Gentrification in Deteriorated Urban Areas and Its Relationship with the Index of Vulnerable Homes (IVH)

Depósito de investigación de la Universidad de Sevilla https://idus.us.es/ Esta es la versión aceptada del capítulo publicado en: This is an accepted manuscript of a chapter published in: Energy poverty alleviation: new approaches and contexts (2022): 14/01/2022 DOI: https://doi.org/10.1007/978-3-030-91084-6_4 Copyright: © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 El acceso a la versión publicada puede requerir suscripción. Access to the published version may require subscription. “The Version of Record is available online at: https://doi.org/10.1007/978-3-030- 91084-6_4” Chapter 7: Gentrification in deteriorated urban areas and its relationship with the Index of Vulnerable Homes (IVH) Delgadillo, Lina1, Castaño-Rosa, Raúl2,3, Martínez-Rocamora, Alejandro1, Solís-Guzmán, Jaime1,* 1 ArDiTec Research Group. Department of Architectural Constructions II, Higher Technical School of Building Engineering, University of Seville, Seville, Spain. 2 Carlos III University of Madrid, Leganés, Madrid, Spain. 3 Faculty of Built Environment, Tampere University, Tampere, Finland. * Av. Reina Mercedes 4-a, 41012, Seville, Spain. E-mail: jaimes[email protected]. Abstract Gentrification is produced as a consequence of transformation processes that occur in certain neighbourhoods. Families who had an almost vulnerable situation cannot face the rental and lifestyle increase that improvements in buildings and the area generate. In this study, the influence that energy rehabilitation processes aimed at solving energy poverty problems has on the possibility of provoking a gentrification process is explored. To that end, a case study is evaluated through the three main indicators comprised in the Index of Vulnerable Homes (IVH) developed by the authors. Finally, it is evidenced how certain families incur in a situation of vulnerability and energy poverty when the quality improvement derived from an energy rehabilitation of the building triggers an increase in rental prices. 1. Gentrification, commodified neighbourhoods Cities are established as engines of economic and social development. As a result, existing territories continually suffer interventions aimed at mutability, in response to a changing economy, a demand from society and the constant changes in the current markets. The urban regeneration processes appear as a response –or consequence- to these demands, which triggers changes in both the social and spatial structure of the intervened areas. These processes are accompanied by permissive and in many cases non-existent public policies which perpetuate a neoliberal economy that contributes to the creation of social gaps and, with it, to the disarticulation of the social fabric. In order to analyse their possible relationship, the present state of the art will address the two main themes of this study: gentrification and energy poverty. In the first place, the term gentrification will be exposed, including its direct relationship 2 with economic, social and cultural aspects framed at a national and European level. Subsequently, energy poverty, research trends in this field, and the Index of Vulnerable Homes (IVH) developed by the authors will be defined, which allows identifying homes in a vulnerable situation at risk of suffering from energy poverty. 1.1. Gentrification The term gentrification was coined in London in 1964 by the sociologist Ruth Glass. This term comes from a study that was carried out in working-class neighbourhoods in London's East End that were undergoing socio-spatial transformations. In the concept of gentrification, inequities and injustices created by politics and the market emerge, which unleashes a class and housing struggle. However, the use of this term has generated tensions within the academic world, since its analysis must take into account local characteristics based on social, cultural, political and economic aspects. These characteristics determine the development of the process in situ and, therefore, may differ in the generality of the process. In other words, the problem lies in the variety of developments it has depending on the context. In the present study, the term gentrification is defined as the processes of urban transformation that commodify the city and perpetuate the differences between social classes on a territorial scale. This transformation produces consequences such as the expulsion of a population, practices and knowledge from a specific territory in order to attract public and/or private capital in favour of the intervention of the real estate market and the injection of capital and, with this, the incorporation of a population with greater purchasing or cultural power. These interventions take place mainly in popular urban areas whose renovation is closely related to real estate speculation and, as a result, a displacement of the population is generated (Sequera Fernández 2020). During the last decades, this term has been introduced into the common lexicon of society, more specifically in places where the population has experienced this phenomenon. The transformations that are generated in a neighbourhood are focused from the perspective of public and private entities, which are interested in creating more pleasant environments. In the first place, the streets, buildings and public space