ByKathy Moore Cowan
The term "green building" is often used interchangeably with the terms "sustainable building," "high-performance building" and "environmentally responsible building." It is most commonly defined as a process that creates buildings and infrastructure that minimize the use of resources, reduce harmful effects on the environment and provide healthier environments for people.
The term "affordable housing" is often used interchangeably with the terms "low-income housing," "attainable housing" and "subsidized housing." It is used most often to describe single-family or multifamily dwellings that have purchase prices or rental payments affordable to low- to moderate-income individuals, usually with the help of subsidies.
For most people, green building and affordable housing are not considered compatible. However, if the term "affordable housing" is used to describe "sustainable affordability" of single-family or multifamily dwellings for lower-income individuals, then green building becomes a perfect companion.
In our current environment of rising utility costs and escalating gas prices, simply building houses that are affordable for low- to moderate-income individuals to purchase or rent is not sufficient. To be truly affordable over the long term, residents must be able to afford the monthly mortgage or rent payment as well as the utilities and transportation costs associated with the home. Homes must be energy-efficient and located close to public transportation.
Residents of green-built housing can realize long-term savings through efficiencies incorporated in the design of the home. Green, affordable housing presents an opportunity to reduce variable costs, such as utility and transportation expenses, which disproportionately affect low-income people.
According to a 2005 report by the Federal Home Loan Bank of Atlanta, in addition to lower utility rates, green building practices improve occupant health and comfort through the use of better ventilation systems and better construction materials. The end result is cleaner indoor air and a reduction in the occurrence of asthma, respiratory diseases and other ailments.
Designing affordable housing that is also green requires careful consideration of what green features to include and what green features are simply too expensive to maintain initial affordability. Heightened environmental awareness has made fund-raising for affordable green projects slightly less burdensome. However, keeping the homes affordable still requires careful upfront planning.
Some common green features used in affordable housing projects include:
Maintaining a relationship with local green-building experts is essential for developers who want to prevent costly mistakes when undertaking a green built project. State or regional chapters of the U.S. Green Building Council are a great place to start. Chapter locations are listed at www.usgbc.org.
The main challenge to green building cited by most affordable housing developers is the higher initial capital outlay. However, a report by New Ecology Inc. shows that total development costs for green projects reviewed for the report ranged from 18 percent below to 9 percent above the costs for comparable conventional affordable housing. On average, the 16 case studies in the report show a small "green premium" of 2.42 percent in total development costs. These incremental costs are largely due to increased construction, as opposed to design, costs.
Other challenges related to affordable green building include:
Whether a home is considered affordable has traditionally been calculated based on the upfront initial cost to the homebuyer. In the United States, a commonly accepted guideline for housing affordability is housing costs that do not exceed 30 percent of a household's gross income. Housing costs considered in this guideline generally include taxes and insurance for owners, and sometimes include utility costs. When these combined monthly costs exceed 30 percent to 35 percent of household income, then the housing is considered unaffordable for that household.
Life-cycle costing is needed to adequately assess housing affordability. Life-cycle costing takes into account the long-term costs of building maintenance to provide a more accurate picture of the total costs associated with a structure. Components considered are the total cost of a structure, including initial construction costs, and long-term operating and maintenance costs. When looked at from a life-cycle cost perspective, the operating savings of an affordable green-built home far exceed the incremental capital costs. Traditional costing methods simply do not capture the economic benefits of green building.
Financial institutions should develop mortgage products and underwriting standards that look at life-cycle costs rather than only upfront purchase costs.
Federal, state and local housing finance agencies should give preference to applications for funding for projects that include green technologies.
Philanthropic organizations should support capacity building for affordable housing developers to enable them to effectively incorporate green technologies in their projects. Utilities and for-profit entities should support pre- and post-purchase education for homeowners to ensure that they get sustained benefits from maintaining a green home.