Addressing Climate Change Through Affordable Housing

Oct 11 2019

By: Andrew Foster, Board of Directors & Duke Law Professor

There is an overwhelming consensus in the scientific community that urgent action is needed in order to reduce, and ultimately eliminate, the production of greenhouse gases. Without such action, humanity will almost certainly face catastrophic impacts resulting from changes in the climate due to increases in global temperatures. These impacts will likely include an increase in the severity and frequency of severe weather events, the loss of land mass as sea levels rise, water and food shortages, and the large scale displacement of people around the world leading to forced migration.

If the worst-case scenarios come to pass, it is inevitable that the effects of climate change will touch everyone. Low-income and other vulnerable populations, however, are likely to be impacted most severely. This is because these populations tend to live more frequently in the kinds of places that are most likely to be impacted by climate change; for example, in low lying areas that are particularly susceptible to flooding.  Moreover, low-income and other vulnerable populations are less likely than others to be able to quickly recover from disasters.

In the face of this gloomy reality, several recent reports, including ones by the United Nations Intergovernmental Panel on Climate Change (“IPCC”) and the Center for American Progress, offer the hope that tackling our country’s affordable housing crisis – if done right – can also help to address the climate crisis. To make the most of this opportunity, however, it is critical that developers, owners, investors, and governments at all levels understand this will require new approaches because business as usual will likely make things worse.

The National Low-Income Housing Coalition estimates that the U.S. has a shortage of more than 7.2 million units of affordable housing. As a result, there is a need for substantial new development in order to solve this crisis. The U.S. Department of Energy and the National Association of Home Builders each note, however, that housing accounts for nearly 20% of all greenhouse gas production. As a result, actively addressing the climate impacts of both existing and new housing stock can make a big difference. To this end, there are at least three things the affordable housing sector can be doing to help fight climate change as it also works to ensure that all Americans are appropriately housed.

First, because the majority of the greenhouse gases produced in connection with the housing sector are a function of the amount of energy used in connection with each unit, significant reductions in emissions can be achieved by enhancing residential energy efficiency. These strategies can and must involve everything from investing in energy efficiency upgrades for existing affordable housing units to using “green” design and building techniques with new units. Because such techniques should reduce energy usage, they should also have the effect of reducing utility costs and, as a result, should make units more affordable. While there may be challenges in figuring out how to finance the cost of these activities, the technology exists and there are many great models to follow.

Second, in addition to energy usage, there is an opportunity to reconceptualize affordable housing units, particularly multi-family properties, not just as homes, but also as small-scale utilities with the capacity to generate renewable energy through the incorporation of solar installations into design plans. Again, there can be challenges with financing the additional costs of such installations. As the costs of solar installations continue to decline, and as financing strategies, like third-party power purchase agreements, become increasingly common, the incorporation of solar needs to become a design standard for the industry. As with enhanced energy efficiency, this strategy can also be economically beneficial to both owners and residents over time because it either reduces utility costs or creates new streams of income associated with the sale of power back to the grid.

The third strategy is, arguably, the most impactful. It is also the most controversial. To really tackle the twin challenges of housing affordability and climate change, we need to rethink land use policy. As the IPCC report notes, sprawl is endemic across the country. This is due, in large part, to policies favoring low-density development and single-family home ownership. Over the last 16 years, the United States has lost more than 24 million acres of natural land. As communities grow and push out beyond the suburbs, at least in part to create more affordable housing options, not only do we lose valuable natural resources, but we force people to drive more frequently and for longer distances. This dramatically contributes to climate change as nearly 30% of greenhouse gas emissions in America result from transportation.

Instead of pushing out to the exurbs to find new locations for affordable housing, the IPCC report, the Center for American Progress, and others advocate for a renewed focus on increased density and infill development within existing communities. This kind of approach would also help to increase the likelihood that low-income and other vulnerable populations will live in communities with meaningful economic opportunities and strong social networks. Some cities have taken bold steps to change their development ordinances to make affordable multi-family and transit-oriented development a priority. These efforts need to be assessed carefully and the successful models replicated widely.

Climate change is a crisis that will impact us all, and we all have a role to play in finding solutions. The most powerful solutions will be replicable at scale and will also address other pressing social problems at the same time. The affordable housing sector has a special role to play in this process. There is a unique opportunity for developers, owners, investors, and governments at all levels to embrace change and be leaders on this critical issue. As they have done so many times in the past, I hope that they will accept this challenge and seize this opportunity.