in general initiate a change in their morphology. These changes attract the arrival of new residents. The new residents generate a change in the needs of the area due to their purchasing and cultural power and, with this, a differentiation is generated with respect to the initial residents in terms of how they inhabit the space, resulting in a process of gentrification in the territory. Finally, this generates the expulsion of the initial residents due to the rise in prices, the fracture of the urban fabric and the change in the relationship between the inhabitants and their territory. Although it is true that the change and intervention of spaces is conceived as a necessary process that goes hand in hand with economic growth and the develop- 3 ment of society, the forced demographic change that this generates cannot be ignored. Therefore, in order to have a broad view of the phenomenon, it is necessary to open a debate regarding the effects of gentrification and the impact that this produces, taking into account each of the gentrifying agents that, from their respective roles (consumers, builders, developers, householders, mortgage lenders, government agencies, real estate agents and tenants), perpetuate the negative effects of improving an urban environment. Gentrification has become an urban phenomenon of great interest, in which two different approaches can be distinguished as a basis for analysis: one focused on demand and the other focused on supply. The former is understood as a transforming element and a precursor of spatial change, while the second arises from the current of neo-Marxist thought, where gentrification can be revealed as a global strategy applied in response to a model of advanced capitalism (Sequera Fernández 2020). The state of the art will focus on the analysis from the point of view of supply, where one of the major exhibitors is the geographer Neil Smith, known for his great academic contributions from the field of geography and its connections with social studies. Smith introduces the term revanchist urbanism, in which the terror of a dominant middle class that persecutes social minorities is evidenced, making racial, economic and cultural distinctions, among others, which unleash processes of class struggles from all its aspects, and with this he bases the existence of a global strategy inherent to capital accumulation. 1.2. Commodification of housing In response to an economy in search of greater capital accumulation and profitable long-term investments, land and housing become merchandise, leaving aside the idea of housing as a fundamental right. Economic interests prevail within global market trends, fuelled by the positivist views of developers and/or the private sector when setting a path based on urban regeneration. One of the processes that precedes this phenomenon in areas prone to gentrification is disinvestment and abandonment by public and private agents due to high risk and low rates of return on investment. These factors generate a deterioration of the image and urban morphology of the neighbourhood and, as a consequence, its economic depreciation. To explain the disinvestment in the neighbourhoods, a homogeneous neighbourhood in terms of quality and age is taken as a starting point. Three causes for the depreciation of a neighbourhood can be distinguished: improvements in work productivity, obsolescence of style, and physical deterioration (Garca Herrera and Sabat Bel 2015). Specifically, the latter causes a decrease in the value of the property that generates a net capital loss in the area. Active disinvestment is directly proportional to the decline in property value, and it does not occur in isolated properties, but on a zonal scale and accompanied by sociocultural factors. 4 Subsequently, real estate harassment becomes imminent, and with it begins a process where the private sector buys dwellings in decline at reduced prices, generating the displacement of the initial population towards the suburbs. Additionally, there is filtering, a process that generally precedes gentrification and that is erroneously confused as the process discussed above. The neighbourhoods that were initially occupied by a population with greater purchasing power are leaving vacancies due to the migration of this population to new homes as a result of changes in their interests as consumers. As a consequence, a new group of lower income enters to occupy the space, generating a new way of living. Gentrification, called by various authors as a process of movement back to the city, would be the process of filtering from the bottom up, since a process prior to gentrification is associated with the migration of the elite population to the suburbs (Díaz Parra 2013). The aforementioned change in consumer interests becomes a fundamental factor when analysing the social and economic restructuring associated with gentrification, since it determines the response to which the market should aim. As Smith points out, consumption patterns have come to dictate production patterns. However, the role played by the rehabilitation of the urban space does not depend on the new inhabitants who move to the neighbourhoods, but on how much productive capital returns to these areas. The rehabilitation of degraded central areas begins to be seen as a source of opportunity and injection of capital. The increase in the value of construction in land from the peripheral areas of the city creates the need to generate an alternative in response to high prices, and to see the rehabilitation of built-up areas with an optimal location as a solution to the price of land and to a new consumer emphasis. It should be noted that focusing on gentrification from the perspective of consumer preferences, as well as demand, is a limited approach; however, we will delve further into the other gentrifying agents from their respective roles. 