We Need a Green Industrial Policy for Housing

By Daniel Aldana Cohen, Julia Wagner, and Ruthy Gourevitch

This is the first piece in a CCI substack series exploring why the United States needs a Green Industrial Policy for Housing. This series will feature CCI researchers, labor experts, and housing practitioners in the coming weeks.

The planet is burning, with climate impacts hitting people where they live. But there’s another existential threat that’s even more consuming: the threat of losing a home. And to achieve both climate safety and housing security, we need more and better tools to green housing—and we need to make them affordable. To get abundant green housing security, we need a green industrial policy for housing.

The need is dire. 42 million US households spend over a third of their monthly income on housing—nearly a third of US households. Of those, 22 million were renters. And over 12 million renters spend half their income on housing. Evictions are rampant, homelessness growing. There aren’t enough affordable housing units available. And utility bills are unaffordable: a quarter of all Americans struggle to cover energy costs, while half of Black and Latino households cannot afford decent levels of heating and cooling. Exploding home insurance costs—fueled by climate disasters and bad governance—make things worse. And home energy use causes a fifth of the country’s heat-trapping carbon pollution, fueling the climate chaos that’s driving up costs.

In short, our climate and economic crises are converging in our homes. Green solutions could too. But so far, green home improvements are mainly going to the already affluent, and to the tiny slice of households that are benefiting from clever pilot projects. We need rent control to stabilize tenants’ costs, and we need to invest in building social housing at scale. But to ensure that everyone can benefit from affordable, high-quality, climate-friendly housing, we need a focused effort on improving the literal production of green homes and home improvements.

Green Industrial Policy Can Fix the Housing Crisis

A green industrial policy for housing is how we bring down the costs of key inputs; build coalitions across government, industry, labor, and residents; coordinate interventions to get things done; and ensure affordable, accessible options to upgrade homes. Of course, this is a compliment—not a substitute—for taking on extractive corporate power, a key driver of growing insurance costs, rising rents, and rising utility rates. And we’re not going to win a huge federal policy shift under Trump. But by starting conversations now, and building on scattered gains we’ve already won in blue cities and states, we can lay a foundation for years of effective action.

The upside is worth the effort. Healthy, green, electric, and energy-efficient upgrades to existing homes can help homes weather bad weather, slash housing’s carbon pollution, and cut monthly costs. And investments in carbon-free, green social housing could help forge dense, livable, climate-friendly communities that everyone can live in. This would take an enormous amount of work, leading to millions of green-collar careers. Under the right conditions, these could largely play out as stable union jobs and worker-owned cooperatives. The technological, design, policy, and business-model innovation that would flourish could fundamentally improve how we build and inhabit our homes, enhancing freedom and security.

We want to start a conversation about using green industrial policy to build power for abundant green housing security. We see huge opportunities by renewing our focus on home-building and home improvements. Yes, that will require changes to zoning rules—changes essential to enabling denser, healthier, more walkable communities full of homes everyone can afford. But this isn’t an essay about zoning. And we’re starting with more questions than answers.

From the IRA to Green Social Housing

We do believe that to develop a transformative green industrial policy for housing, we can learn from the experience of the Inflation Reduction Act (IRA). Why did certain priorities—like electric vehicles—survive Senator Manchin’s whittling down of President Biden’s Build Back Better proposal, while other priorities—like green and affordable housing—were almost wholly cut out?

One key reason: the EV coalition stacked American capital, American manufacturing, American workers, American consumers, and American innovation. There was a nationalist element here. But massive investments in EVs and their supply chains also reflects the kind of coalition one can assemble around manufacturing. By contrast, when housing struggles focus on zoning and land ownership, they run head first into the issue of land ownership, with its dizzying patterns of speculation and financial complexity. And when housing struggles focus only on subsidizing whatever technologies, materials, and programs are already in place, they fail to build energy or expand coalitions. We need to have those fights. We can also build power on a third front.

With a green industrial policy approach to housing, we could assemble new coalitions by focusing on:

• mobilizing capital to finance construction and building upgrades, from public investment to incentivizing private investors

• manufacturing, from appliances to building construction

• labor, from factory workers to the contractors who install appliances and construct new homes

• consumers, from individual families to intermediary consumers of green housing inputs like public agencies, non-profits, and private developers

• innovation, from public institutions like the Department of Energy’s Building Technologies Office and its national labs, to universities, major firms, and start-ups

At each of these levels, green housing and labor advocates could build power for abundant green housing security—in part by networking, amplifying, and organizing power that already exists, from organized tenant movements to green appliance manufacturers. Progressive causes only win in American politics with a broad, multi-faceted coalition.

Longer-term, our goal is a Social Housing Green Industrial Revolution (SHGIR): green sugar. In that vision, sustained investments in non-market housing—built, inhabited, and governed in a diversity of ways—would be the engine that powers improvements to housing conditions for everyone, as we’ve seen in places like Vienna. Indeed, European architects of green social housing, and some standout projects themselves, have won some of the region’s and the world’s top architecture prizes. The shorter-term, bridging idea is simpler: a green industrial policy for housing. The connecting themes are public intervention, public subsidy, and public coordination, with an eye to ever-broader, deeper coalitions that gain steam as the multiracial working and middle classes win tangible improvements to their housing. This agenda could be a cornerstone of progressive campaigns and policymaking in cities and states, and in the platforms of candidates in upcoming election cycles. We can get to work now.

