Can we work to solve the climate crisis by fighting the affordable housing crisis? 

By Natalie Rogers, junior policy associate

As temperatures rise, carbon emissions skyrocket, and severe weather continues to strike, cities and communities across the nation are seeking dynamic local policy solutions to combat the growing climate crisis. There is little debate that can discredit the reality that the climate is changing. According to a UN Intergovernmental Panel on Climate Change report, the World needs to cut its total emissions in half by 2030 and reach net zero emissions by 2050 to avoid apocalyptic warming in global temperature. While these facts are sobering, there are model programs in communities across the US that can be recreated to effectively combat the climate crisis, reduce our emissions, and provide a better quality of life for all people. 

In August of 2018, eight American mayors, including the mayor from New York, Los Angeles, and Washington DC, signed a pledge to dramatically alter how their city’s buildings use energy. The pledge stipulates that by 2030, every new building constructed in the cities will have net-zero emissions and that, by 2050, all existing buildings will have been updated to meet these new standards. This move is important because emissions from buildings can constitute up to 70% of overall emissions within a city. It is also important because retrofitting buildings to meet these new energy standards means the creation of new green jobs. For example, the mayor of Vancouver, Gregor Robertson, said his city has experienced a 53% increase in green building jobs since 2010. 

Retrofitting buildings to meet green standards would also impact housing, and while these investments into green, energy efficient housing might be steep at first, these investments are proven to save residents a significant amount of money in the long run. Green affordable housing is cost-efficient, sustainable, and provides a better quality of life for residents when new developments are coupled with thoughtful planning that situates the places we live near the places we work, play, and learn. In fact, some communities have already began using available resources to develop green housing that prove its positive impacts. Making all housing emissions net-zero could make citizens healthier and cost them less to heat their homes, which would be especially impactful for low-income building renters. According to the U.S. Green Building Council (USGBC), updating all multifamily housing stock to be energy efficient could save 15%-26% in energy usage over the next 20 years. 

Currently, energy and water consumption place a disproportionate burden on low income residents. The USGBC reports that households that earn $50,000 or more spend 3% of their income on residential energy expenditures while those that earn $10,000 or less spend 33% of their income on energy expenses. A report from the American Council for Energy-Efficient Economy found that making low income housing as energy efficient as the average house in the US would cut 35% of energy costs.

Other groups across the country are revealing the impact of green developments in their state. A report by Southface and the Virginia Center for Housing Research revealed residents of green developments use 14% less energy per square foot. Another study on energy efficient, green housing in Virginia showed residents saved $54 per month or $684 annually on their electricity bills. Developing green housing is not only a step forward for climate justice, but economic justice as well. 

These changes are already being implemented successfully in communities across the country.  Recently, North Miami, Florida adopted Green Housing Rehabilitation Guidelines requiring 100% of federal CDBG, Homeownership Opportunities Programs funds, and Florida State Housing Initiatives Program funds to be used for rehabilitation, redevelopment, and construction projects that contribute to the greening of the city in a sustainable manner to promote energy efficiency. In Denver, Colorado the Colorado Housing Finance Agency and seven metro Denver cities collaborated to provide affordable housing near transit stations and provides funding for projects that will build affordable housing near metro stations to reduce vehicle travel and increase access to reliable transportation for low income residents.

Green housing means developers are constructing higher quality housing at a lower cost and residents are saving on their utility expenses and living in better conditions. A study on LIHTC funded multifamily properties in Alabama, Georgia, North and South Carolina found that green developments perform better than non-green developments in terms of construction and development costs, energy efficiency, utility costs, and satisfaction. Non-green developments were found to be only 1.6% less expensive in terms of hard construction costs when compared to green developments, and green developments are nearly 5% less expensive on total construction costs per square foot and more than 13% less expensive on soft construction costs than the non-green developments. 

Photo of West Arbor Complex
West Arbor Complex, a green affordable housing development in Ann Arbor, MI

Michigan is making strides toward providing green affordable housing, too. According to a study done that scores all of the state’s Qualified Allocation Plans (QAP) for smart growth and energy efficiency promotion, Michigan’s QAP was one of only two states, the other state being Ohio, to receive a perfect score. To receive a perfect score, QAPs had to incentivize third-party green certification programs, require Smart Growth standards like building near public transit and other services, promote housing rehabilitation, and require energy efficiency standards in all low income housing development.

An example of Michigan’s green affordable housing development in action is shown in the Ann Arbor Housing Commission’s development of the West Arbor Complex. The 42-unit complex features green standards like super-insulated panels and radiant-heat concrete flooring. All of West Arbor’s residents were formerly homeless and receive rental assistance so they only pay 30% of their income to live there. The project was developed using Low Income Housing Tax Credits, and is a prime example of how new housing can be developed in Michigan with existing resources that is both environmentally friendly and provides stability to struggling families. 

While the climate crisis will take an international effort to be addressed comprehensively, it is clear there are tangible steps that can be taken from the local level to reduce emissions and provide affordable, sustainable housing. Although the climate crisis presents us with a life-altering challenge, it also presents an opportunity for local governments to completely rethink how cities are planned and how new housing is developed. If done thoughtfully, we can shape a new world where our communities are sustainable, livable, and accessible for all.

Interested in developing affordable housing using Low Income Housing Tax Credits? Do you want to learn more about green development? Check out our Real Estate Development Boot Camp curriculum. CEDAM hosts this week-long training the first week of June every year!