1.3. Potential income difference The view of housing as a constant object of commodification that is adapting and transforming according to the dynamics and logic of the economy and the real estate market of the moment is based on the so-called urban rent. In order to support the gentrification argument, Smith puts forward the theory of the potential income difference, or rent gap, in which the depreciation of real estate generates objective optimal conditions that make the increase in the value of capital a rational response to market (Garca Herrera and Sabat Bel 2015). The value of dwellings (or invested capital) fluctuates based on depreciation and appreciation, depending on the current conditions of the property. In turn, the sale price comprises the value of the property and the value of the plot, the latter being set according to external factors. Thus, the potential income difference is the difference between the capitalized rent (the current price of the property) given its current 5 use and the potential rent that can be capitalized through better use of the property (basis for future prices). If this difference is wide enough, considering that in a period of approximately 25 years the expected returns were obtained from the initial investment, a reinvestment by a public or private agent can be considered. Smith's theory quantifies the proneness of a neighbourhood to undergo a process of gentrification, since this takes place when the income difference is wide enough for the developer –the real estate agent- to obtain a satisfactory return, closing the urban rent gap in its favour. The neighbourhood then enters a process of urban rehabilitation and gentrification, and begins a new cycle of use. As Smith puts it, the physical deterioration and economic depreciation of downtown neighbourhoods is strictly logical, it is the rational result of the land and housing market. 1.4. Lifestyle The urban gentrification process is accompanied by a series of dynamics that go beyond economic investment by public or private forces. The consumer, as a gentrifying agent, influences cultural and social capital, generating dynamics of a hegemonic lifestyle, where the rehabilitated neighbourhood experiences a spatial mercantilism based on a marketing process. The arrival of a new population to the rehabilitated neighbourhoods is accompanied by a new form of habitat and, with it, a search for identity by the incoming population, in which an attempt is made to replicate the same lifestyle, consumption and urban aesthetics according to their consumer interests. As Sequera Fernández (2020) states, we must not forget that cultural capital also undergoes processes of circulation and accumulation, which is why it can be one of the most efficient gentrifying devices, as a systematic element of inequality and segregation. Gentrification is not only a process that generates physical and morphological changes in the city, but also symbolic changes. Therefore, if the physical space is modified, its social practices will also be affected and reconfigured (Sequera Fernández 2020). This is why the migration of a new population to a rehabilitated area is directed towards a specific social profile, the professional, bourgeois and salaried middle class, whose cultural practices and consumption preferences are materialized in a physical space, and which generate a new commercial demand within an area that has been intervened in order to recreate the image of a desirable city. Following this approach to gentrification from the viewpoint of social capital, the great relevance of tourism stands out. This global and generalized process, which is currently a fundamental part of the economy of many countries, has become a decisive factor for spatial, social, economic and political transformations. The problem occurs when tourism is used as an urban renewal strategy, initiated by the government based on public policies that, by generating a morphological change in the city, leaving aside social and cultural factors, inevitably favours the development of gentrification (Gotham 2005). However, it must be clarified that although 6 tourism is an accompanying process, it is not always an implicit agent. Tourism arises as a response to a capitalist economy that changes from industrialized production to production focused on growth in services. Therefore, the touristification of the city can be analysed from the changes and economic restructuring, analogous to consumption patterns. On the other hand, the increase in tourism in cities is also due to greater mobility and transnational migrations in today's society, which responds to a global economy of consumption and homogenization of lifestyles. Consequently, there is an increase in the demand for leisure services and commercial spaces aimed at a population of new consumers who, as mentioned above, have a typical social profile and, therefore, are a source of attraction for the injection of capital. 