N10);
• Energy audits before and after renovation of the buildings were made;
• Energy needed for heating of the buildings after renovation decreased by 50%;
• The lower level of subsidizing the project leads to a longer payback period (The renovation of block 10 with a “soft loan” has to be repaid in a 20 year period);
• Use of long term soft loan is based on the principle of constant running costs for the building – savings from the heating bills after refurbishment are directed to the repayment of the long term renovation loan.

Lessons learned

The following obstacles were revealed during pilot implementation:

• Subsidies for renovation are limited and application procedures are not clear;
• Lack of necessary regulatory framework for organizing and financing the renovation activities – better regulation is needed in regard to forming of homeowners associations and as well as financial incentives for end users.

In order to be feasible, energy efficient renovation measures for existing condominium have to be:

• Decentralized by creating a proper organization at local level;
• Organizations of tenants (homeownership associations) has to be created in order to assure the proper level of involvement in renovation activities;
• Sufficient financial incentives (subsidies and tax relieves) have to be secured.

Particular attention must be paid to the end users - the apartment owners and the newly emerging associations of apartment owners.

Additional Information

The project results have been widely covered by national media in Bulgaria and also reported to a large number of national and international specialized events such as:

• SOCIAL HOUSING: A TOOL FOR EU COHESION conference, organized in partnership with the Committee of the Regions, and with the support of the EIB, the CEB and DEXIA;
• UNECE FIRST WORKSHOP ON ENERGY EFFICIENCY IN HOUSING - Sofia 2009;
• ENERGY GLOBE WORLD AWARD - Prague 2009, National Leader Award.

Contact:

Eleonora Gaydarova
BHA - The Bulgarian Housing Association
E-mail: bha@bha-bg.org
Phone: + 359 2 98 31 200