The Impact of Green Affordable Housing: A Report by Southface and the Virginia Center for Housing Research

The impact of green building certification programs on the cost and energy performance of multifamily affordable housing has long been misunderstood due to a lack of data and analysis, particularly in the Southeast United States. The research presented in this report addresses this data gap by comparing a sample of green building program certified multifamily affordable housing to non-green multifamily affordable housing in the Southeast.

The research team, consisting of Southface, a nonprofit in Atlanta, GA, and the Virginia Center for Housing Research (VCHR) at Virginia Tech University, conducted a year-long research project to collect and analyze data on the cost and efficiency impact of green building certification programs on affordable housing development. A total of 18 affordable housing developments in Alabama, Georgia, North Carolina and South Carolina participated in the study. Eleven of which are green building program certified or “green” developments, and 7 represent conventional or “non-green” developments. The sample consists of Low Income Housing Tax Credit funded multifamily new construction properties with a minimum of one year of occupancy. The developments, otherwise, represent a wide variety of rural and urban locations, building characteristics and amenities, construction methods and residents. Despite the limitations of the variability and scale of the sample evaluated in this study, the research presents a large amount of compelling, significant data to compare the cost and energy performance of affordable housing developments across the Southeast.

Contractors, developers, housing finance agencies (HFA), property managers and residents provided cost documentation, operations and maintenance (O&M) reports, one year of utility data and surveys to inform this study. The research uses comparative statistics to evaluate the qualitative and quantitative difference between green and non-green affordable developments.

Overall, the research findings suggest that the green developments are performing better than the non-green developments in terms of construction and development costs, energy efficiency and utility costs, and satisfaction. That said, however, the research also highlights some areas of improvement for the green building industry, challenging green building certification programs and practitioners to continue to push the bar beyond energy code to achieve even greater energy savings throughout the buildings lifecycle by providing enhanced training and guidelines for building operations and maintenance.

Key findings from the report are:

1. Families residing in green developments save nearly $8/ month and $96/year, and seniors save more than $10 per month and $122 per year more on energy costs when compared to non-green developments.
2. Green developments in this study save nearly $5,000 per year on owner-paid utility costs when compared to non-green developments.
3. Green developments spend 12% less on energy (common areas) per square foot than non-green developments. Residents of green developments use 14% less energy per square foot.
4. Green developments are nearly 5% less expensive on total construction costs per square foot and more than 13% less expensive on soft construction costs than the non-green developments. More specifically, analysis indicates that green certified developments in GA, NC and SC cost less to design and build than non-green alternatives in AL and SC.
5. Non-green developments are only 1.6% less expensive in terms of hard construction costs when compared to green developments.
6. Total operations and maintenance costs are 15% less expensive for non-green developments when compared to green developments.
7. Developers, property managers and Housing Finance Agencies agree that green developments are more energy efficient.
8. The majority of developers indicate that green buildings provide benefits in terms of quality of end product and achieving their firm’s objectives and mission.
9. Property managers and residents require a greater level of education on how to properly operate and maintain green developments in order to fully realize savings.

In summary, when affordable housing is green-certified, developers are constructing higher quality housing at a lower cost while low-income residents are saving more energy and money. Housing finance agencies that administer the state affordable housing development programs are also recognizing that properties with a green building certification are providing a higher quality and more efficient product, which saves money for residents and provides the agencies with additional quality assurance. Savings and benefits could be even greater with improved education, training and technical assistance to housing finance agencies, property managers, maintenance staff and residents. This research demonstrates that green building program certified affordable housing does not cost more to construct and provides short and long-term benefits, challenging the argument that green development comes with an excessive premium that prohibits cost-effective development.

The research presented in this report adds substantive data evidence to the anecdotal argument that green buildings save energy and money, and disputes the perception that upfront costs for green building are prohibitively significant for affordable housing development. Empirical data indicates that green buildings are providing an array of benefits to affordable housing stakeholders including: contractors, developers, housing finance agencies, property managers and residents. It is our goal that this research is used by other researchers, industry associations and policymakers to advocate for the adoption of green building policies and requirements for affordable housing development across the Southeast and nation.