1.5. Displacement Displacement and expulsion are direct or indirect consequences of the gentrification process of a neighbourhood, which generates a modification of the social practices of the initial inhabitants that will later affect commerce and social practices in the public space. Undoubtedly, this is one more example of how the most fragile population is overcome by the economic interests of those who intervene in this process, specifically public administrations and private investments. The displacement and expulsion of the inhabitants occurs due to different factors. On the one hand, from the increase in property prices and, consequently, the increase in rents (rent gap). As a consequence of this, part of the initial population manages to remain despite the increase in prices and lifestyle, but another part is forced to move towards more peripheral areas, as its economy becomes unsustainable. This phenomenon can be defined as non-forced and invisible expulsion, being more prone and characteristic in central areas of the city that were previously neglected and now, as a result of investment in infrastructure and housing, they become a focus of capitalization (Contreras Nossa 2018). On the other hand, there is a direct and forced expulsion, in which the government is the direct gentrifying agent. This is produced from articulated laws for the development of public infrastructure, where, according to government arguments, the common good prevails over the individual. These urban intervention plans are contemplated in urban regulations and, as Contreras expresses it, in some cases the inhabitants are relocated within the same neighbourhood, in industrialized and approved housing buildings. These inhabitants end up selling or renting their property since it is more profitable than inhabiting it, and then they look for a cheaper home within the same neighbourhood or in other nearby locations, thus reproducing the housing problems. The expulsion of the inhabitants in a symbolic way, as mentioned above, is a non-forced expulsion and, therefore, less perceptible, which is generated from an economic, social and cultural differentiation with the new residents who differ from their social profile. It is important to highlight that the image and morphology of a 7 space is a direct response to the demands of a specific population. By modifying the initial habitat of the native population, a rejection and exclusion is generated that is not perceptible, but that is more imposing than physical barriers. Displacement does not remain a reductionist fact as a result of a process of infrastructure transformation, but rather gives rise to a new field of research, where ideas of the dimensions that this implies are reconsidered. This is not a merely physical fact, but it also implies the change of a population in terms of its habitability and possibilities of access to resources and mobility that, otherwise, could go unnoticed. In relation to this issue, Janoschka et al. (2014) propose a research line focused on determining where those who are displaced go, analysed from an economic, demographic, social and cultural perspective. Finally, displacement produces negative consequences in the workplace, destruction of social ties, and a greater impact on the vulnerability of homes. The identification of the costs associated with the urban gentrification process arises a relevant debate, requiring a change in focus towards a reconstruction of perspective that allows greater visibility of the impacts of population displacement. Likewise, it is necessary to consider the pre-existing conditions and triggers for displacement when analysing the vulnerability of a population from the economic, social and habitability viewpoints. 2. Energy poverty Taking into account that the consequences of a gentrification process highly influence the vulnerability of homes, it becomes necessary to link the displacement phenomenon to energy poverty and with it, to examine the conditions of habitability in which a home was in terms of energy efficiency. Energy poverty (EP) is defined as the inability of a family to cover the minimum energy services and therefore, not being able to satisfy their basic household needs. Likewise, it is worth mentioning a study by the Association of Environmental Sciences (ACA by its Spanish acronym) which published the first study of EP in Spain, which defines energy poverty when homeowners are unable to pay the sufficient amount of energy for the satisfaction of their domestic needs, such as maintaining an adequate thermal comfort at home (Tirado Herrero et al. 2014). In short, energy poverty is recognized as another aspect of poverty in which health and well-being factors are affected and which are intrinsically associated with income deficiency in a household. Three characteristic aspects can be distinguished that make a home more or less susceptible to suffering EP, being these based on a consensus of different studies that seek a correct approach to this phenomenon. These factors are: low income level, poor quality of the building and continuous increase in energy prices. Low income level relates to the inability of a home to pay its energy expenses, thus being one of the biggest determinants when it comes to suffering EP. Low quality of the 8 building refers to the low energy efficiency that homes