Affordability As One Possible Response To Climate Change

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easons for the lack of new affordable housing seem nearly limitless. Depending on whom you talk to, factors can include inflation, NIMBYism, governmental red tape, labor shortages, material costs and others. All contribute to the ongoing crisis of a shortage of 7.1 million affordable and available rental homes, according to the National Low Income Housing Coalition (NLIHC). The NLIHC estimates just 35 affordable and available homes exist in the U.S. for every 100 extremely low-income renter households.

But some developers and architects believe if new affordable housing cannot be built in sufficient volume, there exists a next best idea: Creating more old affordable housing by renovating and preserving already existing structures.

The added benefit of doing so is it is a more sustainable solution than building anew. Renovating old housing avoids the environmental tradeoffs of new construction, including carbon emissions and demolition waste. Renovating existing buildings to provide housing helps trim waste, lower energy usage and fortify those communities most susceptible to the impact of climate change.

As Americans work to scrape together savings for down payments and closing costs, sky-high mortgage payments are pushing homeownership ever further from reach, says Genger Charles, managing director, head of internal affairs and impact strategies at The Amherst Group LLC. Amherst is a U.S. residential real estate investor working to address the continuing housing crisis and supporting Americans and their communities by adding more for-rent and for-sale homes to the nation’s housing supply.

“While increasing housing supply is widely seen as a key solution, new construction can’t keep pace to help hardworking families in need today,” she points out. “This is part of the reason we need to reimagine the American Dream and the tools to achieve it. Preserving an existing home can provide a family with stability just as effectively, and often more quickly, as building a new one.”

Improved quality

Another company pursuing a similar objective is Hudson Valley Property Group (HVPG), a 15-year-old enterprise whose portfolio has grown to 92 communities and more than 17,170 units preserved across a dozen states. The company has injected an average $19,000 in each of 17,168 rehabilitated units. Deep affordability is preserved, with some 67% of residents in the company’s units paying less than 30% of income in rent. On average, affordability restrictions are extended by 30 years across HVPG’s properties.

HVPG’s approach demonstrates how well affordable housing preservation works as part of a climate strategy. One hundred percent of HVPG’s renovated buildings now feature LED lighting and water-saving fixtures. Energy audits and upgrades help ensure those properties that qualify integrate green technologies like smart thermostats and high-efficiency boilers. Says Andy Cavaluzzi, HVPG co-founder and partner, “We’re proving housing can be a platform for both climate action and community health.”

Energy Star upgrades

Deterioration of existing single-family housing contributes mightily to the supply-demand imbalance propelling the nation’s housing crisis. Professional platforms such as The Amherst Group leverage their capital and economies of scale to rehabilitate homes needing too much upgrading to make them viable for-purchase options for most Americans. Each home Amherst operates has benefitted from an investment by the company of more than $30,000 in initial repairs, more than seven times the amounts a typical homeowner can afford to inject into a home repair effort.

The company has spent more than $21 million in upgrading its homes to Energy Star appliances in an effort to increase sustainability, generating $6 million in cost savings for the homes’ residents. Concludes Charles: “One of the ways we can help alleviate the ongoing crisis is by fixing up dilapidated homes and returning more supply to the housing market, both for rent and for sale.