Can Housing Be Affordable Without Being Efficient?
About 3 billion people, or 40 percent of the world’s population, will need new housing by 2030. That will require constructing approximately 21 million new homes every year across the world.
Several of the fastest-growing countries have ambitious goals to meet this need. The Indian government aims to construct 20 million affordable houses by 2022. Nigeria targets 1 million homes built per year for the next decade. Indonesia’s president initiated the One Million Houses program to serve low-income citizens.
While these programs show much promise, a critical question remains: What kinds of homes will they be?
The choices of where and how affordable homes are constructed and maintained can make the difference between improving quality-of-life for low-income and vulnerable families, or further burdening them with costs and social isolation. One critical choice is the efficiency of the housing. Energy-efficient housing is more affordable over its lifetime than non-efficient buildings. And when benefits beyond direct costs are accounted for—like improved health, increased productivity, new jobs and less pollution—the benefits outweigh the costs many times over.
Any construction, especially affordable housing, that does not include efficiency standards is neglecting the needs of families in those homes. Yet inefficient housing construction is still all too common, as exemplified by the fact that nearly two-thirds of countries do not have mandatory energy codes in their construction standards.
When you look at the evidence, it’s clear that there are a multitude of reasons to invest in efficient housing, and no good reasons not to.
2 Types of Building Efficiency
The benefits of efficient housing are numerous and reinforce each other. An efficient home is not only more affordable, it can increase social and economic opportunities for the family that lives there.
Two important types of efficiency produce these benefits:
1. Location efficiency
Housing location has a huge impact on quality of life. Houses in compact and connected communities with access to public transit, walking paths and cycling lanes are more livable, affordable and sustainable. Location efficiency improves access to jobs, education, entertainment and healthcare. It can also reduce greenhouse gas emissions and pollutants from transport, and lower the cost of providing services. Being connected to a wider community also facilitates human engagement and social cohesion, two factors proven to strengthen family and community resilience in times of crisis.
Inspired by this evidence and a pilot project coordinated by WRI Brasil, the Brazilian government enacted a new law in 2017 updating standards for its national social housing program, Minha Casa, Minha Vida. The new policy discourages the construction of developments that are isolated from urban centers. The law aims to promote compact, connected and coordinated development to benefit low-income families, while taking care of the environment and reducing costs.
2. On-site energy and water efficiency
Buildings that make better use of resources consumed on-site—especially energy and water—enrich residents’ quality of life by improving health and well-being while reducing utility bills, which are a disproportionate burden for low-income families.
Three examples include lighting, ventilation and water-saving technologies. Better window design and orientation can optimize lighting. This reduces the need to keep the lights on while maximizing views and natural light, which have positive impacts on mental health. Natural ventilation through passive design can prevent overheating or excessive cooling, improving comfort and reducing energy bills. On-site water efficiency solutions, such as rooftop gardens, can collect water, reduce runoff, improve biodiversity and promote equity because urban low-income communities usually lack access to green spaces. This solution can also mitigate the urban heat island effect, a phenomenon where cities are significantly warmer than their surrounding areas. Urban heat island effect is a rising cause of death and illness among vulnerable populations.
In Mexico, where the residential sector accounts for 16 percent of total energy use, the ECOCASA program is building 27,000 efficient, affordable houses. These houses consume at least 20 percent less energy than conventional construction. By aiming for affordability and energy efficiency, ECOCASA exemplifies how countries can meet the growing demand for housing while avoiding long-term lock-in of costly and wasteful infrastructure.
Addressing Missed Opportunities and Correcting a Misnomer
Every new housing unit constructed without location- and resource-efficiency is a missed opportunity. Fortunately, this is a problem relatively easy to rectify. Because construction standards for affordable housing programs are usually set by the national government, it is possible to introduce a single set of changes that will have significant impact throughout all of a countries’ cities.
Two recent analyses show how affordable housing programs in Colombia and Brazil can gain on-site energy- and water-efficiency benefits through better construction standards.
As part of the Building Efficiency Accelerator, the city of Bogotá, the Colombia Green Building Council and other partners produced a technical report to adapt the local construction code to comply with new national energy-efficiency standards for buildings. The report found that if national energy- and water-saving targets were implemented in affordable social housing, it would reduce energy and water consumption by 17 percent and 19 percent, respectively, while only increasing direct construction costs by 0.2 percent. These affordable, efficient houses would generate a return on investment in just 73 days.
Unfortunately, affordable housing is currently exempt from Colombia’s national energy efficiency standards for buildings. Bogotá is now working with national policymakers to change the law to address this perverse reality and allow families in affordable housing in Bogotá and other Colombian cities to also benefit from efficiency policies.
In Brazil, while the Minha Casa, Minha Vida program is now factoring in location efficiency, on-site resource efficiency remains an untapped opportunity. WRI Brasil published a report that analyzed the costs and benefits of integrating on-site efficiency measures into housing built through the program. We found that most of the energy-efficiency measures related to passive design, like light-colored exterior walls, are essentially zero-cost. For regionally appropriate measures that require additional funds—such as solar photovoltaics in the north of the country or solar water heating in the south—the analysis showed reasonable payback periods of a dozen years or less.
Minha Casa, Minha Vida now faces an uncertain future with proposed budget cuts that may result in fewer units constructed. Nevertheless, at least 600,000 new houses are still planned over the next two years, offering a huge opportunity to introduce on-site efficiency.
Affordability and efficiency go hand-in-hand, and publicly supported affordable housing programs are an important place to focus government action. Over their lifetimes, efficient homes are more affordable, healthier and provide better opportunities for residents than conventional buildings. An affordable housing program that doesn’t prioritize efficiency is not just falling short on its mission and wasting money – it’s also a misnomer.