currently have, mainly due to the age of many existing buildings, which were not designed under thermal regulation standards. This triggers an economic investment on energy resources to be able to keep the house in acceptable thermal comfort conditions, mainly in summer and winter. Finally, the constant increase in the price of energy affects the capacity of households to pay their bills. According to Eurostat data for the second half of 2018, countries such as Denmark, Germany, Belgium, Ireland and Spain rank as the five countries where the most expensive electricity is paid in the entire European Union. This is mainly due to the inclusion of costs related to social and environmental policies and to another more complex phenomenon: pricing mechanisms (Vega Mulen 2016). Similarly, the European Commission uses three basic criteria to assess a situation of EP: the inability to keep homes properly conditioned, the delay in paying the utility bills, and living in unhealthy homes (leaks in ceilings, walls or floors, appearance of mould and rot). EP went from being an almost invisible phenomenon for public administrations, non-governmental organizations, companies and other actors to generating an increased interest in developed countries (Raya Díez 2017). This was due to the concern about the increase in energy consumption in which the developing world will suffer the effects of global warming, due to the high levels of energy demand that are required to reach the expected level of economic and social development. Within the research field of EP, two main theoretical and methodological approaches can be identified for its measurement: the subsistence (or biological) approach and the consensual approach. The former considers the percentage of income per family that is destined to pay for the energy consumption. The sufficiency of a family’s monthly income to cover its basic needs not only depends on the income, but also on the quality and energy efficiency of the equipment at the household. Therefore, EP is defined as when a household cannot have adequate energy services with 10% of its income (Garcia-Ochoa and Graizbord 2016). Similarly, sociodemographic characteristics and consumption habits are taken into account. In order to tackle these theoretical and methodological limitations, the consensual approach is proposed, based on the relative deprivation developed by Townsend, who was in disagreement with the subsistence approach because the idea focused on physical needs, not including social ones. Townsend considers the social and institutional structure of each place and period to analyse the deficiencies that people must face. Thus, this structure grants people social and economic roles that determine their consumption patterns (Eugenia et al. 2019). 2.1. Social problem Energy poverty not only has implications at the economic level but also at the social level. Thus, given the economic shortage many families have, they are forced to 15 housing blocks through energy rehabilitation, reducing energy consumption for air conditioning and improving the comfort conditions of homes suffering from energy poverty. Similarly, it is necessary to contextualize Getafe and the neighbourhoods in order to gain broader knowledge on its economic and social context. Getafe’s population is mostly born in other Spanish provinces within foreign families. Las Margaritas neighbourhood has the largest foreign population, with around 28%. Likewise, in 2011 Getafe had a total of 62,509 households as mentioned in the diagnosis of the 1st Getafe Social Inclusion Plan. According to the Population and Housing Census, 75.5% of the households were occupied by 2 and 4 members. It should be noted that Getafe has urban, housing and population heterogeneity in its different neighbourhoods. In addition, it is distinguished by having a higher rate of third-age population compared to the rest of the Community of Madrid. The focus of the action plans is in Las Margaritas and Fátima neighbourhoods (La Alhóndiga) since it is estimated that 48% of the homes that are located in these neighbourhoods do not have a heating system and, likewise, 200 of the families need public aid to pay rent and basic necessities, so it can be assumed that they are in a situation of energy and monetary poverty. The objective is to include around 15 buildings corresponding to those 200 families as part of the energy rehabilitation, since the urbanized land was built in the 1960s with low quality and energy efficiency standards, ranking the order of the interventions according to the IVH. Specifically, Las Margaritas area comprises 107 buildings with 2,418 homes and La Alhóndiga area has 100 buildings with 2,396 homes. Table 1 shows the characteristics of each building typology according to the data reflected in the diagnosis: Table 1. Building typologies in Las Margaritas and La Alhóndiga neighbourhoods. Typology No. dwelling/floor No. floor No. hallway No. dwellings Las Margaritas 107 2418 Type A 4 5 or 6 75 1677 Type B 4 5 or 6 28 605 Tower 3 Port. 3 8 or 10 3 72 Tower Mercado 8 11 1 64 La Alhóndiga 100 2396 Type 1 4 10 6 231 Type 2 4 6 16 366 Type 3 4 6 10 229 Type 4 4 6 30 689 Type 5 4 5 or 6 15 303 Type 6 4 7 22 540 Type 7 6 7 1 38 Total 207 4814 16 Concretely, a housing block located in Las Margaritas neighbourhood, located on Crisantemo Street in Getafe (Fig. 2), is taken as case study to be evaluated and characterized using the described methodology. Fig. 2. Case study building in Crisantemo Street, Getafe. It is a private detached residential building with a total built-up area of 1,694 m2, reaching 16.80 m high with 6 floors, which contain 24 homes of approximately 60 m2 each. There is a staircase as central core, currently without any elevator or ramp. It was built in 1968, mainly with load-bearing masonry walls and a concrete structure for the staircase, and interior brick partitions. It has a flat tile roof with 25% slope. The building is located in an area with paved streets, curbs and public lighting. It has public services such as sewage networks, supply of pressurized drinking water, electricity and information and communication technologies. 