Minimum energy performance standards and house price capitalization: Evidence from France's rental ban on “energy sieves”

Energy performance disclosure is increasingly paired with minimum energy performance standards to accelerate the capitalization of energy inefficiency into housing prices and strengthen homeowners' incentives to renovate inefficient dwellings. We study the 2021 French policy implementing a progressive rental ban on the least energy-efficient dwellings ("energy sieves") and examine whether it has affected house prices. Using more than 900,000 housing transactions over 2014-2024, we document that energy sieves sell at an additional discount of about 5 percent following the policy announcement. Consistent with expected renovation costs driving the post-ban-announcement discount, the discount is much larger for houses that are costlier to renovate. The increase in the supply of G-rated houses on the sales market is also concentrated among those properties. While the post-ban-announcement discount reduces the gap between expected renovation costs to achieve compliance and expected sale loss due to noncompliance, we find limited evidence of a renovation response.