Investments in this strategy aim to limit environmental harm from affordable housing units by increasing unit and building energy efficiency, increasing environmental sustainability through green certification-required practices, and reduce presence of airborne pollutants and harmful chemicals. The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.


Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What problem does the investment aim to address? For the target stakeholders experiencing the problem, how important is this change?

Affordable housing units can be particularly energy inefficient, because project developers often tend toward inexpensive materials and building practices to keep costs down. For example, residential energy in the U.S. comprises more than 20% of total energy consumption, households spend more than $160 billion annually on energy to heat, cool, and light their homes (11). Emissions like these are among the primary contributors to global warming, and the scientific community widely regards a 2 °C increase in global temperature as likely to increase the risk of planetary catastrophe—melting ice caps, longer heat waves, more severe natural disasters, and faster disintegration of coral reefs, for example—with negative consequences for life. Models of current emissions project a resulting increase of far more than 2 °C. Therefore, the outcomes highlighted in this strategy are likely essential for both people and planet (5). Investments in theme can:

  • reduce unnecessary energy use and environmentally harmful emissions by increasing unit and building efficiency;
  • reduce end beneficiaries’ household expenditures on electricity and fuel by increasing energy efficiency;
  • increase the environmental sustainability of affordable housing projects through construction in line with green certification requirements (9); and
  • reduce end beneficiaries’ exposure to airborne pollutants, harmful pests, mold, and harmful chemicals (e.g., lead paint), thereby increasing the likelihood of healthy childhood development and reducing the risk of certain negative health outcomes, including asthma.

What is the scale of the problem?

Figures vary by country. In the U.K., an estimated 13% of greenhouse gas emissions come from residential sources, with an additional 17% stemming from business (12). In Australia, an estimated 11% of emissions result from residential sources (13). In the U.S., since 40% of emissions come from buildings, energy retrofits have large potential to reduce these emissions contributions—by as much as 30%, some estimates suggest (2). Meanwhile, persons with income below 185% of the poverty level faced a home-energy affordability gap of $34.1 billion at 2007/2008 winter heating fuel prices (6).


Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who (people, planet, or both) is helped through investments aligned with this Strategic Goal?

This strategy delivers impact to both individuals living in poor-quality housing stock and the environment, as follows:

Individuals with Environmental Health-Related Challenges: Individuals suffering from asthma, lung diseases, and certain cancers, among other diseases, are particularly susceptible to the negative health impacts of poor-quality housing and greatly benefit from environmental retrofits (1).

Environment: In many developed economies, buildings (both residential and business) produce between 30-40% of national greenhouse gas emissions (2, 12, 13). The environment is the most direct recipient of negative outcomes from these emissions, and thus is particularly well targeted by this strategy.

What are the geographic attributes of those who are affected?

This strategy could impact any part of the world, or the globe as a whole. Particularly vulnerable target individuals and households live in temperate regions, where heating and cooling costs are especially high.


Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

How can investments in line with this Strategic Goal contribute to outcomes, and are these investments’ effects likely better, worse, or neutral than what would happen otherwise

The extent to which this strategy can mitigate environmental harm depends on the energy efficiency and production capacities of the constructed or rehabilitated facility. Housing accessibility requires units that are physically, financially, and intellectually accessible to their intended end beneficiaries, including measures to ensure that energy-efficient characteristics are properly employed for minimal negative environmental impact. New and rehabilitated housing projects that improve energy efficiency, reduce harmful emissions, and reduce end beneficiary exposure to health risk factors will likely be better for both beneficiaries and the environment than current housing options.

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many target stakeholders can experience the outcome through investments aligned with this Strategic Goal?

The number of individuals who can receive outcomes through this strategy is dependent on the number of individuals who lack adequate access to high-quality, affordable units; low-quality units often expose tenants to health risks such as pollutants, mold, and pests, and many are energy inefficient. Estimates vary by country, but more than 19 million U.S. households spend more than 50% of their income on housing, and many of the current housing options for low-, very-low-, and extremely-low-income and vulnerable individuals/families are likely of low quality. Individuals living in affordable housing that is not “green” certified are also targets for this strategy.

How much change can target stakeholders experience through investments aligned with this Strategic Goal?

The amount of change that end beneficiaries can receive through this strategy depends on the housing itself, the extent to which it successfully provides its tenants with green, affordable housing, and the establishment of housing maintenance procedures consistent with best practices or certifications to minimize environmental impact over time. Examples of change aligned with this strategy include:

  • One evaluation found that the studied green developments saved nearly $5,000 per year on owner-paid utility costs compared to nongreen developments (9).
  • In one example, children with asthma who moved to Seattle’s Breathe-Easy Homes (built by the Seattle Housing Authority) experienced a 65% increase in symptom-free days. Residents who moved to sustainable, “asthma-friendly” homes were far less likely to be exposed to triggers like mold, rodents, and moisture (4).
  • Including five units of affordable housing in a 41-unit development near transit reduced annual vehicle miles travelled by 22,630 miles, thereby reducing annual greenhouse gas emissions by 28,470 pounds (7).
  • Retrofitting an affordable housing complex with energy-efficiency improvements enabled the building to achieve energy savings of nearly 60% for a total reduction of nearly 150 tons of CO2 annually from fuel and common-area electric use (10).

Illustrative Investment

The Los Vecinos Apartments in San Diego were one of the first LEED Platinum, zero-energy, low-income housing projects built in California. The 42-unit development meets almost all of its electricity demand through 93 kW of on-site solar panels. The building includes tankless water heaters, hydronic heating, Energy Star–certified appliances, low-VOC paint, and low-flow water fixtures, among many other energy-efficient features (8). The developer, Wakeland Housing & Development Corporation, worked with a renewable energy advisor, Global Green USA, to create a highly efficient heating and cooling system. Solidifying its commitment to green building, Wakeland Housing established a tenant education program focused on energy conservation, recycling, and non-toxic cleaning. The project also occupies a transit-accessible location, the site of a once run-down motel that contributed to the community’s high crime rates. Completed in 2009, this recycled property is now reinvigorating a neighborhood that was once in decline. Investors looking to improve resource efficiency can invest in any number of developments that follow a similar business model (8).

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

The Costs and Benefits of Green Affordable Housing

William Bradshaw, Edward F. Connelly, Madeline Fraser Cook, James Goldstein, and Justin Pauly. “The Costs and Benefits of Green Affordable Housing.“ Cambridge (MA): New Ecology (2005).

The Costs and Financial Benefits of Green Buildings: A Report to the California Sustainable Building Task Force

Greg Kats, Leon Alevantis, Adam Berman, Evan Mills, and Jeff Perlman. “The Costs and Financial Benefits of Green Buildings: A Report to the California Sustainable Building Task Force.“ A Report to California’s Sustainable Building Task Force. USA.

Evaluating the Health Benefits of Green Affordable Housing

Enterprise and National Center for Healthy Housing. “Evaluating the Health Benefits of
Green Affordable Housing.” Presentation (January 15th, 2014). Research report forthcoming.

Home Rx: The Health Benefits of Home Performance

J. Wilson, D. Jacobs, A. Reddy, E. Tohn, J. Cohen, and E. Jacobsohn. Home Rx: The Health Benefits of Home Performance–A Review of Current Evidence, US Department of Energy, Energy Efficiency and Renewable Energy. DOE/EE-1505. December 2016.

Green for All: Healthy and Efficient Affordable Housing

U.S. Green Building Council. “Green for All: Healthy and Efficient Affordable Housing.” Policy Brief.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.