In this article, we discuss the tie between climate change and affordable housing, the role that legislation and government funding plays, along with a list of top U.S. organizations working to build greener, more affordable communities for all.

The U.S. Housing Crisis: High Prices & Little Options

The U.S. is in the midst of an affordable housing crisis. According to the National Low Income Housing Coalition (NLIHC), there is a shortfall of 7 million affordable and available rental homes for extremely low income households, defined as those earning 30% or less of their area median income. Currently, no state has an adequate supply of affordable housing to support the nation’s over 10.8 million extremely low-income families.

Furthermore, research shows that 70% of all extremely low income families pay more than half their income on rent and that the lack of affordable housing costs the U.S. economy about $2 trillion annually in lower wages and productivity.

The current state of housing across the U.S. is riddled with high prices but little options for those who need it. From 2021 to 2022, home and rent prices have spiked due to a widening gap between supply and demand, causing over 9 million homebuyers to be priced out of the housing market. Higher mortgage rates, competitive investor purchases and the supply of available homes at a record low has put first-time buyers at just 26%, forcing would-be homebuyers to return to the rental pool.

This demand in turn has caused rent prices to soar. The average asking rent in the U.S. is now $1,900, with most states seeing an increase of 10% and Florida topping the list at a 28% increase. Without exceeding 30% of their total annual income, someone working full-time at the federal minimum wage of $7.25 cannot afford the average asking rent in any U.S. state.

Fixing the current housing crisis is not just a pressing issue for today, however. Greater access to affordable housing breaks intergenerational poverty and has lasting effects for generations to come. Financial and housing stability supports better health and educational opportunities for children compared to children coping with overcrowded homes, disadvantaged neighborhoods and disruptive moves brought on by high rent prices or eviction.

Climate Change and Affordable Housing

The affordable housing shortage has been exacerbated by a number of factors such as rising rent, stagnant wages, and increased development costs. But one factor that is often overlooked is the impact of climate change and environmental regulations on the availability of affordable housing.

This is a double-edged sword scenario. While climate change is shown to have the greatest threat to underserved communities, environmental regulations working to minimize this impact can also simultaneously impede on the availability of affordable housing.

In many cases, environmental regulations can make it more expensive and difficult to build new developments, affecting both the soft costs associated with financing and environmental impact assessments and the hard costs of construction and ongoing operations. While environmental laws often improve the design and planning of communities, they also pose new hurdles that can both delay and increase costs of new developments and thus, the availability of affordable housing.

Notable federal environmental laws that pose specific environmental and land use standards on development projects include:

• National Environmental Policy Act (NEPA) – NEPA requires environmental impact assessments for any action approved, funded or carried out by federal agencies to determine the potential environmental, social, and economic effects.
• Endangered Species Act (ESA) – The ESA requires that federally-approved projects such as housing developments do not threaten listed endangered species or their habitat.
• Clean Air Act – The Clean Air Act regulates all sources of air pollution, including construction equipment, building sites, and land conversions that may create new sources of pollution.
• Clean Water Act – The Clean Water Act sets water quality standards, implements pollution control measures, and requires facilities to obtain a permit to discharge wastewater and pollutants into navigable waters.
• Wild and Scenic Rivers Act (WSR) – The Wild and Scenic Rivers Act preserves the nation’s rivers and streams recognized for their natural, cultural, and recreational value. The WSR Act encourages river management that maintains appropriate use and development of river areas.
• Coastal Zone Management Act (CZMA) – The CZMA guides states on how to develop a coastal protection program and preserve the integrity of coastal habitats from the impacts of development and other government-approved projects and activities.
• State and Local Environmental Policy Acts – There is a growing number of states and local jurisdictions implementing NEPA-like environmental policy acts to preserve the natural environment and minimize impacts from housing and development projects.
• The U.S. Department of Housing and Urban Development provides more info and guidelines on federal environmental regulations.

There are often costs associated with abiding by federal and state regulations such as costs for third-party assessments, building permits, housing upgrades, etc. These costs play into the overall final cost of the project and influence surrounding real estate prices.

On top of regulatory hurdles, climate change poses a long-term threat on community resilience and the ability to withstand climatic changes, e.g. more frequent and severe weather events, changes in crop production and water availability, etc. In 2019 alone, natural disasters displaced close to one million Americans and predictions show more “climate migrants” having to relocate due to climate change-induced events.

Unfortunately, in many cases, the most affordable housing options are in poorly developed and underfunded neighborhoods whose outdated infrastructure and lack of resources makes it difficult to cope with long-term climate change.

The Role of the Government in Addressing Climate Change and Affordable Housing

Affordable housing and community resilience against climate change are interlaced issues whose solutions will vary from region to region. One fact is unwavering however. The federal agenda on how to navigate climate change is more imperative than ever as this sets the pace for future progress and the outlook of countless vulnerable communities.

Signed into law by President Biden in August 2022, the Inflation Reduction Act maps out energy security and climate change investments that aim to achieve more sustainable and affordable communities across America:

• Policies that promote lower consumer energy costs via energy-efficiency rebate programs, tax credits, and grants
• Investments in U.S. clean energy technologies, manufacturing facilities and vehicles
• Decarbonization of all industries via grants, tax credits and loan programs to promote clean energy technology, energy storage, and clean fuels and vehicles.
• Environmental justice, access and equity, and clean energy grants and rebate programs designed specifically to help disadvantaged communities
• Tax credits and grants for farmers, forestland owners and rural communities in order to build climate-smart agricultural practices, support forest conservation and urban tree planting, coastal restoration, and biofuel production and infrastructure.

While the 2022 Inflation Reduction Act is a historic step towards nation-wide sustainability for the U.S., establishing successful climate solutions in an ever-fluctuating economic and political arena remains a challenge.

Organizations Supporting Affordable Housing for All

Thankfully, there are several national and state organizations working to improve housing policies and secure affordable housing for all. Below are some of the top housing and development organizations in the U.S.:

• National Low Income Housing Coalition (NLIHC)
• National Affordable Housing Trust (NAHT)
• National Housing Trust (NHT)
• Homes for America (HFA)
• Mercy Housing
• BRIDGE Housing
• National Church Residences (NCR)
• The Community Builders, Inc. (TCB)
• Volunteers of America (VOA)

Conclusion

Achieving housing development that supports building more sustainable communities while also ensuring affordable housing for all is a complex challenge. It is necessary to view the current housing and climate crises under the same lens because they’re intrinsically related and any improvement in one translates into improvement in the other. Creating a livable future for all requires climate legislation and federal funding that supports investments in clean energy technology and green infrastructure, industry-specific regulations and accountability, and housing initiatives that build affordable, climate-smart communities for everyone. Further, there is more funding needed for on-the-ground organizations serving disadvantaged communities..

Whether you’re a business or homeowner, or working in community planning or the housing industry, together we can push for greener, more affordable communities for all. You can read our other articles related to sustainable housing on our blog:

• How to Build and Retrofit a Sustainable Home
• Buyer’s Guide for Sustainable Home Products
• Renovations and Improvements for Sustainable Homes
• Green Realtor® Guide: Marketing Eco-Friendly Homes and Sustainability