17 Fig. 3. Case study’s standard floor plan. The ground floor of the building is made up of three home types. Type A has two bedrooms, living room, bathroom, kitchen and terrace with a total of 40 m2, type B and C have three bedrooms, living room, bathroom, kitchen and terrace with a total of 50 m2 and 54 m2 respectively. On each standard floor (Fig. 3) there are two types of apartments. Type D has two bedrooms, living room, bathroom, kitchen and terrace with a total of 42 m2. Type E has three bedrooms, living room, bathroom, kitchen and terrace with a total of 48 m2. Regarding aspects related to the building’s energy efficiency, it is located on the Spanish climate zone D3. Each home has individual heating and DHW systems. Only 45% of the homes have air conditioning, additionally they do not have sun protection. The energy efficiency of the building was rated as E, with recommendations to improve its thermal envelope. 4.2. Rehabilitation proposal As mentioned in previous sections, three main factors can lead to a state of EP: low income, the high cost of bills and low energy efficiency. Regarding this last factor, the high energy consumption of a home is directly related to its design and internal climatic conditions. Therefore, the analysis of the characteristics of the building's location helps to elaborate strategies and solutions according to its environment. Energy consumption data could be obtained from a study carried out by the Gas Natural Fenosa Foundation called Express Rehabilitation for Vulnerable Homes - 18 Low-Cost Solutions (Fundación Naturgy 2021) which, together with the aforementioned EPIU Getafe Healthy Homes project, seek to carry out diagnostic interventions of the homes in Las Margaritas and La Alhóndiga neighbourhoods. These interventions are focused on using low cost solutions that can be quickly applied. Likewise, they are proposed as improvement works by the lessee or lessor, and are subject to compliance with the Energy Saving Basic Document of the Spanish Technical Building Code. Before carrying out the intervention in the building, a non-renewable primary energy consumption of 196.9 kWh/m2·year and CO2 emissions of 40.0 kg/m2·year were estimated from its energy certification, obtaining an energy rating class E, considering the thermal data for the building’s envelope shown in Table 2. Table 2. Thermal data for the building’s envelope. Name Area (m2) Transmittance (W/m2K) Origin of data Southwest façade 183.68 1.77 Known Northeast façade 198.68 1.77 Known Northwest façade 163.3 1.77 Known Southeast façade 70.0 1.77 Known Southeast dividing wall 106.26 0.00 Known Upper division 232.54 0.53 Estimation Lower division 232.54 0.86 Estimation Based on the diagnosis made for the building, improvement measures were proposed. For this case study, the installation of a thermal insulation on the façade, a heating system based on heat pumps and the improvement of accessibility at the different levels are proposed, since the building does not currently have an elevator: • 1. Execution of an External Insulation Façade System (EIFS), which would decrease the demand for heating by 46.1% and the demand for cooling by 3.7%. Global emissions would drop 31.7%. The energy rating of the building would increase from the current E to D. The cost of this improvement is estimated at 63,600 €, an investment that would be amortized in 18.3 years, and it yields a Net Present Value (NPV) of 268,516.6 €. • 2. Installation of a heating system based on high-efficiency heat pumps, which would decrease global emissions by 50.9%. The energy rating of the building would increase from the current E to C. The cost of this measure is estimated at 50,400 €. The investment is amortized in 15.6 years, and it yields a NPV of 11,227 €. • 3. Likewise, according to the studies carried out in the building, a lack of accessible entrance is identified that affects a number of 9 people with reduced mobility and/or over 70 years of age. Therefore, it is necessary to evaluate the adequacy to satisfy the basic conditions of accessibility. That said, based on the Building Evaluation Report, the construction of an access ramp is proposed, as 19 well as the reconstruction of the staircase with a single linear section since, due to the configuration of the building, the installation of an elevator is not viable. This proposal has an estimated cost of 90,000 €, where a public aid from the city council of 40,000 € is expected. For the case study, the focus will be put on the improvement proposal number 1, which is the one that involves an integrated intervention of the building. The lack of data for the combination