Skip to main content
Climate ChangeHousing Affordability

Massachusetts Can Lead in Both Climate Policy and Housing Production

Carbon neutrality vs affordable housing signpost

Massachusetts has a long and distinguished history rooted in the innovation of its people, institutions, businesses and government. Drawing upon this strength for centuries, the Commonwealth has consistently and resolutely risen to the challenges of its times. Today, the challenges before it include both stemming the manmade causes of climate change and meeting the housing needs of its people – particularly those working families and individuals severely overburdened by housing costs and denied the opportunities afforded to generations before them. Both climate policy and housing production can, and must, be advanced through bold, thoughtful and comprehensive action that does not pit one at odds with the other. Instead, Massachusetts can simultaneously lead both fields by harnessing the innovation of industry, supporting the growth of a “net zero” marketplace, implementing financial programs to mitigate against the additional costs of building housing under increased net zero code requirements, investing in the training of a net zero work force, and educating residents on the economic values of net zero construction and how to live most efficiently as net zero tenants or owners.

The recent enactment of the Baker-Polito Administration’s “Housing Choice” initiative represented a monumental step forward for housing attainability in Massachusetts. By lowering local government and board approval thresholds from a super-majority to a simple majority, the provisions of Housing Choice will afford municipalities greater freedom to craft new housing production bylaws and approve innovative residential development tailored to local needs and land planning. Housing Choice holds the potential for “a place to call home” to become attainable for tens of thousands more Massachusetts families by the end of the decade.

There is no reason that strides forward in housing production should be at odds with initiatives in the Commonwealth to do our part in lowering carbon fuel emissions associated with powering, heating and cooling homes. The Legislature’s recent passage of “An Act creating a next-generation roadmap for Massachusetts climate policy,” which was signed into law by Governor Baker on March 26, directs the Massachusetts Department of Energy Resources (“DOER”) to develop a “net zero” energy code in coordination with the Board of Building Regulations and Standards. The goal is to make a net zero energy code available for voluntary adoption by cities and towns beginning in or about the Fall of 2022, as an optional tool in reducing fossil fuel emissions.

In theory, a “net zero” building code means that energy used to heat, cool and power a building will be at least offset by energy generated on site or nearby – resulting in “zero” net energy needs met by fossil fuels. In practice, implementing a net zero building code – particularly as one of the first states in the country to do so – will add to the cost of new housing construction, and could easily reduce housing production – particularly the production of affordable and workforce housing. Moreover, the operational achievements of a home designed to theoretically achieve “net zero” depends greatly on the use of that home and its systems by informed residents.

Any objective consideration of a net zero building code must acknowledge the additional costs of construction– including for multi-family rental housing and “starter” homes. These costs will be further increased by the absence of a mature and competitive market for qualifying products and providers. Increased construction costs will impact housing production because they will be passed on to buyers or tenants. Some projects will simply fail to “pencil out” as financially viable in areas of the state where increased rents cannot be supported or higher purchase prices exceed what new buyers can afford. Increased construction costs are not – standing alone – reason to reject a net zero code.  However, municipalities and families should not be forced to choose between housing attainability and climate action. This conflict can be easily avoided. Now that the Legislature has put in motion an opt-in net zero code for municipalities, the Commonwealth has an opportunity and obligation to: (1) objectively calculate the cost implications of every new requirement that the administration considers as it drafts the code; (2) assess the cumulative impact of those additional costs on housing production; and (3) put in place climate and housing programs to mitigate those costs and avoid negative impacts on housing production.

Increased building code requirements – the specifics of which will not be known until the DOER begins hearings to consider proposed changes – are sure to increase construction costs. Some early estimates predict that increased costs could range between $10,000 to $50,000 per home. While the exact figures are still unknown, it is a certainty that any increased costs – unless offset by state or local initiatives – will adversely impact housing affordability. The National Association of Home Builders calculates that for every $1,000 increase in housing costs, 1,974 Commonwealth families are “priced out” of home ownership. Added to this economic reality, is the fact that residential home markets vary significantly across the Commonwealth. As a result, added costs of net-zero construction that might be absorbed more easily in affluent suburban and Metro-Boston communities, threaten the viability of multi-family projects in other parts of the state, such as Cape Cod, where the affordability of workforce rental apartments is defined by seasonal hospitality and tourism earnings, not biotech or financial services salaries.

As signed into law, the Act does not differentiate between low income, workforce or luxury housing. Upon local adoption, the net zero code would require all new residential construction to incorporate an array of enhanced materials, high-efficiency products and specialized construction services – despite the fact that a market for these has not yet been developed and therefore reflects few options and artificially high costs. The Act also focuses solely on incremental new construction – which is already being built to the highest energy efficiency standards in history – and ignores housing stock, whether decades or centuries old, where the greatest inefficiencies and potential gains exist.

The Act also purports to direct environmental benefits toward, and stem the impacts of fossil fuel emissions upon, “environmental justice populations” (meaning minority and/or low-income) that have been historically and disproportionately impacted by pollution. Ironically, however, if a net zero code can be adopted by municipalities as a proxy for exclusionary zoning, and if the Legislature does not help offset the increased costs of building income restricted housing to a net zero code, lawmakers will have traded on behalf of those same “environmental justice populations” the promise of reduced emissions for the certainty of reduced affordable housing stock. Such a forced trade does not represent any measure of “justice” for the Commonwealth’s housing insecure families.

The good news is that the Commonwealth has stood at the dawn of new climate policy in the past, and there are existing models and precedent at both the state and federal levels that can be adopted or enhanced to mitigate increased costs of construction and potential impacts on affordable housing. One need look no further back in Massachusetts history than the decade between 2007 and 2018 – during which installed solar energy production grew from approximately 3 megawatts to over 2 gigawatts (2,000 megawatts). The success of that initiative was rooted in a series of renewable energy credits, rebates and low interest loan programs that could be easily adapted to realize similar gains in net zero construction – for both new construction and existing homes. Net zero building code cost offsets and initiatives that should be considered include tax credits, robust product rebates, low-interest loans for net zero home improvements, and increased housing density or other allowances for new development by municipalities that decide to adopt the new energy code.

As with Housing Choice, the Legislature should be commended for taking a bold step forward on climate policy and positioning Massachusetts at the front of the national challenge to stem fossil fuel emissions and mitigate their impacts on climate change. However, directing the development of a net zero code is only half the job and leaves the Commonwealth at the crossroads of climate policy and housing production. Both the Legislature and the Administration now have the opportunity and obligation to turn their attention to the financial investments and support necessary to ensure that steps forward for climate policy will not mean steps backward for housing production. “Climate AND housing” must become the mantra repeated by policy advocates, stakeholders, lawmakers and the Administration. Indeed, Massachusetts families and individuals of all ages are counting on the Commonwealth to chart upward parallel paths for both housing AND climate. Doing so will help secure the wellbeing of Massachusetts families for generations to come.

Massachusetts is comprised of companies and tradespeople who have developed innovative products, techniques and technologies to meet the Commonwealth’s housing needs for generations. The variety of their work spans urban infill development, starter home production, custom home building, and filling the “missing middle” with unique multi-family solutions tailored to their surroundings. At housing AND climate .org, we look forward to taking a “seat at the table” and participating as part of the broad cross section of experts and stakeholders that will be necessary to meet the challenges of climate policy AND housing production in Massachusetts.