Green Affordable Housing: One Step Towards Justice
Equity and Justice Series Content
The federal minimum wage is intended to be a living wage, but can anyone possibly live on $7.25 per hour? To many, $7.25 might be the cost of a morning cup of coffee. We do not think of it as one hour’s worth of labor because for many of us, it’s not.
But 1.7 million people in the United States earn an hourly wage that is at or below the federal minimum wage, and 21 states have yet to establish their own minimum wage that is higher than the federal standard. Even the states that have set their own minimum wage (29 states plus Washington D.C.) have not sufficiently raised it to a livable wage.
This situation is especially jarring when we consider that an individual making minimum wage and working full-time cannot afford a two-bedroom apartment in any state in the U.S. The graph by the National Low Income Housing Coalition reveals “housing wages” by state. A housing wage is the minimum hourly wage that is required for an individual to afford a two-bedroom rental space while working 40 hours per week, 52 weeks during the year.
An important aspect of the housing wage is that renters allocate no more than 30% of their pre-tax income to rent, which is held as the standard of affordability. At present, three-quarters of low-income families in the U.S. are spending over 50% of their income on rent.
Workers in California, the state with the highest housing wage in the continental U.S., have to earn $36.96 per hour to afford a modest rental space. This translates to a required 114 hours of work per week at the state’s current minimum wage, and California’s minimum wage is $5.75 higher than the federal minimum wage.
This country is not adequately supporting low-income individuals and families, as so many of them are losing unreasonable shares of their income to cover their high rent.
Such inadequacies created racial and economic injustices. According to the U.S. Census Bureau, the poverty rates in 2019 for Black people, Asians, and Hispanics was a combined 41.8%, compared to 7.3% of white people. These rates have declined over decades, but there is still tremendous room for improvement and more equitable racial justice. The Harvard 2018 State of the Nation’s Housing report also revealed meager improvements in Black homeownership rates. Since 1994, Black homeownership rates have risen 0.3%, and they remain 29.2% lower than white homeownership rates. Moreover, the rate of black homeownership in 2018 was 2.6% less than it was in 1983. Black people are more likely to be impoverished and thereby less likely to own homes, and such disparities call for increased affordable housing options to begin to remedy injustices.
Additionally, affordable housing options are critical to bettering a child’s future. Stanford economists Raj Chetty, Nathaniel Hendren, and Lawrence Katz studied the effects of moving to affordable housing on children and their families. They found that children were more likely to attend college, earn higher incomes, and live in safer neighborhoods as adults if they lived in affordable neighborhoods from a young age. Affordable housing also increased the financial stability of the households, which led to greater educational success for children.
Increasing the availability of affordable housing is one pathway towards equitable and just communities. Once rent and other housing costs are reasonable for lower-income communities, the individuals are granted greater financial security. Given such security, those with lower income are better equipped to support their lifestyles. With time, more affordable housing options can lessen the wealth disparities in cities, as they work to shrink the income gap.
The integration of green building principles and practices lowers the construction and maintenance costs of a project, resulting in healthier, durable, and more affordable buildings. Site selection is an important consideration for any green project, and it holds promise for affordable housing developments. When building green, buildings are encouraged to be constructed on infill properties, an underutilized or vacant lot that is typically located in an urban environment. Building affordable housing in an infill site would locate residents closer to jobs and community needs, reducing residents’ transportation costs and increasing job opportunities that contribute to economic mobility.
Building on a brownfield remediation site is another location supported by green building concepts. A brownfield is a site that is abandoned and usually polluted to some degree. The contamination decreases the value and cost of the site. After cleaning up the site, the property may be safely developed; the value of the site also improves after the contamination has been removed, typically increasing in value by 5 to 11.5%. These sites are great opportunities for developers looking for inexpensive plots of land to construct affordable housing.
Another key aspect of green building design is energy efficiency. Green design promotes energy-saving principles and equipment, such as the use of natural light, renewable energy sources, efficient HVAC systems, and better insulation. These ideas may be implemented in the initial design of a building, but they also can easily be implemented in existing buildings to help lower operational costs. In a report on green affordable housing by Southface Energy Institute and the Virginia Center for Housing Research, researchers found that people living in green, affordable housing developments used 14% less energy per square foot compared to non-green developments.
Environmentally conscious site selection and energy efficient practices are just two components of green building philosophy; other aspects like materials reuse and water efficiency can also benefit affordable housing developments. Solara is an example of one project that invested in these green building principles to create a housing community that is both green and affordable.
Solara was developed in 2007 by Community HousingWorks, a nonprofit organization focused on creating affordable communities in California. It sits outside San Diego on a former infill site and is within walking distance to schools, stores, and other community services. Its 56 apartment units are powered entirely by solar panels, which eliminate virtually all utility bills for tenants. The project capitalized on government funding sources that encourage renewable energy to help lower its construction costs: “The $1.1 million cost of the photovoltaic panels was almost entirely covered by state and federal incentives rarely used in affordable housing financing.” The project also implemented a number of energy and water-saving tactics, such as EnergyStar appliances and dual-flush toilets.
By integrating green building principles, Solara is able to keep rents affordable for its occupants. According to the Urban Land Institute, “At Solara, rents range from $388 for a one-bedroom apartment to $1,075 for a three-bedroom unit.” For comparison, the fair market rent for a one-bedroom unit in the same county (San Diego County) is $1,566 and a three-bedroom is $2,894.
Solara is one example of an affordable housing development that successfully implemented green design principles to increase the availability of affordable properties for low-income individuals of San Diego County. This project is a model for other affordable housing developments across the U.S.
Notably, Solara’s success was largely credited to the funding available from the state of California. California has more renewable energy rebates (cash returned to consumer) and incentives than most other states. For example, Community HousingWorks received rebates worth $409,000 from the California Energy Commission, which covered a sizable chunk of construction expenses. In order for more communities like Solara to be possible, states must adopt similar incentives and tax credits for renewables.
Additionally, building codes in general must be updated to require more energy efficient appliances and systems. This will reduce the operational costs of buildings and lower tenants’ utility bills. The International Green Construction Code is one standard for green building construction that states should adopt to improve the environmental footprint of buildings and consequently reduce energy costs.
It is most important that the savings generated from a green development actually reach the building’s occupants. Without an equitable distribution of the savings written into policy, building owners can keep rents high and pocket the savings, which is especially detrimental for low-income tenants. Inclusionary Zoning is one means of assuring affordable housing is available for qualified individuals. This type of zoning requires buildings to lower the rent on a number of its units so that they are affordable to households meeting low-income criteria.
As rent lowers and lower-income individuals and families are able to reside in spaces within their range of affordability, they develop financial security. They are then able to allocate more money towards other necessities and even begin to invest in their futures. Increased economic stability is a key goal for developing equitable communities. As this financial security is sustained over time, the income gap will diminish as individuals in low-income communities (again, mostly POCs) experience upward mobility, bringing a level of socioeconomic and racial justice to their communities.