of proposals has not made this second analysis possible. When making a comparison of the energy saving associated to certain interventions in buildings, economic and thermal comfort data are clear enough. However, making these comparisons in households that are not only in EP situations, but also in monetary poverty, entails a bias in these data due to the fact that families in vulnerable situations are deprived of using air conditioning systems because of their economic situation. Therefore, speaking of an economic return when making an improvement is not possible in homes where the initial consumption is minimal or null. 4.3. Monetary Poverty Indicator (MPI) Energy rehabilitation is promoted based on the attractive economic capital gain that it can generate. As Cuchi and Sweatman stated, when a deep rehabilitation of the building is carried out, improving accessibility, habitability and thermal insulation of the envelope, dwellings are revalued in an effective way. Experts of the Rehabilitation Working Group (GTR for its Spanish acronym) have evaluated this capital gain at around 10% of the property value (Alfaya Arias 2014). Similarly, according to the estimates by Tinsa Certify, dwellings in a building located in Madrid that was part of the PREI project (Pilot Project of Integrated Rehabilitation) were revalued to 25% of their initial value. Following the methodology proposed in this work, the MPI explained above is applied to the case study in order to determine the level of vulnerability of households to suffer a gentrification process, taking 25% as the increment in rent when the house is revalued, and considering that none of the families in the building are homeowners, and thereby must pay a rent. The data necessary for the calculation is obtained from the National Institute of Statistics (INE). Concretely, data on the average income per household and the average expenditure per household were gathered for 2019 in the Community of Madrid (INE 2019) (see Table 3). Then, a comparison of the data is made based on its categorization before and after the 25% increase in rent. Table 3. Mean expenditures by dwelling (INE 2019). Expenditure Spain Community of Madrid Housing 8088.00€ 10,325.93€ 20 Water 397.20€ 507.44€ Electricity 696.00€ 888.32€ Others 259.97€ 331.46€ Health care 1047.71€ 1197.46€ In the first scenario, the MPI is determined in the situation where the rental price of the house has not changed. The expenses for housing, water and electricity are directly obtained from the INE (2019). As can be seen in Fig. 4, from these data, taking as a sample 4 types of families, no family would be in a situation of monetary poverty. However, in a second situation, by increasing the rent by 25% in each of the family types, families with two adults and three children would be in a situation of monetary poverty since, when making a comparison of their net income and average expenses per household, they are below the threshold, thereby being vulnerable to social exclusion. 21 Fig. 4. Results from applying the MPI to the two scenarios defined for the case study. 22 4.4. Energy Indicator (EnI) For the calculation of the Energy Indicator, several hypotheses are considered. In the first place, the consumptions are obtained from the energy rating of the building, so only data on heating, cooling and DHW are available. Subsequently, to obtain the indicator it is necessary to determine the average built-up area per dwelling, which in this case study is 60 m2. Fig. 5. Results from applying the EnI to the two scenarios defined for the case study. As can be seen in Fig. 5, EnI is obtained following Eq. 5: 𝐸𝑛𝐼 = 𝐸𝐶 𝑀𝐸𝐶 (Eq. 5) where EC is the energy consumption required, which is obtained by multiplying the total consumption and the average area per dwelling, and MEC is the median energy consumption required by the type of building in the study area. A household’s energy consumption will be adequate or admissible if it is below the established energy threshold (IEn < 1.00), otherwise it will be inadmissible (IEn> 1.00). To obtain the MEC, the SECH_SPAHOUSE II Report (IDAE 2019) is used as a source of information. As the residential building is located in Madrid, a continental climate and block typology have been selected, whose average annual consumption per household is estimated in 9,796 kWh. As this consumption corresponds to all the equipment in the home, the percentage corresponding to heating, cooling and DHW was determined through the same report as 69.1% of total consumption. Therefore, the median energy consumption of the case study would be 6769.04 kWh. Consequently, an inadmissible rating is obtained, so it is understood that the building is currently in a vulnerable situation regarding this indicator. In scenario 2, where the energy rehabilitation of the façade is proposed, although the improvement is significant, the situation would still be one of vulnerability. If the joint measures had been implemented, the indicator would probably have been below 1. MEC: Median Energy Consumption Admissible: EnI < 1.00 Inadmissible: EnI > 1.00 Heating (kWh/m²) Cooling (kWh/m²) Domestic Hot Water (kWh/m²) Total consumption (kWh/m2) Built-up area (m2) MEC_lim. (kWh) EnI Result Scenario 1 131.11 19.70 46.05 196.86 60.00 6769.04 1.74 Inadmissible Scenario 2 70.60 18.97 46.05 135.62 60.00 6769.04 1.20 Inadmissible Per year EnI_Energy Indicator EC : Energy