Green Affordable Housing: A Modest Premium for Significant Long Term Gain

At a conference last month on green homes and sustainable communities, San Francisco Mayor Gavin Newsom said that green affordable housing “may cost a little more today, but the actual costs are fixed and lower.”

Mayor Newsom was speaking from experience. A year ago, he committed to applying environmentally sustainable development principles to all of the City’s new affordable housing projects—including the nine-story Plaza Apartments designed for very low-income families. Completed in January 2006, the structure incorporates a variety of green features, such as high-tech insulation, solar panels, the use of natural lighting and recycled materials. City officials estimate that it cost between 2 and 3 percent more to build than a comparable “non-green” structure, but expect to recoup the investment quickly through reduced energy costs and other operational savings. (Initial energy savings alone are projected to be about $10,000 a year.)

A study by New Ecology Inc. and the Tellus Institute had similar results. Based on a review of 16 green affordable housing projects across the U.S., the study found an average “green premium” of 2.42 percent. However, the authors make an important distinction between first costs and life cycle costs, concluding that the longer term “benefits of green affordable housing are real and, in some cases, substantial.”

In addition to reduced energy and other utility savings, the study points to increased durability of materials and equipment (which lowers replacement costs), benefits to residents in terms of health and comfort, and of course reduced environmental impact.

“I’ve heard people say that ‘green affordable housing’ is an oxymoron,” said Ward Hubbell, executive director of the GBI. “But there are many practical and affordable ways to build structures that are energy-efficient, healthier for occupants and better for the environment.  As these features are incorporated, energy and operational costs decrease creating a net overall saving for the homeowner.”

Like San Francisco, an increasing number of cities have begun to promote green building principles to developers, designers and others involved with affordable housing. Minnesota, for example, offers a Green Affordable Housing Guide that includes design strategies for the neighborhood, yard, house, assemblies and components, as well as information on costs, standards and links to additional resources. Santa Monica also offers a Green Affordable Housing Checklist, which includes recommendations related to energy-efficiency, landscaping, framing and carpentry, indoor air quality and other building systems and materials.