Can Affordable Housing Be Green?

In short, yes! Many assume that green homebuilding, which often costs more at the outset, is not appropriate for affordable housing. However, the greening of affordable housing can actually be more economical because over time homeowners will benefit from lower utility bills, fewer maintenance costs, and healthier environments. Affordable housing developers and operators also benefit from higher quality, more efficient, and more durable buildings. Buildings that are integrated to the site, use energy, water and materials wisely, minimize and recycle construction waste, create their own energy, are durable and easily maintained, and promote good health for both workers and residents enhance housing affordability as well.

One of the initial hindrances to affordable housing is that developers of affordable housing face financial hurdles before most homes are built to environmental standards. Housing affordability is usually measured by the initial construction costs. Green building often requires additional upfront costs and so does not appear to promote affordability from the outset. The Natural Resources Defense Council found that the upfront costs of contracting a LEED certified green building project tend to match or only slightly exceed those of comparable non-green buildings.

To assess the true affordability of green building practices, proponents argue for a life-cycle approach that accounts for both upfront capital costs and long-term operating expenses to measure affordability. Case studies conducted by New Ecology found that energy and water costs for green housing were significantly lower than for conventional housing. Total development costs for the green projects reviewed ranged from 18% below to 9% above (about $34,800 less per unit to $9,700 more per unit) the costs for comparable conventional affordable housing. This wide range was mostly attributable to whether the developer retained a long-term ownership interest and whether the owners or residents were responsible for utility costs. From a life-cycle valuation perspective, the studies showed that the benefits of green affordable housing are real and, in some cases, substantial.

For developers to be successful implementing green features into affordable housing they must incorporate and integrate green features into a project early, and assemble an experienced green team which will employ an integrated design approach and utilize life-cycle costs in evaluating the economics of the project. For policymakers, creating innovative funding mechanisms that recognize the long-term value of green projects, instituting higher mandatory standards for energy efficiency in building codes, and adopting a minimum green standard for affordable housing, are the important elements to better implement green, affordable housing. A better understanding of the costs and benefits of green affordable housing projects will ensure that greening affordable housing is cost effective and will be pursued.

-Elizabeth Barron, Legal Intern