The IRA already seeded scattered elements that could be recovered for a more comprehensive approach. These include a green industrial policy for lower-carbon steel, concrete and other key construction materials. The IRA also subsidized green upgrades to existing housing, albeit through chaotic, poorly-organized mechanisms—tax credits that disproportionately helped wealthy households, and a clunky rebate program that mostly didn’t materialize before the election. The lack of overall investment and planning undercut these efforts. The nascent Greenhouse Gas Reduction Fund was meant to leverage public finance to spur private financial confidence in home energy upgrades, but has been assaulted by the Trump Administration. There were consumer-level incentives for buying heat pumps—but there was little effort to bring heat pumps’ prices down by improving manufacturing, which could have helped local manufacturers and workers. (Biden did use the War Powers Act to modestly accelerate heat pump production.) And the IRA failed to properly tackle the notorious problem that most contractors lack training and experience installing green upgrades.

What’s more, the Biden administration made no effort to finance a systemic shift in home manufacturing processes, or to equip public agencies and non-profit developers to systematically expand and retrofit their housing stock. There was no real support for the Department of Energy’s longstanding efforts to scale up, coordinate, and “industrialize” green construction and retrofits following European models, which have cut the costs of modern green housing across the entire housing market. There was no effort to support innovation in more sustainable bio-based building materials, using materials like straw and hemp as green buildings in Europe are doing, which would integrate homebuilding into increasingly regenerative agricultural practices.

But the problem isn’t that the Biden administration refused to implement a green industrial policy for housing. The problem is that there was none—and thus, no coalition around more, better, and cheaper green housing.

Most green housing advocates in the non-profit space were focused on helping financially solvent homeowners access a limited package of existing technologies—like the rooftop solar panels, modest batteries, and heat pumps that already exist. This influential vision of greening U.S. homes is precisely premised on policy minimalism—the idea that governments just need to nudge homeowners to substitute clean, efficient appliances for dirty, inefficient ones at the normal moment of replacement. In this vision, the already-wonderful American way of life can proceed unscathed, decarbonizing one trip to Home Depot at a time.

Meanwhile, other housing advocates focused on other issues—on zoning, on affordable housing vouchers, on battles to increase subsidies for affordable housing and even green social housing, on efforts to organize tenants to support rent control, fight evictions, and otherwise keep them in their homes. When policy advocates focused on green retrofits for poor, working class, and racially stigmatized families, they mostly took the existing universe of green amenities for granted, and focused on subsidies to make them available for people who would otherwise be excluded. This includes far-sighted policies, like Pennsylvania’s Whole Home Repairs, which we have supported and celebrated.

Incredibly, in an age of growing work on green housing issues, and the spreading popularity of green industrial policy, we see a striking gap right where the issues should overlap in a venn diagram.

It’s all the more remarkable because informed experts know that in Europe, initiatives ranging from the Dutch Energiesprong to Paris’s and Vienna’s overarching social housing strategy, are examples of highly successful industrial policy-like approaches to housing, with a particular focus on affordability and greening homes. These efforts to subsidize green retrofits for existing affordable housing, and the construction of green social housing, have brought down the cost of green housing overall. (In the US, elements of this approach are sometimes called “market transformation.”) We’ve also seen a growing focus on reusing materials from building demolitions and building with wasted biomass—the start of an exciting circular economy in building that could slash embodied carbon emissions. Take Vienna’s huge aspern Seesdadt project, which built housing for 25,000 people—two thirds of it social housing—on a former airport; developers systematically reused on-site materials, and debris from construction, in creating new housing and infrastructure.

Here in the US, even New York City’s cash-strapped public housing agency, NYCHA, has demonstrated the potential of green industrial policy approaches for decades. In the 1990s, it partnered with the state’s public energy utility, NYPA, to get a US manufacturer to produce the country’s first energy-efficient, apartment-sized fridge, bringing benefits to consumers all over the country. In recent years, NYCHA has worked with NYPA and another New York public agency, NYSERDA, to incentivize manufacturers to produce cheaper, more effective window-based heat pump units. They can be installed as easily as window-based air conditioners, but provide both heating and cooling, an ideal combination for multi-family buildings that would otherwise require much more expensive interventions to eliminate polluting gas. A winter pilot study found residents were extremely enthusiastic—92% said they got the heating “just right.” And the heat pumps cut energy use by over 85% compared to fossil-powered steam heat.

Now, NYCHA’s working with its public partners to procure the most affordable version of electric induction stoves with built-in batteries, which can be plugged into a normal outlet. These “Charlie” stoves provide the most modern cooking technology, build resilience in case of power outages, and allow the stoves to be plugged into a normal outlet, avoiding the need for expensive electrical upgrades. The stoves are manufactured in Berkeley, California. (NYCHA will get a lower-cost model at a bulk-price discount; other affordable housing developers are working on bulk orders.)

In each case, public agencies have worked together successfully to use tools like upfront public finance, procurement, and coordination to implement cost-saving green upgrades that improve residents’ quality of life, while helping US manufacturers and workers thrive in a greener economy.

Towards a Social Housing Green Industrial Revolution

If New York City’s embattled and underfunded public housing agency can be a leader in green industrial policy for housing, imagine what fully motivated cities, states, and eventually the federal government could achieve. In the years ahead, public actors across the US could pursue piecemeal, bottom-up versions of a comprehensive, national approach—assembling and growing coalitions one project at a time.

In a series of essays and interviews in the coming weeks, we’ll cover what a green industrial policy for housing could look like. And we’ll probe the possibilities of its most ambitious version, a social housing green industrial revolution. We’ll explore the failures of the current system in greater depth. We’ll see how private companies can play a crucial role when partnering with public agencies. We’ll hear from former public officials, and from organizers campaigning around this kind of vision from the grassroots. Thinking big isn’t sufficient to tackle the crises converging in our homes—but it is necessary. And by working out an ambitious policy agenda, we’ll focus on building powerful coalitions around it.

Ultimately, our goal is simple—to research policy that helps everyone live in green, affordable, high-quality homes—homes where people can reach out with their hands and literally touch climate safety.