Consumption required EnI = 23 4.5. Index of Vulnerable Homes (IVH) It should be noted that in this chapter we will not take into account the third indicator, comfort, since it falls outside the boundaries of the analysis. The hypothesis is that in all scenarios the situation, as well as that of the EnI, is of discomfort, thereby obtaining an unfavourable result for this third indicator. With all these considerations, and following the IVH methodology, the final results are shown in Table 4. By analysing these results, it is possible to see the influence of housing expenses on the risk of suffering from a situation of EP. Specifically, the family consisting of two adults and three children experiences an increase in their level of energy poverty from scenario 1 to 2 caused by the increase in housing costs. In scenario 1, the household has a quality of life corresponding to 0.825 QALYs, which represents a cost for the national health system of 5,250 € (HRQLC). However, the increase in housing expenses in scenario 2 causes a situation of vulnerability of level 8 for that same household. In this case, the quality of life of the family becomes 0.484 QALYs, and the associated expense for the national health system accounts for 15,480 € (HRQLC). Table 4. Final results for the Index of Vulnerable Homes (IVH). Index of Vulnerable Homes (IVH) MPI EnI CI QALY HRQLC (€) IVH Level Scenario 1 Two adults NMP Inadmissible Inadmissible 0.825 5250 3 Two adults/one child NMP Inadmissible Inadmissible 0.825 5250 3 Two adults/two children NMP Inadmissible Inadmissible 0.825 5250 3 Two adults/three children NMP Inadmissible Inadmissible 0.825 5250 3 Scenario 2 Two adults NMP Inadmissible Inadmissible 0.825 5250 3 Two adults/one child NMP Inadmissible Inadmissible 0.825 5250 3 Two adults/two children NMP Inadmissible Inadmissible 0.825 5250 3 Two adults/three children MP Inadmissible Inadmissible 0.484 15,480 8 5. Conclusions This paper addresses the relationship between gentrification processes and EP rates. To that end, in the first place, the term gentrification is exposed, including its direct 24 relationship with economic, social and cultural aspects framed at a national and European level. Second, EP is explained based on the concept, research trends and the IVH, by which it is possible to identify households in a situation of vulnerability at risk of suffering from EP. The bibliographic review shows the benefit that energy rehabilitation in buildings generates at the environmental level and in improving people's habitability. However, the potential for social exclusion that derives from this is also shown. Fundamentally, it relies on the fact that these interventions become a necessity in families that are in a situation of poverty and, likewise, vulnerability. Therefore, the options are limited when families are unable to meet the costs of an intervention of this level and, as mentioned above, in cases where it is considered a luxury to make use of air-conditioning systems. In this sense, it is clear that it is impossible to carry out an energy rehabilitation in vulnerable sectors without public funds. It is worth emphasizing that energy rehabilitations are defined in such a way that the amortization of the initial investment is recovered from the savings produced in energy bills after reducing energy consumption. In this context, the possible risk of suffering gentrification problems is shown in populations where it is necessary to carry out these energy rehabilitation actions, but whose neighbours have economic limitations to cover them. As a consequence, they are forced to abandon their homes once they have been rehabilitated because they cannot cope with the increase in associated housing costs (rent, maintenance costs, etc.), thus favouring a process of social exclusion in which households in a situation of energy poverty end up living in neighbourhoods whose buildings have a low quality of energy efficiency. It is important to indicate that the results of this work must be taken with caution due to the limitations found in data access and the defined hypotheses. However, it presents a new research line that should be further explored in future studies: the effect of energy renovation (revaluation of housing) on gentrification and the possible increase in the risk of suffering from EP. In conclusion, this work presents a case study in which an energy rehabilitation action is associated with an increase in income for families living in rehabilitated homes, causing an increase in the situation of vulnerability to suffering from EP. This situation, in turn, is associated with a poorer quality of life for family members and, consequently, an increase in costs for the national health system. Families will be at higher risk of diseases related to a decrease in income for food, heating, cleaning and personal care. Acknowledgments This research is partially funded by “Nuevo Análisis Integral de la Pobreza Energética en Andalucía (NAIPE). Predicción, evaluación y adaptación al cambio climático de hogares vulnerables desde una perspectiva económica, ambiental y social (US- 125546)” funded by the European Regional Development Fund (ERDF) and by the “Consejería de Economía y Conocimiento de la Junta de Andalucía (Spain)”. Also partially supported by the 6th Own Research and Knowledge Transfer Plan of the University of Seville (VI PPIT-US). Authors acknowledge