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The Inflation Reduction Act: A Historic Investment in Climate Friendly and Healthy Housing

The Green & Healthy Homes Initiative celebrates the historic passage of the Inflation Reduction Act and the opportunity it creates to make transformative investments in homes across the country. Creating climate friendly and healthy housing has long been a priority of GHHI. Improving the comfort, resiliency, safety, and affordability of housing can drive huge advances in public health and racial equity. We are proud to have worked with our partners in crafting programs in the bill, such as US Senator Chris Van Hollen’s Hope for Homes legislation that will make housing upgrades possible for countless families. We look forward to working with our partners in the federal government, state and local governments, organizations across the climate and housing sectors, and members of the communities where this work will take place. Addressing the climate crisis through homes, where health and economics outcomes can be dramatically improved for many of the most vulnerable members of our communities, will have both immediate and long-lasting impacts on the well-being of families across the country.

The need for centering homes in climate legislation is obvious and urgent. In 2020, over 20% of national greenhouse gas emissions were attributable to commercial and residential usage. We cannot hope to reach our national climate goals and keep global warming to survivable levels without dramatically reducing on-site emissions from these buildings (13% of national emissions) and reducing emissions from the off-site energy that powers our buildings (8% of national emissions). And, at the same time that the energy system is damaging our climate, it is creating economic burdens and health risk for families.  34 million US households reported experiencing energy insecurity in 2020. Nationally, households below the poverty level spend an average of 9% of their income on home energy bills, an unsustainable amount. In GHHI’s home state of Maryland, that number is even higher at 14%. Generally accepted recommendations are for this number, referred to as energy burden, to be no more than 6% of household income. Households of color face even higher energy burdens than their white counterparts at the same income levels. Historical and ongoing discrimination in resource allocation and opportunities to build wealth creating unacceptable levels of inequality that manifest in high energy burden. In our current system, the way we power our homes is not just causing a large percentage of the national greenhouse gas emissions, it is also driving economic and racial inequality.

The impacts of this burden are devastating for families, and we see them every day in our work. High energy costs force families to cut back on food or medical care. Sometimes families simply cannot pay the bills. Utility shutoffs can damage credit, leave people unable to use necessary medical equipment or keep medication at stable temperature, and create unhealthy conditions in homes. The elderly, disabled, and those with underlying medical conditions are especially at risk from extreme heat and cold. When people cannot create comfortable conditions in their home, they are less likely to be productive, healthy, and resilient to other challenges.

We are also seeing growing scientific evidence and acknowledgement from the medical community about the health risks created by fossil fuel appliances in homes. Regular gas leaks, even at low levels, and the biproducts of standard combustion are consistently creating pollutant levels well above national outdoor air quality standards, and evidence that these can be directly linked to asthma development and symptoms is growing. Asthma and related diseases can have massive impacts on the families we serve. Asthma is the third leading reason why kids are hospitalized, and the primary reason why kids miss school at a total of 14.4 million days annually. Housing intervention can make a difference as 40% of asthma episodes are caused by triggers in the home. (See the CDC asthma surveillance data for more detail). We support the efforts to improve the indoor air quality of homes through appliance replacement, and we are incorporating stove replacement and electrification measures into our direct service programs where we will be measuring the economic impacts, air quality changes, and health outcomes for families.

We believe the Inflation Reduction Act can play a major role in changing the status quo for the better, and we call on our partners across sectors to ensure that the implementation of this law and related efforts will alleviate rather than increase the unacceptable burdens on the most vulnerable members of our communities. We are particularly excited to work on the following programs within the bill:

  • $9 billion in home energy rebate programs that will help people electrify the appliances in their homes and for energy-efficient retrofits, with increased resources for low-income consumers.
    • $4.3 billion via Senator Van Hollen’s HOPE for HOMES provisions, which offer valuable rebates for home energy retrofits for low-income households that will make housing safer, healthier, and greener through work such as building envelop improvements, insulation upgrades, and HVAC system upgrades.
    • The High Efficiency Electric Home Rebate Program to increase access to clean energy, which includes expanded consumer tax credits for rooftop solar, energy storage systems, electric heat pumps for heating and cooling, and electric appliances. Bonus tax incentives are provided to develop clean energy resources in low-income communities and areas experiencing a transition away from fossil fuels.
  • $1 billion for affordable housing through a HUD-led grant program that will improve energy and water efficiency, air quality improvements, climate resilience, and clean energy technologies in affordable housing communities.
  • In total, $60 billion for environmental justice, with a variety of investments for communities disproportionately impacted by pollution and climate change.
    • $3 billion in Environmental and Climate Justice Block Grants to address the disproportionate environmental and public health harms from pollution and climate change in Black, Brown, and low-income communities. Funds can be used for reducing pollution, improving energy infrastructure, climate resiliency, workforce development, and reducing urban heat island effects.
  • $1 billion towards building codes, to support states and municipalities in developing, adopting, and implementing more efficient and safer standards.
  • $27 billion for a Green House Gas Reduction Fund, which will be dedicated through green banks, including establishing a national green bank. The green banks will capitalize deployment of emission-reducing technologies, with at least $7 billion specifically for projects in disadvantaged communities.
  • Billions of dollars in workforce development funds, to retrain and expand American clean manufacturing capacity, bringing this technology home and creating millions of American jobs.

The scale of this act is historic, and the impact can be too. How much so will depend on the ways in which we implement the programs and to what degree we prioritize the communities where the need is greatest. We cannot repeat the mistakes of the past and forget the existing disparities that can leave behind millions of Americans. To maximize the benefits of the Inflation Reduction Act and truly meet the moment, the rollout must lead with equity, not treat it as an afterthought. We call on our partners to engage community stakeholders, identify client values (such as health, affordability, and community development), lower costs, democratize jobs, and deliver results. The work is just beginning, and we thank all of those that played key roles in the development and passage of this historic act to create this incredible opportunity.

Additional detail on the provisions of the Inflation Reduction Act can be found in these documents from other organizations:

RMI – Inflation Reduction Act Could Transform the US Buildings Sector: https://rmi.org/the-inflation-reduction-act-could-transform-the-us-buildings-sector/

US Green Building Council – Inflation Reduction Act of 2022 https://www.usgbc.org/resources/inflation-reduction-act-buildings-provisions

Sierra Club – Real-world Benefits of the Inflation Reduction Act’s Historic Climate Investments https://www.sierraclub.org/sites/www.sierraclub.org/files/program/documents/Real%20Benefits%20IRA_web.pdf

 

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