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In debates related to energy poverty, the link to questions of residential segregation remains somewhat peripheral. Because, usually, only energy-poor households are at the focus and residential mobility is not addressed, the interdependencies between households’ energy costs and the residential segregation of cities remain out of sight. Concern that energy efficiency measures could foster socio-spatial segregation in cities has recently emerged in Germany. If only households with higher incomes can afford housing with high energy efficiency standards, whereas low income households tend to choose non-refurbished but, in sum, more affordable housing stock, an increasing concentration of poor households in poor housing conditions would result. German energy efficiency and CO2 reduction policies are relatively insensitive to such questions. Using survey data from a small shrinking city in Germany, we explore how energy costs are interrelated with residential location decisions and, thus, with segregation processes and patterns. Shrinking cities represent an interesting case because, here, a decreasing demand for housing stimulates residential mobility and paves the way for dynamic reconfigurations of socio-spatial patterns. We found that energy-related aspects of homes play a role in location decisions. Low income households seek to minimize housing costs in general, paying specific attention to heating systems, thermal insulation and costs. Resulting segregation effects depend very much on where affordable and, at the same time, energy-efficient housing stock is spatially concentrated in cities. These findings should be taken into consideration for future policies on energy in existing dwellings.

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