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How Cities Can Tackle Both the Affordable Housing and Climate Crises

The affordable housing and climate crises are closely intertwined. The lack of affordable housing in many cities forces households into suburbs, exurbs, and areas at higher risk of wildfires, floods, extreme heat, and other hazards. Urban sprawl accelerates climate change (PDF) by encouraging larger homes, increasing energy usage, fostering greater dependency on cars, and destroying natural habitats crucial for biodiversity and carbon sequestration.

Meanwhile, the increasing frequency and severity of extreme weather events—driven by climate change—exacerbate the housing crisis by reducing the supply of affordable housing and increasing housing and related costs. In 2021 alone, 1 in 10 US homes—more than 14 million—was damaged by disasters.

These dual crises are particularly acute for people with low incomes and people of color, who are both disproportionately cost burdened and more vulnerable to the effects of climate change. These disparities partly stem from historical racist policies that have led to today’s separate and unequal neighborhoods but are compounded by ongoing practices like exclusionary zoning and land-use policies that prevent development close to job centers and other desirable amenities, as well as inequitable disaster recovery allocations that privilege homeowners over renters and white people over people of color.

The scale and urgency of the affordability and climate crises requires concerted action from all levels of government (PDF), but cities are at the frontlines of climate change, with many already experiencing influxes of climate migrants. The federal government provides the vast majority of funding for both affordable housing and climate action (in addition to disaster relief via the Federal Emergency Management Agency), but much of this funding flows down to states, many of which enable their municipalities to enact policies—especially housing policies—independently.

Ensuring the availability of safe, affordable housing while mitigating and building resilience to climate change is more crucial now than ever. Fortunately, there are several steps that cities can take to tackle both.

1. Encourage and fund the rehabilitation of existing homes

Energy consumption in residential and commercial buildings contributes to more than 30 percent of the nation’s greenhouse gas emissions. These estimates exclude embodied emissions (which result from the manufacturing, transportation, installation, maintenance, and disposal of home-building materials), so the true climate impact is likely even larger.

Significantly reducing emissions from residential homes will require rehabilitating and retrofitting existing buildings, including by installing renewable energy sources like solar panels, replacing gas-powered appliances with electric ones, and making homes more energy efficient through weatherization and other upgrades.

These retrofits can advance affordability by reducing ongoing operations and maintenance costs for residents and building owners. This is key for households with low incomes, who spend more than 13 percent of their incomes on energy (PDF)—nearly five times as much as all other households. Retrofitting older homes can also build resiliency to climate change by improving insulation, incorporating cooling measures, and upgrading air filtration systems.

The Infrastructure Investment and Jobs Act and the Inflation Reduction Act both allocated significant federal funding toward programs and incentives for homeowners and building owners to invest in electrification and energy efficiency retrofits. However, homes with existing repair needs may be ineligible for some of these programs. Cities can thus consider providing grants or low-cost loans to homeowners with low incomes and owners of affordable rental housing (who may not otherwise have incentives to improve their properties, as tenants bear most of the economic and health costs related to climate effects) to allow them to capitalize on existing state or federal programs.

Although retrofits are essential to reducing buildings’ climate impacts (PDF), they could result in higher rents as landlords seek to recoup their investments. To mitigate the problem, some subsidy programs, such as New York City’s Multifamily Housing Rehabilitation Loan Program, prohibit owners from increasing rents as a result of capital improvements made with government subsidies. Although likely effective at keeping rents affordable, this may also remove the owner’s incentive to conduct retrofits, so local governments must find ways to balance incentivizing landlords with protecting tenants and maintaining affordability.

2. Invest in new, green public housing and community-level mitigations

There are 200,000 fewer public housing units across the country today than in the 1990s. This means many localities likely have leeway to construct many new, green public housing units, as the Faircloth Amendment only prevents increasing public housing stock from the amount that existed in 1999. Building more public housing would not only expand a critical supply of affordable housing but could also help significantly reduce carbon emissions while improving residents’ quality of life.

Complementing those investments with support for community-level mitigation efforts, such as levees and open spaces that serve as fuel breaks, can help protect entire communities against growing threats. Cities can look to Washington, DC’s Green New Deal for Housing Amendment Act, which proposes to create net-zero, transit-oriented social housing built using green construction techniques. 

3. Enable and incentivize the private and third sectors to develop affordable, climate-friendly housing

Building enough green, affordable housing to alleviate the housing crisis will require the private and third sectors to get involved. This first requires local governments to revise land-use policies (including zoning codes) to allow denser, multifamily housing by right; reduce lot size minimums; eliminate parking requirements and height limits on buildings; and allow transit-oriented development close to jobs and services; all of which can reduce housing costs and lower carbon footprints

But removing density restrictions alone doesn’t guarantee developers will build affordable and climate-friendly housing. Cities can also leverage land-use policies to discourage developers from building in areas at high risk of floods, fires, and other hazards, as well as incentive sustainable development practices, such as using locally sourced green materials and incorporating adaptation and resilience strategies (PDF). Incentives could take the form of carrots, such as tax abatements and exemptions for projects that meet certain criteria, or sticks, including taxes on vacant land that may incentivize infill development.

Cities can also consider updating their building codes to require higher energy-efficiency standards. Some cities, such as New York City, have mandated electrification in all new buildings, following evidence (PDF) that all-electric homes are cheaper to build in many areas than mixed-fuel homes.

Though housing policy alone can’t solve the climate crisis, changes to how we build homes and where we build them could help mitigate the climate crisis and build resiliency to climate impacts while alleviating the nationwide affordability crisis and providing safe, affordable homes to all who need them. Local leaders can consider the above strategies to capitalize on the opportunity to simultaneously address the affordable housing and climate crises.